Niche vs. Generalist Recruiter

Niche vs. Generalist Recruiter

The world of recruitment has changed in the last 10-15 years. Fifteen years ago most major towns and cities had local recruitment agencies that supported their community and local economy.

They were generally situated on the high street and were the main source locally for employers seeking staff and workers seeking employment. They have fulfilled a key role in the development of our regional economies.

Often they supplied:

  • Admin & Clerical
  • Accounting & Payroll
  • Customer Service and Contact Centre people
  • Distribution staff (FLT Drivers, drivers, pickers & packers)
  • Construction Workers
  • Legal
  • Sales & Marketing
  • IT
  • Education workers

The list is actually endless and certainly not exhaustive. Their key differentiator was they were local and knew all the local employers and attracted local workers.

The rise of the Internet has seen this world change and the squeeze on margins and the introduction of in-house recruiters by larger employers has seen the commercial viability of many of these businesses traditional core markets have become almost unsustainable.

The need for recruitment agencies to recycle the unemployed/displaced workers and support individuals make informed career moves has not diminished increasingly this role has been fulfilled by Niche/Specialist Recruiters.

So successful have they become that they dominate most industry lists of high growth recruiters and those with the highest profitability.

Niche or specialist recruiters know the gaps in the markets, know which skills carry the highest premiums and are now the ones that achieve the higher margins. In fact it is fair to say they dominate most sectors.

So successful has this niche business model been that, those achieving the highest growth and margin figures are now often working in Ultra-Niches. No longer focusing on IT, Accounting or Engineering but specific skills within a sector such as Cyber Security, Avionics Systems Engineering or Cost & Management Accounting.

This is a trend you cannot ignore and in our support of clients we don’t.

Choosing their ultra-niche or niches is critical. Knowing which are growing, which have the best margins and accessibility is key. Migrating from a ‘generalist’ regional recruiter model even one in a specific sector like construction or engineering to a ultra-niche model is not easy or without its pitfalls and challenges. Not everyone manages it successfully and without losing staff and clients.

One of our oldest clients however made the move to a niche recruitment desk model eighteen months to two years ago and are now achieving 300% growth rates in revenue and profitability. This performance is not unique and replicable with the right training and coaching support. Done in the right way it can have other benefits in increasing consultant productivity, speed of development of trainees and brand and market penetration.

A critical consideration is do you know where the ‘skill-gaps’ are in your markets. Niche Recruiters leverage the ‘supply/demand’ equation to maximum benefit. They justify their higher fees by finding the rare/premium skills that other suppliers struggle to attract. Your knowledge of where these ‘gaps’ in the market exist and for how long they are likely to remain is therefore crucial. A good experienced recruitment growth coach will have some of this knowledge and help you find what is best for your business.

Before embarking on this journey factors for consideration will include:

  • Which niches/ sectors are growing?
  • What knowledge/experience do you have in these niches?
  • What existing client relationships and commercial agreements do you have in or outside these sectors?
  • What 360 recruitment practices are consultants skilled in?
  • What capacity and appetite do they have for niche recruitment?
  • How flexible are they to changing their working practices?
  • How keen are they to learn and acquire new skills?
  • Are you permanent or temp/contract/interim focused business?
  • What are your core businesses ‘service values’?

In your quest for the lucrative sectors that are growing, you might be interested to know we publish a blog every year on the Top Recruitment Sectors for Growth you might find this a useful place to start. There are many other sources of information on skills gaps and market trends. The KPMG/REC monthly Jobs Report is another good place to keep tabs on.

Many of the premium skills-gaps exist in IT, Technology and Engineering sectors but these may not be areas you have any knowledge or expertise in.

Equally healthcare and education also have huge skill shortages but there are barriers to entry unless you have access to government framework contracts and a whole regime of compliance to understand and learn.

Again there is not ‘one-size that fits all’. The journey to niche recruiter is not easy or right for every business and the advice and support of a good recruitment growth coach with experience of doing this successfully with other recruiters is therefore essential.

 

Recruitment Agency MDs – Will you Adapt or Fail?

 

 

 

Was anyone apart from the board of directors of HMV or Blockbuster surprised when their businesses went into liquidation? I know I wasn’t and most people I have spoken too weren’t either.

