The boom times of the last decade and the absence of client choice until now have enabled the agency sector to submerge problems which have only been exposed now the tide has gone out. These include standards of professional behaviour, placement inefficiency and uncompetitive pricing.
The problems all stem from a lack of barriers to entry to an industry that is also completely unregulated and massively fragmented. Anyone can set up as a recruiter tomorrow, pick up the phone to the HR Director of a company and talk a lot of drivel. This has led to multiple SME recruitment firms creating massive over-supply in a shrinking market, adopting desperate tactics in an effort to survive and good recruiters are justifiably fed up with it.
Some might argue that it’s a case of the survival of the fittest. However I believe the unfit need to be excluded now otherwise they will continue to spread negative PR and damage the prospects of good recruiters who have invested years in their businesses.
In order to control the number of suppliers and stem the flow of new entrants we need government sponsored Licensing and Regulation. This could be in the form of a professional entrance exam and Continuous Professional Development. Regulation is about monitoring the performance of agencies. This is currently being done in the Financial Services industry by the FSA. To set up an independent regulatory body costs money so a licensing fee will be necessary.
In order to improve efficiency, lower costs and make pricing more competitive on the supply side some form of inter-agency cooperation is desirable. This could take the form of sector specific networks which create a focus for say IT agency recruitment. e.g. TITAN – The IT Agency Network .com. This would provide a means by which jobs unfilled by an Employer’s IT agency PSL could be cascaded to other IT agencies to improve overall fill rates and allow agencies not on a PSL the opportunity to deliver matching candidates to clients as and when required.
Efficiency also demands that the quality of recruiters improves. This will start to happen once the Demand v Supply balance is restored, Agencies start to see their order books improve, revenues rise and the attraction of better quality trainee recruiters becomes possible in a market in which they can flourish.
If you believe government sponsored regulation might be the answer, please comment and share as we need to get a consensus going on this and start to press for change.
I know that there are a lot of poor quality recruiters out there. They wash out quickly, all by themselves. The market takes care of them.
Every Monday, thousands of new recruiters start a new job. Training is not easy. Those new people are on the desk, calling clients immediately. They make mistakes. They wash out. FAST. One out of ten new hires might make it a year on the desk.
Another government agency? Can I puke? I am all for standards, but honestly, let's find another way.
Any and every business has the right to decide who they want to work with to provide goods and services to their company.
Many professions have license and regulation requirements and it certainly does not insure the capability of those who practice within that profession.
My suggestion is that if you were going to use a CPA, an attorney, a plumber or someone to repair your roof you would be furious if the gov or some association told you that you could not use the provider of your choice because the one you wanted to use had too much business.
It's my take that what you are suggesting here would have all of us working for the government at a set rate determined by someone else and would achieve nothing but lower the quality of service. Think about the last time you tried to get anything done with any gov. agency and the level of intelligence of the person you had to deal with. And a sure fire way to drive an entire industry offshore to get out from under excessive regulation.
I think the next election in the US is going to be a strong comment about regulation and what it does to business.
@Sandra That would be a "No" then.
My proposed regulator would prevent a plumber fixing your boiler if for example they had no plumbing qualifications. They'd block a brain surgeon operating who had a history of operating whilst drunk. It's not about over regulation it's about having some where there is currently none.
@Chris Ok so why does your govt impose import duty on foreign imports if less freedom = less business ?
David: You are running into a cultural buzzsaw with the whole regulation thing. For the most part, Americans don't like to be told what to do. Having some government bureaucrat (who has likely never walked a mile in our shoes) telling us how to run our business is reprehensible to those of us who participate in the meritocratic segment of the US economy. So far, the only good thing to come out of the Obama administration is the reminder that we prefer freedom to regulation.
With respect to import duties, just because our government does something, doesn't make it right. To my point, import duties make it more difficult for consumers to afford goods manufactured out of the country. Again, more government (taxes) = less freedom (purchasing power).