Is there a future for recruitment agencies?

 

The modern day recruitment industry was born in the 1940s as a direct result of World War II.  With much of the working population serving in the military, the positions left behind needed to be filled and once the war had ended, the returning soldiers were in need of employment.  This is where employment agencies came in and the industry took off to become what it is today; an industry not limited to public and private sector employment agencies, but with other divisions including head-hunters and executive search firms.  But with the Euro zone in turmoil, fears of an imminent financial crisis and constant cuts being introduced by the government, what hope is there for recruitment agencies in a time of cutbacks?

 

According to the Office for National Statistics, the unemployment rate in the UK is at its highest since 1996, with 2.62 million people unemployed. Many companies have to keep costs down when it comes to recruitment and some simply can’t afford to take on new staff at all. On the rare occasion that there is a vacant position, companies might choose their own in-house recruitment process rather than opt for a recruitment agency, given that the main rivals, online career sites, generally charge less, if anything, for their service.  The websites “Monster” (launched in 1999) and “LinkedIn” (launched in 2003), certainly pose a threat to recruitment agencies.  At face-value they provide a cheaper alternative, whilst at the same time granting access to millions of job seekers.  How can agencies remain the viable option and contend with the likes of “Monster,”  “LinkedIn” and other job boards?

 

Boasting over 145 million professionals, LinkedIn presents a clear threat to recruitment agencies. With a growth of about 2 members every second, its popularity is clear. This network allows access to a rapidly increasing database of professionals for free. The job site Monster also continues to grow. As well as reaching out to millions of people (Monster has over 150 million CVs in its database), the cost of posting a job is not, comparatively speaking, extortionate.  One “Premium Post” on Monster costs £199 and lasts for 30 days, whereas using a recruitment agency generally costs the employer between 10 and 20 percent of the employee’s yearly wage. With the pressure on businesses to keep costs down, many companies are making the effort to recruit themselves rather than handing out large fees to agencies.

 

There may be advantages to using the above-mentioned sites, but, for employers, signing up to them does not guarantee a job position being filled.  LinkedIn allows you to build connections and enlarge your talent pool by networking, but this does not necessarily lead to employment.  As for Monster, the job posting section comes at a cost and quite often simply posting a job online and bearing the cost is not enough.  As I have mentioned, with Monster, a “Premium Post” lasts for 30 days, but 30 days is a relatively short amount of time to find the right candidate, especially in the case of executive roles.  Naturally, it depends on the company and the position, but if the applicants within this time period are not up to scratch, then more money and more time need to be spent on the recruitment.

 

Despite what it may seem, there are many benefits to be gained for both candidates and employers by using a recruitment agency. It is true that time means money and so any time spent by an employer on recruitment is, in essence, an extra cost to the company.  Employers need to consider whether they have the time and resources required to recruit a high-quality member of staff.  The recruitment process takes time; writing a job description and posting it to various online job boards, sifting through the CVs received as well as those in the databases on sites such as Monster, looking through social media websites, ensuring that the job is well-advertised and finally arranging and organising interviews with applicants to fit both with their schedule and that of the interviewer.  Recruitment agencies have databases with hundreds of candidates, each one carefully selected, interviewed and assessed.  What’s more, there are many recruitment agencies which specialise in certain areas, making the process faster whilst increasing the likelihood of employment for both parties. Provided they have been well-briefed on the position, a vacancy could potentially be filled in a few days.

 

As much as it would seem otherwise, recruitment agencies do save clients money.  The agency incurs all of the advertising charges and the job specification is likely to be posted on more than one website.  This is in addition to the fact that their time is spent and is only paid for upon results.  Furthermore, some agencies offer a guarantee, whereby if it turns out that the selected candidate does not fit the bill within a certain time frame, a replacement is provided free of charge.

 

For candidates too there is nothing lost in signing up to an agency.  Registering usually costs nothing and you can benefit from being able to work full-time whilst simultaneously looking for new jobs.  Moreover, recruitment agencies will have more clients who are larger organisations of 50+ employees, and so is a great opportunity for those candidates who want to get into large, corporate environments.  However, of course candidates cannot rely on agencies as their only means of getting a job.  There are always more candidates than jobs, so it is certainly worth registering with the online career sites and actively searching at the same time.

 

Recruitment agencies have survived thus far and according to the Survey of Recruitment Agencies conducted in 2007, there were approximately 16,000 agencies operating in the UK. The industry obviously took a blow during the credit crunch, but it is making its comeback.  Monster and LinkedIn, thought at first to be competitors to recruitment agencies are now actively used by them to improve the quality of their services.  So it’s not just the way that people search for jobs has changed, recruitment agencies have also changed the way in which they work and have adapted.  In recent years, the industry has suffered casualties but continues to not only survive, but grow as well: proof that despite economic uncertainty there is still demand for the service.  One advantage which recruitment agencies will always have, and which may well ensure their future, is the personalised service which they provide, something with which technology cannot compete – well, at least not for the foreseeable future…

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1 Comment

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