Mixed Messages: Recruitment debate

Just last week, the former chairman of JDA and now serial entrepreneur, Carl Hopkins announced his latest venture – an online recruitment service called Agencybods aimed at providing an alternative to the larger consultancies that have dominated the market for many years.

Commenting at the time of his launch, Hopkins took no time in explaining why he felt there was a gap in the market for his new company. “Practically every agency owner I know has an issue with the way recruitment agencies operate and the list of contentious issues is endless: CVs are simply passed on and not vetted, blanket mailings of candidates are sent out, there is little or no candidate preparation and half the time candidates don’t even know where their CVs have been sent to.

“There are even more issues surrounding their fees: there is no shared risk with the agencies and any form of recruitment is risky. The payment terms are demanded before the end of the probationary period of the candidate plus there is no refund if the candidate doesn’t work out.

“They claim their fees are transparent but I cannot find the rates on their sites, and they never seem to tell the candidates that they charge 20-30 percent of their first year’s salary to the employer. So I decided to use my 25 years’ worth of contacts and experience of the marketing industry to do something about it.”

And ‘doing something about it’ means setting up an agency that charges just 10 percent of the first year’s salary, gives candidates a cash bonus if they remain in the job for a few months, but offers employers cash back if they leave.

He plans to place around only three or four candidates per month. He’s starting small, for sure. But his sweeping comments represent a big swipe.

Christopher Webb of specialist PR agency Hargreaves and Webb responded directly to Hopkins’ comments online. Posting next to Hopkins’ announcement, he said: “Carl, you must have met some right bloody cowboys. I’ve had many dealings with recruitment agencies as a candidate and as a recruiter, both for agency roles and in-house roles. I don’t recognise any of these issues with recruitment agencies, only with the ‘online’ recruitment services I’ve tried.

“However, I do recognise cheap publicity stunts. And how can you claim that an online agency is anything BUT ‘faceless?’ Sorry Carl, but when we start looking for people in a few months time I’ll be working with the recruitment agencies I’ve been happy with for years.”

Hopkins responds that he isn’t merely a jobs board, but will be meeting candidates to vet them.

However, some of the other questions raised might be tougher to answer.

The 10 percent recruitment fee, for example, will make it hard to generate sustainable margins according to other recruitment firms.

Steve Ollerton, of Creative and Active Resource, is one who believes the numbers cannot stack up.

“These days,” he says, “we’re lucky if we get to charge 17 or 18 percent. Not 20 or 30 percent. And as for vetting, we spend around an hour and half with each candidate – using BPS profiling tools, as do most companies that are in the field. Economically, it wouldn’t be possible to make money charging below 15 percent.”

Better candidates

Fiona Christian, business leader of Blue Skies North, is skeptical if it is possible, through charging so little, to provide a quality service at all.

She believes that the better recruitment consultants are able to put forward better candidates, because they attract them through a number of initiatives.

“Fees also need to include the other overheads that are essential for recruiters to acquire their candidates,” she told The Drum, “Blue Skies invest heavily in media advertising spend in the UK which allows us to secure the best candidates, we operate several referral schemes and we run regular free events and seminars both for candidates and clients.

“As a national recruiter, we can utilise our national database of over 10,000 live candidates. It’s a common misconception that recruiters can randomly come up with the perfect candidate – we make a huge investment into candidate acquisition which in combination with our industry expert consultants, gives us a real edge in an industry where there are some less than professional sharks who give the recruitment business it’s poor reputation.”

And that is the point.

Not all recruitment firms resemble the Photo-fit image of the shady character conjured up by Hopkins.

Said Christian: “Carl shouldn’t tar all recruiters with the same brush – there are now several boutique and fast growing recruiters doing things very differently to the age old sales recruitment model.

“Blue Skies was launched ten years ago by two brothers – marketers who were fed up with the often shocking level of service they received at the hands of recruitment agencies, both as candidates when they were searching for a job and as clients when searching for applicants. Thus one of our founding philosophies has always been to ‘treat candidates as we would like to have been treated ourselves’ when we were in that position.

“Equally from a recruitment position, we have always believed less is more – no-one wants to be bombarded with twenty CVs, none of which meet the brief.”

Steve Ollerton goes further saying the type of rant Hopkins delivered undermines the good work being done by many. “He made some huge sweeping statements, suggesting we’re not doing our job properly. The biggest problem is that it’s giving clients the wrong impression.”

Properly Vetted

Mike Carter of Orchard/Suits, specifically disagrees with the contention that candidates are not properly vetted.

“We meet them all,” he said, “spending two hours with each candidate and putting them through relevant evaluation. There are regulations we all have to comply with and it’s not feasible that he can avoid all of the concerns he mentions and provide the same level of service that most recruitment consultancies offer by halving the price.”

But Carl Freelove, of Big Fish admits there are issues that the recruitment business has to face: “It Is true that marketing and creative recruitment is fiercely competitive and has its fair share of mavericks who do too much talking, not enough listening and give the industry a bad name.”

Obviously, Big Fish does not fit into that category, he continues: “At Big fish, our philosophy, values and open way of working completely flies in the face of Hopkins recent comments about the way recruitment agencies operate.

“Over the past five years we’re proud to have built an enviable reputation amongst our clients and candidates for our honesty, integrity and our happy knack of putting the right people in the places.”

Hopkins seems perplexed that his venture has yielded such interest, admitting “it could all die on its arse in six months and the recruitment industry can have a good old chuckle at my expense... but of course it could become the Easyjet of the recruitment market.

“Agencybods is just another option. I’ve always had people come to me and ask what I think about this person, or that person, whether I know someone suitable, etcetera, etcetera.

“It goes on between most agency bosses and always will. Now I’m no longer heading up an agency, I’m still frequently asked for advice on recruiting. All I’m doing is formalising what I’ve been doing for years.

“At most, I’m probably going to be placing three or four candidates per month. Being online just makes it easier for people to access and to upload information. It’s no threat to the big recruitment consultancies. I’m just one guy looking to place a couple of people. I don’t have a city centre office, I don’t need to move 50 candidates a month.”

The right role

But it’s in comments like “I’m more interested in putting one candidate in the right role, than placing 10 of them in jobs that aren’t right,” that – as noble as they may seem – appear to be taking a pop at traditional recruitment consultancies.

“What I said was from personal experience and from what I’ve been told while researching ahead of launching the service,” he retorts.

“Over the years, I’ve been sent CVs of people that already work for me or people who I’ve fired; I’ve been sent monthly mailers about candidates that probably don’t know where their details are heading and received CVs from recruitment agencies when I’ve advertised directly. I’m not making it up, this all happened and speaking to other agency heads, it happened to them too.”

But Fiona Christian feels she has heard it all before. “At the end of the day I think his motivation for setting up Agencybods.com isn’t a million miles away from that of Blue Skies.

“That said the proof is all in the execution of the strategy. Good luck Carl.”