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- Peter Crush
The rise of sites such as LinkedIn has led some to predict that agencies will no longer be needed. But Peter Crush discovers that the death of the recruitment consultant has been greatly exaggerated.
Adrian Kinnersley, Twenty Recruitment
“The LinkedIn phenomenon is fascinating,” declares Phil Clarke, CEO of recruitment agency Independent. “What a shame it’s happening in a recession. That’s probably masking its true influence.”
As proclamations go about the visibility of this social networking giant (which has just notched up its milestone 200-millionth member worldwide – more people than the population of Brazil), it’s an arresting one. In 2008, business networking site LinkedIn had just 32 million members. Today its recruitment revenues (from selling job postings and giving employers access to its database to lure people in direct) are greater than Taleo’s (recently acquired by Oracle for $1.9bn). Within six months it could foreseeably reach the size of Monster.com. As Clarke says: “Ten years ago, job boards attracted agencies; now LinkedIn et al is firmly attracting end-users. It’s given employers self-sufficiency; taken the black magic out of what agencies do.”To many these will be yet more warnings about the death of the recruitment agency. Stories abound of companies using it to great effect. Take the brewer SAB Miller – which says it saves £1.5m on recruitment each year in the UK, or insurance company LV=, which over the last five years has performed a full reversal – from doing 90% of its recruitment through agencies, to 90% direct. They all add up to a scary scenario. But as Clarke and others assert, the death of recruitment agencies is – for the time being at least – still grossly exaggerated.
Finding the right fit
Clarke says: “Employers can, and should, do recruiting direct, but to do so they need a strong brand and the internal skills to do it. What I think social media is already doing is changing the nature of what agencies do – to focus less on ‘speed’, and more on the process of hiring – the assessment of candidates, the onboarding etc.”
According to Lucy Cheatham, director at Grad Central – which deals with social media-savvy graduates – “finding a person is probably the shortest part of the process. The service we provide is more around finding ‘fit’,” she says. “Our attrition rates are only 5-10% – tiny for the graduate age-group – because of the high degree of time-intensive match-making we do.” As Adrian Kinnersley, founder of Twenty Recruitment asserts: “Ability to find people is all very well, but the skills you need to extract them is completely different. People don’t just skip out of their jobs just because they see an approach from social media sites. All I’m seeing is sites like LinkedIn dominating versus the job boards, and it’s caused the bad recruiters to move from agency to in-house.”
With recent figures from applicant tracking specialist Jobvite suggesting 93% of employers use LinkedIn (up from 78% in 2010) to hire direct in some form or another (Facebook trails at 66%, but it’s up from 55%; while Twitter is 54%, up from 47%), agencies like Grad Central are playing them at their own game. It’s developing its own online portal (including enabling candidates to post ‘talking CVs’), tapping into social media to encourage people to come to them first. Cheatham says it means she’s virtually a headhunter, but that’s how she believes agency roles are changing.
“No substitute for human contact”
James Lock, Communicate
Executive search consultant Gary Chaplin adds: “The death of recruitment agencies is valid, but only in lower level positions where recruitment has become commoditised. Once positions become more important, there is simply no substitute for the human contact. Some 75% of people I place are not on job boards, are not looking at advertisements, not on agency databases and are not active on social media. They need to be sold to.”
And size, says James Lock, CEO of Communicate, is not always good when it comes to social media. “The problem with LinkedIn and others, is that actually, the bigger it gets, the harder it becomes to manage,” he argues. “In-house HR simply won’t have the time or will to sift through it all.” His supporters argue that even the other threat agencies face – automated selection software that bolts onto social media sites, and sifts automatically, still won’t cut the mustard.
Says Sinead Hasson, MD of market research recruitment consultancy Hasson Associates: “As we all know, these automation tools simply search CVs for keywords aligned to a specific job role. If the correct words are found, a candidate is approved; if not they’re dropped. It’s obvious that the automated approach to recruitment can end up with candidates simply being seen as a series of words.”But far from this being a threat, she argues recruiters actually need to be savvy to this. In fact she believes recruiters must evolve their role to also play along with it. “Our role as recruiters is not only to find a suitable candidate for a client, but to also add value and provide guidance on the recruitment process itself,” she says. “Regardless of ho w we feel about this automated approach, we still need to understand the process. It means agencies actually need to be working with candidates to ensure their CVs are appropriately optimised, in order to boost their chances during the automated screening process.”
Adapt and survive
But perhaps a reason why agencies will still survive (albeit with some adaptation) is from another argument, also offered by Lock: “Despite some firms claiming to be successful by going direct, there’s still a perception that is doesn’t look good for a company to go to someone without an intermediary,” he says. “An FD might well know who he wants, but will still go through an agency to make sure the process is properly done.”
And remember, HRDs do themselves still prefer the personal touch. “We still use agencies for senior recruits,” defends David Smith, HRD at agency-cutting firm LV=. “It’s essential we get the right people, and we recognise you need a mix of channels. We use friends of employees [up to 15% of new recruits are found this way], in-house resources and agency. You always need to cover your bases.”
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