R.I.P Recruitment v.2.0

I have had some really interesting conversations on Twitter recently, many on the future of recruitment. One particular conversation with fellow twitterers @mervyndinnen and @billboorman was followed up by a post from Bill on his Recruitingunblog entitled R.I.P Recruitment, encouraging recruiters not to give up on their industry and insisting its not dead.

Of course it’s not dead! It never will be. People will always join and leave organisations. That will never change. But HOW they find and join organisations – the recruitment supply chain if you like – will change.  Bill, I think, advocates a return to traditional recruitment and a rational, rather than alarmist, approach to the impact of social media on the recruitment industry. And in this respect he is absolutely right. Social media will not kill recruitment but it will, without doubt, materially effect the supply chain, changing it’s dynamics permanently. And a fundamental part of that supply chain is currently the recruitment industry.

As a result, the chances that we will see a wholesale return to ‘traditional’ values of recruitment are unfortunately unlikely.  Don’t get me wrong, these values – building long term relationships, deep understanding of clients and candidates and exclusive relationships – are the bedrock for a successful recruiting partnership.  As both a client and candidate that’s how it was for me, and continued to be so in my first search role.  But by the time I entered the world of executive search in the late 90’s the seeds of change had already been sown.

Fast forward 10 years and the landscape, particularly at the lower and mid market levels up to say £100k base salaries, has changed significantly.  Out has gone the deep, exclusive relationship and those lovely retainers, in has come procurement, preferred supplier lists, faceless portals, non exclusive deals and success only fees.  Competition is fierce and its dog eat dog out there.

My point, in all of my comments and rantings on twitter though, is that what most recruiters don’t seem to understand is that one of the root causes of this seismic shift for the worst is the recruitment industry itself.  It is perhaps one of the best examples of being a victim of its own success. You see back in the 90’s, the recruiting industry got greedy.  It changed the model.  It focussed on hard sales, drove the consultants ruthlessly through KPI’s, lowered basic salaries and cranked up the commission and recruited consultants with less and less experience – with devastating results for the industry and its customers.

As a client I got fed up with calls from ignorant, pushy consultants trying to convince me to see a candidate (despite not having a vacancy!) and refusing to send me the CV beforehand, or threatening to target my people if I didn’t use them as my main supplier.  I could go on.  The worst thing is, this still goes on and those responsible are currently poo pooing the impact of social media, predicting a return to the glory days of growth in the ‘next quarter’.

Well, I’m afraid that’s unlikely to happen.  Things have changed for the recruitment industry dramatically in the last 10 years and it has nothing to do with the internet or social media, and everything to do with the industry’s ignorance, apathy and sharp practice. Granted, there are many still in it who, like Bill, Mervyn and me to name a few, who have always maintained standards.  But unfortunately, despite our efforts, the others took us over the tipping point, forcing clients to embark on a long term strategy to wipe us out of the process.

And what of the future?  Well things will definitely change and the impact of social media will be significant, but probably not realised, until it has passed into the natural order of doing things, to a time when its no longer extraordinary and when we no longer attend conferences to talk about it.

R.I.P Recrutiment?  No.

R.I.P Current Recruitment Business Model?  Inevitable.

I could write more, but my posts are too long already so I think I’ll save it for the Recruiting Unconference!

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7 thoughts on “R.I.P Recruitment v.2.0

  1. Wow, what an interesting post Gareth!

    Yes the marketplace is changing, but so is society. I wrote a post today on my blog, about how different life was pre-gen Y, and how they (gen Y) wouldn’t actually recognise the way we all grew up, because they have been mollycoddled too much.
    The same can be said for recruitment.

    The recruiting landscape HAS changed…..but not for everyone.
    Yes there will be significant change in some areas, due to the 10 gallon cowboy recruiters riding on their four legged bulls***.
    Yes social media will give clients easier access to candidates.
    Yes, you will lose some clients to their own direct recruiting strategy.
    Yes the twat recruiters will always be out there, not understanding what they are talking about, and unfortunately still being a thorn in the side when it comes to winning business.

