2015 Has Been a Good Year for the Recruitment Sector…but Has It Been Outstanding?

This blog was originally produced by James Osborne, Chief Executive Officer of the Elite Recruitment Network, who work with the REC as part of a Strategic Alliance.

Having spent most of this year completing Business Heath-Checks with recruitment company owners across the sector, the data I have been looking at shows that, for some, yes it has been an exceptional 12 months. But when you look deeper, there are still quite a large number of recruitment companies that are still so far behind the curve of market trends that they need to make some significant changes to what they are doing if they want to catch everyone else up.

So what has been going on exactly?

Since 2013 we know that there has been this widening gap between the number of vacancies and availability of talent and we know by 2020 they are predicting a 20 million skills shortfall across the EU.

These skill shortages aren’t simply going to go away (the impact of globalisation, improving economic conditions, changes in general working attitude, etc, will see to that).

But what I have found really frustrating this year is that whilst this macro talent issue has been perpetuating (a lot of which has been out of our control) organisations, recruitment companies at a more micro level seem to have been battling against each other to win this so-called “War for Talent” from within a diminishing talent pool.

Quite simply, I believe 2015 would have been a truly fantastic year if hiring organisations and recruitment organisations had been playing a lot nicer together!

So, what does the current playing field look like at the end of 2015, leading into 2016? According to the latest data released by the REC and KPMG:

• Demand for permanent staff was up +6% for permanent positions year-over-year, while temp vacancies were up +2%. 
• Availability of talent continues to fall, especially in the capital, 
• Permanent salary growth continues to rise, as it has done for almost two and half years now.

So, how have we responded?

I see talent acquisition on the top of every board agenda I attend, but for some reason, it never seems to quite make it to the top of organisations’ priority lists when it comes to their day-to-day activities - quite simply, we need to lift talent management up to being the number one priority for our businesses.

In consequence, I see 2016 as a year of collaboration, interaction and transformation.

Collaboration (aka partnership, alliance, cooperation – whatever you want to call it…)

It has often been the case that the market reputation of many recruitment agencies is not always quite as “polished” as it should be.

In a recent survey I did across users of recruitment organisations, only 13% would actively recommend their agency supplier to a contact or colleague. For some agencies, but by no means all of them, their behaviours and ways of working in the past have propagated that. 

However, the recession has forced the industry as a whole to change and adapt to what is now a very different market. Some agencies have managed that evolution well, and some just haven’t quite been able to.

But this continued evolution cannot be done alone – it demands collaborative working partnerships with hiring organisations that move beyond the purely supplier / customer relationship

Like a marriage – you have to work at it, be committed to each other and tolerate each other’s failures!
You may think that the cost of using agencies may be high, but what is the cost to your business of not being able to find the talent you need to grow?

In fact, the huge irony is that in a time when it is now three times harder to find and engage the top talent, many backward-thinking organisations are spending more time trying to negotiate with agencies on the fees they charge than on working them to create great candidate engagement programmes together for their brand.

Agencies are the face of your business in front of the active and passive jobseeking market - they are your talent brand ambassadors and they should be recruiting for you continuously, not just when you have an opening - creating live talent pools, headhunting, promoting your brand and so on.

At the same time, they are data centres about the talent markets – who is moving, why are they moving, where are they moving to - I can’t stress how important this data is when it comes to aligning your brand proposition to current jobseeker market trends and the impact it has on your conversion ratios from vacancies to placements.
Agencies and their customers should be getting together regularly, irrespective of whether you are actively recruiting or not, to review this data and planning their talent acquisition strategies accordingly. Organisations would do well to speak to their agency account managers about this.

Statistically, those organisations that understand this and work with agencies as talent partners, not suppliers, quite simply get access to the best talent in the market – because they in return have given the agency recruiter access to the inside of their businesses, their culture, the soul of their business so they can then sell that on to the market to attract jobseekers and position their clients as employers of choice.

Kevin Green talks more about collaboration here in an interesting blog piece which touches on this subject.

Interaction

I have a couple of questions for hiring organisations:

• How are you communicating with your target jobseeker population
• What is your employee value proposition? 
• Does everyone in your business know it, does your recruitment partner know it and are they using it continuously as a sales tool to all potential new recruits?

Recruitment organisations that are currently maintaining a significant competitive edge and are consequently outperforming the rest of the market have evolved to become more like data analysts and social marketers than ever before.

This is not about pushing information on to jobseekers through traditional advertising but about pulling in jobseekers with high quality, digital content.

One thing is for certain - the UK workforce, the international workforce is ever increasingly being populated by the Millennials.

These are tech savvy, always connected, jobseekers whose careers to date have been burdened with recessionary activity and restructurings, so many of them are far from positive about employer activity to date. The quality of our social interaction needs to empathise with this, reflect on this, not only to engage with jobseekers, but also to ensure we retain them once we have managed to entice them into our net.

