Recruitment Agency Opportunities and Threats
I recently partnered with Broadbean Technology for some detailed research on the SME recruitment agency market in the UK. The aim was to look at how they were doing and also at ways in which they were adapting to market changes. Overall we found the sector in fairly buoyant mood and posting record figures. It has become a crucial supplier of strategic skills to the UK’s business sector, yet we also identified potential headwinds that some were beginning to feel.
Changing preferences of a new generation of candidates and consultants, both in the way they look for work and what they want to get out of it, are beginning to impact the way agencies attract and engage with candidates and trainees. The speed of interaction that technology enables, and users expect, is one that recruitment businesses have to embrace, particularly in an evolving era of transparency and ratings.
Clients are building their own internal capability and in many cases are looking for a different type of relationship. Some recruiters find negotiating with procurement, and working through an RPO provider, to be particular pain points. For forward thinking agencies this does create opportunities to add value and be seen more as a partner than a supplier. Making this change happen will require a different mindset and approach, and one that the research showed is starting to appear in the SME sector.
Amongst the trends we found underlining this, was a prioritisation on the development of marketing initiatives and building awareness to replace a more traditional sales-led transactional approach. This is important as the research showed only 10% of agency vacancies coming from outbound sales calls and 11% from speculative inbound calls. Building reputation and investing in CRM technology is helping many move away from a transactional model.
To support the increase in vacancies from developed relationships rather than speculative approaches, consultants are supported in becoming true sector specialists, offering knowledge and insights to clients, and to build their networks to source candidates. Growing concerns over the hiring and retention of consultants is being addressed by increasing investment in their learning and rewards, and realising the potential of employer branding.
During the research I spoke with a number of SME agencies who were trying different approaches. Some were embracing more agile models, others were taking a much more creative marketing approach, whilst building advocacy and client loyalty.
We featured some of their stories in the report along with more insights into how the SME recruitment agency sector is developing to meet current opportunities and challenges.
To find out more of what they are doing, and see how you compare, download a copy of the report here. And let me know how you are currently finding the market…
(It should be noted that we completed this research, and the report, prior to the referendum on the UK’s membership of the European Union. Whilst that result will undoubtedly play a significant role in shaping the recruitment agency sector over the next few years, it is almost certainly too early to tell what direction that may take)