Hardly a week goes by without some ‘expert’ trumpeting the death of agency recruitment or a technology startup predicting the ‘disruption’ of our industry, and how recruiters are an endangered species.
Really? Who exactly? And when exactly? Didn’t LinkedIn promise that, what, a decade ago? We are still here. Growing in fact.
Agency recruitment is not a dying industry. In fact, despite what you read, our prospects have never been better! We must re-invent and evolve, for sure, but where we are going, if we get it right, is a far richer, more intellectually stimulating future than anything we have seen before.
To be clear, I believe the recruitment industry is on the cusp of a new golden era. The opportunity for companies to grow and make profits has never been better. The opportunity for individual recruiters to make money and forge fulfilling careers is back on the table. But not for everyone. In fact, most will not ride this new wave of prosperity and fun. It’s an opportunity, not a right. The smart and the quick to adapt will thrive. The rest, not so much.
But, why do I believe agency recruiters have the world at their feet, if they make the right strategic and tactical decisions?
For years now we have been running scared because of the rise of in-house recruiters. And hardly a week goes by without some head of internal recruitment trumpeting how they have reduced agency spend. And that reduction is no doubt true and felt by many of us. But increasingly, the evidence is that all is not so rosy in the in-house world. Reducing agency spend is one thing. But what about key metrics such as ‘quality of hire’. Line managers are reporting a drop in quality of candidate, and that is holding business back.
And what about ‘time to hire‘? The internal team saves an agency fee, but it took them six months to fill the job? What was the cost to the business of that delay? And then, what about your employer brand if your processes provide a horrific candidate experience, which many corporates do. What does that cost? In money, in future candidates and in customers?
There is no doubt that we are seeing a shift back to clients realising that the time and infrastructure required to recruit high-quality people at short notice does, in fact, need agency expertise.
So, the effectiveness of in-house is being tested and will come under the microscope even more as talent shortages start to affect corporate results. So, I believe that one of the biggest barriers to agency growth – in-house teams – will become less of a threat. But only if we are able to provide our clients something they cannot get themselves. We have to do what in-house cannot do. And that is mostly to do with accessing specialist talent.
Technology recruitment solutions have been popping up almost weekly it seems, all claiming to be able to wipe out agency recruiters. Many have come and gone already. Others, such as LinkedIn, pose a much more credible threat. But none of them, LinkedIn included, have come close to wiping out third-party recruiters. And bear in mind, LinkedIn has been around for 12 years. Longer than most of you reading this have been in recruitment! LinkedIn is not a startup deserving of time to ‘get it right’. In fact, frankly, LinkedIn has as many issues to address about their business model as recruitment agencies do. More maybe.
And our industry has not suffered since LinkedIn came along. In fact our industry just grows and grows. The global staffing industry is worth $440bn and growing at more than 5% a year. The US temp staffing numbers have just hit an all-time high, with 2.9m temporary workers placed through agencies every day. The Australian recruitment industry is worth $21bn. And many of the digital, technology-driven recruitment disrupters, who started with a hiss and a roar while no doubt carving a niche in some cases, are clearly no significant threat to our model.
Don’t get me wrong. I am not dismissing the impact of technology on our industry and on agency recruiters. I call these companies ‘high tech/no touch’ recruitment matching models and they will take some business, mostly low-level, but in my view they will do our broader industry zero real harm and there is one key reason: Talent is not an online commodity. Identifying candidates is not the same as recruiting them. It’s the ability to bring talent to the hiring table and manage the process that clients will pay us for. And that leads me to the core reason why our industry is approaching it’s best ever era.
Sustained, epidemic shortages of skills and talent required to do the jobs, many newly created, is what society needs. Skill shortages are already upon us and they will get far, far worse. And skills shortages are nirvana for us, if we become world champions at finding talent! There are endless stats on this topic, but suffice to say more than 50% of global employers are currently reporting talent shortages. And crucially, they say the shortages significantly impact their ability to meet their client needs.
Each industry and sector already has a list of niche skills that are in short supply, and this will intensify over the years ahead and the impact is being felt right now. Meanwhile, ITCRA reports that the time it takes to fill IT contractor roles doubled in the last three months of 2014, as the search for quality contractors intensifies and this costs companies money. And this is only beginning.
Talent has become the epicentre of competitive advantage. In fact, talent is now the new currency of wealth creation. It is what makes companies win or lose in the market, and it’s what will make entrepreneurs rich. Or not. It’s a differentiator. It’s non-negotiable. You must hire the skills. And that, ladies and gentlemen, means agency recruiters are back! Skills shortages and the currency of talent alone means huge opportunities for third party recruiters.
On top of this, technology has changed the way candidates look for jobs. They have literally dozens of channels including job boards, company career sites, social media, and increasingly, search engine job searches.
So, the best talent will know their worth. And they will also know how complex the job search has become, how time-consuming and what an invasion of privacy it can be. And if agencies are good enough to provide this option, they will come to us because we can act as their agent.
It’s now crystal clear that many of the standard talent-sourcing channels, that most corporates use, are becoming increasingly ineffective. Job boards are still a major source for hires. Don’t get me wrong on that. But they only tap into a very active group of jobseekers and more importantly, jobseekers are getting sick of them, favouring new ways to connect with new jobs.
LinkedIn is waning in effectiveness in my view. In many ways, LinkedIn has actually weakened the efficiency of the recruitment function. It’s now more difficult to connect with qualified talent, because LinkedIn has made data so available, the best candidates get swamped and they get approached in such an untargeted way. Technology can help you identify talent. But human beings recruit.
The recent decision by LinkedIn to limit InMails is clearly in response to many of it’s members being inundated with recruiter spam. Many of the most qualified individuals are actually going out of their way to make themselves harder to find! There is now a perceived advantage in privacy. And in my view, 2015 marks the beginning of an era where we return to ‘the relationship’. All-digital recruitment does not work.
The fact is power is shifting to the candidate and if it hasn’t in your sector yet, it no doubt will do. And in a candidate-driven marketplace, waiting for them to respond simply does not work. It changes everything. Relationship-building and candidate experience become key. We think all of this is a problem for us agencies. But it’s a massive problem for companies who want to hire direct. Their old strategies are not working either. So what are they going to do now? Well, they will look for outside help. And we need to be ready. Match-fit. Primed to respond.
And that means one thing. Recruitment companies have to become world champions at finding unique talent. We have to create candidates. We have to be skills hunters and talent magnets. And that is going to take a change in mindset for many of us. We have to be innovative and sophisticated in developing a wide variety of tactics to drive candidates into our talent funnel.
And to do that, recruiters have to behave like marketers. Yes, marketers. But more on that later….
By Greg Savage
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Read the original article here
Through a career spanning 35 years, Greg Savage is a leader of the global recruitment industry and is a regular keynote speaker at staffing conferences around the world. Luckily, Greg has some exciting events coming up in Dublin for both enthusiastic recruiters and business owners:
Social Talent presents Greg Savage in Dublin: A Recruitment Masterclass
Social Talent presents Greag Savage in Dublin: Masterclass for Recruitment Owners and Managers
