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Thursday, 25th April 2024 |
| The changing face of recruitment across the globe |
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| Recruitment companies have had to evolve with the times to maintain their vital role in the recruitment process, notably by diversifying and specialising, writers Louise Campbell. |
Although recruitment companies have been in existence for decades, it is only in the past 20 to 30 years that they have become a widely used recruitment vehicle with the majority of Irish companies.
Due to the widening gap between demand and supply of skills in the Irish marketplace, most organisations are broadening the net to incorporate a variety of recruitment methods such as: direct recruitment, referrals, job boards, newspaper advertising, graduate programmes, training and retention strategies as well as recruitment consultancies.
In line with the ever changing market, recruitment consultancies are constantly changing to meet the new demands of the market. As a result, the ways in which recruitment companies have operated over the past two decades have changed dramatically. Many people thought that recruitment agencies would disappear with the introduction of the internet and that the client and jobseeker would discover each other via on-line methods, therefore obliterating the need for a recruitment 'middle-man' and ultimately leading to more cost effective recruitment campaigns.
Although direct on-line advertising from organisations has had a degree of success, the role of the recruiter has possibly become more important than ever. The evolution of the marketplace has made organisations in the present time compete for talent like never before. As a result their recruitment strategy has become more diverse than ever before.
Recruitment consultancies have had to diversify their practices in order to survive in this competitive environment. The main trends in recent years are as follows:
• Agencies are becoming more specialist often employing, for example, accountants to recruit fellow accountants, or individuals within the banking industry to recruit into organisations where they have in depth knowledge of the roles and market. The focus on candidates is extremely specific and although there may be many specialist units within the recruitment company, each area will be specific to a particular profession
• The emergence of RPO (Recruitment Process Outsourcing) is becoming more and more prominent as companies realise the time and cost savings involved
• Candidate sourcing and generation methodologies are now extremely sophisticated. Gone are the days when recruiters could rely on putting an advertisement in a newspaper in order to generate an overwhelming response. Most quality recruiters will host candidate evenings, sponsor professional bodies at corporate events, host breakfast seminars, run roadshows between the UK, Europe, Australia and Asia Pacific, along with the more traditional newspaper and on-line techniques
• The recruiter/client relationship is also changing. Employers are looking for a more customised and personal relationship than previous years and with this comes a more flexible pricing strategies. Employers are willing to pay retainer fees for specific recruitment campaigns and many pay an up-front retainer to recruiters to provide them with quality candidates in the market
• The emergence of Preferred Supplier Lists (PSL) and the increased power of client procurement. In the past five years the PSL has become extremely popular with clients as a means of controlling their spiralling recruitment costs and maintaining a cohesive list of suppliers who will prioritise their needs. In such a candidate-short market, many of these agreements are falling apart due to the low rates agreed and the difficulty in generating candidates.
• Renegotiating fee agreements has increased as recruiters spend more time generating candidates for whom the marketplace will pay a premium
• The counter offer - this has always been a popular method of 'buying back' a candidate, you can be guaranteed that any candidate worth their salt who resigns will be counter offered.
Most of the time there will be a promise of a promotion in the not too distant future and certainly the promise of a pay rise.
However, this only serves to inflate candidate salaries and future expectations and in the long term is rarely a successful retention method
• The emergence of the contract worker - temporary, contract and interim assignments are widely used in most companies these days. Employers typically use contractors to cover during holiday/maternity leave or for specific projects where they need to fill a skills gap with individuals who can hit the ground running. Contractors are no longer seen as 'drifters' or people who are not suited to long term employment, rather as a valuable asset who can provide excellent assistance in the shorter term.
Growth in salaries
The IFSC has had a huge impact on the Irish recruitment sector over the past 20 years. The growth in IFSC exports comprising mainly insurance, financial services and business services exports has been in the region of 250 per cent since 1999. The number of people employed in the industry has grown dramatically in the years since and over 20,000 people are now employed directly in the international financial services industry. Salaries in the twenty years between 1987 and 2007 have also increased significantly. A newly qualified accountant in 1987 would have earned in the region of ?10,000 - ?12,000 (€13,000 - €15,000) per annum. Newly qualified accountants now command in the region of €55,000 or more depending on their specialist experience. Benefits have also improved, whilst we have seen a decline in the defined benefit pension scheme, employees now enjoy better performance related bonus' and flexible benefits in the areas of healthcare, childcare and working hours. The era of a job for life is firmly over but qualified professionals now enjoy far more breadth of opportunities which in many cases translates to better short-term earning potential and flexibility.
Conclusion
The future of recruitment will revolve around changing business models based on ever-changing demographics, trends, new technology and legislation which will challenge the recruitment business significantly over the coming years. Companies need to keep their recruitment policies and sourcing strategies diverse. Recruitment companies need to make sure they keep abreast of market developments, continue to develop innovative sourcing methodologies and remain flexible as well as client service focused in an ever changing market. |
Louise Campbell is managing director of Robert Walters.
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| Article appeared in the July 2007 issue.
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