Perms recruitment death knoll….

Guy Logan from Personall Today wrote the 14 May 2009. Recruitment agencies are faced with an uncertain future after HR directors warned they were unlikely to use them as much, if at all when the economy recovers. A survey of 117 senior in-house recruitment professionals by hiring firm Oakleaf found that nearly 70% believed that the recession would have a lasting negative effect on the need to use recruitment firms. Barely one-third felt that smaller, boutique recruitment firms would grow to help fill specialist needs. Richard Colgan, chief executive of Oakleaf, said he believed the recruitment landscape had changed forever. “The recession has created a shift in attitude toward the value of recruitment functions, with many being forced to take on a broader remit, including internal talent sourcing, compensation benchmarking and employer branding,” he said. “Employers are relying more on their recruitment function in an attempt to cut down on extra costs.” HR directors said recruitment firms would struggle to return to pre-recession activity levels.

Christine Armstrong, head of HR for the non-profit Hanover Housing Group, said she expected the impact to last. “I wouldn’t be surprised to see the impact of the recession permanently affecting recruitment firms,” she told Personnel Today. “HR will continue to improvise and find a way around additional costs.”

Steve Pearsall, HR director for stock exchange NYSE Euronext, added that although he had continued to use recruitment firms during the downturn, this would change in the coming months. “We’ll do more intelligent outsourcing of activities like recruitment over the next year,” he said. “Recruitment will be down as it is, but going forward we’ll look to reduce the number of recruitment firms we use, as well as the amount we use them.” The largest gainer the recruitment business in the coming period will be that of providers who understand specialist markets and for robustness in the temporary staffing and for very high margins head hunters

Permanent placements.
The bit that will be busy later in 2009 through 2010 will be the mass recruiters providing loads of people to continuously traipse over the doorstep to fill cloned jobs (call centers etc). Lot’s of it, but low margins. The others dealing in permanent placement will have to introduce quality into their businesses; recruiters who find the brain surgeon to fix us all or the scientist to administer The Large Hadron Collider will always be in big demand. Serching Monster and sending CV’s is, for the time being, a fond memory.

Temporary staffing – blue collar
Challenging times ahead at very low margins indeed. Not where any SME’s should be. Leave it to the big boys who have their own money to cope with the low margins and long payment terms.

Temporary staffing – white collar
Still viable; challenging margins and payment terms

Where is the real money in recruitment then? Close to the customer; niche and emerging markets; non discretionary services.