I’ve worked in and around recruiters for the last 30 years. I’ve been a director of a national recruitment business, and up to 3 years ago all of my career had been in third-party agency sector. the last few years nearly all of my clients have been corporate, because the corporate sector has been quickest change, but I’m not by any means anti-agency, or one of those ex-recruiters taking a pompous attitude about those recruiters who are still running a desk. I write this post because I’m concerned for the future of some of the recruiters out there who are showing no sign of change despite what the market is telling them.
this isn’t about social media, or the really slow adoption by some recruiting firms. The big challenge is coming from direct sourcing particularly in the EMEA region. Most of the businesses I know who have historically used external recruiters for the majority of their hiring are starting to look at bringing recruiting in-house, Whilst it is easy to think that this is all about reducing the cost of hire, the answer is a bit wider than being just about the £’s or $’s. If that was the case, the low or flat fee recruiters who have set out to buy mass business by slashing margins would be doing much better than they appear to be when you cut through the hype. I know very few businesses who feel this offers them that much benefit, cheap is rarely little more than that.
The 4 issues they are looking to solve by bringing recruiting in-house are:
> Maximizing employer brand and telling their own story.
> Value. If you are offering little more than a CV service then how can you justify the fees?
> Pipeline. sourcing beyond immediate needs and forward planning. Building relationships now.
> Staff referrals. Seen as the best source of hiring, now extended by social referrals.
This doesn’t mean however that they wont use an agency for hiring, they just won’t make you their first port of call. You can continue trying to justify why you are different and do more. i know all the arguments. I’ve made them enough times in the past, or you can look at what companies are willing to pay for, and position yourself to offer it. What hiring companies are willing to pay for are:
> Expert knowledge of the market to offer real advice. Being a real expert means being immersed in the market you recruit in, making connections who can keep you current, and being a real consultant rather than a salesmen.
> Building unique relationships so that you can offer candidates they can not reach through conventional sourcing.
> A real network rather than a candidate base.
You need to be in a position to offer knowledge and candidates these companies just can’t access, and that means building relationships, moving from recruiting as a transactional sales process through to having a real network in the niche you recruit.
I hope agency recruiters can make that change, looking beyond the sale now mentality, and make the changes whilst they have the option.
Bill
Norton Folgate: The Recruiting Unblog 
I agree but this isn’t exactly new ground you’re treading here Bill, many, many of us in the indsutry have been saying the asme thing for years now.
Thanks for all your comments. Matt, I agree this is not new, but from an agents point of view the impact of direct sourcing is getting a lot more acute. A bit like the candidate experience argument, it has been talked about a lot, but little is changing yet.
Thank you Bill for this.
Don’t you think external recruiters (agencies) will continue to exist mainly because companies don’t have the time / money / will to do it themselves?
In my opinion, companies are willing to pay to get the right candidate quickly and without too much effort.
i think this is switching from the majority of companies through to a few companies now that need time/money. What they actually need is time and money, and this is sadly lacking.
@swissherve I think that was true a year or two ago but things are changing very rapidly now. There has been a large amount of internal reeducation taking place and companies are learnging that the percieved amount of time it takes to recruit is actually something of a fallacy. A good internal recruiter is oftentimes going to be quicker then an external and the time sapped by talking to a consultant who is constantly trying to sell, arrange a meeting and build a relationship is what really takes up a big proportion of time.
The big switch for me matt is from job by job recruiting as with the agency to the longer term approach.
Whilst this has indeed been said for sometime, the shifting whispering sands of change is definitley in the ‘here and now’. Not only of client and candidate expectation shifts but happening at the same time of shifts in technology, cloud, search, big data, digital & mobile and not least, a generation shift. What worked in recent years cannot work in future – in most things not just recruitment.
What hits the nail on the head from Bill’s post is “building relationships, moving from recruiting as a transactional sales process through to having a real network in the niche you recruit”. Master the real connected network in advance of even a job requirement, then you have a 3rd party recruiter future and that future is already upon us.
It’s actually like working the days before say 1995 and therefore it’s kind of ‘back to the future’ except without the phone. So in those days I was a recruiter but one day, and I’m not sure when, someone called me ‘Sales’ and then came the en masse CV’s, targets and kpi’s [which were more activity stats than anything to do with performance and value]. But alas, many transactional recruiters today don’t know anything different as they were born into sales as opposed to recruitment – hence so many are completely fixed on the transactional, the next ‘deal’ and are not paying attention to what has arrived already!
It will soon be ‘no u-turn ahead!’ for many!.. and the connected recruiters with real knowledge of their networks – where everyone is hanging out and everyone is a potential candidate , will be certainly on the right track to add that real value required and innovation going forward. And those potential candidates, even the actively seeking Susan’s, will have no reason to just listen to broadcasts of the #me #me #me… and the #job #job #job#… and less likely to send a CV into a black hole. Instead they are more likely to be connected to the clients direct sourcing and referral strategy or their select few ‘a-n-other’ agy’s warm value network. Carpe Diem ahead!