After all technology changed the way their customers could purchase their products and both HMV and Blockbuster were slow to adapt their business models. When you can buy your music and video choices on-line why would we go to a shop unless they added value.

The same is true in the World of Recruitment. With technology increasingly making the sourcing of mainstream talent and resource easier, employers will not use agencies in the future unless they can supply their ‘product’ with an added value. Only where acute skill-shortages exists may agencies still have a role but only if they can source the best talent.

 

The burning question is with their existing business models will they be able to?

 

7788113_sIn my recent blog Third World War begins now I discussed how the scale of the ‘War on Talent’ is about to accelerate dramatically. I questioned whether recruitment agencies would be allies of corporate businesses or mercenaries but the choice agencies face is far starker than that.

 

What is at stake is their very survival.

 

The traditional recruitment agency’s business model has been set up around attracting candidates; contractors and temporary workers who predominantly come from the ‘baby-boomer’ (born pre 1964) and ‘generation-X’ (b1965-1981) age groups. Only now are they starting to engage the ‘Millennial Generation’ (also known as Gen-Y born after 1982 and started work since the millennium).

 

A lot has been written about this generation and if you have not read it you need to quick.

 

Millennials have very different expectations and attitudes to work and so they will increasingly make different demands in the way they engage with agencies and employers. In a future world with acute skill shortages, highly educated young talent will progressively become harder to find.  Sourcing these millennial candidates is therefore a must if any recruitment agency is to thrive.

 

In my Third World War Begins now blog many of you will remember that in the next two years ‘Millennials’ are set to become the dominant generation in the work place. This is going to come as a shock for many ‘Baby-boomers’ who as a generation, have dominated the workplace for over thirty years.

 

It’s a timely reminder in the week that she passed away that Margaret Thatcher’s reign _66808649_66808648coincided with the ‘baby-boomers arrival as the dominant generation in the UK workplace. It was a period of huge change in the UK and US both within work and society.

 

New management practices came in and the old large monolithic business hierarchy’s dismantled. The Baby-boomers readily embraced IT into mainstream corporate life which saw swathes of administrative and clerical functions computerised and abolished. They embraced the free market economy and entrepreneurial spirit, which the US & UK governments were so keen to unleash at that time.  Whether one was a product of the other is debateable but the ‘Young and upwardly mobile’ Yuppies certainly exploited the opportunity that in the UK, the Thatcher government created.

 

Similarly todays ‘Millennials’ are poised to have a major impact on the post 2015 world.

 

So what are the key areas that make ‘Millennials’ different?

 

Meaningful Engagement – Most research indicates that the millennial generation are unwilling to perform dry boring work. Kevin Sheridan, the Senior VP of Avatar HR Solutions (an organization that specializes in employee engagement and talent management.) recently told SHRM On-line.

 

“In a gargantuan difference between Baby Boomers and Gen Y, the latter set their career as one element within their life, not the single element that makes their life. Gen Y wants their job to provide personal fulfillment and support a positive work/life balance.”

 

Clearly the work they do has to have a value and meaning. As recruiters we will find it increasingly difficult to find young people to undertake boring, repetitive and tedious roles and certainly not doing over 45 hour shifts. Recruiters might need to think differently how they sell the jobs they are seeking to fill. Millennials will increasingly demand more job information before attending interviews.

 

Fearless and Intolerant – One of the main qualities that sets Millennials out from the rest of us is their fearlessness and intolerance.  If there is something they don’t like they will not suffer in silence. They will not bite the bullet, or get their head down and get on with it.

 

No, they will challenge it and if  unsuccessful they will simply walk.

 

Increasingly the skilled and educated ones will know that they can get another a job. As greater numbers of this generation have travelled the world they already know first-hand that there are many countries where they can get work, Australia, China, Brazil, Russia the Middle East to name just a few.  Employers and agencies seeking to control Millennials with the fear of unemployment will simply find it ineffective.

 

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Flexibility – Millennials demand working environments, which are flexible. They will not work rigid 9-5 days. They will demand the flexibility to complete their tasks when and where it suits them. Employer’s business models will therefore need to reflect this desire including recruitment agencies own models.

