IS THE RECRUITMENT PENDULUM FINALLY SWINGING BACK?

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And what does that actually mean. Normally as the market changes when things start to get busier clients no longer have the bandwidth to do their own recruiting.? Finding the right people and candidates becomes naturally harder to find, more time intensive, and this leads to clients needing help again to attract the right people.

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It’s no trade secret that recruitment companies have suffered over the last two years, especially those that were tied into the ‘VC funded startup market’.

Startups have been under huge pressure since the regular VC funding disappeared and these companies have had to trim all of the fat and become profitable overnight. This for many has been an ongoing battle over the last two years, generating enough ARR to meet the existing payroll. Only hiring when the ARR rises to justify bringing in another person. Many startups cut every budget they had, including the recruitment and training budgets, the first to go.

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As a result most startups have been doing their own recruitment over the last two years and this has had an impact in so many ways, here are some of the main ones:-

1.????? The managers, staff and the leadership have had to invest a huge amount of time in the recruitment process beyond what they have historically had to when using a recruiting partner. It’s not that they are not able and capable, but it sucks a huge amount of time, and that’s time sacrificed out of their day-to-day tasks. Let’s face it, there are only so many hours in a day, and historically they got their recruitment partner to do all the donkey work, so they did not have to.

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With the advent of AI, which came at godly time to provide huge benefits in helping to screen and filter out candidates, discarding the more unlikely (those not in the country or those that don’t have the skills and experience needed) but it misses more than a few tricks along the way.

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2.????? Clients don’t get it right all the time because they can’t afford to put the same level of rigor in that their recruitment partners put in. This has resulted in huge mis-hires and many bad hires over the last two years. I ‘ve had so many clients say “we hired xx number of people last year and they either all left, or we had to let them go. It burnt up a lot of man hours, as well as payroll that we paid, not to mention the chaos it caused to the team and wider company with people joining and leaving.” This or similar stories we heard a lot during the end of 2023 and Q1 of 2024.

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3.????? Many recruiting firms have let people go who have ended up moving out of the industry, and as things improve, they will have to hire people back from competitors or start training new people. But this is something that has happened repeatedly over the years. We had similar changes with the financial crisis back in 2008-2011, it took a while for things to improve and find a new normal and again during lockdown, not as long but just as painful.

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4.????? While many good firms have simply shut their doors for good over the last two years, largely due to the rollercoaster ride we have all endured over the last 20+ years. Others have reduced in size, operating on skeleton staff to keep the doors open and getting ready for the market to return, which it inevitably always seems to do, but setting a ‘new normal’ each time.

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5.????? Technology has taken another step forward, there has been a real growth in the number of new recruitment software solutions/companies in the market, everything from CRM, ATS systems, AI search & filtering technologies. But a lot of this is still early tech and has a long way to go to replace the human in ‘the human recruitment game’, people like talking to humans. In many cases candidates prefer speaking with an agency to speaking directly to a client. Having a buffer in place creates a positive environment, it gives candidates the opportunity to have someone to provide a wider oversight and for a client someone to help manage and guide the process and weed out those that are unsuitable, maximizing the time and effort they denote to the recruitment process.

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It’s not just recruitment in the ’VC funded startup market’ that has been affected, it’s been across all markets.? Why you ask, well the overall economic climate has shown signs of moderation, with factors like rising interest rates and inflation impacting business activity. This has created a general slowdown in economic growth and companies pull back hard on the reins and recruitment is more often than not, the first layer to have its budgets reduced.

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Interestingly we have over 40 countries going to the political polls this year, many with a growing nationalistic mandate, but the general forecast is one of positivity and expected growth moving forward. Like in most times there will be winners and losers and the as the circle spins some will enjoy growth and others decline. Hopefully recruitment will see the pendulum finally swinging back in a positive basis.

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It’s led companies across the board to be more cautious in their hiring of people, far more risk averse. Working with fractional or temporary (Contractors) people has seen less of a drop and therefore clients will consider fractional (Contractor) workers at the same time as permanent people, largely due to the fact it gives them more flexible hiring options and less risk attached to a hire. It often prompts the ‘contract to permanent’ option or the ‘try before you buy’ option to make sure they have the right person for the job. The downside with this is that fractional (Contractor) workers don’t or won’t consider permanent roles or will work on a fractional (Contractor) basis with one client but won’t consider a permanent role with the same company.

Although the general analysis shows lots of jobs being available, it is taking a much longer cycle to fill a role than it did two years ago. It is not the extra rigor that clients are putting in to the process but the tardy or disconnected process that slows the whole thing down.

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Fingers crossed that we have a period of growth coming our way both as a country, and an industry.

About the Author

Howard Longstaff has over 20 years of experience delivering people within the talent acquisition arena. Having worked extensively across the UK, Europe, USA, and Canada.

Over the years he has specialised in two fundamental areas, the first area he has a real passion for is ‘building Sales Teams’.? The second area he loves getting involved in, is the leadership team, the C-Suite, helping to get the balance right, covering the gaps in knowledge, and back filling these roles as companies grow.

‘Getting it right first time’ is never easy, Howard is one of the few, executive search consultants who is willing to guarantee the work he does, offering a 12 month free replacement.

‘No one is perfect, but a team can be’, working with SaaS startups, SEM’s and Mid-Market clients who are scaling up. In most cases we work in either an exclusive or retained basis and are typically engaged for a 3–5-year period, sometimes much longer.

Howard is someone that uses technology to enhance the hiring process, to save time, money and effort. Taking the pain out of the process, we operate a ‘Private Client Video Portal’ keeping everything together & secure, candidate videos, as well as the psychometric behavioural assessments on each candidate and executive profiles. He has repeatedly built teams across three continents, has a good breadth of knowledge across the talent acquisition arena.

[email protected]? +44 (0) 7710 907 988

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