The 9 Lives of the Recruitment and Search Industry

Where change is systemic

You have all heard the saying, “a cat has nine lives”. In Egyptian mythology cats were considered sacred and believed to have supernatural powers, The number nine was also sacred as it was associated with the sun god Ra.

Having been in this industry for over 20 years and a customer of it for at least 10 years more it would be easy to think that we have been blessed with supernatural powers given the successful negation of the all too frequent portents of our doom.

I’m not going to list which, and how many lives our industry has used, but rather comment on current trends to dismiss the premise that this is an old-fashioned industry.

Over the last 20 years or so there have been regulatory changes around the world that would appear to create hurdles for the continued provision of excellent service by the recruitment and search industry.

While there will be many more examples, the IR35 regulations in the UK which were introduced by the government as an imposition on recruitment and labour hire firms to collect and pay tax on behalf of contractors which the government believed was being minimised by these same contractors provided a significant administrative burden.

In Australia, the repeal of the “Work Choices” legislation and its replacement with the Fair Work Act under the Rudd government had a significant impact. Work Choices allowed companies whose labour costs could not keep up with mining construction industry wages to secure skilled foreign labour at award rates. The new Fair Work Act mandated that two employees working the same job side-by-side needed to be paid the same. This change directly impacted the capacity of non-mining construction industry companies to employ labour at a fair rate, It also immediately cut off the supply of income for services provided to one business sector by the recruitment industry.

This was soon followed by the confusion of varied state-by-state licensing of labour hire companies – as if labour is constrained by state boundaries.

The recruitment and search industry was able to respond in the agile way it always has.

However, if you read the commentary, the greatest threat to our industry came from technology.

• Online paid advertising on job boards was seen as a threat as employers could hire direct. The flaw in this assumption was that recruiters write better ads, target better, interview better and have the capacity to handle volumes of applications that HR departments, with all their other work could not. In general terms, HR, more often than not, does not like recruiting anyway.
• Specific social media channels entered what they perceived to be a “lucrative” industry. Facebook jobs came and went but LinkedIn developed algorithms to analyse candidate profiles, match them with job postings and provide targeted messages to jobseekers. While there are many companies who have bought LinkedIn recruiter licenses, the capacity of the in-house HR team to use these anywhere nearly as effectively as recruitment companies is very limited.
• Arguably, Google jobs has never really taken off and in reality the sophisticated searching techniques of recruitment companies via Internet browsers has always stayed at least on a par with, if not ahead of even LinkedIn’s sophisticated capabilities. Recruiters and search firms will use LinkedIn largely because of convenience and consistency. Most can continue to do this without paying high licence fees.
• Applicant tracking systems (ATS) such as Bullhorn, PC Recruiter and more recently Oorwin have been loyal to the recruitment and search industry. To one extent or another, each has introduced various levels of AI and analytics to automate tasks in the process of matching employees and employers, managing processes and augmenting decision making. If the recruitment and search industry does not provide the majority of revenue to such providers, it certainly provides the highest level of innovation and best practice.
• More recently, the rapid emergence of ChatGPT (we are sure there are more such systems coming) and AI-based video production have also been mooted as potential death knells for the industry

Beyond technology the rise to prominence of ESG from the foundations of corporate social responsibility has seen many “experts“ warning about discrimination and bias and the risk to recruiters. The reality is that it is often the consultants in our industry that are guiding employers away from such risks.

Underneath all of this there are two common trends supporting the resilience and growth of the recruitment, search and staffing industry. The first is simply that we care about people and the productivity of their working relationships. We understand both the tangible and intangible contributions that they make to organisations and the societies in which those organisations operate.

Secondly, while we have seen massive changes arrive quickly in the application of technology and in the emergence of social norms that have to be adapted to, the recruitment and search industry and has proven itself to be not only early adopters of transformational technology but also the agile architects of its success. We are dealing with these issues and opportunities every minute of every day

If our industry does have nine lives, I’m not even sure that it has used its first one yet.