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Nine Factors to Shape Recruitment in 2011

By December 16, 20104 Comments

This will be the last proper Whiteboard post for 2010.  I say “proper” because I will probably do something next Friday, but being Christmas Eve I really don’t think there will be much interest from you lot.  But I’ll give you something, nothing much, but something nice from The Whiteboard to wish you all a Merry Christmas while you cast sideways looks at your recruitment managers or Directors and wonder just when they are going to crack open the wine cabinet and call an end to proceedings for the year.

I was going to write a reflective piece on the year in recruitment we have just had.  But to be honest, as much as I’ve enjoyed every minute of it, I’m a bit over it now.  It can be summarised like this:

1st Quarter:  Wow we’re busy again!  What is that plastic box on my desk making weird noises?  What do you mean pick it up?  Hello?  Sorry…who?  Oh yes thanks for returning my call from October 2008.  You’d like some staff?  And you’d like to pay me to find you people?  But we made everyone redundant and there’s no-one left to recruit for you!  Quick let’s build up our teams again – but this time make sure they are bloody good recruiters, none of that cowboy stuff from 2007!

2nd Quarter:  Ooooh wait a minute.  Double dip, double dip.  Hmmmm…don’t want to be caught out like last time, no siree.  We’re not going to be the ones all the other recruitment firms laugh at for moving too quickly and over-egging the pudding.  This pudding is remaining flat!  We’re making pancakes, none of this fancy soufflé stuff.  Let’s just take it easy.  OK you can join us but you need to prove you can start billing $100k per month from day one or the deal is off.  We still have debts to pay you know!

3rd Quarter:  Right this is really knackering.  The job board is absolutely buckling under the weight of orders from clients, but those poxy economists are still playing around with their Alphabet Spaghetti and talking about U-shape, V-shape and W-shape recoveries.  And house prices are NOT GOING UP for goodness sake!  But all of my team is exhausted and close to burn out!  Oh what the heck, Australia hasn’t even been in recession officially, and they’re going mental, what are we waiting for?  Let’s go for it!

4th Quarter:  Wahey!  Record months, record Quarters, happy days are here again!  But let’s not get too carried away.  2009 is still a painful memory and the lessons must be learned.  It’s slowing down now towards Christmas anyway…at least I think it is…oh hang on it’s getting bloody busy again!  Jeez we need a break but how can we say no?  Not after last year!  Keep going keep going keep going.  Friday 24th is in sight and we can all take a massive…well-earned…collective sigh of relief.

Well done everyone.  From what I’ve heard talking with a huge number of recruiters this year, things have certainly improved and recovered and there have been some stellar Quarterly results posted recently around New Zealand.  But it is also fair to say that most recruiters are knackered – so enjoy your breaks!

Then onto 2011.  Continuing economic recovery and the Rugby World Cup will all provide for a big year for New Zealand business, and as ever us in recruitment will be right in the thick of it.  Here are some thoughts from The Whiteboard on what might be in store for the New Zealand recruitment industry in 2011:

1.       Growth

Simple enough concept for us to all to understand.  But how recruitment companies handle it and harness it and take real advantage of it is going to be the trick.  Those of you in external recruitment will have a wonderful opportunity to get back to pre-recession levels of billings in 2011.  Those of you in internal recruitment will get increasing pressure from line managers and stakeholders to deliver on increasing numbers of roles.  Be prepared to work hard to take advantage of this upswing in business because if you don’t, someone else will.

2.       Competition

2011 will see the introduction of more and more recruitment businesses into the market place.  Some will spring up organically within New Zealand and some will enter from overseas.  What the big players need to realise is that these smaller boutiques can pose a bigger threat to their business than perhaps they could in the past.  With the amount of technology so easily available nowadays, small solo operators can move quickly, efficiently and with great flexibility and will work very hard at developing tight client relationships.  They can also source candidates via a raft of new methods that don’t necessarily rely on expensive job boards and ancient candidate databases.  The old adage of “big likes to play with big” doesn’t ring so true nowadays.  Many HR teams or candidates like to build a relationship with a person rather than a brand, so the bigger recruitment firms need to allow their recruiters to build their own personal brands and not hide behind a chromed, marbled, corporate image all of the time.

