There was a time, just a few years ago, when City recruitment consultants could earn a fortune, in many cases probably far more than the staff they helped to place. Generally speaking, the last three years have not be kind to the industry and many recruiters and their firms have had to tighten their belts just to get by. And they are the lucky ones. Well, with the City looking a sure bet to come out of its malaise some time soon, will the good times return for the intermediaries who find the talent and fill the jobs ?
The balance of power has certainly shifted since 2000 and City employers currently have the upper hand. With very few jobs, firms have often identified and hired staff via their own in-house recruitment teams or internal staff-referral schemes. In many cases, recruitment consultants have been marginalised. The practice of 'cold-calling' has also done some damage to the industry and its reputation. HR departments became inundated with calls from previously unknown consultants who have attempted to get a piece of what little action there was. Terms of business also changed. Often, City firms said that they would not pay a fee on a guaranteed bonus, sign-on or car allowance any more. The percentage paid on deals has also fallen dramatically. And search fees ? Mostly you can forget it!
So, will the world look a little rosier for recruiters when City firms start to push the boat out again ? Will the good old days be back some time soon ? Well, the answer really depends on whether City firms hold steady or, in any new quest to recruit the best, throw caution to the wind and open up the floodgates, encouraging a free-for-all. Activity levels are clearly at a manageable level at present. In-house recruiters and vendor managers can easily fill what vacancies they have without casting the net too wide. But will this still be the case if we have any significant upturn in recruitment activity ?
Costs will remain fairly key and City firms will continue to negotiate hard on price for as long as they can. Although fees may start to rise again, the move away from more traditional forms of recruitment will continue. Employers will do all that they can to generate CVs themselves. Internet recruitment will surely come into its own.
And internet recruitment is not simply about posting a job on a website and waiting for something to happen. The jury is still out on this form of recruitment. Unfortunately for the medium, web-based recruitment just got geared up and the bottom fell out of the City job market. The number of people recruited via the web is still at a disappointingly low level. Having said this, there haven't been that many jobs around. And job-seekers of all ages now use the internet as an accepted source of potential job options. Jobs have been so scarce over the last two to three years that the internet option could not be ignored. There are now several specialised net recruiters out there just waiting to make a killing.
The internet will never, however, totally replace the more traditional recruitment firm. The best of these will always be around. But the pickings might not be as rich. Many of the big players may even decide to play the internet game themselves and snap up a popular City web-recruiter.
And what about the search boys ? With times being tough, many 'search' consultants have had to get their hands dirty working without a retainer. When the market returns, can they expect to get their upfronts back ? Some will, most probably won't. Not if City firms have any sense, anyway.
In conclusion, then, good recruiters will continue to bring home the bacon when the market improves. In a highly competitive market which provides City employers with more recruitment choices than ever before, however, the dosh is likely to be somewhat less than that enjoyed in the heady days of the great bull run.