What has the King of Tonga got to do with Recruitment Agencies?

I think we have all accepted that Social Media and the In-House recruitment model have taken root and we need to adapt our recruitment agency offering accordingly.

Does this acceptance mean that a large part of the £20 billion per annum spent on agency recruitment will disappear? The answer depends on to what extent agencies evolve new services to generate new revenues that will replace those that will inevitably be lost.

So what might Recruitment Consultancy look like going forward?

New Services:

Agency recruitment has traditionally been a single outsourced function. Your clients are now exercising the option to take that back in-house. However there are new challenges they will face. These challenges are actually bi-products of the very changes that triggered the move back in-house in the first place. They include: fast-evolving social media, software, technological and cloud based recruitment tools. We may also see: agency licensing, professional qualifications for in-house recruiters, national recruitment agency networks, global recruitment agency alliances. In 5 years time there will be many more. If your client wants to remain recruitment-competitive they may well seek expert help in choosing and integrating the best resources. Are you equiped to provide it?

Greater Accessibility:

What Agencies must also do is overcome market fragmentation and become more accessible. We need to create a supply side where 1000s of great agency recruiters no longer have to shout to be heard.

Due to the nature of the job, the way you are rewarded and zero barriers to entry, fragmentation is inevitable as Recruitment Consultants ultimately seek and value their independence. However there is a possible solution.

The one-stop Recruitment Network who's members cover: all Recruitment Agency sectors, Contractor management, Social Media consultancy, HR consultancy, In-House consultancy, New Product reviews and Global recruitment solutions offers the client an accessible resource that meets all possible needs. It also goes a long way to removing the now redundant PSL.

Like the King of Tonga ruling a tiny kingdom may not be what it once was.

The Word is not Enough!

Recruitment Consultancy in most peoples’ eyes involves the successful introduction of a candidate to a company resulting in an agency earning a fee.

But this isn’t Consultancy!

Consultancy is about providing advice, in this case about how to best approach recruitment, irrespective of where the candidates eventually come from.

In the old days the way you best served your client was by finding and delivering the right candidate. Nowadays, in spite of the fact that agencies are in a shrinking market, fortunately there’s much more to talk to clients about.

The options and choices hiring companies must consider to remain recruitment competitive are complex and demanding: In-House? Agency? RPO? ATS? Facebook? Twitter? Mobile?

Consultancy is about helping these companies get the best blend of resources, optimising their effectiveness and syncing them with internal resources. It’s about delivering the best recruitment outcomes.

Recruitment is evolving.

Calling yourself a “Consultant” is not enough.

If you choose to do so, you have to become a Consultant.

Don’t complain about agencies if you haven’t given enough thought as to how you use them.

One of the problems with using agencies is that there are so many of them and they’ll all tell you how good they are. So what you’ve done is adopt a PSL and engage with a few good suppliers and block the rest out….. Is that really the way to get the best out of the market?

That was fine in the 90s but the world has moved on.

Now you’ve got smart phones, LinkedIn, In-House recruiters, you download music, cars run on electricity and Man City won the Premiership….come on things have evolved! The way you use agencies must evolve too.

Inflexible models like the PSL must give way to faster, leaner, better agency recruitment mechanisms in the same way newspapers have given way to online and desktops are yielding to tablets.

I’m not suggesting you don’t have relationships with agencies but working with 25 agencies paid purely on results, on a PSL is the worst of all solutions for all concerned.

So if there’s a part of your recruitment you’re going to use agencies for:

1. choose a single recruitment partner,
2. take your time finding them,
3. pay them on a monthly retainer,
4. review the relationship as you would any company employee and
5. let them optimise the outsourced element of your recruitment by:
1. working alongside your In-House team,
2. complementing your social media strategy,
3. monitoring new recruitment tools and processes,
4. partnering with and managing external agencies and
5. developing a global network of potential suppliers.

