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Are recruiters becoming obsolete?

Recruiters have often attracted mixed opinions over their role, their worth in today’s market and their consulting fees (perceived by some as exorbitant). Some businesses rely on and subscribe to the recruiter services religiously. Others prepare to run the gauntlet themselves in the belief that it is more cost-effective and just as easy to run an in-house recruitment model.

 

It is no secret that Social Media has fibre-optically connected the planet and has certainly made ‘connecting’ with people infinitely easier than it was a decade ago, but does that therefore make direct-recruitment easy? Errrrm, I don’t thinks so.

Despite this evolution in technology and a market threatening in growing number to circumvent the recruiter’s role, recruiters still nonetheless have a very important part to play and, albeit slowly, the market is starting to return to that way of thinking.

Companies considering or wishing to embark on a direct-sourcing initiative are in for a challenge, not a cost-saving treat. Let’s take your typically-placed job advert on social media. For starters, good candidates typically don’t need to apply to adverts because they are already very well networked with recruiters and are comfortable with the assurances that dealing with agencies offers. By sending their requirements to someone that understands them, they just then await to hear about well-matched opportunities with good companies. Let’s face it, it doesn’t cost them anything and it’s a whole lot easier than trawling the internet/social media/job boards trying to find the job themselves. An interesting point to note is that only a small percentage of candidates that are actually partnered by the agency are attracted through advertising. The bulk comes from networks and referrals.

An advert placed through social media will indeed attract people, but a lot of people, which for that reason will serve as a deterrent to good candidates contemplating an application to you. Their odds are better stacked with agencies. In fact, your advert will attract anyone that fancies applying. Now that’s one hell of a floodgate! In the applicant’s mind, they have nothing to lose, and they’re right! A typical branded advert will attract several hundred responses but not from the market’s top-tier talent pool. No, they are busy working with recruitment agencies in a much more exclusive way. Your abundance of applicants will perhaps be those who have the time to plough through social media adverts and apply for as many as they like, perhaps will less care or consideration for their suitability.

I guess what I am trying to say is that there are no safeguards. No one to filter the CVs. No one to do what an agency does for you. 

The task for the HR adviser is to wade through hundreds of responses from anyone that fancied applying, some of which - completely irrelevant, some - too ambitions. Yes, there might be a super-star applicant in there somewhere but the effort of discovering that one person from such a long list is utterly bonkers! Of course it’s a mammoth task, but one which agencies take care of for their client.

Let’s assume we’ve reached the shortlist. Next: interviews. There is no knowing what these applicants might be like in person. Agency candidates however will obviously have been met beforehand and you will have in your possession detailed commentary about what they are like and why they have been placed in front of you. They will undoubtedly be worthy of your time (the agency’s reputation depends on it!). With the direct-sourcing model, you have to arrange the interview and hope for the best.

Ok, so the interviews are finally arranged. Who manages the candidates in the meantime? Who keeps them ‘warm’ and engaged, who manages their expectations, their availability and ensures the delivery of that candidate to interview?  Who is going to provide you with instant back-up candidates if your interviewee has to cancel in favour of something else? Handling candidates is a full time job and often a grizzly business.

So, we move on to the point of reaching Utopia: you have appointed someone from a direct-sourcing model! Congratulations, but from start to finish, weeks, even months have elapsed. Recruitment firms make every effort to reduce the costs of time-wastage by understanding their clients’ cultures, market-drivers and needs. They take on-board what you want and then deliver it to you. It’s that simple. 

You get five CVs (from thousands), you interview three, you offer one - simple.  From start to finish they make sure they manage the process and everyone in it, making sure your hiring experience is as efficient as possible.

Let’s say for the sake of argument that an appointed candidate decides after a month of being with your business that your organisation isn’t for him/her? Perhaps they get offered something better or their circumstances change and they need to resign. This can and does happen! As an agency-hire, contingency candidates will have been sourced and dispatched immediately do you, the process would be reengaged and the role would be filled again, without any charge. In the direct sourcing model, it’s not so painless. Adverts need to go out again and the whole soul-destroying exercise needs to be repeated. Not ideal! 

So, we’ve established that direct sourcing doesn’t attract the best talent, it consumes a huge amount of time, it’s a process that is poorly managed and the talent is precariously managed. In contrast, agencies are fast, they deliver the best people, they manage that talent on your behalf and they guarantee their work. They then charge for this in a single, reasonable fee, only when the job is done, which includes all costs, search fees, advertising, candidate management etc. Direct-sourcing in comparison has to bear the costs up-front, and there is no guarantee of getting the right candidate. It’s worth noting that over 70% of in-house solutions fail to source all or even 90% of their vacancies themselves and sometimes need to engage agencies anyway to help, driving the cost up.

When we factor in the costs associated with length of time to hire, this massive overhead (and it is an overhead) starts to make direct-hiring rather expensive. In-house recruitment can take 12-16 weeks to offer a chosen candidate  and every day that the role is not filled it is costing someone time and money.

So, if it’s not cheaper and certainly not easier, why bother to bare significant recruitment costs AND a very inefficient version of the all the agency’s work too? 

My advice is: leave recruitment to the professionals because they are very much needed in this modern world of social of media, they do an invaluable job in a highly competitive market and I’m convinced will be around for a long time to come. I’d love to hear your opinions on this.

Richard Lindsay is the Principal for TMT at Interim Partners. 

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