    But that doesn’t mean we will be wiped off the planet, does it? There is one fundamental problem that still exists in the majority of the companies in the workplace……..they still don’t get recruitment! They don’t understand what it is and how to get the most out of using it effectively.
    So IMHO there will be change, but not as significant as you are proposing. The recession will come and go, and many companies will simply return to type and go back to recruiting staff the way they always have.
    Of course the companies that have embraced the recession and used this time to re-look at their strategies, will most definately be ahead of ant recruitment curve. And yes you may well lose these clients forever, but they will only be a small percentage of the marketplace.

    As always within our exciting industry, things evolve. We evolve, change and just carry on recruiting – after all, what do we do……..host a radio show instead?

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  2. It actually amazes me how many recruitment companies haven’t changed already. I work in recruitment myself, but it’s not your average recruitment role and we don’t really operate like an agency. Because of the way we operate, I’m also occasionally involved with in-house recruitment too (well, once upon a time when business was busier, anyway!) It never ceases to amaze me the cowboys that still exist and ring up touting for business! Now they’re not all bad – some of them listen and some of them know what they’re talking about: Good on them! But there’s still an alarming amount of cowboys out there! I won’t bore you with my stories; we’ve all heard them a million times before…

    Personally I don’t (wholly) blame the consultants. You’re right Gareth; they are clearly thrown into roles and have such demands placed on them that they don’t have a chance in hell of getting to grips with what professions they’re recruiting and what their clients are looking for!

    I don’t think recruitment will die either though. Just taking my employer as an example; even though we ourselves are recruiters, it suits us to use a third party sometimes. We’re a small company and don’t have the advertising budget and buying power of some of the large, national brands. Also, the type of candidate we recruit for ourselves is not the same type of candidate that we recruit for our clients and the approach needs to be different. We can and do recruit directly – we have the skills after all – but sometimes our time is better spent elsewhere. And I don’t think we’re alone – perhaps bigger companies have the staff and budget to do all their recruitment themselves but smaller companies don’t and they don’t recruit constantly either. As Andy says, regardless of this, some companies just do not get it: Recruitment OR social media. And, for certain industries at least, third party recruiters will continue to be the preferred method of recruitment regardless of what’s going on in the rest of the world.

    I think it’s important to recognise that the recruitment landscape is not just changing on the employers’ side too. Candidates too are now getting more savvy to social media and are using it to their advantage. They realise that they can connect directly with companies on Twitter and Facebook and do research on LinkedIn and so on. But, as with the employers, there will always be those candidates who just do not get it too.

    Bill was right when he wrote in his post that we are constantly evolving as an industry. I think things are changing all the time and will continue to change too, but perhaps not as much as they ought, because there will always be a need at some level and there will always be a cowboy or two out there tarnishing everyone else’s reputation.

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  3. Extremely interesting perspectives and timely. As the economy begins its slow rebound it’s likely that most independent recruiters have been thinking about what roles, if any, they will fill int he future.

    It’s a fact that our clients have easier access to candidates but I totally agree with Andy that most companies don’t get recruitment.

    I was told by worried recruiters back in 1997-1997 that the industry had changed and Monster, CareerBuilder and the like would eliminate the need for our business. Some companies did go that direct route and were lost as clients. Some went that route and it didn’t solve all their recruiting needs so they continued to use recruiters for more specialized positions. Still others didn’t want to take over the task of recruiting and went on with business as usual. Recruiting did not die then and it won’t die now. It certainly has and will continue to change…but so will we.

    The revolving door of cowboy recruiters has been with us since the beginning. Fortunately, there have always been enough good recruiters offering real value to keep our role alive.

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  4. Hi folks – thanks for your responses, great thoughts and views!

    Andy i had to chuckle about your radio show comment – i guess we could do that if there is any room left in that market after Bill! I guess when i say the market will change i do think it will be significant but its all about timescales. I dont think you will see significant changes in the next 1, 2 or 3 years but beyond that the pace will quicken signiicantly. But then i would say that as a wannabe futurologist! a lot of companies and individuals dont get it, you are right, but the number that do, that adapt, will increase.

    Interesting comments about the candidate too Wendy. They too are getting more savvy as you say (although it still amazes me how clueless some are, particularly in areas like HR where this stuff is right on there agenda). One thought though is that for a lot of candidates coming through now, unlike me, they dont appreciate or know what ‘tradtional’ recruitment values are – they have been brought up on a diet of jobsites, arms length relationships via web and piss poor management by consultants. There is no romance or alignment there at all which i think could have as big an impact as the client activity. If we dont have the candidates, we dont have the currency.

