There is cause for some low-key autumnal cheer as nearly 60% of the UK’s agency recruiters report seeing moderate improvement in their business environment in September and October, as the recession nears the end of its second calendar year.

The celebration should pick up dramatically in spring, with 54% expecting significant improvement then. Another 15% holding their breath until summer to see big changes, according to agency respondents to Recruiter’s ‘Future of Recruitment’ survey.

More than 500 agency recruiters responded to the survey on recruiter.co.uk in September and October, in which they were asked about their expectations of the recruiting environment once the downturn had ended. Nearly 200 in-house recruiters responded to the parallel side of the same survey which asked them to look into a crystal ball from the client perspective. (See 25 November issue of Recruiter for the view from in-house.)

There was also recognition of diverse opportunities, such as acquisitions, new markets, the 2012 Olympics, offering a broader range of services and new public sector opportunities

Once the recession has ended, agency recruiters believe the recruiting landscape will have changed in several critical ways: three-quarters expect there will be fewer agencies; nearly 60% expect more in-house activity from employers’ own recruiting teams; and, possibly as a result of the latter, 56% expect increased pressure on fees. However, 41% anticipate that agencies will offer more services, a trend that has already begun manifesting itself with more firms seeking to address their clients’ entire hiring cycle to include onboarding, talent management and outplacement.

Others responding to the question were optimistic that the recession would force rogue elements out of business, with one predicting that surviving agencies would enjoy stronger relationships with employers. “Agencies will be forced to add more value,” a respondent said.
While most often associated with their employer clients, the issue of brand values resonated strongly with the agency recruiters, who throughout the survey expressed frustration with “cowboys” and practices of rogue agencies, which tarnish the industry’s reputation generally - a clear belief that strong brand values had to differentiate their agencies from the competition.

Asked how they would see their agencies communicating their brand values, nearly all (91%) said they would do so through the actions of their staff, with face-to-face networking chosen as the second most favoured option, by 73%. Additionally, 67% of recruiters said they would communicate their brand values both by the added services they will offer and by the types of people they employ.

Individual recruiters also said they would communicate their brand values by “being first to market with new ideas”, offering “client customised solutions”, corporate social responsibility, hosting networking events/workshops/seminars” and “positioning ourselves as thought leaders”.

Three-quarters of those recruiters who planned to change and add value to their services said they planned to accomplish this through gaining a deeper understanding of their clients’ needs. The second most popular option (52%) was background checking. Skills testing was chosen by 47%, while 41% said they would offer creative services for job adverts or recruitment campaigns. A third said they would offer psychometric testing.

Several individuals ticking the ‘Other’ box said they planned to offer onboarding or induction programmes, and one was poised to provide a 12-month guarantee. Another was prepared to offer clients business leads.

As for agency recruiters’ own staffing levels, 59% anticipated increasing their staff moderately over the next 12 months, while 26% expected numbers to stay the same. Only 9% expected their staffing to increase dramatically, but there was even better news: 5% expected a moderate fall in staff, while a miniscule 0.4% expected a dramatic decrease.

When asked what, aside from the economy, was their biggest challenge, the top five complaints in terms of frequency were (in no particular order):

• fee pressures by clients and agency competitors
• direct sourcing by employers
• the threat of social media networks to traditional recruitment
• a perceived dearth of quality consultants on the market
• the recruitment industry’s reputation or, as one respondent said, “the cut-throat nature of the industry where…unprofessional people give the industry a bad name”.

Others singled out cash flow as their biggest challenge. The lack of high-calibre candidates also received numerous mentions.

On the other hand, there was also recognition of diverse opportunities awaiting them, such as acquisitions, new markets, the 2012 Olympics, offering a broader range of services, new public sector opportunities and, as one recruiter put it, “As redundancy packages decrease/get spent by candidates and gaps in the CVs go beyond six months, there will be more realistic individuals in the marketplace”. But the most popular view of all was succinctly summed up this way: “Less agencies = greater market share”.

keyfacts

In future, do you feel that your clients will spend more or less on recruitment fees as a proportion of their overall recruitment spend?

• Less: 50.4%
• More: 10%
• The same: 39.6%

Recruiters expect to see more of the following types of employees as a proportion of clients’ workforces in the future:

• Temporary: 57.3% said more
• Part time: 44.5% said more
• Flexible hours: 51.9% said more
• Interim: 51.2% said more
• Contractor/freelance: 50.3% said more
• Outsourced: 53.3% said more

The future of permanent employees was murky, with 34.6% anticipating less in the workforce, 34% expecting more and 31.5% believing the proportion would stay the same.

As the economy improves, what steps will respondents and/or their organisations take to improve the performance and professionalism of their own staff?

• Improve our own internal recruitment process: 53.8%
• Employ more experienced consultants: 50.3%
• Invest more in training: 61.5%
• Improve management standards: 53.6%
• Other: 4.1%