Are Recruitment Agencies a dying breed?

Submitted by daniel on Tue, 21/11/2017 - 14:00

I have been working as a Web Developer since 2001. Until a couple of years ago I have worked as a contractor in a number of roles thanks in part to the army of Recruitment Consultants who are registered on the job boards gaining access and to my credentials and matching me with possible opportunities, arranging interviews and setting up contracts and of course making sure you get paid for the work that you do.

Today, it seems there are just as many recruitment consultants out there, however they seeem to be working much harder for that lucrative contract. One reason for this might be the governments crack down on tax evasion and the use of Umbrella companies and similar who help you set you up as a limited company that can use clever accounting schemes to ensure that you pay as little income tax as possible, and of course receive the maximum amount of renumeration. It is understandable then that the government is working to squeeze or close these types of arrangements as it undermines its own revenues.

With this is mind there is a reduced benefit for a company employing contractor v's say someone full time. Companies seem to be offering less contractor opportunities today and are looking to employ people under IR35. Hence the requirement for contracting is squeezed, historically an essential part of recruitment consultants revenue.

Another change on the landscape has been the rise and rise of social media. If you are looking for a job, chances are that you have a Linked In account. Many companies today are looking to leverage these online social networks as a means of recruitment and is one way of cutting out the 'middle' party.

Cutting out the middle person can be beneficial both ways. As an potential employee, you can be proactive and apply for jobs that are of interest to you, not co-oerced into something that an 'agent' might want to match you for which may or may not be something you are comfortble with. This is a more informed approach. From a recruiters perspective, they can offer a more competitive package without having to worry about the commissions liable for recruitment consultants, which I believe can be around 10% of your starting salary.

Today if you are applying for a new job employees have a linked in account that they advertise their roles on. If not they may use some other channel. I have recently noticed that Stackoverflow have started to act as a forum for employees looking to recruit from specialist areas. This make sense as these same social networks offer some reference into employees experience and interests, and is also a more targeted approach.

Chances are that today recruitment agencies also use these same channels to find out about new opportunities that are actively being recruited. You can probably tell if that is the case because more than one agency will call you about the same role. How often do you hear a recruitment consultant ask if they can add you to their linked in account?  However, from an employee's perspective, they are likely to look on someone who applied directly more favorably than someone who goes through an agency, and if it does get to offer stage, you are probably better off negotiating directly than having to also compensate for the introductary fee that the agency will expect.

So in 2017 with the culture of social media and its recruitment benefits adopted by many organiations today, where does that leave the trusty recruitment consultant? It seems that they are being sqeezed by the governments push for companies to take on less contractors and employee people directly under IR35, as well as a new technology shift in the power of social media as a recruitment tool today. It is not uncommon for companies to still use these agents to close those hard to fill positions, but there is probably little or no exclusivity and they are often competing against many other agencies also looking to profit from being able to close that same vacancy. 

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