The recruitment industry has been hit hard by the economic downturn. But how deep are the problems? What is the current supply and demand scenario for recruiters? Are recruitment firms still hiring? I explored some of the issues facing the recruitment industry with Clare Barton, Director, at Barton Mills, an international Recruitment to Recruitment (R2R) firm based in Sydney.

DT. In the last few years, growth in the R2R industry is fuelled mainly by a strong Australian economy and a reciprocal boom in demand for the services of recruitment firms, now that times are harder how are R2R firms adding value in a recessionary economic climate?
CB: Obviously the situation varies from firm to firm and it must be remembered that the question of ‘adding value’ holds true for the whole recruitment industry, not just the players within the R2R space.

• We add value to our clients in a number of ways. We target passive candidates. We bring a higher skill set and more experience to the table.  We can introduce a superior candidate.  Yes it is in our interests to advertise and be aware of the candidates who are doing the rounds via SEEK, but we are aware that for a minimal cost our clients can tap into this market themselves.  With nearly all of our placements over the past 3 months, we have encouraged clients to see candidates generated through their own channels and to benchmark them against who we have represented.  I would say that in 80% of cases, our candidate has won through and therefore justified our fee.
• Part of our job is to raise the profile of our clients. We have a number of clients, who for various reasons have had problems with their employment brand in the market.  The roots of the problem have been rectified but the negative perception remains.  We are able to bypass this and explain the changes, the new opportunities, changing culture etc to candidates who previously would never have considered working for these companies.
• Our market knowledge is in demand as companies look for additional revenue streams to supplement their business in the current climate.  Areas of interest are not limited to but include salary guides, sector performance, performance by state, changes to commissions etc.

DT. What is the supply and demand situation for recruiters in Australia? Is demand stronger in some sectors? What types of skill sets are currently in demand? Are 360 degree recruiters the answer for lean times?
CB: With many companies going through numerous waves of redundancies, we have experienced an influx of recruitment consultants.  This has created an allusion of abundant supply of recruiters. However, good consultants are quickly snapped up. Many others have left the industry or in the case of overseas recruiters, returned home. The current disparity between supply and demand, we believe, will be short lived.

We also noticed our clients expectations have changed significantly.  In short, to be hired as a recruiter in this market one needs to be really exceptional. The bar has been raised and the supply to meet these increased expectations is simply not there.  At BMR, our challenge lies not in finding companies who are hiring and will use our services but in finding these superior consultants.  Sound familiar?  For us in R2R land, the situation is not drastically different to 12 months ago – for us the pool of talent, for whom we can justify asking a fee,  in this market is incredibly small.

Demand for recruiters is certainly stronger in some sectors than others.  Sectors that remain buoyant include education, Health (medical, scientific, pharmaceutical and technical) nursing, and specialist engineering. In recent weeks both our clients and media reports also point the banking sector recovering.

Whether 360 degree consultants are the answer to the current climate or just a knee jerk reaction by employers remains to be seen, but they are certainly the people in demand.  Skill sets we are being asked for are simple: Sales skills, new business skills, contacts, local knowledge and ideally experience of a previous downturn.

There are exceptions to every rule but unfortunately we are finding it very difficult to help overseas candidates with minimal local experience and local contacts.  As the legislation around 457 visa holders tightens, our clients are becoming increasingly wary of looking at candidates that require sponsorship, even if they have qualified for sponsorship previously.

DT. Who are your main clients, why do they choose to engage a R2R firm?  Has there been any interest from the corporate sector for your service, apart from recruitment firms?
CB: We have been servicing the recruitment industry in Sydney for the past 5 years.  During that time we develop a very broad client base; everyone from the specialist recruiter, boutique start-ups to large generalist multinationals. We are now obviously in a very different market and there has definitely been a shift in our client base.  As a general rule of thumb, the larger international companies who are often driven by shareholder return have gone through major cost cutting exercises and are not hiring, certainly not through R2R firms.