Remembering that the external agency market is huge by comparison to a company’s In-House recruitment team, clever management of that external resource could pay huge dividends in a company’s efforts to hire the best available talent, at the right price and in as timely a fashion as possible.

Licensing – The 10 Commandments

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The recruitment agency sector is a broad church facing unprecedented challenges on all sides. Now is the time for every Recruitment Consultant who cares about the industry to step forward and help shape change from within.

In order to achieve change I believe the current representative bodies (IOR, REC, APSCo and others) plus the government agencies (GLA, EAS and others) plus the growing number of networks (IRG and others) should harmonise their individual policies around a set of broadly accepted, fundamental principles and in line with current legislation.

The “stick” would be provided by the above mentioned bodies issuing revocable licenses to Recruitment Consultants and promoting the benefits of Employers of using licensed Consultants only. The “carrot” would be the raising of standards, strengthening of value proposition and the improvement of the industry’s reputation.

If you wanted to effect change, what would your 10 Commandments be?
Here are mine. 

1.      All Recruitment Consultants (you) must pass a common entrance exam covering law, best practice and compliance before receiving a license.

2.      All Recruitment Agencies (firms) should self-certify that they and their Consultants comply with the relevant licensing obligations for that year (they may change from year to year) and make themselves available for inspection

3.      You will send a summary of “Expectations and Rights” to every candidate you represent.

4.      You will not send a CV unless you have written authorisation from the candidate regarding both that client and that job.

5.      You will provide timely and honest feedback to all candidates you choose to represent.

6.      You will send a summary of “Expectations and Rights” to every Client you work with.

7.      You will agree and sign Terms of Business with all clients prior to submitting CVs to them.

8.      You will not advertise a job unless you have written authorisation to do so from the client regarding that job.

9.      You will represent all jobs in writing accurately.

10.  You will not call anyone for at least 1 year if they have expressly asked you in writing not to call them.

You cannot claim to be professional unless you belong to a trade body!

The thing about …isms (sexism, racism etc) is that the attitude spreads rapidly amongst stupid people who believe their status is enhanced by it. So for example a sexist remark, enforcing the speaker’s sense of superiority and the victim’s inferiority, is quickly adopted by stupid men (mostly, although it could equally be stupid women) as a kind of peer group position.

The same is true of “recruitmentism” as exemplified by various HR bloggers including Neil Morrison who refers to Recruitment Consultants as “the gutter rats of business”. The HR community quickly adopts this position as a way of falling in line with “HR thought leaders” without thinking for themselves how insulting it is to the many perfectly good Recruitment Consultants who perform a valuable service.

As with all … isms the solution is education. Recruitment agencies and their representative bodies need to educate and inform the marketplace about: what they offer, how they add value, how they intend to maintain professional standards, how their Consultants are developing themselves professionally etc etc.

Over time this will make a huge impact on how the market views recruiters but will not work unless it is done collectively, as one industry and as such will require leadership by the IOR and other bodies and most importantly the overwhelming support of all recruiters.

If Recruiters really want to do something about how they are perceived in the marketplace they must join or form groups that can truly influence change. Personally I’d join the IOR as they have a progressive agenda. Annual membership for a Consultant is only £49! thats less than dinner for 2 at Pizza Express!!! 

http://www.theior.org.uk/ior-membership?r=member

But if you don’t join any group I don’t think you can claim to be “professional”.

6 factors that will shape the agency sector.

In spite of the fact that agency recruitment is under attack on all sides I have no doubt it will survive if only because agencies are “independent” and able to supply any employer whereas in-house recruiters are not. This critical distinction is what agencies should now focus on whilst building candidate-orientated as opposed to client orientated businesses.

The days of working for “clients” who don’t return your emails, don’t pay you on time and regard you as a necessary evil, to quote some of the recent LI discussions posted by embattled recruiters, are over. Now is the time to take back control.

