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Changes, challenges and opportunities: The recruitment industry in 2016

Across the last thirty years, the recruitment industry has transformed beyond recognition. We spoke to David Head, Director of Recruitment International, and Neil Clark, Performance Director at Nicoll Curtin, a leading IT & Change Recruitment Consultancy, about how the industry has changed and what may lie ahead.

In what ways has the recruitment agency changed since you’ve been a part of it?

Neil: I started in the industry in 1983, and it was a really fragmented industry at the time. There were many very small players in the industry. Now, there have been a lot of mergers and acquisitions in the business. But the key for me is the professionalism. It has changed an awful lot. We were really creating an industry that didn’t exist. I think that, as time has passed, recruitment’s actually become a profession.

David: I think you’re right, Neil. I remember when we first published in ’87, and it was very fractured. If you’d got the top twenty biggest recruitment companies in a room, they probably wouldn’t recognise one another. Only if they bumped up against one another would they possibly even know that the others existed. Around that stage you started to get specialist agencies, so instead of doing everything, they specialised in I.T., healthcare, accountancy, finance, banking, teachers. The mid-eighties was about the start of that era. Some specialist companies precede that, but it was still pretty generalist in those days. That to me is just one of the ways that we’ve become far more professional as an industry. We’ve focused and specialised in certain areas.

Neil: I think it’s also just the people in the industry. Probably until ten years ago, I’d never met anybody that chose recruitment as a career. Every single person fell into recruitment because they didn’t know what else they wanted to do, or someone just happened to mention it. It was just a way of people being able to pay their bills, and a lot of people thought of it as a way to make easy money. I think that’s changed completely now, and there are people coming out of university now thinking “this is a career”. That, again, is because the companies are much more professional. They go about things in a completely different way.

David: I highly concur. Back in those days it was invariably a generalist office, based in the local town. That was how it started out. As Neil says, now, you come forward thirty-odd years and recruiters have realised that to get talent they have to improve what they do. Recruiters are much better at attracting graduate talent, and they’ve got a much better image. In surveys going back thirty years we ranked below photocopier salesmen, fax machine salesmen… The reputation of our industry was appalling. Now it’s on a much better footing, because generally the companies in it are more professional.

Neil: The good news is we’ve now taken the bull by the horns and as an industry we’re starting to take more responsibility. That’s only a change in the last ten years – us actually taking responsibility for our industry, rather than being forced to by our clients. We’re now a business that lobbies governments. We do that ourselves, because we’re serious about this as an industry. Almost every agency that was set up, was set up by someone that had a few years experience in a recruitment agency, thinking they could sell and do it on their own. Low barrier to entry. No regulation. No particular skills needed to do the job. But that’s completely changed now. The one negative is – the barrier to entry is still low.

David: It could be contentious saying this, but I think we should have some form of licensing or bonding. It should be much harder than someone in their bedroom on the internet placing some friends. That’s not what recruitment should be about.

Neil: The one barrier to entry we used to have was entry cost. You had to have an amount of money to buy pages in the industry trade magazines. Now you can just go online and get a LinkedIn recruiter license. So I think you still have that issue of the barrier to entry.

David: The other thing to add is that while we’ve done well here in the UK, in countries like Asia our industry is actually held in much higher esteem. In places like Hong Kong, people look up to recruiters. Lawyers look up to recruiters. It’s the same in the U.S and other markets, where they’ve developed it and they’re ahead of us in certain areas. Hopefully that’s a sign of things to come in this country.

What do you see as being challenges for the industry in the future?

Neil: We have to reflect what our clients want. So it’s not just about putting bums on seats, it’s absolutely about giving valued services. If we don’t move with the times, with what our clients want, we’re going to become irrelevant. There will always be a place for highly skilled recruiters. We have to look at the niche roles that our clients can’t find directly themselves. We all know that RPOs are going to continue to grow, that on-site recruiters are going to continue to grow. So as a specialist recruiter, the only way to stay relevant to your clients is to have a very high skill base, deep knowledge of their industry and of their business.

David: I think that’s exactly right. The one thing that we’ve been guilty of as an industry over the last decade is we’ve allowed people to commoditise what we do. People aren’t a commodity. How can a candidate be a commodity? It’s a human interaction. As Neil says, if you stay focused in your niche, inch-wide, mile-deep, you won’t be commoditised. People ask if our industry can be “Uber-ised”, and it can. There’s Winolo, Freelancer, People-per-hour.

Neil: David’s right, the commoditisation of our industry will happen. Already now, on the West Coast of the States, there are people producing software that will commoditise parts of our industry. What they’ll never commoditise is the knowledge and the relationships, so it’s all about building solid relationships with your clients and candidates.

What are some of the opportunities for recruitment in the future?

Neil: The biggest opportunity for the industry is to reflect the needs and wants of its clients. The world has become a smaller and smaller place. Our clients expect us to have a global presence. So for us it’s globalisation. It is still staying in those niche technologies, but going deeper into our clients as well. Understanding exactly where our clients want us to be. They want us to take those relationships wider and more global.

David: You’re spot on, Neil. If you look back thirty years ago, if you had an office in London and Birmingham, that was a big geographical spread. The players are going global. Your clients demand it, your clients are global. As we’ve seen, if you’re in a market that has skill shortages, you need to be able to find that talent. If that talent is doctors coming in from South Africa, or teachers coming in from the Caribbean, you need to be able to find them. To do that, you have to have some form of global presence. Five of the best paying jobs currently in the world didn’t exist five years ago.

Neil: That’s how we have to stay relevant, that’s the opportunity for us. That deep understanding, and that can never be commoditised. I think we also have to embrace the use of technology. I spoke about the threats of technology, but we also have to embrace the use of technology ourselves.

So what do you think? How has the recruitment industry changed and what will be the key challenges for the industry in the future? Share your thoughts in the comments below.

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