Why Hiring Hub’s betting on recruitment agencies

Recruitment agencies are not going to die and no new-fangled machine learning algorithm will circumnavigate or replace them. Instead, we’re going to see 1000s of new recruitment agencies startup over the next five years during a period of unprecedented fragmentation and growth within the industry…

If I got £1 every time someone told me recruitment agencies will be extinct in a decade, or balderdash along those lines, I’d have at least £53. Probably more. And only because few are bold enough to say it to my face. Others think it – that I’m flogging the proverbial dead horse – but don’t have the gumption or mettle to come out with it when, you know, I’m so invested in the sector.

But they’re wrong. Obviously. Recruitment agencies aren’t dead, or dying. The opposite is closer to the mark: they’re flourishing. The industry is growing, and has been for a good while, and I’d take a bet there’ll be thousands of new recruitment agencies formed over the next few years as the market continues to fragment at pace (read my blog on that here). Yep, the role of an agent in the recruitment process is as relevant now as it was 10, 20, 100 years ago. For clarity, then: They. Are. Going. Nowhere.

How can I be sure? Well, I’ve been a student of the recruitment agency market for a good while, both on domestic soil and further afield. Quietly watching its reaction to technology and an ever-evolving employment landscape. And, yes, recruiters are having to be agile, and adapt, but they’re not being killed off. Despite rhetoric to the contrary, no new-fangled algorithm or AI-wizardry is going to replace the most low-tech of things: a human, in the form of a recruiter. Here’s why…

– Recruitment is time consuming and hard. It requires focus, so outsourcing it to a dedicated, third-party specialist makes sense.

– Changing jobs is a big decision, up there with buying a house or choosing a life partner – most of us like to talk it through with someone neutral that isn’t friend or family.

–  We are humans and we like interacting with other humans. Particularly when we need advice, convincing, and reassurance. An AI-bot just won’t do
Algorithms can identify active or passive talent, but it’s the softer skills and salesmanship of a recruiter that brings open-minded talent willingly to the table.

– The recruitment agency service is valuable (albeit flawed in its current guise, but I’ll come to that in a moment), see my first point.

– Increasingly, recruiters are well-networked and focusing deeper within sector/market niches; it’s useful to be able to tap into that expertise and black book.

– Agencies are viewed as a necessary evil yet we still use them; the UK industry is worth >£35 billion a year and it’s growing, consistently, year on year.

So recruitment agencies aren’t going to disappear, or be made redundant by technology, but admittedly they – and the sector – has to change. There’s accepted truth in that last observation, or statement: “agencies are viewed as a necessary evil.” Some recruiters like to fight me on it, but write “recruitment agencies are…” into Google and its predictive search tool does the rest (see results below). Rubbish. Useless. Scum. Parasites. It’s hardly a glowing testimonial.

Genuine screenshot taken in January 2018 ???

That’s why I think people believe tech will disrupt the recruitment industry and recruitment agencies will become extinct. Because, quite simply, they don’t like them very much. So they want it to be true. “Wouldn’t it just be easier if we could type ‘data scientist’ into some website and, the following Monday, a data scientists turns up at our office to start work?” Yeah, fantastic. But it’s not going to happen. Like, ever.

Agencies won’t die

I mean, if technology was going to replace recruiters, don’t you think Monster or LinkedIn, or any number of well-funded Silicon Valley startups, would have done it by now? Of course they would. It’s a $500 billion global opportunity. That’s huge. Massive. Gargantuan. A company that unlocked that would become one of the largest and most valuable in the world. But they can’t. Because we need humans. Recruitment consultants. So it ain’t happening.

If you’re still reading this (well done because it is a long one…) and doubting me, then acknowledge that the very size of the industry proves they are “necessary.” Granted, their collective reputation isn’t good, but you use them anyway. To lighten your load, and because the best candidates don’t look for jobs; they’re not on the market and they’re completely switched off to new opportunities.

The value of a recruitment agency is to find that off-market talent, talk to it, persuade it, coach it, nurture it, and bring it, enlightened, motivated, excited, to the hiring table. This is a time-consuming and exhaustive task that hiring managers simply don’t have the time, capacity, inclination or soft skills to undertake. It makes absolute sense to outsource the process to a good, specialist recruitment consultant. One you can trust.

So, again: technology designed to circumnavigate agencies is NOT going to work. At least, not beyond what already exists in the form of online job boards, CV databases, et al. Sure they’ll be better versions of those (there’s plenty about). Powered by improved UX and technology. But they won’t render recruiters obsolete.

Fixing a bad rep through action, not words

How, then, if agencies will still be around in 2028, do you rock the status quo? Fix the reputational and relationship issues within the industry? Improve things? Because recruitment is broken. Or tarnished, at least. That is not up for debate.

It’s here that I believe tech does have a role to play. Not to replace recruitment agencies, but to facilitate the relationship between them and their clients.