 

Already a great many global companies who are aware of this are migrating to operating models where employees are evaluated on performance rather than presence. The ROWE (Results only Work Environments) is one of these such environments. Cali Ressler and Jody Thompson are the Founders of CultureRx and creators of the Results-Only Work Environment (ROWE) and their site is worth a read. This model will not work for every industry and there will be a need for some people to work core hours but entire workforces working rigidly will be a thing of the past.

 

Dynamic Environments – Stayed and monotone working environments will not appeal to Millennials they demand change. They also have low attention spans and will rapidly move on if the work isn’t stimulating and challenging. They are not afraid of tough challenges and will strive for ambitious goals. So recruiters when taking briefs you need to check how stimulating the work is otherwise your refund clauses could be used a lot more frequently that you might like. Money is not their primary motivator in making career choices.

 

Recognition and Management – Millennials crave feedback, instant reaction and gratification. They will not wait for annual appraisals they have been brought up on social technology and are accustomed to getting frequent responses. They will not suffer pretentious and insincere fools as managers. ‘Authentic and honest’ superiors whose knowledge they can respect is what they seek. 1970s and 80s autocratic leadership founded on hierarchy and status will not work. If your clients operate this way prepare to find them very difficult to recruit for.

 

Diverse, Fun loving Team Players – Millennials like most of us are fun loving at heart and for them work is not supposed to be an austere place. They will expect to work in multi-cultural and multi-disciplined teams with other workers who have knowledge they can respect and learn from. When attracting candidates your techniques and approaches need to reflect this.

BYOD

Technology Sensitive – If your clients are luddites and do not embrace new technology then Millennials will shun them. Filling jobs where employers shy away from investing in the latest and most efficient technology will see the Millennials leave. BYOD ‘Bring your own Device’ employers are expected to become the norm. Agencies that employ old methods of applicant attraction, which do not embrace the latest technology, will also see themselves lose out too.

 

To this end Social Media is therefore the most effective way to engage them.

 

This is the battleground recruitment agencies are already losing. The Millennials, who seeking ‘meaningful engagement’ are connecting with employers who are already ahead of the curve. Astute and forward thinking corporate HR departments are aware of these demographic and social changes and are reshaping their businesses to accommodate them. They are also learning to leverage their corporate brands to recruit and attract the best talent using In-house/Direct Sourcing team.

 

Like Network Rail, who at the CIPD conference in Manchester this year, outlined how they had used Facebook very successfully to hire virtually their entire 2013 apprentices, businesses are creating and cultivating their own talent pools not by tweeting incessantly that they have vacancies but by placing meaningful and highly relevant and interesting Unknowncontent into a Facebook Group.

 

A move to in-house recruitment at Network Rail has saved the company 85 per cent in hiring expenditure, the CIPD’s annual conference in Manchester has heard.


The reduction in recruitment agency fees has seen costs per hire drop from an average of £3,500 to £500 in five years, said Adrian Thomas, head of resourcing at the rail maintenance firm. The company – which employs 35,000 people – externally hires or internally promotes around 10,000 people a year.


Now, 73 per cent of external recruitment is done through direct resourcing, with only 7 per cent fielded out to agencies, delegates were told.


The majority of candidates were now generated through a revamped careers website, explained Thomas. Other initiatives included a specially designed Facebook forum for the Network Rail apprenticeships scheme, which generated 6,000 applications for the 200 places on offer, he added.


 

Other companies are similarly using YouTube, Twitter and LinkedIn to post relevant and domain specific videos, articles, case studies and industry news for their target audiences to feast on. Only once their core following is established do they start to post jobs news into it. Like good farmers they spend hours preparing the soil before planting the seeds.

 

This is nothing that niche agencies in IT, Oil and Gas, Engineering, Biotech or Nursing couldn’t do but they choose not to. It requires patience and investment without immediate returns. Sadly for the agencies however by the time the industry accept the returns are there it may be too late. Agencies will have lost the high ground and the commercial advantages that go with it.

So MD’s will your businesses also go the way of HMV and Blockbuster or do you have the courage to start to change now. As Network Rail demonstrates there are models out there that work.

Globally the number of people under the age of 30 now exceeds 50% of the world’s population.  Somewhere between 2014 and 2015 the Millennials will become the dominant generation in the workplace. The time to change is upon you.

The War for Millennial Talent has begun. The only question is do you have the courage and wisdom to triumph?