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Recruitment start-ups

By The Drum | Administrator

March 4, 2002 | 9 min read

Like many businesses' recruitment consultants say that the events of 11 September have affected their balance sheets. But unlike most industries, the terrorist attacks in the USA, ironically, appear to have had a positive effect on the recruitment industry.

Despite a lot of companies laying off staff in the wake of the economic downturn which followed the World Trade Centre attacks, many have re-recruited discreetly through recruitment agencies.

Patti Docherty, managing director of Glasgow's Aspire Personnel, believes streamlining of companies was on the cards, but last September's events just made it happen more quickly in a lot of organisations.

"I think companies had wanted to streamline their operations and staffing levels anyway. When I was in America President Bush was telling companies to get back to basics. That was something that was on the cards here in the UK as well. But what happened last September made it all happen much more quickly everywhere."

Alan Fraser, managing director of Fraser Green Recruitment Advertising Agency and Consultancy, said: "Some employers perhaps don't want to be seen to be advertising because they may have already made people redundant. Ads could run under the consultancy's name and with some clever copy you wouldn't be able to guess what company it is."

The atrocities also turned many people's attention on refocusing their lives and putting their energies into a new challenge. According to Docherty, this has also contributed to a recent boom in business.

She said: "We've been doing more life coaching for people. This is no longer exclusive to people in their 40s or 50s, young people need it too. I've had someone of 26 come to me recently.

"People are now much more exposed in business. They know what goes on. They know they can earn more elsewhere or get training or promotion with a rival company."

Docherty believes that gone are the days of 25 years' service with a company then being rewarded with a gold watch. People are less loyal to their employers now and more so to themselves and their career development.

The Recruitment and Employment Confederation believes a longer term reason for the growth in the industry is companies' desire to remain flexible.

Marcia Roberts, the external relations director for the confederation, said: "Companies have recognised that to remain competitive they need to be flexible in their use of labour.

"At the same time individuals are choosing to be temporary workers due to the increased options it gives them. As a result, increasing numbers of recruitment companies in Scotland are starting up to cope with this demand in the working environment."

In recent years First People Solutions has been born, and scooped the title of Scottish Recruitment Consultancy of the Year 2001, along with ID Recruitment, which has made a significant impact, Fraser Green and Aspire Personnel to name but a few.

A spokesman for the Office of National Statistics said there has been a rise in temporary workers in the UK, but in the last few years this has settled from the boom in the early to mid-1990s.

The figure peaked at 1.712m in 1997, while the latest figure for Spring 2000 shows this settling just under 1.7m.

Small to medium-sized employers cannot afford inhouse human resources departments but need this advice and expertise when looking for staff.

Docherty said: "There are a lot more small businesses. In marketing services especially you get a lot of breakaway companies starting up. They don't recruit all year round, they don't have an HR department."

She believes HR has become a lot more focused in the time recruitment has boomed in Scotland. "People have a perception that HR departments dealt with the payroll or wages with a bit of interviewing thrown in. But HR has so much to fulfil in implicating new employment legislation. Interviewing for projects is time-consuming, which is why it often goes out to agencies."

As well as a general boom in the number of recruitment consultancies, the industry has diversified with many specialists setting up shop.

Just Web People is an agency specialising in internet and new media specialists.

Managing director Eddie Docherty (no relation to Patti) founded the agency around 18 months ago and has recruited for clients including Iomart, Digital Animations Group, ItsNotRocketScience and Realise.

Companies favour agencies which are specialists in their clients' particular market, according to Mr Docherty, because they get a higher standard of service.

"Clients are looking for someone who knows their market for better quality of service and advice on things like salaries.

"I worked at an agency before where we were really just generalists. In that situation it's impossible to really know your clients."

With industries like the one which Just Web People serves many people at the start of their career work in London but further down the line want to return to their home place as a lifestyle choice. However, they do not want to lose out on a good remuneration package and challenging work. Help in seeking the ideal job is often sought through a recruitment consultant.

Mr Docherty said: "There was always so much competition in London that salaries went through the roof. The market down there reflected the property boom.

"In Scotland new media is a growing industry. For a lot of people coming back they do so as a lifestyle choice and not a money choice."

Meanwhile, Patti Docherty, who has London-based candidates seeking relocation on her books, said: "People can now get the same salaries up here that they can in London. People can now get the £40k or £50k that they want, because there are so many more companies here now."

A lot of the time employers might also prefer to recruit through a consultancy than via an advert in the press because they believe they will get a higher calibre of candidate, according to Aspire's MD.

She said: "People who are with recruitment agencies are people who are in employment generally. Sometimes it can be a full-time job to find a job. You might not be committed to finding another job but it doesn't take a lot of effort to register with an agency.

"Some candidates might not necessarily be looking for a new job or more money but use agencies as a good way to hear of opportunities which might interest them."

However, every silver lining has a cloud. Fraser, a veteran of the recruitment industry, has seen it all before.

"I find the whole thing fascinating. I've seen this happen before. There are times when the recruitment advertising market explodes then contracts. When it contracts the recruitment consultancy market explodes. On the consultancy side it's probably over the last five years that things have taken off."

Another reason for the fluctuation is changes in the Scottish employment market in recent years, believes Fraser.

A change from engineering towards the IT and now a heavier focus on the leisure industry has taken place.

Fraser said: "There's a skills set shortage in Scotland. A good recruitment consultant will sell the opportunity and client to the potential employee.

"But when you get down to the end of the process a candidate has to deal with a client direct and it's sometimes at that point that the client doesn't sell themselves enough and no placement is made. This means no fees for the consultant. You could have spent two or three weeks of working hard to get no fee at the end through no fault of your own."

Patti Docherty is also of the belief that there is no point in the wrong person filling a job for the sake of getting a fee.

She said: "There is no point in putting a square peg in a round hole. The person will leave the job in three to six months, leaving your client back at square one. The person will tell everyone they hate their job and how they got it. You can do a skill match but more often than not it's personal attributes that are important."

Fraser believes a boom in the industry is positive but a cautious approach is required. "One of the things that annoys me about the proliferation of recruitment agencies is that people can just open up and put a sign above the door claiming to be one.

"The industry has got a bit mixed up over the last few years. There's a big difference between recruitment advertising agencies and consultancies but it's got a bit grey in recent years. We must remember about standards in the industry and about levels of professionalism and creativity."

How to...start your own recruitment consultancy.

1. Do your research. The recruitment industry is highly competitive and highly developed. It is vital to research the sector in which you intend to operate.

2. Contact potential clients operating in the sector which you wish to serve and get their views on whether there is a need for a specialist agency in that area.

3. Check out any potential competitors. The Yellow Pages is good to see which companies are already operating in the market you intend to serve.

4. Choose the right name for your company. It is advised to choose a name which clearly indicates what your business does e.g. Personnel, Employment and so on. Ensure that your name is not too similar to that of another consultancy as that can cause problems under the Business Names Act 1985.

5. Most people starting an agency will look to serve a sector which they understand. Therefore if you have spent years working in that sector use your contacts. But use them well and don't let them down.

6. Under the Employment Agencies Act 1973 if your name does not state you are a recruitment consultancy then it must be clearly stated on letterheads and advertisements e.g. ...Associates (Employment Agency).

7. Familiarise yourself with recruitment legislation. The Acts include the Employment Agencvies Act 1973, The Conduct of Employment Agencies and Employment Business Regulations 1976.

8. Ensure that you have taken out Employers Liability Insurance.The Recruitment and Employment Confederation also advises taking out professional indemnity insurance.

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