1. Regulation
2. Cooperation
3. Efficiency

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.