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Are Recruitment Agencies dead????
Recruiting & Staffing
Are Recruitment Agencies dead????
Exchange ideas about sourcing, screening, interviewing, finding passive candidates, measuring your results, and more.
Do any you guys think that recruitment agnecies are in decline. I have recently started a training company highlighting this and I'd like any feedback or advice. www.avanti-sl.co.uk
Thanks
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Forums » Topic Forums » Recruiting & Staffing » Are Recruitment Agencies dead????
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Are Recruitment Agencies dead????
posted at 2/12/2002 9:54 PM EST
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Posts: 32
First: 2/4/2002 Last: 2/24/2003 |
DanaHM you sound a little like a Recruitment Consultant to me. Could you honestly say the skills that recruitment Agencies are supposed to obsess couldn't be taught to an internal recruiter. You say that usually one person does not have the experience or expertise to hire across the business. I disagree with the right tutoring anyone could select the right candidates. I'm sure you didn't know everything about recruitment the day you started working in it. Unfortunately, and this is my humble opinion, recruitment agencies professing to be experts and specialists in certain areas, aren't. They follow the same processes of hiring for all different positions. This surely isn't acting like a specialist. Unfortunately for Agencies people are wising up and not prepared to pay huge amounts of fees for little work! |
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Are Recruitment Agencies dead????
posted at 2/13/2002 4:40 AM EST
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
Let me add a few comments to brookings notes above.
There is little or no chance that an outside agency person will have the insights into an organization that an internal recruiter has. Any good recruiter knows that what's written on a job description is only part of the requirements; the rest is made up of unwritten needs, wants, biases, etc on the part of the hiring manager. Knowing these makes the internal recruiter more productive than the outside recruiter. I would suspect that people hired with these unwritten perceptions in mind would also be better fits in the organization. And the internal recruiter can also be better held accountable for producing qualified candidates. Placement agencies are big business - there's an incredible motivation to fill positions and collect the 20 - 30% fees. Many agencies, and I suspect the majority, are primarily interested in collecting the fat paycheck. An internal employment staff can be much more productive at much less cost. |
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Are Recruitment Agencies dead????
posted at 2/15/2002 1:52 PM EST
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Posts: 1
First: 2/15/2002 Last: 2/15/2002 |
I agree with last two comments. If my experience is anything to go by, recruitment agencies are in it for 'big bucks' and as little as possible to do!
I think your training idea is great. if you have a good training programme, which it sound as though you have, I could suggest a few contacts who would make good use of your service. I'll send details to you. |
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Are Recruitment Agencies dead????
posted at 3/26/2009 5:22 AM EDT
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Posts: 6
First: 8/29/2001 Last: 3/26/2009 |
In this era of cost-cutting, it's tough to justify the expense of a recruitment firm, unless there is a unique skill to fill.
However, were I do think the recruitment firms have a stronghold is for the last minute requests like, my receptionist called in sick today, can you send someone now. |
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Are Recruitment Agencies dead????
posted at 3/26/2009 5:50 AM EDT
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Posts: 1
First: 3/26/2009 Last: 3/26/2009 |
As with any decline in marketplace demand (in this instance, for external recruiter use due to the ecomony), the "cream" usually rise to the top and not only continue to exist, but can thrive. It's fashionable at the moment for companies to avoid external recruiter use as it focuses on cost-cutting. But when the ecomony's health is restored...and it will be, while possibly fewer in number, external recruiters will be in big demand, partly, because there will be a "rush" to recruit talent to fill the voids and gaps created by RIFs, etc.
There are three reasons that explain why I believe external recruiters will "hang around" for a long time: 1). there will always be companies that lack the internal resources, know-how and/or willingness to conduct its own "sourcing" of talent. 2). there will always be those "difficult to find talent" job searches that will require the focused attention of an external recruiter who is out there and knowledgable about target marketplace. 3). There will always be companies that place a value on their relationship with "good" external recruiters who can also be valuable sources of marketplace intelligence when needed, intelligence that may not otherwise be available. PS. I am not an external recruiter. I am an officer running the national staffing function for a North American HR consulting firm. |
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Are Recruitment Agencies dead????
posted at 3/26/2009 6:32 AM EDT
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Posts: 7
First: 4/9/2003 Last: 3/26/2009 |
I think I can speak to this topic with a certain amount of expertise which included 15 years of contingency search and for the last 9 years as the President of RecruitAlliance.com - www.recruitalliance.com. To paraphrase Mark Twain, The reports of the agency recruiters death have been greatly exaggerated. It was not too long ago that Monster claimed their job board would forever make the agency recruiter irrelevant and in fact predicted the demise of the industry.