Where we are finding our business is predominantly within the SME market.  Privately owned, national or one state agencies are using this downturn as an opportunity to “up skill” their teams and building a much stronger recruitment practice.  These agencies can and are using our services to source the best talent.  They are prepared to take a hit on their bottom line and looking at a longer term strategy as far as staff are concerned.

We have never actively chased the corporate sector, seeing ourselves as specialists to agency recruitment.  However, it is a market that we have been researching.  Unfortunately based on feedback we are receiving, R2Rs who have tried to break into the corporate sector had mixed results. Companies are also “weary”.  Candidates have been floated to the corporate HR for the wrong reasons i.e., not because candidates have a suitable skill but because they have agency and sales experience, and incorrectly think internal recruitment is an easier prospect.  The reality is the corporate sector offers different and new set of challenges – it is not easier – just different

DT. It can be argued that every recruiter in Australia have a LinkedIn profile, which arguably makes it easier for recruitment firms to find new staff. Do you see social media as a threat to the R2R business?
CB: No more so than it is a threat to the more traditional recruitment streams. Exactly the same question was posed when online job boards made advertising vacancies a much more cost effective option available to any employer.  Social media is constantly evolving and increasing in popularity as a networking tool however it is exactly that – a tool to be used alongside traditional methods of recruitment.   Social media does not and cannot replace a behavioural interview around culture fit and motivation.  It does not and cannot replace thorough reference checking.  It does not offer solutions around the issue of negative brand perception that some companies suffers from.

DT. A large number of recruiters in Australia have UK roots, and many Australian recruiters seek stints in the European market. Is cross border movement of recruitment talent still strong? Is Australia still a good destination for international recruiters. What perks does Australia offers?
CB: With the world economy reeling, Europe and the US arguably more affected than the Asia-Pacific region, we are receiving large number of queries and demand from overseas recruitment consultants regarding opportunities in Australia.

Twelve months ago a large percentage of our revenue was gained through placing overseas candidates (especially UK)  into Australia companies.  In today’s climate there are very few opportunities for overseas recruiters who does not have local market experience and contacts.

Australia is still seen as a favourable destination for international recruiters from a lifestyle perspective, but the message is quickly getting through that it is virtually impossible to get in at the moment.  In the last three months, Australian recruitment companies have brought the shutters down on the possibility of sponsoring overseas candidates.

DT. What do you think are the main challenges faced by the R2R industry in the coming months? Do you see consolidation happening?
CB: As a result of the downturn, the R2R industry will face a number of challenges in 2009. It is particularly vulnerable because the very nature and main income of the industry is almost exclusively based on permanent recruitment.  In agency land there are minimal opportunities to build a solid contractor book, therefore, there is no contractor revenue to fall back on when times are hard. To survive, R2R agencies must keep billing month on month. There have already been a number of victims, including long standing competitors.  The challenges, like all other mainstream recruitment agencies, is to demonstrate the value of our services, which mainly is our access to the cream of the active and passive talent pool.

Equipped with a unique perspective gained from years as an agency recruiter and currently as recruitment manger at DWS, a technology consulting firm, Dan Nuroo navigates the rapidly evolving recruitment landscape with aplomb. A regular on industry forums and a prolific user of social media tools, Dan blogs, tweets and shares his experiences and views on recruitment with refreshing openness. One wonders if he represents a new breed of HR/recruitment professionals in Australia. I caught up with Dan to find out more.

Q. You are a prolific participant in forums and social networks. Are your activities a deliberate strategy to reach out to candidates? How has your participation contributed to the acquisition of talent at DWS?
DN: I have always been a prolific reader of material in the Recruiting space, with ERE.NET being my first foray into it. The strategy has been two fold, some partly aimed at candidate attraction, others, are just because I have things I like to contribute. I enjoy collaboration and have found that the more you put in the more you get back. My time spent on Recruitingblogs.com is purely for my own learning and information sharing.

