There is no doubt that there have been massive changes in the industry over the last 20 years. Technology has been the driving source of much of the advances, making it much quicker to find talent and to get CVs in front of a potential employer. A shift from, card index systems to sophisticated recruitment CRMs, from fax machines to email, from printed media advertising to digital etc. etc. All of these have improved certain elements of the service and arguably deteriorated other parts of the service. There is no doubt that an over-reliance on technology, coupled with a massive increase in competition, has eroded the personal element of the service which has undoubtedly impacted quality.
The Contingency Staffing Recruitment Model
However, as much as the recruitment industry has evolved in Ireland the one thing that has remained constant is the contingency recruitment model. Basically, for the vast majority of recruitment assignments, the prospect of a recruitment agency earning a fee is contingent on the agency introducing a suitable candidate to the employer and on that candidate subsequently commencing employment. This has been casually referred to over the years as a “no foal no fee” service. While this model made sense in the early days of the recruitment industry, one would have to question how that sort of recruitment service is relevant today.
Originally there was Little Competition for Recruitment Agencies
Forty years ago there were just a handful of recruitment agencies in Ireland, and even by the early 1990’s, the number of relevant agencies was small. Speak to anyone who started their career back then, and they will tell you stories of how vacancies would constantly roll in by fax with many recruitment agencies having what they called a “vacancy controller” employed specifically to manage the inflow of job requirements from clients. Put simply; there was little or no competition.
The Current State of the Irish Recruitment Market
Today, the landscape is completely different. There are now over 600 recruitment agencies licensed by the Department of Jobs, Enterprise, and Innovation. Also, there are dozens who are operating with no license at all. Many employers feel that they will get the best results if they give their assignment to multiple agencies, all competing against each other on a contingency basis.
Here are some thoughts to ponder.
● Statistically, a recruiter working on a contingency basis has to work 5 or 6 assignments to be guaranteed one fee. Therefore 80% of their efforts do not result in a fee, and only 20% of their focus is on the job that they will ultimately get paid for. This means quality has to be compromised. Often good candidates are overlooked, and poor candidates are included just to make up numbers.
● If 80% of contingency assignments result in no fee that means that the remaining 20% are subsidising the costs involved in providing a service to the other 80%.
● Is it really in the best interests of an employer to have multiple agencies competing to fill an assignment on a contingency basis whereby there are inevitably more losers than winners? Employers frequently complain about the “scatter gun” approach adopted by many agencies, yet it is this open competition that forces recruitment agencies to sacrifice quality for quantity.
● To mitigate the perceived risks of dealing with multiple recruitment agencies some employers implement PSLs and SLAs. These add another layer of administration for the client and more overhead on the recruitment agencies to work harder and quicker to provide CVs.