The Recruitment Industry Benchmarking (RIB) Index is a web-based management tool that enables recruitment executives to benchmark their company’s performance against their industry peers on key, industry specific, business measurements. The data has been being collected and collated for quite some time but this month they introduced the ‘Ribinar’; a webinar for RIB Index members, to discuss real time trends in the Recruitment Industry. Denise Walker was one of the panellists and here is her take on what was discussed:
1. More perm jobs but clients appear to be ‘DIY-ing’: The current demand from clients of recruiters is for them to go ‘deep sea diving’ – finding people that clients cannot find for themselves. That is why the majority of niche recruitment businesses are growing and generalists on the whole are not (although there are some notable exceptions to this to my knowledge).
2. Skills shortages: We need to be engaging with clients in their ‘world’, to work together to try – and be seen to be trying – to resolve this issue and to find alternative solutions. In general adding real and genuine value to clients’ organisations can have a positive impact, such as offering added values services like on-boarding, mentoring and coaching schemes.
3. External influences (PESTEL) trends are important to monitor, because things are changing rapidly: What I’ve seen work well is for recruiters not only to immerse themselves in their chosen markets, but also to work towards becoming very close to clients, to really understand what is affecting them and where they see their businesses going in the next few years. This enables them to adapt and align their own services to their clients’ changing needs.
4. The changing levels of demand for temp and perm: Obviously, this will vary from sector to sector but either way, smart owner-managers are ensuring internal resources are being adapted accordingly. The trick is to ensure that the sales/operational aspects are properly resourced (i.e. BD, service delivery, quality and account management). I recall changing the way my own recruitment consultants worked, when running my first recruitment business, from traditional temp and perm consultants to consultants who did both, with strong admin support to back them up. At the time, this was due to a change in client demand patterns, similar to those discussed today – and I see my own clients making pretty drastic changes to their recruitment businesses in today’s market. On a very positive note, Romney Rawes reminds us that over the last 40 years the industry had gone through several recessions (regardless how many dips there were in each one). There has been a consistent pattern in that going into recession, temps go off before perms and coming out of recession, temps rise first. As we are possibly seeing this temp rise now taking place it should provide even more fuel to view that “things are looking up”.
5. Increase in temp margin: I think this is great – and I suspect there are many reasons for this this, not least because recruiters are dealing with more senior roles and because clients are interested in value for money – and will pay for value-added services.
6. The cost of funding temps: This is an issue that can seriously affect cash flow and profit margins if not carefully managed. I am heartened to know that recruiters are shedding less profitable business and maybe supply and demand forces will give us more room to negotiate a better deal in the near future. What I see working also is the explicit discussion about terms up front between recruiters and their clients, with an explanation of the reasons why prompt payment are important to the provision of a quality service. I have also seen recruiters’ clients improve payment terms when they understand the cost of the debt.
7. Shortage of quality recruiters/fee-earners: Great recruiters that are on the market have always been rare but even more so today. Savvy owner-managers are not prepared to pay top rates for mediocre performers and many have left the industry. The inability to recruit the right people is a serious obstacle to the growth of a business. Strategies I see work to counter this are: a) Long-term ‘wooing’ of targeted consultants (head-hunting); b) Splitting out the 360-degree recruiter role to BD-ers and resourcers; c) Building a team of resourcers around top billers (the queen bee effect); d) Improving employer brand to attract, retain and fully engage the best talent (a ‘go-to employer’ in this market spends as much time on developing their staff differentiators as their differentiators for external customer); e) Training novices who demonstrate they have the raw materials in terms of attitude and skills trainability (this needs a good learning environment to succeed but the results can be fantastic – especially if recruiting people with sector/business knowledge in the first place).
8. Investment in training is low in our industry: Well we’ve always been tight in this area haven’t we?! Actually, I don’t think the amount we spend on learning is the issue – it’s the quality and ROI that counts. Smart owner-managers that are committed to this are developing their management (and leadership) teams to become coaches and learning organisations so they can develop their teams on an on-going basis themselves. I can think of at least 7 companies that have done this in the last 6 months and saved themselves a fortunate on external training by only buying in what they could not provide themselves. This, as well as other key factors goes a long way to ensuring full employee engagement – something the government knows is vital to growing businesses, hence the funding available for development in this area for SMEs.
I’m hoping to report back on each Ribinar but if you want more information about how it all works I suggest you contact them direct.
