So do recruitment agencies really have a future?

Got sent a link to this fantastic article and made me wonder if recruitment agencies really do have a future. This guy seems to think they do but I'm not convinced.

What does everyone else think?

Personally I think that agencies will survive but I agree with the article that the money that agencies used to make will be much harder to come by.

http://zodo.tumblr.com/post/11735418257/recruitment-agencies-do-the...

Paul

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Replies to This Discussion

Permalink Reply by Sandra McCartt on October 24, 2011 at 3:29pm

Recruiters will still be around, doing what we do best assessing/presenting and managing placing candidates. This guy is selling an ATS system thus his blog is more of a reason to buy his system. If you believe that an ATS system is what makes a good recruiter you may really not be around in ten years. :)

Permalink Reply by Noel Cocca on October 24, 2011 at 6:51pm

Recruiters have been on their way out since I started in 1996. Good to see we are still on our way out.

Permalink Reply by pam claughton on October 24, 2011 at 7:34pm

Monster and Hotjobs were once supposed to be the death of recruiting firms too.....instead, Monster bought Hotjobs and recruiting firms are thriving. :)

Permalink Reply by Raphael Fang on October 24, 2011 at 7:39pm

No automation system or social networking website will replace recruiters in the near future. Recruiting is all about the personal touch.

Permalink Reply by Ron Kubitz on October 25, 2011 at 10:15am

As with in any industry the good recruiters that provide a valuable service will grow and prosper while the inferior recruiters will fall by the wayside! Good recruiters will use all of the tools available to them and build strong client relationships while the poor recruiters will be no better than the 1-2 tools they rely on!

Permalink Reply by Mike Hard on October 25, 2011 at 10:50am

Thanks for sending this along Paul. Every couple of months someone gets attention by writing a "RIP for headhunters" article. Usually a retread of the same old arguments, but this one is entertaining. My 5 favorite quotes in this silly article:

1. Quote: "When you think about it, a recruitment agency is really just a cv database searched on your behalf by a recruitment consultant". Hmmm....bunch of folks may not agree. Agency market is evolving but thriving.

2. Quote: "The bigger and more well known the employer the more likely it will be that they can source candidates directly...". A great deal of evidence shows that even the largest and most sophisticated employers make contingent search a strategic part of their recruiting strategy, even if they do quite well sourcing directly.

3. Quote: "Margins via lower fees will be cut. Expect agencies to have to work at 5 - 10%, not 15 - 20% as they used to do". Actually, during the past 2 years fees to headhunters in the US have RISEN from 19% to a bit over 21%.

4. Quote: "Thirdly, it’s a doddle for the employer to save cvs submitted to previous jobs...". I have no idea what a "doddle" is, it just sounds fantastic and I plan to use it 3 times this week on the streets of NYC.

5. And my favorite quote: "we get paid upfront but typically charge much, much less….. about a tenth of what a standard agency fee would be". I knew the punchline would be buried in here somewhere.

Permalink Reply by Cora Mae Lengeman on October 25, 2011 at 11:08am

Interesting article and an interesting look at the agency firms' demise which we've been hearing about for years. It appears this article is talking about very large firms that push a lot of resumes and don't do any of the other many things that make recruiters so valuable to companies large and small. I have already seen the decrease in number of recruiters employed in those firms in my area. Those firms that boosted 25 - 40 recruiters now have maybe 10 to 12 people or less.

Personally, I don't want to be part of the largest firm; I simply want to be the best headhunter. The person they call when they need a really specific person, with specific skills, from a specific industry and they want it done quickly and quietly - no job boards and no advertising. They can call me when they need to have someone fit into their leadership team while having the skills to move the business forward. I don't see my practice going down, I see an increase in business.

I do not see a decrease in fees in the future - I expect an increase.

Permalink Reply by Raphael Fang on October 25, 2011 at 11:55am

Cora raised a good point. Head hunters, including myself, don't rely on job boards or advertising. I rely on myself to source out the candidates and evaluate them. I don't have the time to sit and wait for the right candidate to show up. I need to go out and the find the person actively.

However, many recruiters still rely on advertisement exclusively. The Automation systems will replace them, but a true head hunter will never be replaced. We will still be out there making the connections for our clients.

Permalink Reply by Amy Ala Miller on October 25, 2011 at 5:52pm

love this... thanks Mike :)

Mike Hard said:

Thanks for sending this along Paul. Every couple of months someone gets attention by writing a "RIP for headhunters" article. Usually a retread of the same old arguments, but this one is entertaining. My 5 favorite quotes in this silly article:

1. Quote: "When you think about it, a recruitment agency is really just a cv database searched on your behalf by a recruitment consultant". Hmmm....bunch of folks may not agree. Agency market is evolving but thriving.

2. Quote: "The bigger and more well known the employer the more likely it will be that they can source candidates directly...". A great deal of evidence shows that even the largest and most sophisticated employers make contingent search a strategic part of their recruiting strategy, even if they do quite well sourcing directly.

3. Quote: "Margins via lower fees will be cut. Expect agencies to have to work at 5 - 10%, not 15 - 20% as they used to do". Actually, during the past 2 years fees to headhunters in the US have RISEN from 19% to a bit over 21%.

4. Quote: "Thirdly, it’s a doddle for the employer to save cvs submitted to previous jobs...". I have no idea what a "doddle" is, it just sounds fantastic and I plan to use it 3 times this week on the streets of NYC.

5. And my favorite quote: "we get paid upfront but typically charge much, much less….. about a tenth of what a standard agency fee would be". I knew the punchline would be buried in here somewhere.

Permalink Reply by Bill Schultz on October 25, 2011 at 5:55pm

LOL, you could get arrested.

Permalink Reply by Amy Ala Miller on October 25, 2011 at 8:13pm

Doddle (noun)

Something easy

ex. "I'm sure I'll pass the test - it'll be a doddle."

and now you know. I'll be using that in future conversations with my hiring managers. "Amy, where'd you find this awesome candidate?" "Oh, it was a doddle". :)

Permalink Reply by Paul Thomas on October 26, 2011 at 9:38am

I'm not sure he's actually prophesying the end of recruitment agencies. I think he's suggesting they will likely work to either lower fee levels and/or offer a slightly different service proposition. I don't know if I agree with changing what we do but I can see the argument for pressure on fees. Not sure about formal, retained Head hunting services but certainly for contingency work, fees are not what they used to be. Let's hope they go back to 4 years ago but I suspect earning what we used to bring in will become harder, but not impossible.