It's been a challenging year in recruitment. The industry has shifted in favour of the candidate, and their expectations – and the best practice for agencies as a result – has shifted.
Ask any recruiter: Staff turnover within the industry is always high. What's new in recent years, however, is the growing number of consultants leaving employment to create their own agencies.
There are now over 15,000 in the UK alone. While healthy for the industry on the surface, this glut comes at a time where candidate availability is low and operational costs high.
Today we touch on these challenges in detail and describe how agencies can hone a competitive edge in 2019 despite this fresh adversity.
The challenges faced
So, what exactly is making so many directors burn the midnight oil? We've identified several key factors that, while not new in themselves, are critical challenges within the industry at present.
1. Talent shortage: Already a high-turnover industry, recruitment agencies are in a buyer's market. Many are struggling more than ever to bring the best talent to their doors.
In 2019, agencies must impress their potential employees by demonstrating values that matter. Reputation must be legitimate – a challenge in such a networked, connected industry – and engagement must be demonstrable.
Also of increasing importance to top talent is corporate social responsibility (CSR).
Previously an optional pursuit, the industry is now recognising the value of CSR from a risk management perspective: by emphasising their efforts in this area, agencies may protect their operation from the danger of talent shortage caused by poor retention and acquisition of new consultants.
2. Candidate shortage: There's an old saying amongst recruiters: the best candidates all have jobs. This is true today more than ever, thanks in part due to low unemployment levels.
As investment in employee engagement – and the services associated with it – becomes increasingly important and popular, candidates are choosing to stay in their current roles despite the conventional wisdom of moving company every few years to maximise income and career progression.
Talent shortage due to Brexit is also on many a consultant's mind. If Brexit is to occur, it may be the case that there will be a smaller pool of available talent from the EU for UK agencies to access and bring to the country for their clients.
3. Costs and efficiency: One of the biggest challenges of an agency is to keep costs to a minimum when finding candidates, signing them up and getting them into a placement.
This subject also affects the two subjects we've described above. Poor efficiency often comes with problems such as lengthy time-to-hire; a problem that can have your best candidates whisked away by other agencies and employers before you can place them.
Agencies need to ensure their systems and employees are as efficient as they can be and that they are one step ahead of the competition so that these costs and their time are kept to a minimum.
Action points: What agencies can do to stay ahead
Enough doom and gloom; let's finish with a concise list of actions agencies can take to protect themselves and their operations in the year ahead.
Recruitment marketing: This strategy focuses on nurturing and attracting top talent – whether candidates or consultants - using marketing methods. It is increasingly popular in response to the aforementioned talent shortage.
Research by LinkedIn has concluded that 75% of job seekers will research a company before applying for an open position, with reputation and employer brand being key areas of that research.
What does this activity look like for agencies? Two popular activities are; performing research on your overall candidate experience and encouraging referrals. These marketing-based efforts aren't cutting edge, but they do offer the development of a valuable competitive edge for an agency.
Inbound recruiting: Let the candidates come to you – a challenging concept for many consultants.
Although inbound requires a new manner of investment compared to the traditional and familiar outbound approach, it's still viable and accessible for even small boutiques.
Content marketing is a great example. By publishing relevant content, an agency can be discovered by interested readers. These readers then discover their own pain points – such as low engagement or salary - through the content you provide, leading them to view your agency as a viable option.
Automation: The trend towards automation via machine learning and AI is new, but it's here to stay.
In 2019, agencies may benefit from the investment in tracking systems and software such as recruitment marketing software. These can automate much of the process of recruitment and talent acquisition.
Attracting talent, engaging employees, and nurturing and converting candidates are areas where modern software may save an agency valuable time.
In conclusion
The recruitment industry boasts one of the most competitive markets around. It's hard work to attract the best talent – for your own workforce or for your clients.
The current economic climate as relates to employment, in addition to the changing culture around corporate social responsibility and employee engagement, means new approaches and methods must be tested by the agency looking to remain competitive.
Where investment in these areas was before an optional means of improving profitability, it is now an essential element of risk management within the industry.
In 2019, agencies that address these issues proactively will survive and thrive where others may not.