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Employers who use the recession as an excuse for cutting staff pay and benefits will regret their actions when the economy recovers, predicts the boss of a large Australasian recruitment company.

Nigel Barcham, managing director of Robert Half, said that although most employers are now focusing on cost-cutting, they should not take advantage of staff in the process.

"Short-term-thinking companies will see these times as a way to take advantage of staff, potentially by increasing demands or reducing benefits," he said.

"I think this is a ploy that will leave them without their desired staff when times become good. They [staff] will probably leave - people have long memories."

However, employers who continue to invest in and value key employees will continue to be rewarded for their investment and be positioned to make the most of the inevitable recovery, he said.

"Downturns don't last forever, and it's your best people who will help you maximise your return in the next bull market."

Barcham says Robert Half has seen "greater hesitation in making decisions" by employers since the end of last year, across Australia and New Zealand.

"Clients are becoming more particular and expecting to see more candidates ... rather than seeing one or two candidates as they previously did when there was a real talent shortage," he says.

Some companies imposed hiring freezes at the end of last year, and although several of these were lifted at the start of this year, Barcham expects others to continue until the end of March.

He said he is also seeing an increase in candidates who are prepared to take a small pay cut "for the right opportunity", although this is still the exception. The norm is still for pay to rise with a new position, but these rises are "certainly not at the levels we saw previous to this downturn".

Despite the downturn, demand is still high in some sectors and for some roles, he said. There is a strong demand for finance and accounting staff in the health sector and in the fast-moving consumer goods sector, as people "still require their staple goods".

And competent staff for basic accounting roles are still sought-after across the board. "Although we are not seeing a lot of job creation, if the financial or management accountant moves on or is promoted, these roles are being replaced."

There is also still strong demand for more technical roles such as compliance and internal audit, and skilled cost management and business improvement staff are also in strong demand.

Megan Alexander of Robert Half (NZ) said that over the past few months the market for permanent employees has become softer, but she expects the contracting & temping market to strengthen.

"This is the classic employment pattern of a downturn," says Alexander.

"Employers become more cautious and require greater flexibility with uncertainty as to the resourcing requirements of their businesses going forward. So rather than immediately filling vacancies with another permanent employee, they hire a contractor for short periods to cover the peak workloads,

"We have now seen several temporary contracts rolled over for a second three-month term, and expect that pattern to continue."

* The podcast Impact of the global downturn on recruitment is now available for download.