There will be some sniffing around from some larger players overseas too, particularly Australia.  Talent International, the fifth largest IT Recruiter in Australia, has already opened its doors here, as has Integrated who are a massive supplier of labour hire over there.  No doubt we will see some eying up from the likes of People Bank and Chandler Macleod too, once they have finished acquiring the Julia Ross business.  My gut feel though is that 2011 might be a bit too early for these guys to make a really bold move.  It will be hard for them to acquire businesses because the current owners will feel they can significantly grow the value of their recruitment businesses over the next couple of years, and will be unlikely to sell their undervalued businesses right now.

3.       Internal Recruitment

2011 will herald a new era for internal recruitment teams but the full effects won’t start to really show through until later years.  More companies will implement an internal recruitment function, and all will do so with the best intentions, but not all of them will get it right first time.  The old system of putting in disgruntled agency recruiters, or starry-eyed HR advisors, to create a department disrespected and misunderstood by hiring managers, is in the past.  Internal recruiters will need to develop systems to engage with the wider business and earn their respect.  They will need to harness new technologies to attract candidates, but more than that it will be about developing and nurturing a passive pool of talent, rather than going out to recruit reactively as and when it is needed.  They will also need to understand employment branding, how to create a brand and culture that people aspire to work for, and how to keep that message consistent and real throughout the business.

Importantly, they will also need to know how to manage relationships with external recruitment agencies.  Whilst many internal teams will be built with the aim of reducing recruitment expense, it is no longer going to yield the best results for your business by simply appointing a panel of PSA suppliers who have offered to drop their pants the lowest on fees.  To access the best talent, much of which will still come via recruitment agencies, the smartest internal recruiters will get more by developing quality relationships with specific recruiters who intimately understand your business and really get the culture.  During 2011 this will start to happen increasingly outside old-style PSA panels, although the PSA supplier relationship will still remain at the fore until later years, especially with bigger businesses.

4.       Flexibility

The recruitment industry has come some way in this regard in recent years, but 2011 will take it to a whole new level.  No longer the sole occupancy of fiery, energetic, young Grads, more and more recruitment desks are populated by more experienced, commercially-astute and business-minded consultants.  With the ability to monitor e-mails on the move and log onto your CRM from home, some firms will go to 9-day fortnights.  New Mums will be able to return to work and run a desk, without leaving their child in day care for the entire working week.  Experienced overseas recruiters, seeking a move to New Zealand for the fabled “lifestyle purposes” will not want to find themselves stuck in an air-conditioned skyscraper for 60 hours per week.  Firms failing to develop a more flexible working style for its employees will lose quality experience and expertise and struggle to attract good quality recruitment talent from overseas.

5.       Contracting

Following on from flexible working practices, the concept of contracting will take off in a big way in New Zealand in 2011.  Lagging behind much of the developed world, this has been slower to properly catch on in New Zealand, but many recruitment companies will look to grow their contractor offerings at all levels.  From a recruiter’s point of view, this is one of the toughest and busiest desks you can run, but also by far the most financially rewarding.  From the handful of $1million+ billers there are in New Zealand, all of them either run exclusively a book of contractors, or have a significant contractor pool to augment their monthly Perm billings.  This is a rapidly growing market and recruitment companies will be ramping up this offering almost universally.

6.       Salaries

During the GFC most base salaries in recruitment were trimmed back by around 20%.  Whilst there has been pressure during 2010, many recruitment firms have managed to hold true to their principles and newly austere approach.  This is already under severe pressure now, but in 2011 it will break.  Firms determined to keep base salaries the same will struggle to attract the top talent and will need to develop very generous commission incentives to retain high performers.  Here is a guide to current base salary levels in New Zealand recruitment (mainly Auckland and Wellington):

–          Candidate Manager        $35k – $55k

–          Trainee Recruiter             $40k – $55k

–          1-2 years Recruiter          $50k – $65k

–          3-5 years Recruiter          $60k – $80k

–          5+ years recruiter            $70k – $90k

There are occasional exceptions to the rule but to go outside this…you will be exceptional…see what I’m saying?  Anyway, expect to see these beefed back up 10%-20% again by the second Quarter of 2011.

