Recruitment agencies threatened by internal recruitment trend
02/06/2011
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Recruitment companies need to build a closer relationship with a qualified talent pool if they are to survive the current shift towards internalised recruitment, according to leading recruitment executives.
Greg Savage, CEO of Firebrand, told shortlist.net.au at a recent RCSA breakfast that recruitment companies need to focus on their competitive advantages if they are to survive.
"There was, in the glory years, a period where a company's default action was to go to a recruiter, and I don't think that's the case anymore. Their default action now is to build in-house recruiting teams or technology or go to job boards, so we've got to offer something different," he said.
Savage said that clients had developed a far better understanding of how recruiters work, and to stay relevant, external recruitment companies would have to offer insights, specialisation and access to hard-to-find talent, not just resumes.
"I think the vast majority of companies are trying to figure out a way not to use third party recruiters like us at all. And I think what that means is we have to come up with a different offer to what we previously have been successful with. I don't think clients will accept the service they accepted before," said Savage.
"We're doing this 365 days a year and [clients are] not. We should be able to build communities of talent that we can tap into, that they can't," he said.
Bakers Delight is one company that performs the majority of its recruitment activities in-house. Gabby Kelly, group development manager and franchise recruitment for the company, said they believe in maintaining high franchise recruitment standards to ensure business success.
“A key advantage of internalising recruitment is being able to maintain full control over the recruitment process which ensures we can provide timely and appropriate training to prospective franchisees and recruit operators that are a good fit for our business,” she said.
“In addition to understanding culture, keeping the recruitment process in-house means we provide prospective recruits with a clear expectation of what is required to succeed prior to embarking on a career with Bakers Delight.”
Vaughn Paul, director of human resources at Optus, told Human Capital recently that their recruitment process is in-house, but they have preferred supplier agreements with a number of trusted agencies working for them. He said it’s important that agencies build a trust with their clients over a longer term.
“It would take a lot for us to outsource our recruitment function, because it’s so core to the brand. If you’re managing thousands of jobs like we do, you can’t manage directly, you’re going to have to go through agencies, but it’s more a case of agencies that you can build a long-term relationship with, they know the culture and they find the right fit for you.”
Mary Pratt of recruitment agency Talent2 agreed that agency recruiters need to focus on their relationship with the talent pool.
“Agency recruiters are the nucleolus to attract talent; they are the ones who work like Trojans to build networks of people not only within the country, but globally," she said.
"[They are] the ones who can in one meeting sit with a distressed CEO… pick up their phone, scroll down, make a call and hey presto, star talent is introduced, stress is reduced and the CEO is back on track to building the business.”
Pratt said another pitfall for agencies is the lack of regulation: “In the UK, [there are] certain standards and accreditations such as the Recruitment & Employment Confederation, but there are absolutely no qualifications required to be a recruiter or open up a business [in Australia], which is madness,” she said.
Latest Comments
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Jason Murray - Rookie Recruits on
02 Jun 2011 01:14 PM
I have to agree that the days of the generalist recruiter being able to charge 15% for sending a client a whole bunch of resumes is LONG GONE ! If you are not able to add some extra value, really get inside the head of the client & recruiting manager and match their needs quickly and effectively then you will not be long for this world. At Rookie Recruits we specialise ONLY in career start talent and offer a 12 month coaching & mentoring program at no additional charge, in fact, you will typically find us to be more competitive than a generalise recruiter, We achieve this price point through the use of systems, technology and a few other smarts (that I can't tell you about). The message from our preferred employers to generalist recruiters is simple - ADD MORE VALUE OR GET OUT OF THE GAME !
Paul.M on
18 Nov 2011 12:03 PM
We recruit internally. The time and cost to get 5 people through a recruit agency is the same as 1 years remunaration for a fulltime employee. I would rather the recruite the 5 people myself (in 4 weeks p/t) and the money I have saved I can then put on a fulltime employee for 12 months.
Regards
Paul.M
Jack Feeney (Management author) on
24 Nov 2011 01:36 AM
Interesting development but not surprising. Integrity is the new paradigm for business success and this is something missing in the majority of Recruitment Companies. It may seem over-simplistic but simply telling the truth in business is crucial. It's not all Recruitment Consultants that are untrustworthy; it's just the majority of them. Recruiter Culling may ensure that the ones who remain are trustworthy.
Kris A on
28 Nov 2011 03:02 PM
I have worked in corporate HR and within a recruitment agency. I refuse to use agencies as I have found that regardless of the promises made, agencies are not able to provide the level of care to candidates and the internal contact that is required. The number of times that I have received a CV that is sold to me by an agency as being a fantastic fit for the role when it is clear that the candidate does not have requisite skills set or experience is astounding. I do not believe that the majority of recruiters employed in agencies are high quality HR staff - my experience has been that they are sales people with a bit of HR knowledge. Add to this the exorbitant amount that is charged to the client for the introduction to the talent (upwards of 10% of total package for a basic admin role, not to mention to the 17% plus for a more senior role) and it makes good financial sense to have your trusted HR manager control the process internally.
Rod Dalton on
29 Nov 2011 08:24 AM
Yes I am a recruiter. Let's get that out of the way first.
I have to agree with the criticisms of the comments above regarding integrity of "some" recruiting agencies, but please don't put all of us in the same basket. My company, Sydney@Work only put forward candidates that meet our client's brief. We do not send resumes (although we do provide a very cheap "advertise & screen" service for that market), but rather send profiles and only 3-4 if we think the candidate is suitable. Our Clients testify to this.
Advantages of using a recruiter vs advertising yourself include:
- access to greater number of candidates via database search, other similar roles being advertised, cross-referencing,
- experienced writing advertisements and knowledge of effective search words to be used in adds,
- less candidates respond to private advertisers due to fear of rejection and pre-conceived ideas of the company advertising,
These are just a few reasons to use a recruiter WITH integrity.
Dan Sawyer on
29 Nov 2011 03:01 PM
As a career recruiter I understand both arguements well, but I actually believe that using an external recruiter does attract more candidates. Often we are more honest when answering questions about the culture and role than the organisations themselves, plus I often get asked as first question "how much is it paying?". You don't ask this when applying directly for fear of an instant relegation to the 'NO' pile.
My candidates often tell me afterwards that the position is a lot easier than I explained, because I hate getting the call that the role is nothing as explained. I put up the hurdles early. Companies can't. I go out and target top staff from competitors. Companies can't. I tell the truth, when companies can't.