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Seven Month Itch – AoG revisited

By April 18, 2013One Comment

The big news in our industry last year was undoubtedly the shenanigans in our capital city resulting in a panel of 40+ recruitment suppliers onto the All of Government recruitment services contract.  After what eventually descended into a bitter and acrimonious RFP process characterised by finger-pointing, points-scoring and pants-dropping by many within our industry, many of the firms involved were left scratching their heads and wondering just how poisoned the chalice they were holding might prove to be.

What’s for sure is that the wind well and truly went from the sails of Wellington’s recruiters.  What had been a vibrant and successful industry had been brought down so many pegs that it was left an indecisive, mistrustful and wounded beast in the darkest corner of the market.  There was very little positive sentiment going around back then, most people deciding to either: A) sit tight and wait and see what it would mean for them, without making any positive moves one way or another; or B) radically slash and cut away at their previous recruitment model to develop a more delivery-focused approach that severely reduced the commission-earning capacity of the recruiters.

So it was with some trepidation that I decided to finally venture back into the Wellington market this week and scratch the itch seven months on from Stephen Joyce’s announcement.

And I was pleasantly surprised.

Maybe it’s the slowly improving economy, maybe it’s the superbly uncharacteristic summer they’ve just experienced, but Wellington was a fun, positive and forthright place to be again.  Wellington recruitment seems to have well and truly got its mojo back.

There has certainly been some collateral damage from the AoG fallout.  Some firms reportedly reduced their fees as low as 5% and are finding it understandably hard to turn a profit.  Others have so radically changed their delivery model that many of their top recruiters have agitated for moves elsewhere (including their GM), many leaving the recruitment industry entirely.  One specialist recruiter who failed to make the panel is presiding over such a gradual decline that the remaining Directors will soon be back at the beginning, working from their kitchen tables.

But positive stories have come from it too.  There have been acquisitions (Talent International snapping up Neal Andrews), which always stirs up positive activity.  One global brand has harvested enough work from AoG to have built a productive team of recruiters now larger than their counterparts office in the bigger Auckland market.  Some firms held their nerve admirably and are now able to deliver to AoG at rates of 11%-12% which at least leaves some room for profit.

Yet commentary around AoG seemed to be that a positive spirit has returned in spite of last year’s circus.  I spoke to firms who hadn’t actually made it onto the AoG panel but are still getting work from Government departments who just refuse to take part and want to continue with the relationships that served them well in the past.  I spoke to a Crown Entity who claimed they might use it for lower level roles, but had no faith in the ability of firms to deliver more senior level assignments at the rates quoted.  They were one organisation refreshingly aware that in recruitment, like many things in life, you get what you pay for.

It would be good to get some commentary here on The Whiteboard from any readers in the thick of providing recruitment services to Government.  Has AoG been a boon for your business?  Is the onerous stack of reporting required taking too much away from time spent on actually recruiting?

And how about the customers?  Anyone working within Government Departments who have used recruitment services through All of Government, how has it gone for you?

I maintain my stance that PSA’s don’t work to the optimum level that procurement departments dream they should, especially in recruitment.  Particularly in this case too, where the procurement team responsible has experienced over 100% turnover of staff since the process began.

But as ever, I’m happy to be proved wrong.  Seven months into the three year contract, can anyone see the model being maintained beyond 2015?


Jonathan Rice

MD at New Zealand rec-to-rec firm Rice Consulting and co-founder of on-demand recruiter offering Joyn. Recruitment agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.

One Comment

  • Janer says:

    Great article Jon. I certainly am getting a lot of work through it…..but I dont know if it is rhe rates or the rep….?