1. The SME market.
   Ask yourself the question: Why do employers use agencies? The “It’s easier than trying to do it ourselves” reason seems to be evaporating as many employers find ways to engage and attract new hires directly. But is this true of all employers or are the well-known brands enjoying the benefits of social media recruitment but in fact the less-well-known employers are lost in the ensuing noise. The agency sector must use its unique independent status to offer the SME sector access to candidates.
   
   
2. The Candidate’s the Client?
   Are employers clients or are candidates clients? What I mean is who do you represent? A Sports Agent will represent his/her client the sports person. So if Wayne Rooney goes to City, his Sports Agent will represent him and City will pay the Agent. Exclusive candidate representation is the way forward which will give agencies a much stronger position in the recruitment process, allow them to deal with any end-user and provide candidates with a better service.
   
   
3. Social Media.
   How does SM work for agencies? Recruiters needs to build and engage with their candidate communities using high quality, relevant content and their independent status to attract candidates who want to understand what’s happening in the fast changing SME markets. Those that are best at it will attract and work with the best Candidates.
   
   
4. Competitive pricing.
   The issue of fees is a tricky one because all agencies feel that they work hard for their revenue whereas many employers think the opposite. It’s the Pied Piper story all over again and we know what happened there! The truth is that agency fees can only fall sustainably if agencies are able to: reduce operating costs and/or increase candidate placements. Building SM candidate pools and joining new channels to the end-user market provided by 3^rd party websites will help agencies become more competitive.

5. Education.
   This is tied up with number 6 and is all about raising standards and being seen to raise standards. Not investing in the CPD of recruitment consultants is a false economy. It’s about individuals taking time out to learn new stuff and being progressive as an industry. Education provided centrally also helps get the industry on the same wavelength.
   
   
6. Leadership.
   Someone needs to find a way of representing the interests of both the bigger players and the thousands of small firms that operate in the market.  They also need to energise and unify the sector by rolling out initiatives designed to help agencies evolve. Recruiters have endured years of poor or zero representation and so winning back their support and subscriptions is challenging but nevertheless an essential part of taking a big step forward.

Agency recruitment needs a game-changer like the Internet!

Most people don’t address the “what if” scenario until it’s too late: what if the banks go bust in Spain, what if global warming melts the ice caps and what if Zuckerberg has a Ratner moment?

The big problem with such scenarios is that the outcomes are usually catastrophic.

A similarly dangerous scenario is converging on the agency recruitment sector and yet nobody within the sector seems to be taking any steps to avert it. Why?

The first problem appears to be that Recruiters don’t think there is a problem! They broadly accept the market is changing but are reasonably happy that the outcome will be the survival of the fittest (that means them) and the extinction of the mad, bad and sad.

The second problem is that Recruiters (In-House and Agency recruiters) are reluctant and even suspicious of new ideas and models proposed by 3^rd parties. I bet there are fewer than 10 Agencies/In-House teams in the UK that have someone monitoring emerging new recruitment products and services for value.

And finally the third problem is that the industry does not have an innovative and representative leadership. We need leaders who consider the "what-if" scenarios and find solutions to the problems now being faced by every recruitment firm in the UK, Europe and Globally.

If nothing is done the most profitable agencies will probably survive but there will be a lot of pain for everyone along the way and you’ll continue to do the same things you’ve been doing for the last 10 years but in a much smaller market.

I believe doing nothing is not the answer and agency recruitment needs a game-changer or two! We need something that only agencies can offer and which employers will find irresistible - like for example the internet!

Everyone knows what the internet is: It’s a collection of inter-networked computer systems that spans the globe. It’s the "system", offering huge efficiencies in terms of time, reach and cost, upon which progress and change seem to depend. Think of Google, Skype, Facebook and Twitter; none of these would have evolved without the internet.

If we could create the same type of "system" using inter-connected recruitment agencies around the globe, you’d have the recruitment equivalent of the internet to offer your clients and the best bit is that only the agency sector can offer it. All we need to do is connect it up!

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