Using some social media tools, like YouTube, LinkedIn, Facebook etc are all part of our Talent Acquisition Strategy at DWS. However, I’d be naive to believe my writings etc have added to anyone applying to my company, as my company is a technical company, and technical skills are something I am particularly lacking in.

Q. Have you hired anyone through networking sites like Facebook, or even Twitter?
DN: I have only recently started looking into Twitter as a source for hires, but am very excited at the possibilities. We have and are currently courting people because of a relationship on Facebook. We also use Facebook as a cross checking function with LinkedIn.

Q. In a past life, you had been an agency recruiter, now your worldview is shaped mainly from the perspective of an employer. How different is your current responsibilities from your agency days?
DN: It is an interesting leap, and even more interesting when you are hiring for yourself and watching other people trying to make that same leap. I must admit my final days in the agency world are a little jaded in my mind. The Revenue Generation focus is nowhere near the focus it once was. Essentially my role does not generate revenue at all.

My current responsibilities are still focused around the servicing of a company with quality talent, however the focus on quality and culture fit are even more heightened. You can see firsthand the effects a bad hire has on a company, and most of the time you have to deal with that personally, so yeah you have more invested in the process other than a commission cheque at the end of the day!

The focus on being an ambassador for the company is always front of mind, to many people my team and I are the face of the company. It is very important to try to enhance the candidate experience as much as possible. I also only need one focus for every candidate I meet, I don’t have to have a number of client companies in mind, and I think enhances the value I can add.

Whilst there is no pressure to make money, the pressure to deliver quality is higher I believe. If we are short of people, that costs us money, and nothing hurts a company more than opportunity costs.

Q. Do you track where you source your talent? What is the most effective source of talent at DWS? What do you think are promising channels to find candidates?
DN: I see everywhere people eulogising about the death of Job Boards. I understand where these people are coming from, however, the news of “their demise has been greatly exaggerated”. The majority of our hires still comes from these mediums. There are a lot to try, new niche boards popping up, everyone with a “new angle” on the same thing. One of my biggest learning’s over the last few years has been to avoid being an early adapter. I feel I have spent unnecessary money on some great ideas with absolutely NO traffic and little return.

I think we will continue to build our Employee Referral Programme, and that will continue to be a big driver of our hiring success.

We will however keep abreast of technological advancements, specifically the Recruitment2.0 Technologies and use those to our advantage. We are successfully utilising LinkedIn, Facebook, and soon on Twitter properly, it will be interesting to watch these tools evolve.

Q. The economy has not been kind on anyone. When times are hard, does the role of a national recruitment manager change, if so in what ways?
DT: A great question. It’s actually harder. Previously I was (in my own mind) aiming to be a General in the War for Talent for DWS. However, there is not much use of Generals in a Detente. And it is something I have discussed with the CEO of the company, who has been asked the same question by market analysts. However, we are hiring, responsibly with a wider view of the market as a whole. Our responsibility to our people and our shareholders is to ensure the business is working well at its optimal size.

My role however, hasn’t changed, it is to ensure the hiring of quality people, who successfully get through our process for our company and continuously find ways of adding value to DWS. My participation in a variety of forums, and other online communities has helped grow numerous ideas (good and bad) in so far as trying to help DWS improve itself and the way we do things in a cost effective manner.

Q. What is the mood at DWS, are you increasing or reducing headcount? What type of talent are you looking for in the current economic climate?
DT: The mood at DWS is quietly confident. We are continuously looking at our market share and how we can continue to add value to our clients, staff and Shareholders. We tend to hire people as opposed to skill sets. The skill sets are important, however, the people side, to use a poor phrase their “softer skills” and “cultural fit” are very important to us. I am always looking for strong consulting types with a technical bent, and that is Australia wide, whether that is for an immediate hire or talent pooling for future needs.