    Fran, i too remember the predictions of the late 90’s and the hysteria that web 1.0 brought with it. Heady times indeed and a lot of humble pie has been eaten since. But there are a few fundemental differences:

    1) there was no recession then – in fact the rec market was just hotting up
    2) we are on the cusp of a generational change in decision makers which we were not then
    3) ‘connectedness’ – its a new and powerful phenomena, something that was not possible or even a notion back then

    I rmember presenting to some of the countries largets contract recruiters back in 98/99 and asking how many of them thought email would be significant in their business and only about 5% said yes – the rest thought fax would continue to be the main cv exchange method! fax! bloody hell!

    You have all mentioned the client dynamic and i think this is important. I can tell you that since joined the courtenay business 6 years ago i can list at least 10 major blue chip clients, who we had worked for for over 10 years, on a retained basis, with almost a 100% success rate and had great relationships with and who we placed some of their international stars. That work has now dissapeared. No falling out, no failure to deliver on our part, no. Simply an inhouse or RPO strategy. This is not uncommon.

    I also spoke to a good friend of mine at one of the uk’s largest and longest established recruiters – older than us and we have been around nearly 40 years, 1000’s of consultants, £m’s in revenue – and they have now officially designated their recruitment consultancy offering (the bedrock of the business for many years) as an SME solution only. I think this is not only a massive bit of foresight but also very significant.

    Like all of you, im convinced we will still be here, but it wont be in tradtional recruitment roles, making a buck out of a % of salary, winging round CV’s and interviewing candidates in the way we do today, save for the SME clients!

    Great debate, and needs more attention.

    Thanks once again for taking the time to get involved, its much apreciated. We have a strategy offsite session in December and your views and thoughts will definately be shared!

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  5. I haven’t been in the industry as long but even in the relatively short time I have I have seen all the things you talk about, the focus on commission rather than quality of work, the change in the market and that everyone is talking about twitter as the next big thing, the thing that replaces all of us in the industry. As you say it doesn’t.

    I see our role as the ‘middle man’ the ‘glue’ that links candidates and clients together based on trust, knowledge and understanding. Anyway I like what you’ve said, it rings true with my own rants on standards in the industry.

    We should meet!

    M.

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  6. Gareth,
    I have read and re-read your post and the responses. Your reply to my post gave me a lot to think about. Your counters to my opinion that this change was similar to the web 1.0 were like a very cold splash of cold water in my face!

    ” 1) there was no recession then – in fact the rec market was just hotting up
    2) we are on the cusp of a generational change in decision makers which we were not then
    3) ‘connectedness’ – its a new and powerful phenomena, something that was not possible or even a notion back then.”

    I had not thought of those differences before and agree that it does change the game this time around.

    I believe that my focus on smaller businesses will delay any big changes for me. My best clients have always been companies with less than 100 employees and that has held true for the entire 34 years I’ve been running my business. These companies have less time to recruit on their own and usually don’t have the budget for an HR department. Another advantage is that I get to deal with the bottom-line thinker – President, VP, GM, etc. They are involved in running their businesses and not interested in taking the time to “connect” with prospective talent.

    It will be very interesting to follow these seismic changes in our industry. Thanks for giving me another perspective.

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    • Hi Fran

      Thanks for coming back and sharing your thoughts again, its great that you did that. I do think the dimensions are very different this time round but not many seem to see this on first consideration.

      A also agree with your view on the SME market and what it means for you. We are also an SME ourlseves and see the value in the relationships with our own suppliers and the benefits that can bring for both sides. Personally, im hoping that as the the market matures and the changes take place, the SME market will be where many of the good, independent SME recruiters thrive because the big boys, the cowboys and the crud go out of business or leave the SME market alone on the basis its not big enough for them.

      Perhaps one day this ‘connectedness’ will lead to a new way of thinking, a more collective sense of responsibility where we all see the value in working together and with each other instead of just trying to outdo each other and make a fast buck!

      Thanks once again for taking the time to comment.

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