No more IT recruitment agencies, please

The number of Auckland IT recruitment companies is reaching saturation point, says the new general manager of the Auckland office of recruitment firm Andrews Partners. Kevin Moultrie says there are 23 companies either specialising in, or having divisions dedicated to, IT recruitment.

The number of Auckland IT recruitment companies is reaching saturation point, says the new general manager of the Auckland office of recruitment firm Andrews Partners.

Kevin Moultrie says there are 23 companies either specialising in, or having divisions dedicated to, IT recruitment.

“There are 74 consultants that specialise in the IT recruitment market whether it be permanent or contract. That is a huge number of people dedicated full-time to recruiting for the IT market in Auckland alone. That num-ber doubles if you look in Wellington as well.”

He says there isn’t room in the market for many more new entries. He predicts continued acquisitions and mergers.

In recent times there have been new international players coming into the market such as: Icon Recruitment, which has bought Kelly Luxford in Wellington; Manpower; and Candle, which has set up in New Zealand via the purchase of Doughty Group.

Moultrie believes the market will reduce to cater for two types of recruitment consultancies: the small niche market operators (where there are one or two employees) or the very large. He says privately owned companies in the middle ground will either get swallowed up or struggle, because they’re too big to downsize and become a small niche market operator.

“And they won’t enjoy the key supplier agreements that are being put in place by some of the major vendors.”

Moultrie says key supplier agreements are becoming increasingly more common. They have been around in their current form for about 18 months.

“More and more large organisations — the likes of IBM, Unisys, Oracle and Telecom — are moving toward working with a small number of suppliers in each area of their business.”

In return for having a smaller number of suppliers they expect favourable rates across Australia and New Zealand and better service. That means it’s important that recruitment agencies have a presence in both countries. They are unlikely to make the key suppliers’ list if they don’t, hence the appearance of some international players in the New Zealand market.

Moultrie believes large recruitment agencies will have to become national operations if they are going to survive.

The exception will be for the niche market players such as ITEC, Qube and Protocol, which Moultrie says have been successful in their chosen markets.

He says Andrews Partners is looking to expand its Auckland operation in the face of the competition. It also has a Wellington office, and a Sydney office opened 18 months ago. The Auckland office has traditionally focused on technical recruitment, but Moultrie expects its growth to come from a new model.

“As we have won more key supplier agreements, companies are looking to us to provide a full service — across sales, marketing, management, technical, support, education and also contracting.”

Moultrie says the change will mean a focus more on specialisation.

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