The Established Recruitment Model - Is it Broken???

10 January 2022 Giles Keay

Modelr

To start the New Year I have unusually decided made my Constructive Tip very recruitment industry focused due to observing some fundamental aspects of how the recruitment industry is operating in 2021. As I have mentioned in previous Constructive Tips I have a fairly unique viewpoint in the recruitment market having found myself back to hands on recruiting following running a medium sized national recruitment business for almost 18 years. Coming back to the day to day role and interactions with with clients and candidates and experiencing the 360 degree model has made me really question how well the current established model really works.

I have considered whether it works for the consultant, business, jobseeker and the employer... My honest opinion is that probably not, and to address the reasons why I would love you to consider the below.

The current model provides some fairly strong Pros and Cons which impact all those involved in the process, recruitment being fairly unusual in sales in that there are three parties involved whereas in most sales industries there are normally only two. 

PROS

  1. Consultant - You can make swift placements, sometimes with very little time and effort such as general introductions, mailings and sometimes just right time right place. (Although my strong belief is that although the placement maybe easy it is certainly the months and years that you have spent creating the networks and learning your industry that can make this happen.)

  2. Consultant - The highly transactional model can mean high levels of profitability for recruiters

  3. Client - Employers can go out to the market and engage with multiple recruiters creating highly competitive markets - reducing fees substantially

  4. Client & Consultant & Jobseekers  - Can ensure a swifter result for a client in many cases

CONS

  1. Clients are expecting and wanting to receive a "consulting based" service whereas in most cases the entire fee structure is based on a fee per success model, and internally most recruitment businesses that work on contingent based work (fee for placement) are structured and focused on a sales model. The two outlooks completely conflict.

  2. Clients pay the same for a placement no matter the work that has gone into it, sometimes this can be good value and sometimes it bears no reflection to the work done.

  3. Many wasted hours spent by recruitment consultants due to cancelled assignments by clients, candidates making last minute changes or leaving in the guarantee periods, multiple agencies working on the same assignment creating competition and confusion and a race to what I believe is a poorer service.

  4. From all reports and conversations I have had the industry has been busier this year than ever, my concern is the race and speed of the market too often can have a negative impact on the service and quality.

  5. Recruiters are continually asked to chase new business whilst often struggling to service what we have in front of us.  This volume of work can be detrimental the service that each client receives individually.

  6. The Race to Resume - The current levels of competition and scarcity of candidates has created a level of urgency that can easily result in a lack of a proper search, lack of quality and screening which can result in poor placement and retention levels, wasted time by all parties involved and overall just a poor level of service.

  7. Jobseekers - consultants are often under so much pressure there is a lack of ability to provide the level of customer service they would often wish to provide

Do I personally feel that the current recruitment model gets the best for the employer and jobseeker. Absolutely NOT. 
Do I feel that consultants could add better value and generate greater fees given a different approach to their service. YES
Do most consultants I have known actually want to provide a better service to both Jobseeker and Client. YES 100%

So what is the answer? I believe that it varies dependent upon the business, their client base and sector.  However, at the start of the year it is a great time for recruiters, managers and business owners to take a moment and analyse the success of your desk or your team and whether the return on time and investment this year has been as positive as it could have been.  There are many ways to structure how you operate, I have seen many successful recruiters over the years work in many different ways.

  1. As yourself questions on whether your services are focused effectively?  Would greater retained work, temporary contracting provide a better financial outcome than contingent permanent fees?

  2. Review your Terms of Business and decide if you need to make any changes to them to ensure that you can provide the best service possible to your clients and candidates whilst also ensuring a highly profitable business.

  3. Consider getting your consultants to run a timesheet for a few weeks like most professional services businesses to allocate there time to specific clients and vacancies, you will be surprised how many hours end up unbillable.

I hope that that this reflection gives you a pause for thought to consider even some small changes to your desk/team/business in improve both service and revenue for 2022.

Good Luck

Giles