No-one with even half an eye on the employment marketplace over the past five years will have failed to notice a material shift in the balance of power and influence between employers and recruitment agencies. This is as a result of a multitude of factors, but mainly the following in particular.

Let’s take them one by one.

The financial crisis caused a seismic collapse in the recruitment sector in 2008 and 2009, and continues to restrain spending and growth. i.e. Far fewer jobs to fill, and a serious resistance to paying sizeable recruitment fees to agencies.

Advances in database technology, cloud computing, and hardware, all at considerably lower costs, has meant employers and Human Resources have the ability to do so much more themselves, rather than contracting out.

Social Media: LinkedIn (in particular), Twitter and Facebook have opened the curtains on the kind of networking, or black magic, that only commercial recruiters were previously able to indulge in.

These developments have led to the enormous boom in demand for In-House Recruiters. This is not simply poacher-turned-gamekeeper, where a good recruiter can save an employer his or her weight in hefty recruitment fees, but that those factors mentioned above are far better combined seamlessly and strategically within the confines of the company.

Wasting MoneyAt the Innovation in Recruitment Summit last week, (a recruitment conference largely attended by world-leading in-house recruiters), some of the best known and largest brands in the UK told us precisely how they have succeeded in dramatically improving measurable recruitment metrics, whilst dramatically cutting costs at the same time. Attendees included Allied Bakeries, Lloyd’s Register, Barclays Bank, Santander, Virgin, Hertz, Enterprise Rent-a-Car, IBM, Autodesk, Travis Perkins, Astrazeneca, eBay, Rolls Royce, Sony and SAB Miller. Some have managed to virtually exclude recruitment agencies from their processes entirely, whereas others had found ways to make much more intelligent and effective use of agency expertise. Such was their depth of forward planning, that it was often seen as a failure of the processes and a last resort, to have to bring in a recruitment firm, after other avenues had been exhausted.

I for one, do not believe for a minute that this is the dawn of a new age, where recruitment firms become obsolete. Instead, it’s a sharp reminder that the recruitment sector has always been a precarious one, which is continually evolving. Firstly I should state that this is not happening everywhere. There are still plenty of employers, probably including your clients, who have no plans or ability to go down this path. However, I do believe that a critical mass of employers could be reached soon, and the established agency model will be challenged. We are already working, and billing, in different ways, and have experienced all flavours of PSLs, RPOs and the like. Thus far we have been able to bring to each model our intimate knowledge of employment market, which even the most proactive and social media savvy employer would struggle to achieve. Recruiters who deal directly, and personally, with jobseekers before they have even entered the marketplace, have detailed, and always up to date information that job boards, and even LinkedIn could not replicate.

Strategy (stefan.erschwendner via Flickr)So how can progressive, cost-conscious employers get the candidates they need, own their employer-brand, plan strategically, and have access to that market pulse, which only recruiters have? By a closely tied partnership with a professional proven recruitment firm. Call it Recruitment Process Insourcing if you like (which is not a new phrase). Delivery can be more virtual than you might imagine, so not necessarily onsite, but the recruitment agency is tightly integrated with the employer, and acts AS the employer in the search and attraction process. All candidates attracted are exclusively within the employer’s talent pool, and not registered with the wider agency for placement elsewhere, the employer brand is maintained seamlessly, and the causes of so many recruitment inefficiencies are driven out. Let’s face it, the recruitment agency’s brand has rarely really been that important to candidates, so removing it from view is no impediment. In fact, responses to job adverts are shown to be on average 4 times the volume when employer branded, as opposed to an anonymous agency advert.

This of course, isn’t the full picture. You’ll have to work out for yourself how this changing landscape affects your firm. Mark this though; the tide is turning, and you’d better be on your toes to not only succeed, but even just to remain in business.

Firefish-Logo300x150I am currently working alongside the very excellent FireFish Recruitment Software, in Glasgow, evangelising on their behalf, and helping bring their products to a much wider audience. – See more at:

Stephen O'Donnell is a lifelong recruiter, internet enthusiast, fadgadget and peripatetic writer.

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