Selling a commodity or providing a service?

Human Resources ….that’s what we’re all called. We’ve got feelings and can be unpredictable but in commercial and economic terms we’re just another commodity.

So are recruitment agencies selling a commodity or providing some other service?

If we’re paid on results it sounds like we’re selling a commodity against other competing suppliers and with no guarantee of being paid. Yet bizarrely there is no single market for this commodity just a multitude of unconnected PSL mini markets. That doesn’t sound very efficient and where there’s inefficiency costs are high!

If you provide a service, shouldn’t you be paid for the work you do and not just on results? In-House recruiters have replicated what agency recruiters do but are paid salaries not fees. Now agencies should replicate what In-House recruiters do by charging day-rate not fees. This is both commercially and morally right!

In fact I believe the future of agency recruitment lies in providing both commodity and service offerings but first we need to make some changes.

If we’re selling commodity we need to build a market that is capable of connecting demand and supply quickly and efficiently. This will allow Employers to source some of their more straightforward hires from the market immediately rather than having to wait around until their recruiters, In-House or Agency, has gone out and found them. This is something that In-House recruitment cannot replicate.

If we’re going to provide a service at a day-rate or project price we must offer more than just the recruitment of candidates. We must build and manage a client’s recruitment function including: tools, templates, training, branding, social media platform, employee referral schemes etc. It’s about providing recruitment consultancy in its most literal sense.

At the moment the traditional recruitment model is beginning to look unfit for purpose. It’s neither one thing nor another. It’s neither efficient commodity market nor high-value consultancy provider. It’s based on fees which are too high because the PSL model is inefficient, it offers no USP the In-House model cannot match and it is beset with service quality issues at the bottom end.

If Recruitment Consultancy is to make itself more desirable it will need to redefine its USPs and to do this will require both an individual and collective effort.