BY JASON NORMAN
SAN FRANCISCO, CA—Many industries have begun laying off mass quantities of employees as companies tighten their belts and trim costs to survive the financial crisis. But so far, the bicycle industry seems to be holding steady.
American companies cut 524,000 jobs last December, which capped a yearly loss in 2008 of 2.6 million jobs, pushing unemployment to a 16-year high of 7.2 percent.
While companies like American Bicycle Group and NiteRider (see pages 6 and 7) have recently cut jobs and salaries off their books, so far it doesn’t seem to be a widespread industry trend.
“I don’t anticipate any huge amount of layoffs,” said Eric Raynard, vice president at Jackson, Maxwell and Raynard in San Francisco, a firm specializing in job placements for sports and recreation manufacturers.
Even so, hiring practices have changed drastically in a short period of time as the candidate pool widens due to the nation’s increasing unemployment rates.
Raynard said he considered 60 qualified candidates for a purchasing manager position he recently filled. Two years ago, the number would have been half that, he said.
“I was talking to a vice president of marketing and he said, ‘You wouldn’t believe how many qualified candidates we’re getting,’” Raynard said.
Raynard predicted that fewer positions will be available in the industry this year, and that companies will look for different ways to fill them such as networking and Internet postings, which offer far greater efficiency.
With such a high supply of candidates and less demand in new positions, salaries might be depressed.
“My clients are negotiating in a very favorable market,” said Raynard, who just filled a high profile position at 10 percent less than what the candidate was making in a similar position before.
During the Thanksgiving holiday, Bill Fields was trying to fill two top-management positions and one mid-level position when “they all got pulled off” the table.
Yet Fields is confident the industry can weather the current storm.
“I don’t think the bicycle industry had a bad year last year,” said Fields, president of his own recruiting and consulting company. “I think there will still be a demand for bikes and repair services for 2009.”
Moreover, since the vast majority of bicycle manufacturing takes place overseas, Fields doesn’t foresee any mass layoffs like in other industry sectors. But he admits that newly created positions within the industry will be few and far between.
“Here and there, you’ll see companies adjusting staff,” Fields said of possible layoffs.
Veteran recruiter Terry Malouf chose to go into bicycle industry recruitment for a simple reason. “I came from high technology and venture capital,” Malouf said. “I wanted to find something not so volatile. I’m not very surprised that things haven’t slowed down [in outdoor recreation].”
Malouf believes one reason why manufacturers won’t unload personnel is how they’ve run their businesses during good times.
“Bike people are used to slim margins,” Malouf said. “Bike manufacturers are used to operating pretty lean.”
Frank Whiting of The Whiting Group, another recruiter, said the bike industry is weathering the economic downturn better than the other industries he serves including outdoor and surf and skate.
“The skate industry is just getting crushed,” he said.
Whiting admitted, however, that he’s not seeing a lot of hiring.
“I’m seeing more critical hiring, infrastructure hiring—to strengthen operations,” he said.
One company seemingly going against the grain on the hiring front is Scott USA. The company has been filling positions in its marketing and sales departments within the last month.
Scott Montgomery, general manager and vice president of Scott USA, said he’d like to add a couple more positions, but will wait to see what the first quarter looks like before looking at résumés.
Advanced Sports, Inc. added eight employees last year, with six of those hires in the fourth quarter. “We’re also still looking for a Web administrator,” said Pat Cunnane, ASI president.
After laying off a few employees early last year including sales director Kevin Cox, Giant Bicycle has been on a bit of a hiring spree as of late, bolstering its product development team in December with three new hires.
“We just put out a call for three new positions,” said Patrick Vanhorn, corporate communications manager for Giant Bicycle. “Where we think we can make strategic growth, we’re adding positions. We’re still very mindful of the bottom line.”