20 May 2016

Rec-to-recs: the verdict is in (they still have a future)

My blog three weeks ago about the future of rec-to-recs, drew a spirited response from a number of people, both rec-to-rec practitioners and rec-to-rec customers.

Here are my major conclusions:

1)   Rec-to-recs still have a valuable role to play
As Davidson Director of Growth, Rob Davidson, said "I'm a rec-to-rec-fan. They play an important role. We have had some good success with Vibeke Thomson (Galaxy Recruitment)."

A senior leader of a large IT recruiter concurs "I think that rec to recs are a necessary in our business, much like we are necessary in our clients business. They know people in the market and are across trends in the market".

Niall Hamill, Chairman of the Andersen Partnership said "….we've had a great deal of success dealing with Russell Bebb and Tony Crane - two guys with an excellent understanding of our business and a really solid passive candidate network.

2)   Rec-to-recs have a tough gig
Hahn Healthcare Director, Craig Moore spoke for many when he said: "I think the fundamental issue with recruiting any experienced recruiter is why would they leave where they are if they are any good? If they are delivering good results and therefore making decent income it is often very difficult to justify leaving the momentum you have built in your existing role to go start again somewhere else. There is of course reason to leave a successful role if you have a personality clash or you need to move interstate or the like, but that can only be a minority of cases. Rec 2 Rec's must always be struggling to identify decent candidates. I think being a Rec 2 Rec is one of if not the hardest type of recruitment jobs out there."

3)   The business model used varies
Watson Collard
have moved almost entirely to a retained model, as has Rosemary Scott. In contrast Lime Resourcing conducts most of its work on a contingent fee model. Steve Heather (Mining People International) used a monthly retainer with Scott Recruitment in Perth across a six month period and "we recruited some terrific people". Rosemary continues to operate business broking services for the recruitment industry. Watson Collard also offers training and consulting services.

Across the ditch in New Zealand, Jonathan Rice (Rice Consulting), having been in business for himself since 2009, said about his growth "Doing so in agency rec-to-rec has proved somewhat futile though, so we have achieved it by broadening our offering to in-house rec-to-rec, HR recruitment, and flexible on-demand recruitment contractors (virtualRPO). All of these offerings fit well together and have made it possible for us to grow to six people across Auckland, Wellington and Christchurch, with more to come I hope. We have tried different pricing models, hosting training classes, developing new-to-recruitment candidates etc, but none of that has really taken off or resonated with the agencies of NZ who generally just want an experienced recruiter with local experience and sadly don't really care how they get them."

4)   It's the individual rec-to-rec recruiter, rather than the company
MPI's Steve Heather summarised a common sentiment; "The only time I observed it (rec-to-rec) working….. was where the recruiters were ex senior recruitment business owner or managers who truly "got it". Almost all the junior rec to rec's who were basically working for the rec to rec owner, were a total waste of my time."

Jonathan Rice again: "I have tried to grow the rec-to-rec side of my own business beyond just me, but it is incredibly challenging. Rec-to-rec just seems to be a business well-suited to flexible, agile, responsive solo operators who can work hard at building a personal brand that recruiters engage with, rather than passing on those skills and traits to other employees. The fact of the matter is the candidates of rec-to-recs (other recruiters) often need closer attention and tighter control than in other sectors, as they can be very fickle and easily swayed. Perhaps it's easier for a solo operating rec-to-rec to maintain that laser focus and "at any cost" constant attention required to get a placement over the line.

Rosemary Scott stated: "I did not stop running a national rec to rec business for any other reason than the franchise model no longer worked, it was not to do with a downturn in rec to rec."

Niall Hamill commented: "With such limited candidate supply, limited candidate control and a highly competitive market, R2R is a terribly difficult space in which to operate and equally very difficult for the business to achieve scale".

Bucking the trend was Lime Resourcing. Lime Director (Qld, Vic & WA) Andy Hardaker, confirmed that Lime had, so far, been able to grow to ten staff across four physical locations (Sydney, Melbourne, Brisbane & Dubai) and is optimistic that there is room to grow each of those markets by one to two consultants across the medium term.

5)   It's all about the candidates
It's very obvious to say but let's confirm it anyway - it doesn't matter how many jobs you have as a rec-to-rec, it only maters whether you have quality candidates. Rob Davidson stressed the need for a rec-to-rec to have patience as high calibre candidates often take years of courting before they are ready to make the move.

Rosemary Scott was adamant: "No recruitment company, whether rec to rec or other, can honestly ensure consistency of candidates in this market, without charging a retainer and conducting a search exercise. Quality candidate shortage is the major issue it seems facing the recruitment industry at present."

The Director of one prominent Sydney recruitment agency was scathing in his assessment of what he has experienced from a wide range of rec-to-recs over the years; "Most R2R's know very little about their candidate (even what type of desk they want sometimes!). And if you asked them in any detail about a candidate's billings and what activity they needed to achieve it -you'd be dreaming if you wanted an accurate response, if any response at all. Most (90%+) R2R's explain why a Consultant left any previous jobs as "the culture changed" which is absolute rubbish."

Vibeke Thomson's (Galaxy Recruitment) view was one expressed by many rec-to-rec operators; "Rec2Recs need to deliver more than just candidates. We are the ears and eyes of the recruitment industry and with our umbrella view, our value-adds are BOTH candidate relationships as well as industry advice to both candidates and clients."

6)   Assessment technology use is close to non-existent: Considering how important an objective assessment of a candidate's competencies is it seems extraordinary (to me at least) that rec-to-recs haven't embraced assessment technology to provide an independent view of their candidates that a review of ‘experience' or ‘billings track record' will be unable to provide. I can only assume it's because clients of rec-to-recs don't care for it or it's another potential barrier to a candidate being offered a job by their client.
 
7)   Optimists are looking brightly at the future of rec-to-rec
All of the rec-to-recs that I spoke to were optimistic about the future of their sector, although none were expecting it to get any easier. Jonathan Rice summed the mood up best: "The future for us lies more in flexible on-demand recruiters which will grow as the sharing /flexible /gig economy grows too. Some agencies see this as a threat, but the more forward-thinking ones use our model for sourcing specialists or to staff up for specific recruitment projects.

I personally love agency rec-to-rec, for all its foibles, but have found I can offer more value and better outcomes by reducing my client base to a smaller number of firms who I have an intimate knowledge of, rather than trying to bring on more rec-to-recs to deliver to a wider client base. The future for us is bright, I believe, but only by making agency rec-to-rec one facet of the way we source and provide recruitment expertise to businesses."

What else do you have to add to this debate?

1 comment:

  1. Welly Recruiter30/5/16 11:57 AM

    I can vouch for the excellent service offered by Rice in NZ. They offer unparalleled market knowledge and deliver to their clients and candidates alike.

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