Figures recently published by the Chartered Institute of Personnel and development (CIPD) show that fewer employers are using recruitment agencies, down from 80% in 2004 to 76% in 2005. This is in part due to the rise of other methods of recruitment such as the web and employee referral schemes etc but interestingly the report suggest that employers are increasingly using what the CIPD call “Recruitment Process Outplacement Companies”.
Recruitment as we have always said is easy, recruiting the right person is not and the process and skills required to get that right do not just happen. Businesses like MBA are specialists, there is the world of difference between an agency that wants to turn a fee by placing a candidate and a partner who wants to help build your business by helping you put in place the right people. It’s only worth paying fees for anything if that spend adds value to your business.
MBA came to recruitment from a completely different perspective to most agencies. Agencies earn fees by placing candidates, MBA’s task is to add value to a clients business and earn it’s living by earning it’s clients more money. The consultancy side of the business was (and is) involved in process improvement but it is no good expecting people to perform beyond their capabilities and sometimes it is necessary as a company or a role grows to recognise that the incumbent management have reached their limits. Trying to push people beyond what they are able to do just ends in tears. Employees get stressed, performance suffers, co-workers get frustrated and the end result always costs money! The result was that we were saying to clients that they needed to strengthen their teams and the response was fairly forthright (this is the window industry after all!) ..”well go and do it then” We were therefore in the position of a client, we wanted solutions to problems, we wanted good people and we could not afford to get it wrong and three or six months later start looking again.
So the figures show that employers are using recruitment agencies less, well there are good and bad agencies and it’s not for us to pass comment, 76% of employers still use them but ask yourself before you deal with anyone not just how much does it cost but rather what do I get for my money how much will it earn me?. We always say to clients that if we charge you £1 million and earn you £2million you will bite our hand off to work for you again but if we charge you £1.00 and your return is £0.90p then you are much less likely to ask us back. It’s not about cost it’s about value and service. Currently our retention rate is 76%, we publish it and we’re proud of it. A study of thousands of recruitment events published in HBR showed that on interview alone the average was 14%....yes 14% retention. Just spend five minutes and tot up the cost of getting a recruitment decision wrong, not just the fees, six months pay before you find out and bring yourself to act. Advertising, time spent interviewing, the cost of having the job done badly, the discontent from co-workers who have to pick up the slack and the opportunities to add value that the wrong person in the role missed. And that’s ignoring the wear and tear on your nerves and the possible effect on valuable and hard to come by customers.
The Americans coined the phrase “Talent Wars” (they would….it might sound like English but it isn’t!). Your company needs to have the very best talent in order to be the best. Outperforming this market will take more than effort it takes talent and getting that talent is a war. The same CIPD survey recorded that 82% of employers experienced difficulties in filling one or more category of vacancy in 2005. Good people can work anywhere, to coin another buzzword you need to be an “employer of choice”
Chris Ball is a Director of MBA and a member of the institute of management consultants, MBA Associates Ltd is a specialist consultancy that partners clients to Recruit, Retain and Develop Top Performing Teams. MBA can be contacted on 01242 821 432,
email@example.com or through the websites at www.mba-associates.co.uk or mbaprofiles.hopto.org