Good post by Bill and good comments that brings things into perspective. Truth is somewhere in between, and I buy into the subject of time being a significant factor that will always mean agencies being around. That said I am finding that I have to spend considerable time in briefing agents on exactly what the culture is about, what good looks like and my specific requirements. To date and counting numerous agents across the world I have come across one (repeat 1) agent that totally gets it and delivers 100% what I need and ask for. The remainder get it 60-75% of the time. The fundamental problem is that very few agents have the maturity and the business understanding to truly understand what a company is about and more often than not rely on a numbers game.
I have just been through 8 agents on 2 different roles and 10 weeks of work to fill two roles that were quite straight forward. Agents came to visit, spoke with me and hiring managers at length, yet still 90% of proposed candidates were not right despite all the efforts made from all sides. Only reason for roles filled was through luck of a drawer. Agents need to up their game, – truly become business partners and move away from the ‘spread and pray model’ and to apply a more in depth business attitude to what they do.
The point i take away from this Jacob is that you are looking for more than you can do yourself, and despite of your best efforts this is lacking.
How will they make this change when the people managing/owning these agencies only know one way of recruiting – which is the same way they learned when they came into the industry?
I suspect the same characteristic that contributed to any success these owner/managers may have previously had, may also be influential in helping them decide if they need to change how they do business.
That characteristic is arrogance by the way.
Change is always slow in this sector until there is no option, i think we might just be there now.
I have to agree with Mitch also. In many cases progress is limited by the willingness of leaders to change and adapt away from a comfort zone and what they know works – or worked in the past – most often where even 100% of revenue still exists in the transactional and is really the camel through the eye of the needle for many. There may be a lot of Kodak moment recruiters to follow!
Mitch and Stephen, don’t you think that the simple law of ‘survival of the fittest’ and those that adapt and change and renew will be those staying, – others will simply fade away. That said it will probably take another 10-25 years by the look of things, – sad but likely true.
I think you are looking closer to 18 months. Change is needed now
Bill
One thing is change needed now, another is when it may actually happen. I think 18 months is hugely optimistic, – if that the case we would see this happening right now with agents having really hard times galore, – is that the picture we see?
As for earlier comment, your assessment as to what I said is not what I meant, – it is about how much agents truly understand my business and needs not to mention culture. If that would be the case I would have to spend less time teaching them and correcting their directions which due to lack of understanding is 30-40% out of sink.
Hello all
Innovation is a continuous evolving matter and we see some big transactional fish around today. Survival of the fittest is interesting. But of the dinosaurs, a seismic shift was introduced to the normal rules and whoosh – shift happened! In our case that is a digital age, mobile, search, big data and on top of that a generation shift – indeed a perfect storm [described perfectly by Andy Headworth].
Regarding adaptation and change the time is now or sooner for many Kodak moment recruiters. This is indeed not doom but an opportunity for the experience Jacob has had with some recruiters to be fixed. That last Jurassic period in recruitment terms, was 1995 to now and I call that the era or the en masse CV and job-boards ~ produced lots of transactional recruiters than never learned [as in the previous era] or had time to develop, the skills to listen, learn and be consulting – exactly what deserving clients and candidate require.
Clients and candidates expectations are now shifting – indeed in every industry not just recruitment. Those not already actively doing innovation and adaptation [seeking ‘how to be’ and not ‘should we be’] e.g., doing more of inbound attracting and moving away from the transactional broadcaster of jobs and CV’s, to being ‘engagers of community and pipeline’ in advance of even a job requirement – then it may already be too late for them.
There are many recruitment businesses who are suffering from ostrich syndrome regarding this. Some have told me “it’s cyclical” and things will go back to how they were (uh-oh! someone’s in denial and in for a shock). There are, on the other hand, those who can clearly see the change coming – some are seeing impact on the bottom line from clients who once recruited solely through agencies now dropping to sub 30% of hires through agencies. Spend with agencies will decrease year on year for the next 3-5 without a doubt. Those that don;t change will perish – following Our Price Records, Kodak and others whose business was out of touch with the changing market.
I am pleased to say that there are going to be agency winners from this – those who are currently building new solutions and methodologies to complement what their clients are doing. These practices will become valuable partners to the corporate recruitment teams rather than seeing them as competitors. These business just don’t tend to blog about it every day and share it in open forums. It’s too valuable given the current future of the industry to share it.
Hi everyone ?? I agree with most of your comments but, perhaps, it’s my female point of view but, the art of “listening” is the only element of successfuk recruiting that has not changed and yet vital to understanding what is required !! Whether it be on behalf of the Client or the Candidate?
In my 18 years of recruiting I have had Clients that have become Candidates and visa versa and I feel it’s because of that factor that was included into the business relationship and laid the foundation of honest and upfront communications
Kindest and well wishing regards
Karen Reis