Hiring organisations need to work with their agency partners to develop and promote creative benefits packages that move beyond typical pay increases, not just to attract the best talent, but to ensure that valued staff stay on board.
So, do we actually know what jobseekers actually want?

A recent survey of the jobseeker market carried out by McKinsey, refers to the following key drivers of engagement for the UK’s jobseeker market:

• A strong set of values and an engaged culture
• A well-managed business
• Opportunity of exciting challenges
• A history of strong performance
• An industry leader
• An inspiring mission
• Good at development
• Job security
• Fun with colleagues
• Career advancement and growth

Dan Pink talks about the autonomy, mastery and most importantly a “Purpose Motive” and according to a recent EY study, flexibility is now a top feature talent look for in jobs and it’s among the top reasons why they leave jobs. Yet our key strategy around candidate engagement across the UK has been a continuous focus on push up starting salaries, to a point where it is almost becoming absurd.

I even heard of one organisation that had headhunted two of a competitor’s sales employees and offered them a basic salary that was equivalent to the amount of money they actually billed the year before!

In 2016, employees will continue to have more options around who they work for and employers will have fewer options around who they can attract, so we must ensure that we are re-aligning our marketing and our social engagement, to our jobseekers’ pain points and telling a story that taps into their underlying motivations.

At a recent event for HR professionals in London, I brought up example content from all the “careers” pages on the websites of everyone who attended and as we rotated through them I asked the audience for a show of hands as to wold would want to work for each of these companies based on the “stories” they are selling. You can imagine what the outcome was – some of them didn’t even vote for their own businesses!

Now is a great opportunity for hiring organisations to take some time out and work on developing strategies that stimulate jobseeker interaction, on your social content strategies and on developing a value proposition that makes you the stand-out Purple Cow (ref. Seth Godin) in the market.

Take a look at Heineken’s talent video on YouTube called the “Candidate” if you want a great example of this. 

Get this right, and not only will you find more talent, but you will also be able to retain more talent.

Transformation

Since 2013 and the end of the recession, just about very organisation I have worked with has created a five year plan that centres around expansion and growth, bottom left to top right.

And that growth is quite simply underpinned by talent – finding them, keeping them and engaging them to exercise their full potential.

However attractive your growth plans may look on a budget spreadsheet, you will never achieve those plans without the right people on board in your businesses.

And so, I am very passionate, very excited, about the world of recruitment and talent management and what it can do, not only to support the growth plans of companies in the UK, but also for the lives of our jobseekers. But only when it is done right. The challenge we have at the moment, is that there are currently over 12,000 recruitment agencies in the UK, making it a very crowded and competitive market. Of those 12,000, I think you can very easily divide them into two separate camps – transactional and transformational.

Transactional recruitment companies focus mainly on high volume CV pairing and hitting their internal KPIs.
They access the same talent pools that you too can access and find you talent that you could quite easily find yourself and their fees are continuously questioned by their clients (and quite rightly so).

Now this more transactional approach may well have worked 10, 15 or 20 years ago when the market demographics were different, and recruitment technology wasn’t as robust, but today’s market demands something far more sophisticated and refined.

The only way to truly solve this so-called war for talent is for organisations to align themselves with transformational recruitment companies – companies that focus on the complete, end to end talent management process and achieving customer and candidate led outcomes.

Take a look at some of the REC case studies of just how transformational the work agencies do can be. These agencies work in partnership with organisations and use their knowledge and data to challenge market and customer thinking about brand positioning. They develop campaigns to give you access to the more passive and hidden talent pools. They find the best jobs for their candidates, aligned to what they really want and they are worth every penny you pay for them. They also only ever have one real unique selling point which is the very real and very measurable ROI they produce for their customers and candidates.

What I do care about is the tangible, measurable outcomes they produce for their clients and candidates and that is what hiring organisations should be focusing on when selecting an agency from the multitude that are out there. The type of data agencies should be talking about are around conversion ratios, time to hire, longevity of placements and how many people have they actually placed. To note, according to the latest REC trends report across the industry as a whole, 634,000 people were placed into permanent roles via a recruiter in 2014/15. I care about the fact that these agencies are playing a very significant part in this revolution to transform the way we attract, engage and retain talent across the UK so we can all continue to grow and I am working in partnership with some fantastic industry thought leaders on a mission to evolve the transformational side of recruitment businesses in 2016.

For any organisation that is looking to outperform their competition, the exceptional talent that you find today, will be your competitive advantage tomorrow. Quite simply, with the talent market in the state that it is in currently with so many deepening pockets of skills shortages, agencies and hiring organisations need to:

• Collaborate together to be able to penetrate deep within the (often hidden) pools of exceptional talent.
• Interact better with the talent communities themselves to create improved levels of engagement.
• Transform outdated / transactional approaches to recruitment into transformational candidate and client experiences.

Will organisations ever win this so-called War for Talent?

I honestly have no idea if they can actually win it, but those companies that work in partnership, not against, agencies will certainly be in a position to outperform the rest of the market in years to come.

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