Talent Acquisition Timebound

What is the Future of Recruitment Agencies?

I’ve written a few blogs for the Undercover Recruiter on how companies can reduce their agency spend by focusing on direct hires. From speaking to other HR types and recruitment consultants that I work with, it’s an increasing trend. Social media, especially LinkedIn, is making it easier than ever for organisations to source their own talent.

‘Hollowing out’ work

Direct sourcing is only one aspect of recruitment, and the world of work generally, that is changing. I recently attended the London Business School Future of Work Consortium, focusing on the future of talent. One of the other key trends that we will increasingly face over the next decade or so is the ‘hollowing out’ of work. For years now we have been outsourcing work to the developing world, and replacing lots of work previously done by people with machines and computers. As this trend continues, we will end up with a labour market with a big gap in the middle. The result will be lots of highly specialised work, for which there is predicted to be a shortage of suitable candidates, and lots of low skilled work which needs to be done by people, such as care work.

Other trends

Other trends will also impact recruitment: changing demography, increased globalisation and continuously increasing technology. Talent will also become more distributed as technology will mean your location is no longer a barrier to you doing certain types of work. The middle manager is apparently an endangered species. Each of these topics is a massive subject in its own right – I’d highly recommend ‘The Shift’ by Lynda Gratton for a detailed overview.

From a recruitment perspective, this war for talent people have talked of for years is predicted to become real in the not too distant future, but what does this mean for the future of recruitment and recruitment agencies?

  • Recruiters are going to have to be agile. The old methods of attracting people to your organisations just won’t cut it in the future. We may well need to create our own talent by engaging those leaving education and investing significantly in their careers through learning and development.
  • Employer brand will become increasingly important, as will taking into account as part of your EVP the needs of five generations in the workplace.
  • Benefits offering will need to be carefully considered and improved if you want to attract and retain the best.

With regard to recruitment agencies, they will also need to adapt to this changing environment. All of these factors, coupled with the rise and rise of social media and direct hiring models will significantly impact their traditional operating model. At the same time, it may also present significant opportunity for those who are looking to the future. The demand for low skill work means that there still will be a need for temporary agencies supplying short term labour. This might be sending in warehouse staff to cope with temporary demand, or sending a temp receptionist for holiday cover, but these agencies can survive the future of recruitment. The predicted demand for highly skilled workers presents a real opportunity for agencies operating at the senior end, as well as retained search. These workers will be able to demand a premium in the future and will be highly sought after.

I do believe however, that those agencies who supply permanent staff ‘in the middle’ will become increasingly challenged. The in-house recruiter is in the rise, and the jobs they hire for are on the decline.

What do you think the history of recruitment is? Let us know in the comments below.

RELATED: How Staffing Agencies Can Survive the Future of Recruitment

By Gemma Reucroft

Gemma Reucroft is a HR professional specialising in recruitment and employee relations, with a passion for coaching. She tweets as @HR_Gem.