Exactly the opposite happened, during the period from 1998 to 2001 agency recruiter ranks swelled due to a huge demand for candidates that far outstripped the ability of companies to adequately provide qualified candidates through their own methods. After 9/11 the number of recruiters shrank but rose again as the economy recovered which parallels the history of agency recruiting which is one of ebb and flow based on economic factors. Currently many have left the business for lack of job orders but as the economies of the world begin to heat back up, which they inevitably will, the ranks will swell again. The reason, employers simply cannot staff fast enough or with competent enough recruiters to fill the seats they will have vacant. Couple this with the often debated issue of the pending talent shortage due to the baby boomers retirement, less quantity and quality of replacement candidates as well as other factors and you have a scenario where employers must compete aggressively in order to fill their requisitions. In theory what some of the respondents to this post suggests sound plausible; however few employers are able to execute as planned to fill all their seats in a growing economy without using ALL the means available which includes agency recruiters. Nork2 states Here in the US, the asking price for a placement by an agency is 33% of total annual compensation. I am not sure where he/she gets this stat but my company RecruitAlliance has facilitated over 7000 placements since 2001 between agency recruiting firms and numerous multinational companies and the average fee is 22%. Every one of our Employers use a number of resources to fill their vacancies and without a doubt their preferred method is to find the candidate on their own, but reality dictates a flexible approach. Agency recruiting will most certainly change but in my opinion the need to utilize an agency will always be a resource that forward thinking companies use on an as-needed basis. Using a resource like RecruitAlliance which manages this agency/employer relationship helps the employer to control costs while tapping into the passive candidate pool. One of our employers realized $3M dollars savings first year on their agency recruiting fees and continues to save money. As to the comment, Many agencies, and I suspect the majority, are primarily interested in collecting the fat paycheck. An internal employment staff can be much more productive at much less cost I could not disagree more. Agency recruiting is one of the most difficult professions and as a result the turnover is in excess of 85%. The fat paycheck those who have not been an agency recruiter speak about may be followed by 3 months of no placements. If the recruiter works for a large agency such as MRI they have to split the fee with the owner of the agency, then they may have to split the fee with another recruiter who assisted and if they are on a draw they have to pay that back first before the put any money into their pocket. Sure there are some very big billers who earn 6 figures but I guarantee they work harder than most salaried HR recruiters who would melt under the pressure of not having a paycheck every week. In closing and sorry for the long winded response, good agency recruiters will continue to thrive and employers will continue to use them on an as needed basis. Gone are the days when lower level positions were filled by agencies but many of the more difficult, technical positions will require an employer to use all resources. Feel free to contact me for further discussion and or information. 772.781.1844 Lou Volpe |
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Are Recruitment Agencies dead????
posted at 3/26/2009 6:43 AM EDT
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Posts: 1
First: 3/26/2009 Last: 3/26/2009 |
nork2,
Your numbers are a slight exaggerantion of the norm in the industry. Your salary of $50,000 would be considered "staff" level and likely a "non" or "semi-skilled" employee. Your quoted fees of 33% are extremely high for this skill level. In addition, placements often offset locum tenens workers which would alter your numbers considerably. If we were to compare the cost of a temp worker (conservitive-$70/hr), add the cost of an internal recruiter($90K) and the cost of job boards ($20K)you're breakeven would be closer to $255,000. Making an agency fee of 20%-25% for a $50K salary a bargin! |
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Are Recruitment Agencies dead????
posted at 3/26/2009 7:20 AM EDT
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Posts: 3
First: 4/4/2001 Last: 3/26/2009 |
In my opinion, agencies certainly have their place, although in these times, we assess carefully before we use one. We must compare the cost of the HR professional's time in weeding through the hundreds of resumes received via the internet vs. the cost of the agency. Where I am located, we can negotiate the fee - a few percentage points can make quite a difference. Plus remember that agencies give a guarantee. One can also negotiate an extended guarantee. We don't use an agency for every position, but sometimes they are a useful resource. |
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Are Recruitment Agencies dead????
posted at 3/26/2009 8:42 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
This post has been around longer than some of the board participants, but Ill chip in an opinion since the question could very easily be asked again in todays economic environment. It was originally posted in the post 911 dotcom bust of 2002. I lost my job as and HR Mgr of a software company early that year in a major RIF. I had email addresses on over 50 staffing agency reps at the time so I sent my resume out to them.
Two months later when I sent and update, half the emails bounced. Within 6 months only a handful of these reps where still there. The reason was clear, the preceding boom had motivated many to set up their own shops. Most of these folks were networked well in one or two companies and specialized in certain positions. The chain agencies had hired large teams to handle the volume of reqs for IT positions. When business was good they all made a living, when the bust hit they couldnt. Who survived: those who were networked broadly into many companies and who could fill a wide variety of positions. Often these were the big agencies who lopped off the IT department and went back to filling admin, accounting and day labor jobs. Some small agencies did survive because they had either been filling diverse job descriptions before or they adapted to change very quickly. (sort of economic Darwinism) No Virginia, agencies are not obsolete because there are still companies that need them, just not as often. They may not be as big or as plentiful as in the past but theyll be there. One agency rep told me that her business was picking up because so many companies had laid off their recruiters and HR staff. So when they needed to replace someone due to attrition, they are looking for outside help. |
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Are Recruitment Agencies dead????
posted at 3/26/2009 8:53 AM EDT
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
This is the new and improved nork2.
If you read the posts closely, foxwhite and gwell, you would see that my comments you quoted are 7 years old. Things have changed in 7 years. In 2002, there was a huge IT boom and agencies did indeed have a "sticker price" of 30% or more for even staff level positions in technical disciplines. In today's economy, most agencies would be lucky to get 25% for the same level of talent, and 20% would be very common. A recession like this one certainly shakes out the placement industry and only the strong players survive. You might also note my comments that IMO it will be the boutique firms who will thrive. These are firms who know a profession or industry very well and have spent time indentifying and establishing the players in it. There will always be a place for these firms since most internal recruiters (and by most I mean about 99%) will not have the time or perhaps even the knowledge to do that kind of research. However, for staff level hiring, it would be a poor staffing department indeed which could not undertake most of that effort especially given the online tools available today which weren't 7 years ago. Staffing departments can use these tools as easily as can agencies (which do use them extensively) and for far less cost. Fortunately for agencies at this level, there will always be a rather large number of small mid-sized firms which will either not invest in internal staffing or wont care to. It's not because they can't do it themselves, it because they won't. For large companies, there's no reason not to bring their staffing inhouse entirely. |
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