In a revealing interview at the end of last year, Andrew Bassat, chief executive of online job site SEEK, voiced his fears about which way the wind was blowing in the recruitment industry.
LinkedIn, the fastest growing social media platform for business professionals, was bypassing traditional recruiters he said, by allowing corporations to go directly to prospective employees.
Yet it was only a mere 15 years ago that SEEK was the new kid on the block and newspapers were looking on nervously as their job advertising began to haemorrhage to online. Now it appears that social networking is the new threat for traditional recruiters.
Greg Savage, author of recruitment and staffing blog, The Savage Truth, says “for many years, the recruitment industry sold their services on the fact that they had a database of wonderful candidates. But sites like LinkedIn now offer a bigger database.”
At Firebrand Talent, a recruitment agency for marketing and creative industries where Savage was CEO until January 2013, 45 percent of placements last year were made via social networking – many of them through LinkedIn.
Savage’s view is that the big job boards are going to become less effective in the future as social media grows more influential.
Alongside these, shortlisting services have sprung up such as Nexthire or Shortlist Recruitment. Once they have a detailed company brief, these services will devise a job spec, tailor the advertising to fit, develop behavioural and skills-based telephone interviewing, and screen and filter applicants to create a shortlist.
Anita Ziemer, founder of Nexthire, explains why she set up the company in 2005 after a career in marketing. “The middle ground [in recruitment] was moving to SEEK but I was learning from focus groups and clients that there was a level of frustration with the amount of time it took employers to wade through 200 CVs. It’s too easy to hit the submit button so anybody can apply for anything.”
Savings to businesses
Shortlist company clients are typically price-sensitive and value-driven, says Ziemer, attracted to flat-rate fees of $3000 for a salaried position under $100,000, which compares favourably with traditional agency fees of around 15 per cent.
One of their larger customers, MEBank, estimates it has saved $500,000 since using Nexthire’s services. “Ninety per cent of our shortlists are hired, s o we’re right on the sweet spot in terms of value and outcome,” argues Ziemer.
Coupled with the GFC, high agency fees have created a trend for companies deciding to bring their recruitment back in house. But the HR landscape has changed considerably from ten years ago, says Marsden-Huggins. “Recruitment has very little to do with HR, which is about compliance, risk mitigation and people. Recruitment now is much more about marketing, so it doesn’t make sense to lump them together.”
President of Recruitment and Consulting Services Association (RCSA) and managing director of ManpowerGroup, Lincoln Crawley worries that the low status of HR across some companies is having a negative impact on recruitment decisions.
Less than 15 per cent of businesses have a workforce strategy aligned to their business strategy, he says. “How can you make choices on whether you should hire someone and train them or hire people who are already trained, for example?”
But whether the choice is to insource recruitment, outsource it to an agency or create a hybrid model, the key word is collaboration, says Crawley.
“Companies large or small need to work with multiple stakeholders to ensure that the right people are coming into the workforce, that they are being engaged, inducted and developed so that ultimately there is less turnover.”
Above all, companies need to work with social media and social networking. The more progressive organisations are doing just that, says Cindy Reid, director of consulting at global recruitment agency FutureStep. “They are using social media tools and social networking to optimise their employment brand and to send messages about their culture.”