One cannot talk about the Australian social media landscape and miss the name of Stephen Collins, founder of Acidlabs, a Canberra based consulting firm. A thought leader on everything social media, Stephen is a sought-after speaker, business strategist and writer. An ardent proponent of ‘openness’ and the ‘need to humanise business’, Stephen’s views are refreshing, and at times confronting. I caught up with Stephen to find out more about his latest project JobCAMP, and also discussed employee engagement and recruitment in the bold new world of social media.

Q. How did JobCAMP originated? What’s the rationale behind it and what can attendees expect to learn or achieve?
SC: JobCAMP originated out of a series of unrelated discussions between the founders – me, Luke Harvey-Palmer , Raz Chorev , Tim Reid and Iggy Pintado. All of us are involved in businesses where creativity and big thinking are at the heart of what we do. We’d seen a lot of people around us and in our extended networks lose their jobs as a consequence of the financial crisis and our discussions, which were originally about creativity and building our own businesses turned to how we might help those who’d lost their jobs. Essentially it was Luke who came up with the idea, but we’re all helping out.

In terms of who should come, we want employers, HR people, recruiters, job seekers, people who want to improve their personal brand and networks. Essentially anyone who might benefit from new and creative thinking around the employment market. Hopefully people will connect at JobCAMP – someone will find a job, or an employer will meet a bunch of great candidates, or people will simply build strength and richness in their networks.

As for take aways from the event – we have speakers on a number of topics – innovation, personal brand, networking, recruitment best practice and the like. The tag line we’re using – Get Australia Working – is what it’s all about. We want people to come away with a job, a lead or ideas on getting that next job.

Q.  A recent Gallup poll found 82% of Australians are not actively engaged at work.  You spoke of the need for ‘collaborating more openly and encourage broad and diverse input from staff’ within companies; is this approach a likely solution to the problem of disengagement?
SC: Engagement is *everything* in my view. So many jobs are process focussed, or routine because employers haven’t really looked for meaning in the role, or for a way to provide their employees deep context to what they do. When this is the case, it’s no wonder people struggle sometimes to be engaged.

The work I do that encourages businesses to open the network of interaction and involvement is targeted specifically at making that context float to the surface. With deep context around your job – what each piece of work means, where it’s come from, where it’s going and why – I really believe that building a work force that’s strongly engaged, deeply loyal and working their best is possible.

Of course, it’s not the whole story, which is much bigger and more complex. But it’s a great start.

Q. You recently attended TED 2009, and spoke at the HR future Conference. Can you offer some insights on what the future holds for the recruitment of staff and the HR profession?
SC: TED was an amazing experience, as you might imagine. My HR Futures keynote was about my TED learnings and what they meant in the context of business today. I think what business needs to do in general terms is smarten up and mature. So much of what we face in business today is unnecessarily complex or bureaucratic. That has the potential to hurt people – physically and intellectually. It also stops us doing our best work.

We need to humanize business and introduce a new moral framework that regard people first – our employees and our clients.

In terms of HR, most of the HR people I know are really good and want to make a difference. But they get bound up in the complexity of just doing their jobs. The new approach I got from TED, and in particular, Barry Schwartz’s talk, can go some way to undoing that.

As for recruitment, again, it’s an issue of breaking down the complexity and the bureaucracy. Just hire great people! The recruiting industry, to my mind, has a lot to answer for. Much of the industry remains stuck in a place where candidates aren’t known personally – their needs, desires and skills aren’t known by the recruiters and they are simply churning out sausages. It’s such bad practice.

Q. CEO of Zappos, commenting on the wide use of Twitter within the company, mentioned “like it or not, companies are becoming more transparent”.  Is the fear, that staff will get poached or remain unproductive if they are given access to social media tools at work, unfounded? Should employees be allowed to blog and twitter about their workplaces? Is there a healthy balance?
SC: Tony Hsieh is a smart cookie! As is almost all of his company – from top to bottom. And Zappos is a particularly open example. They’re very different to most organisations.

