INNERGISE!

In our latest poll, we asked the recruitment industry whom they thought would be their biggest competition in the future. As we expected, we received plenty of responses to this and yet, extraordinarily the results clearly depict that the challenges from recruitment businesses in the future look set to come from all angles, with no one area being an outright winner in our poll.  

So, in light of this, how can recruitment organisations set themselves up for success in the future and ensure that each of these types of competition is reduced and/or negated?

In House Recruiters and RPOs

I think it is fair to say that the prevalence of in-house recruiters is increasing all the time and they are here to stay. Furthermore, to question the quality of the in-house recruitment market, as we have heard many do in the past, is somewhat naïve and hazardous.

With almost 30,000 recruiters having left the recruitment industry (agency side) since the start of the recession a few years ago, as some have predicted, the in-house recruitment market has certainly gained in stature and size from ex-agency recruiters opting for an in-house career path. This doesn’t mean that these were failing recruiters in search for a supposedly ‘easier life’, but actually, a large number of agency recruiters who have made the move were successful billers, attracted by a more defined and rewarding in-house model.

Organisations are looking at attracting more and more (quality) agency staff into their businesses and we must be aware and prepared for that accordingly. Fighting it won’t change a situation that is clearly manifesting itself.

Similarly, the RPO model is also on the increase and yet, in reality, if you look at how RPO differentiates itself from traditional recruitment models, its foundations are built around adding increased levels of service and value adds, building targeted customer brand promotion for specific customers, utilising technology to streamline and improve recruitment practices and overall a model of true business consultancy.

Admittedly, many RPOs have greater scope, resources and capability to deliver larger scale projects but having recently worked with an SME agency who are developing their own, scaled down RPO product. Is this not what all recruitment organisations should be doing anyway in the new era of recruitment?

The greatest opportunity we see in all of this, whether competing against the RPO or in-house model, is where agencies look to partner in-house and RPO teams rather than try and circumnavigate them and create a relationship that focuses on deliverable outcomes for the customer (the business that both are trying to serve). 

Other Agencies

The recruitment industry still has fairly limited barriers to entry, and as such, the growth of new recruitment businesses setting up in these more prosperous times will continue to increase, as it did pre-recession.

Typically, new agencies tend to follow one of three routes:

Untapped markets – when someone has identified a market that has been relatively untapped by other agencies and has therefore a limited number of pre-existing competitors, such as an IT recruitment agency recruiting for an emerging software that is still in R&D phase.

Saturated markets, based on personal experience – when a top biller from an agency gets to the point that they feel they could do it themselves, based on their experience, knowledge and contacts in a particular market.

Saturated markets, based on competitor activity – when an agency notices a competitor agency enjoying significant growth in a complementary market to the areas that they recruit for and decide they can do it too. Whilst creating further competition for you, it is certainly flattering as it demonstrates that you must be doing something right!

It is important to know who and why your competitors are setting up on your doorstep and more importantly how you can positively pitch yourself against them. I am amazed just how similar some agencies’ pitches, collateral and brand presence are – unless you want to play a margin driven game (i.e. the cheapest service provider wins), then we must learn how to effectively differentiate ourselves from the competitors.

Client Access to Technology

I think, on one level, this is good news for the industry as it is forcing agencies that in the past have done fairly little to source and place candidates to up their game and focus on servicing their customers to a whole new level. 

The prevalence of technology has levelled the playing field in recruitment and whilst it makes it harder for some recruiters to win new business (“why should I use agencies if I can do it myself?”), it has ensured that recruiters are adding more and more value to their customers and candidates every day, are pushing themselves to unearth talent that companies can’t find themselves, and are again demonstrating the true, measurable value that lies with using quality recruiters.

In summary, you can take the increase and diversity of competition for recruitment organisations in one of two ways. Either as another set of barriers in the way for you to increase your market share and therefore something to fight against...

...or as an opportunity to raise your game to a whole new level, to demonstrate your position as commercial talent professionals working collaboratively with customers (and in some cases, ‘competitors’) in order to deliver outcome focused services that drive business performance.

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.” – Franklin D. Roosevelt