7.       Probity checks

During 2010 the recruitment industry came under intense media scrutiny around the quality of background checking undertaken, particularly in the instance of Stephen Wilce and Momentum Consulting.  Whilst the recruitment firm was in my opinion unfairly made a scapegoat for the Defence Force’s own ineptitude, it has nevertheless made many in recruitment significantly ramp up their compliance.  So in 2011 we will see many recruitment firms introducing credit checks, education checks and criminal checks along with the standard employment reference checks.  Much of this will be outsourced, but will actually serve as a significant improvement to our overall service offering anyway, so hopefully some good will come out of that difficult period.

Although impossible to monitor, more and more clients and recruiters will also be conducting “informal” background checking through social media channels such as Facebook, Linked In and Twitter.  Whilst the legalities around this remain a little hazy, it is something that will be a major feature of how recruiters handle their candidates and how clients make hiring decisions.

8.       Social Media

Which brings me nicely onto the eighth factor – and the one on everyone’s lips – the influence of social media and social recruiting.  2010 saw the uptake of Linked In in a big way by recruiters looking to build innovation into their old-fashioned sourcing techniques.  In 2011 the same will happen with Twitter and, to a lesser extent, with Facebook.  Whilst internal recruitment teams will start to use Facebook more and more to tie into their careers site, nurture that passive talent pool mentioned earlier, and deliver a human side to their corporate image, I think that agencies will struggle to find any significant Return On Investment to their Facebook efforts.  Twitter will be a different story.  By the end of 2011 most recruitment firms in New Zealand will have some kind of Twitter presence.  However, like Linked In, only a handful will actually harness the real power of this social media channel, most will get it wrong.

Using a job portal to automatically load your job ads onto your website and various job boards is a useful, time-saving tool.  But letting it dump all your jobs on Twitter is not clever, and will actually do more to tarnish your brand than promote it.  Companies using Twitter to solely advertise their jobs are not getting what Twitter is about.  Twitter is the vehicle by which you can do what I suggested earlier, and promote your personal brand.  Develop your online relationships with clients who will come to better understand you as a person rather than just a corporate entity on a PSA panel.  This will engage them and make them want to do business with you.  You do this by being honest, authentic and real in what you Tweet.  Talk about things that will interest your followers, and include links to interesting articles you find, and build a reputation as an industry expert.  OK you can chuck the odd job on there too, but doing it constantly will switch off your audience and make Twitter into what many still regard it as – a waste of time.

Some recruitment firms will also start implementing Social Media Policies, a set of guidelines for their employees on how to behave on the net, how to protect the company image, and how to protect their own interests if those employees decide to leave and take a load of contacts and networks with them.  Once again, most will get this wrong, and many won’t even bother until later on in 2011 / 2012.  Social Media is constantly evolving, so make sure your policies are designed that way too, and get the input and consultation from your own staff on how this policy should look.

9.       Corporate Social Responsibility

What used to be the domain of large multinationals, often headquartered in the USA, is now catching on with smaller, more local firms too.  As profits rise and firms look to give a little back, as well as elevating their perceived image in the wider community, 2011 will see an increasing focus on CSR with many SME kiwi recruitment firms developing new approaches.  Some clients such as Office Max won’t even let you recruit for them unless you have a dedicated charity your company works with.  Kelly Services have started offering all employees a ½ day off per month to undertake charity work of their choosing.  2011 will see a new era whereby clients will start to decide on suppliers based on their CSR policies, and recruiters will chose who to work for based on this too.  I think there will be a lot of well-meaning efforts made in this regard by recruitment firms in 2011, but again many will miss the mark of what this is about.  Make sure it is something supported from the very top down, communicated by company Directors, and make sure there is a CSR dedicated champion in the office who co-ordinates these efforts as part of their daily responsibilities.

So there you have it, the 9 factors that will shape our industry in 2011.  One thing I would love to see more of in 2011 is more comments and discussion on The Whiteboard, which is really what this should be about.  I am humbled by the numbers of you out there reading this and talking to me about it when we meet, but it would be great to get your comments on here too.  This is a Whiteboard for you to write on as a recruitment industry, not just for me and my personal thoughts!

So if you fancy starting now, how about rounding this up to 10 and suggesting what could be the tenth factor to make a major impact on our industry next year?

Jonathan Rice

Director of New Zealand rec-to-rec firm Rice & Co, co-founder of freelance recruiter platform JOYN, and people-centric technology firm superHUMAN Software. Recruitment innovator, agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.