I encourage all my clients to open their businesses and practices as much as they can. I believe it offers a great deal of benefit. That said, it must be done at a pace the business can handle. What it’s about is corporate cultural maturity – many businesses aren’t there yet.

I think the poaching and time wasting view shows a distinct lack of maturity in a company’s culture. The benefits to be gained by having an engaged work force that can and do talk about the business openly are manifold. The research and the case studies are in. Building personal and corporate brand in parallel actually makes for more engaged people. It also potentially attracts better staff to your business if you already employ well-known industry leaders.

I think staff should absolutely be allowed to blog and tweet about work. But there needs to be a level of governance. Rules of engagement must be in place to ensure that your staff know the bounds and that management also have a framework that means they too know what is and isn’t okay so that slip-ups can be dealt with appropriately.

The recent case at Telstra with Leslie Nassar, who was tweeting as Fake Stephen Conroy is a case in point. Telstra’s guidelines were (as far as I know) incomplete. So, while initially, Leslie was asked to be more judicious, he decided instead to continue and get (arguably), more strident in his criticism of Telstra’s reaction. I’d suggest he showed a lack of maturity – which ultimately seems to have led to him leaving Telstra.

As much as some of us, not least of all me, all desire total openness and deep corporate maturity from our employers, there really are lines you don’t cross. Those lines need to be well defined when you allow staff to discuss work publicly online.

Q. It can be argued that a whole industry exist (say the recruitment industry or job boards) largely because companies fail or do not have the tools to converse, communicate and build communities with job seekers. Do you think the emergence of social media will eliminate the need for middle men in the conversation between employers and their future staff?
SC: Smart recruiters are starting to use social media well as a tool to better understand markets and to engage in a conversation with candidates. But employers themselves could be doing the same and I’d encourage them to do so. Of course, this takes a significant investment of time, which is why employers turn to recruiters and job boards.

What needs to happen is a growth in recruitment industry maturity. A move away from churning through lists and making calls to really understanding candidates and building a long term relationship with them. Whether that’s through using social media or just making a phone call makes no difference. I can’t count the number of times recruiters have called me simply because I was on a list from their database that matched a keyword. That’s bad practice.

Why didn’t they Google me? Or look at my LinkedIn profile? Or my blog?

If they’d taken five minutes to do any of those, they’d have had a much better picture of what I was interested in instead or ringing me for something I wasn’t interested in or that was irrelevant to me.

That’s where the smart recruiters are going – prequalification, candidate research, candidate and client relationship management. It’s smart uses there that will improve recruitment and candidate identification.

Talent Talk series, so far:

• Allan Watkinson (Engagement Manager, Gallup Consulting) sheds light on why Australians are not engaged at work.
• Social Media expert, Stephen Collins (Founder Acidlabs), talks about JobCAMP and humanising companies.
• Job posting service are changing how advertisers use job boards, Brett Iredale (MD, JobAdder) explains how.
• Social Media expert, Gavin Heaton (founder, SocialmediaJobs) shares how to tell compelling stories to attract talent
• Trevor Vas (Executive Director  HCMS) explains what attendees can hope to learn from the Australian Talent Conference
• The unique role of job aggregators in talent acquisition is explained by Maneck Mohan (CEO, Recruit.net)
• “While the résumé is about you, it’s not written for you” quipped Gayle Howard (resume expert), and explains why resumes are here to stay.
• Allen Russell (Sales Director, XPAND) talks about recruiting in recessionary times and IT skills in demand
• How is SEEK, Australia’s no 1 job board, fending off competitors, Carey Eaton, CIO, explains.
• Georgie Carpenter shared her experiences on the edge independent recruiters have over large recruitment companies.
• “The world needs another Applicant Tracking System’, believes Tim De Jardine (Founder Hirewall).
• ‘How to find and hire team leaders’, James Adonis (Director, teamleaders.com.au) gives us some clue.
• Kelly Magowan (Director,Sixfigures) sheds light on the behaviour of high-income earners.
• Sourcing talent using advance internet tools is a growing trend, sourcing expert Nicole Cain (Manager, Profusion)  opens up.
• Riges Younan (CEO, 2Vouch) talks about the bold new world of referrals in talent acquisition
• Andrew Turnbull (CEO, nt3) believes interactive candidate database offers unrivalled value to tap talent.
• How do you hire staff in an industry plagued by a 46% turnover? Linda Simonsen (CEO, FuturePeople) tells us how.

