The headline is a grab from an interview I conducted with Ross Clennett, who is a recruitment industry expert. As a coach and mentor of owners and professionals in the agency recruitment industry, he is uniquely placed to observe human resource trends and how they affect the employer, recruiter and employee ends of the market.
Given that several studies, such as SKE’s analysis of high performing workplaces, have shown that employee engagement is a key driver of business value, I was interested to find out from Ross what is really going on out there, especially in the SME market. How strategic are employers?
Social media, such as Linked In, is a disruptive technology that is impacting traditional business models. I was keen to hear Ross’s views on this and much more:
Can you explain the difference between agency recruitment and other forms of recruitment?
Recruitment agencies provide outsourced recruitment services, both permanent and temporary/contract. These outsourced services are mostly provided on a success-only fee basis.
The most common other form of recruitment is a company having an internal recruitment function where they undertake all, or most, of the recruitment activities themselves.
The advantage of agency recruitment is that it is a completely variable cost, incurred only when used. Internal recruitment has many fixed costs including staff, office space, software, telephone, Internet etc that continue to be incurred regardless of the volume of recruitment being undertaken.
Why should we take this market seriously?
Because it is a very large market. IBIS World research indicates that the recruitment industry in Australia comprises around 2,500 business and employs around 15,000 people. It provides a service, especially to the SME market, where internal recruitment would be uneconomic.
What trends are driving change in this industry?
Technology and social media, especially the aggressive growth of Linked In. Companies now have easier and cheaper access to DIY recruitment than they have ever had. This puts far more pressure on recruitment agencies to deliver excellent value for their fees.
The skills shortage means more and more pressure is on making the right recruitment decision, as a poor choice could have significant negative consequences.
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