Two corporate HR trends are likely to decide the future of New Zealand’s battered IT recruitment market.
The first involves larger firms taking back the recruitment function themselves, particularly through the use of e-recruitment and related job boards. The second is smaller firms increasingly outsourcing their recruitment as they find themselves too busy to do the job themselves.
The jobs market is expected to remain tough, with a surplus of IT candidates meaning agencies are likely to be unable to charge fees as high as they would like. The shortage of jobs also means fewer commissions, which will make survival for some agencies extremely challenging. They may have to hold out until the end of the year, when more job vacancies are expected.
The chief of one technology company, who would be quoted only on condition of anonymity, says it plans to use agencies “as little as possible”, even though it plans to double its staff in 2002.
“Right now they are an expensive, glorified, CV-writing agency,” says the company’s head. He says he wants to remain anonymous “as I cannot afford to be blacklisted by the agencies”.
The company says it uses agencies only because they have some good people on their books, but it finds agencies “are in general unable to qualify IT staff”.
“We are unhappy with the service they provide but if it’s a seller’s market you have got to use them. Right now, it is a buyer’s market, proven because we can negotiate far better rates than the standard 15%,” says the company’s chief. Instead, the firm will increasingly use its own website and other job websites and try to attract staff by “humorous” advertising.
Networking company Logical plans to increase staff by 20%, while Vodafone, Computer Associates and IBM expect little change in employee numbers. All hope that becoming “employers of choice” will help them keep and attract staff.
IBM says has increasing numbers of people approaching it directly, which will be helped by the introduction in coming months of an Asia-Pacific e-recruitment system.
Candidates seeking work with Big Blue will deal more directly with it and e-recruitment through its web site will give IBM “more channels for identifying talent and reduce costs — placement fees”, says IBM NZ human resources manager Sarah Brown.
“The agencies seem to have had a lot of staff changes so the relationships we have enjoyed in the past with key suppliers have proved difficult to maintain. We have not noticed a change in their offerings despite the nature of recruitment changing significantly,” Brown says.
Logical and CA prefer to recruit internally or through contacts but say they will keep using agencies to take away the administrative processes of recruiting. They see more firms taking back the recruitment function themselves, but doubt they will have the time or need for it.
“I think the agencies provide a good service [whittling down the number of candidates],” says Logical chief David Tse. “They just need to get to know our business better and form better relationships with key managers. However, they are a high-priced option, but it is the way to go when looking for someone. The new techniques such as online still require a lot of hassle to be done by ourselves — we just don’t have the time to do this.”
Even so, Tse would like to see recruitment firms being more accountable for the post-placement of candidates. “Quality” guarantees need to become standard, much like PR companies are now being held accountable to some tangible return on PR campaigns, he says.
“Recruitment firms need to offer some sort of service level agreement for the quality of personnel that they submit to a client,” Tse says.
CA’s Paul Wallace says his firm will stick with agencies as rarely are the many CVs sent to CA suitable for current vacancies. Wallace sees websites as offering nothing that newspapers don’t, so he sees little chance in CA “experimenting” here, but he too is unhappy with agencies.
"Good recruitment agents — those that listen, that don’t swamp us with CVs in the hope that some will stick and don’t waste our time when they don’t have a potential candidate — are few and far between. That hasn’t changed over the years,” he says.
“Agents generally appear to be raising their fees and this may result in some of them pricing themselves out of the market.” He says as the number of positions diminishes, agents have become more aggressive in trying to attract higher fees without adding any additional value.
What is becoming more common are agents that avoid fee discussions up front, wait until their candidate is selected and then insist companies pay fees well above current market rates for their particular candidate, he says. “This leaves you with the quandary of whether to give up a good candidate or to what amounts to simple extortion. Such agents never get a second chance.”
Vodafone, on the other hand, says it is “happy” with its preferred suppliers — Robert Walters, TMP, Candle and DeWinter. The telco believes agencies provide “good value” and “have proved themselves by fine-tuning their services to meet our needs and by making an effort to understand our business and company culture”, says spokeswoman Alison Sykora.
Even so, Vodafone plans more “regional skill sharing” with its sister companies in Australia and Fiji “which has seen several Vodafone New Zealand staff moving to Australia in recent months”.