I’d argue – and do, regularly – that we shouldn’t be seeking to kill recruitment agencies, but instead we should look to harness their value and strengths, marry it to clever tech, and work to improve the customer experience. So that’s exactly what we’re doing at Hiring Hub.

I co-founded the company alongside an ex-recruitment consultant to overtly champion independent recruitment agencies because, ultimately, while everyone else was trying to find ways to recruit without them, we believed in them and their relevance in today’s world, and tomorrow’s.

However, we accepted that collectively they, and the industry, needed to change if we were going to convince people not just to work with “rubbish, scummy parasites,” but to love them.

Where is the love?

There’s myriad reasons why folk don’t like agencies. People cite: value for money (high fees relative to perceived effort); poaching candidates; enforcing oppressive and unreasonable terms; not being there when you want them; always being there when you don’t; the time it takes them to find candidates; submitting unsuitable candidates; how long it takes to manage them; the unrelenting cold calls. It goes on. All valid.

Sure, it’s a strained relationship. A cocktail of frustration and tension, with little respect. Yet we (you) persevere because there’s no genuine, convenient, effective alternative. Hence the aforementioned industry’s size and consistent yoy growth.

And, let’s face it, as a group, you’re not squeaky clean either. Speak to agencies and you get complaints of poor briefs, slow and rude hiring managers, impossible-to-fill roles, unrealistic salary expectations, no feedback for candidates, jobs pulled after extensive and expensive searches, spreading briefs around to thinly, late payments…

Hence, we’re stuck in this perpetual cycle of criticism, damnation and negativity, with both sides pointing the finger at the other when no one’s to blame, really. At least, I don’t think so.

No, the problem with recruitment agencies isn’t the people – there’s well over 20,000 recruitment consultants in the UK and they can’t all be bad eggs – it’s the system they’re working within that’s flawed. The way they’re measured, incentivised and rewarded. The ambiguity that exists around fees, briefs, terms of business, payment, rebates…

That’s why, with Hiring Hub, we set about altering the system. It was never a wholesale, out with the old, in with the new. We simply took the good bits from the existing model, and sought to use tech to speed up and centralise the process, cut admin, encourage faster abd clearer communication, give empowerment and choice, alter the way performance is measured and redefine the reward system.

These are small tweaks, but smash them together within a new, transparent ecosystem – an online marketplace – and we figured it would go some way to breeding trust and integrity and respect and perhaps even hope.

The original people business

Because recruitment was the original people business. An industry born of the notion that PEOPLE are responsible for the SUCCESS of an organisation. Therefore, it should be celebrated, the top recruiters acclaimed – like accountants and solicitors – their efforts recognised, commended, appreciated.

Yet, increasingly, recruiting feels impersonal; more of a numbers game than valued partnership built on understanding and trust. It doesn’t feel like a relationship business anymore. Thus, the industry is stuck within a vicious circle. A perpetual death spiral in which bad behaviour, suspicion and mistrust is reciprocated.

At the heart of the issue lies a lack of honesty and clarity, the very pillars of good, strong, healthy relationships. Not because the individual protagonists are inherently dishonest, but because of shortcomings in the traditional agency model.

Meanwhile Hiring Hub, intrinsically through its model, hopes to foster a more productive relationship between the two parties in which upfront honesty and clarity isn’t just encouraged it’s a given because its built into the process – employer posts job brief, accepts universal terms and sets fee upfront – and therefore reciprocated, organically, providing mutual benefit while engendering trust.

The key, we believe, to making people love recruitment agencies, and feel good about recruitment – our mission, BTW – is to encourage both parties to be really clear and honest about what they want right from the start, within an environment that, by its nature, is transparent. Because if each knows what each other wants, and what they can offer in return, that’s surely the beginning of a straightforward, open relationship.

Universal terms to govern the transaction and protect both parties. Setting fees upfront to remove ambiguity or negotiation. Encouraging clients to give considered and thorough briefs. Empowering employers to restrict how many candidates an agency can submit to ensure they only see their best. Publishing agency’s performance data and customer reviews.

Small things, none revolutionary. But bring them together on one easy-to-use platform and the result is recruitment that feels better. While also being less hassle, and faster.

It turns out people don’t mind paying recruitment agencies a decent fee, on time, when they feel like they’ve had a good experience and got value for money.

Now, admittedly, Hiring Hub still has a good way to go to achieve its mission. But rest assured our intent is pure and we will keep working hard, keep pushing the value of small, independent recruitment agencies, creating a place where the best of them can prosper and shine, and be recognised for the value they contribute to the success of the organisations they help.

If you agree with me, that recruitment agencies are staying put, but accept that things have to change, please support what we’re doing by posting a job, if you’re an employer, or applying to join our community if you’re a recruitment agency.

That’s all. Small things. Thank you.