The end is nigh for recruiters? No chance, it will never happen.

On the IOR LinkedIn group David Palmer started a great discussion and highlighted a point that many may be legitimately thinking. He entitled his post ‘Agency extinction within 2 years unless you do something now’. As I write, his post has had almost 200 comments, some very angry, some very passionate, he really has ‘stirred the pot’ and it is a great read.

Personally, I don’t see how agencies are under threat by direct employment rising and I will explain why. Currently in larger organisations they already have internal recruiters and recruitment functions within HR, but we see a great business model in RPO. We also see how many agencies are often on multiple tiers of a company’s PSL. Can you imagine how many internal recruiters they would have to employ to access that kind of reach to candidates?

Also, recruitment and the techniques involved have never been a mystery to employers, it is not as though it’s a function they could not manage internally, it’s through an understanding of how outsourcing can leverage a greater labour market reach (and speed) that they use agencies, and always will. With SME’s, they often do not have the internal recruitment resources, so that will always be a healthy market for recruiters.

New technology is not the main driver causing an increase in direct hiring either, it’s the economic climate that is doing that. Once things pick up again you will see that reflected in the agency business model, although it is fair to say there will be agency casualties. Having said that, when the business climate is very tough, CEO’s have to make sure they have a plan for recovery, and to compete in that climate they need one important ingredient, great people, and that leads them back to the recruitment agencies. In some industries (such as certain financial ones) they rely directly on agencies to find the right people, trying to hire directly will just not do.

I agree that employers will expect more ‘consultancy’ from recruiters, and expect more market intelligence, meaning those will fewer skills and expertise will suffer, but that is just market evolution.

If you want an example of what can really damage recruiters you need look no further than legislation such as AWR. On that note, if there are any IOR member recruiters who have clients that are concerned about using their temps because of AWR, do let us know and we can happily provide your client with all the free legal support and advice they need to work with you knowing their full requirements under AWR.