2023’s Recruitment Revolution: Companies Go Solo, Bye-Bye External Recruiters!

In the world of hiring, 2023 was a year of big changes. Companies decided to do things differently by saying adieu to external recruitment agencies and venture into the uncharted territory of self-hiring. This shift in how hiring was done raised questions about what happened in 2023 and what’s coming in 2024. Let’s explore this substantial transformation that shook up the hiring world.

Industry facts

What Happened in 2022:

1. Post-COVID Boom: 2022 was characterised by a post-COVID boom, with unprecedented growth in the recruitment industry.
2. Over-Hiring: The boom year of 2022 led to over-hiring, with recruitment businesses rapidly expanding their workforce, processes, and technology.
3. Talent Shortage: A talent shortage was experienced, leading to a competitive job market.

Challenges in 2023:

1. Poor Investment Decisions: Many recruitment agency owners faced the consequences of poor investment decisions made in the previous year (2022).
2. Market Slowdown: The recruitment industry experienced a slowdown in 2023, leading to challenges in finding job placements.
3. Candidate Behaviour: Changing candidate behaviour presented a significant challenge, making it difficult to fill positions.

Expectations for 2024:

1. Operational Efficiency: In 2024, operational efficiency, AI, and automation are expected to play a crucial role in agency success, particularly in the first half of the year.
2. Investment in AI: Leaders anticipate a greater focus on utilising AI and automation to their full potential.
3. Uplift in the Industry: An uplift in the recruitment industry is expected in the second half of 2024.

2024: What’s Next in Recruitment?

Before we dive into why companies turned their backs on external recruiters, let’s take a peek at what’s expected in recruitment for 2024. It’s predicted that external recruitment might face some challenges, while companies will continue to rely on their own teams for hiring. But why did companies make this move in the first place?

Why Companies Chose to Handle Hiring on Their Own

Understanding why companies made this change is crucial. External recruiters certainly have their advantages, but in 2023, a unique opportunity presented itself. The job market, especially in the IT industry, was flooded with job seekers. Unlike previous years when there were more job openings than qualified candidates, 2023 saw an unusual surplus of applicants. In fact, we observed data indicating a substantial increase, with some clients receiving over 3,000 applicants for IT-related positions, a staggering number.

This abundance of applicants led companies to rethink the necessity of external recruiters. Many began to perceive them as not only costly but also unnecessary. Some recruitment agencies chose to adopt a wait-and-see approach, while others likely significantly reduced their fees.

However, these specialised headhunters do not advertise and passively sit back till someone applies for their posted job role.They have extensive networks and connections across various industries, granting them access to a wider candidate pool than internal recruiters can tap into. Replicating such networks within a single company proves to be a daunting challenge.

2024 Predictions and Advice

In summary, 2023 was marked by challenges and a market slowdown, leading to a reset and focus on efficiency and technology. The industry leaders anticipate a recovery in 2024, emphasising the importance of embracing technology, providing value to clients and candidates, and maintaining a positive outlook.

1. Focus on Quality: Emphasise the importance of maintaining high-quality service levels in a market that may continue to be challenging in 2024.
2. Strategic Business Development: Strategic business development is highlighted as essential for success, emphasising the importance of long-term relationships and value-added services.
3. Investment in Technology: Invest in technology and processes that enhance candidate matching and automate administrative tasks to improve the recruitment experience.
4. Adaptation to AI: AI's impact in recruitment is expected to grow, and embrace AI while ensuring personalised and customised interactions with candidates.
5. Getting Back to Basics: 2023 served as an opportunity to streamline business operations, focusing on core processes and technology.
6. A New Opportunity: Despite the challenges of 2023, it is viewed as an opportunity for growth and success in 2024, with a focus on the fundamentals.

Employers: The Importance of Smart Hiring

Making smart hiring decisions matters. It goes beyond merely filling positions swiftly; it entails building a strong employment brand, nurturing a long-term talent pool, tuning up an excellent candidate experience (where external perspectives can provide valuable insights for improvement compared to internal ones), and identifying candidates who align with your company’s culture and goals. In 2023, many companies were enticed by the idea of saving money and having lots of applicants to choose from. However, they have or will soon come to realise that having numerous applicants doesn’t guarantee finding the best fit for the job.

Take Action: Embrace the Benefits of External Recruiters

As we move forward into 2024, it’s essential for companies to think carefully about their hiring strategies. While it’s tempting to do everything in-house, external recruiters bring unique skills to the table. Their ability to connect with a vast network of potential candidates is invaluable. Their expertise can assist in locating the ideal match for your company. Their knowledge of the market, understanding of competitors, and extensive networks provide significant value that cannot be replicated when confined to a single company. This is why it’s challenging for experienced external recruiters to transition in-house; their personal network holds substantial value.

Are you ready to explore the possibilities of external recruitment and elevate your hiring success? Book a meeting with us at: https://calendly.com/_abaddion/30min

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