by Mike McDonagh, Director at Hays Ireland
With titles like ‘retained search’, ‘executive recruitment’ and ‘search and selection’ the top end of the recruitment business has always set itself apart from the rest of the industry. Firms either operate a distinct specialism (like at Hays) or create a premium brand which stands apart from the parent company. Some niche firms operate solely in the heady world of c-Suite recruitment.
Whilst much has been said and written about disruption in the recruitment industry in general, there has been little comment about the executive end of the market. Social media has transformed recruitment in recent times with LinkedIn in particular disrupting the industry and forcing everybody, clients, agencies and candidates alike to change their behaviour. So, has the executive end of the market escaped the upheaval, or indeed should it escape?
The ubiquitous nature of data means that everyone now feels they can ‘have a go’ at recruitment, internal recruitment teams are now the norm in businesses of any meaningful size and recruitment agencies have had to adapt-or-die. It is no coincidence that recruitment agencies are among LinkedIn’s biggest global customers despite the fact that LinkedIn was itself supposed to spell the end of the industry. It is the progressive agencies’ use of social media and their expertise and technology that keep them relevant. Smaller agencies are becoming even more niche to survive and larger agencies are increasingly turning to the various outsourcing models to generate new business and revenue streams.
But has this easy access to data impacted the executive market at all? I believe it has but I don’t think the industry has reacted to it yet. Whilst the jobs market is buoyant again with a lot of activity at the senior end, a quick glance at the websites of some of the executive recruiters reveals fewer active roles than you might expect. It would appear that employers are increasingly tempted to try the ‘do-it-yourself’ model, particularly if they have in-house recruitment teams.
So the market for executive recruiters is tough, despite positive job flow and unless the business model changes, the outlook is likely to remain tough. The availability of data, not just via LinkedIn but across an ever increasing array of platforms, means that doing research has become so much easier. It is a very straightforward proposition now to find out, even on a global basis, who the other players in a sector are, and who holds down the key roles in those companies. The need for a ‘little black book’ or a lifetime’s experience in a given industry has been usurped by emergence of data as a commodity.
Personal connections and a strong brand will always be important elements of good executive recruitment service but the model has fundamentally changed and the business model must follow.
What then, do recruiters in the exec space need to do to stay relevant and win back those clients that are tempted to use their own resources? I believe there are three key aspects that are fundamental to survive and thrive in this new dynamic.
1. It’s all about the process. Anyone with a laptop and time on their hands can track down and identify the available and relevant talent pool for a specific role. This used to be the sole domain of the rolodex recruiter, now anyone can do it. It is how this information is processed and managed that is the defining factor in the success of any senior recruitment campaign. A rigorous process will identify and secure the best potential candidate for any role and lead to a successful hire.
2. Technology as an enabler, not a disruptor. Recruiters need to embrace existing and emerging platforms and know how to use them to effectively network and identify talent. It was once considered that only active job-seekers would promote themselves on LinkedIn, now the whole world is there, including the very top echelons of business. An inability to navigate these channels as a search executive makes you irrelevant.
3. Cost – there is no doubt that the price point will change. If you are the sole source of critical knowledge (the little black book) you can charge pretty much what you like for it. When that knowledge is an open secret, your value is diminished, unless you can demonstrate the value you can add to the process. This brings us back to point 1, but buying a process never costs as much as buying knowledge.
The trend to out-source, then in-source tends to be circular, and I have no doubt that many organisations who like the sound of DIY recruitment will soon realise that it’s not that easy and they might be best to ‘stick to the knitting’. But when choosing who to work with, if they do engage a search firm, it should be based on that firm’s ability to clearly articulate the value they bring to the process and their skill at leveraging the digital world to identify their targets.