Up until a few years ago, it was still the case that recruitment agencies were a key source of employment opportunities for the majority of professionals in Australia, particularly in the white-collar industries such as Accounting, Law and Information Technology. However, what we are seeing more and more of these days—and no doubt a by-product of the GFC—is the trend of organisations bypassing professional agencies and recruiting their staff directly. In this article TMS examines this trend and discusses the implications for the recruitment market in Australia.
As with most other sectors of the economy, the recruitment market has been shaped to a large extent by technology in the last decade, with the dominance of internet job boards such as Seek in the early 2000’s, to the meteoric rise of social media tools such as Linkedin in the last few years. The result has been a significant shift in the way companies source their potential recruits, with more and more organisations utilising their own in-house recruitment teams to actively source and engage candidates that they would previously have been introduced to by a third party. Very little research exists in the Australian market on this subject, so it is difficult to quantify how large this shift has been locally. However, in the United States it is common for organisations to set targets around the percentage of hires they source directly or even by internal referral, which accounted for an astonishing 49% of all experienced hires at Deloitte in the US in 2012.
Anecdotal evidence from TMS clients suggest that although the Australian market is nowhere near this level of penetration, the trend for direct hiring is increasing significantly.
One aspect of this trend that is important to note is that, in Australia at least, it depends on the level of the role and the industry sector as to how likely a company is to engage a third party to recruit their positions. For example, the blue-collar labour hire market is still dominated by agencies, who provide a fast & effective temporary workforce to clients as well as covering various insurance costs. Equally, an organisation searching for their next Chief Financial Officer is more likely to engage an executive search partner to source potential candidates than advertise themselves. However, the ‘middle market’ level between these two extremes seems increasingly to be heading down the path of the internal recruitment approach.
So what does this mean for the candidate market in Australia, and what job seeking techniques should those looking to secure their next move look to utilise? The answer? be diverse. Those willing to invest time pursuing multiple channels of job seeking (ie. agencies, job boards, social media, direct company approaches and existing networks) are without a doubt the most likely to secure their dream role. With the labour market in Australia still proving to be sluggish (unemployment nationally rose to 5.6% in March), the business of securing employment has become a full time role in itself.
What is also clear from our research on this subject is that organisations are demanding more from their recruitment partners. For example, it is becoming commonplace for companies to request executive search organisations to offer an increased number of value added services, such as background and visa checking, psychometric testing and salary benchmarking, in addition to traditional screening techniques. All the evidence from overseas and locally suggests this trend is likely to continue, however quality providers with an emphasis on value added services at both the volume and executive ends of the recruitment market will continue to prosper.