This blog series seems to spend time talking about “the good old days”.
There is good reason. It is not to be nostalgic. It is because too many companies have not evolved their business solution to meet today’s client needs. We want to highlight the implications of standing still.
Previous articles in this series have discussed the lack of economic growth in the industry and the rise of procurement and HR in purchasing decisions. Both have had an impact on agencies.
The explosion of service models in the industry, including RPO, MSP, in-house teams, off-shoring and unbundled services has recruitment agencies scrambling to remain relevant or even to remain in contact with its traditional client base.
Over the past decade the global acceptance of job boards and networking products like LinkedIn and Facebook have forever changed the way clients, candidates and agencies interact, and changed the way an agency’s value is perceived by its clients. It is more difficult to convince a client of your value proposition.
A rapid increase in venture capital funding for HR Technology start-ups over the past few years is certain to deliver further disruption to the industry. We have all read about the job types that are under threat from the rise in artificial intelligence and where today’s workforce might be able to add value in the future.
Related: Characteristics of a publicly listed recruitment agency
Clients now buy services in a way that was the domain of the consumer market. A recruitment agency that can justify itself in a crowded online environment is more likely to get a call (or a returned call) from a client in need. This online position is earned by adding value, connecting and interacting with the relevant stakeholders in your area of expertise. That requires so much more than a LinkedIn profile, Twitter feed and Facebook page. Steps in the buyer’s journey towards a purchase of services happens without the recruitment agency’s knowledge. You can be selected, or rejected, before you even know there was an opportunity.
You may ask what has this got to do with me and my recruitment agency?
If your agency is reliant on cold calling, is only offering contingent 360-degree recruitment services, cannot articulate its real value to a client, or has not invested in an online and connected presence, you are playing in a shrinking pool.
The recruitment processes that allowed “me too” agencies to survive, or even thrive, in the 1990’s and early 2000’s are struggling today. Those business-sustaining personal relationships fade over time and are not sufficient to ensure success.
Not everything has changed.
The core skills of building trust, of convincing a candidate to apply for a job, of justifying your selection to the client and managing the client and candidate process is still the “magic” of recruitment.
But everything else about running a recruitment business has changed. An external review of a recruitment agency, or an acquirer’s assessment, will clearly identify where the business has evolved and has value and where it hasn't.
HHMC Global provides advisory services to the recruitment and staffing industry and is best known for its work on M&A transactions. HHMC is based in Australia and works with clients globally. To discuss your business future contact Rod Hore or Richard Hayward.