• Trainer and business coach, Ross Clennett, believes good training is the key to getting talent.

If you have something to say about ‘talent’, contact me info (at) destinationtalent (dot) com (dot) au or call me on 02 9212 0702

A subsidiary of the Rubicor Group and winner of multiple awards for service excellence, Xpand is one of the marquee IT recruitment brands in Australia. In the backdrop of an economic downturn which has been particularly tough on IT recruitment firms, I caught up with Allen Russell, National Sales Director, to discuss a range of issues including the employment market, candidate sourcing trends, IT skills currently in demand and Xpand.

Q. Allen, can you give a brief overview of Xpand for Destination Talent readers?
AR: Xpand is a recruitment firms specializing in IT&T and Digital Media, with offices in Sydney, Melbourne and Singapore. We provide permanent and contract recruitment, executive search, recruitment process outsourcing (RPO) and research services such as names generation, market mapping and competitive intelligence.

Q. The recruitment industry, especially the IT sector, is reeling under the pressure of the global financial meltdown. How has the downturn affected Xpand and its operations?
AR: We’ve definitely seen a big drop in permanent job requirements. As in any market though, there are niche skill-sets such as security that are still in high demand. Contract requirements have remained reasonably steady and in some areas we’ve seen an increase of contracting requirements replacing what previously would have been permanent requirements. We’ve seen a big increase in the demand for recruitment outsourcing which can drastically reduce recruitment spend.

Q. Is it true that, regardless of the state of the economy, opportunities are readily available for ‘A’ talent? What are you hearing from your clients, are they open to hiring good talent if they are available, regardless of the existence of a position or not?
AR: Definitely. Many companies are turning over the bottom 10% to 20% of their workforce and the smart employers are using this as an opportunity to bring in better talent. For ‘A’ players this means there are lots of opportunities, particularly those that are in revenue generating roles such as sales and marketing.

Q. Xpand invested heavily on sourcing – importing a sourcing expert from the US, and developing a proprietary  search technology. Can you shed more light on this this initiative. What advantages does Xpand have as a result of this investment? 
AR: Yes, a few years back we took a good look at the US market to get a sense of where the recruitment industry was heading and found that research driven recruiting was the big thing. We’d been early adopters of Linkedin, social network and Internet based searching, and found that while very effective, these methods of finding people can be very time intensive.

As a result we identified one of the leading authority in Internet based research and engaged him to establish a dedicated research function, which our consultants can draw upon when they have a hard-to-fill or senior role. Essentially the research team will conduct a targeted search using a variety of tools and techniques (both internet and phone based) to uncover passive talent that’s off the radar, e.g. people that have never applied to a job advertisement. They then populate a hit list, complete with name, title, company, email and phone number which is provided to the consultant to make a direct approach.

In terms of tools, we use a very cool application developed by the same sourcing expert – if you’re interested to know more you can track him down here www.worldinksearch.net – and a variety of other tools available on the web such as Broadlook, etc. We’ve recently started to sell our research capability externally and have some very strong interest from employers wanting to understand their competitive environment in more detail, from a talent perspective.

Q. Xpand often says it operates differently. How are you different from the rest. In other words, why must companies work with Xpand?
AR: I wouldn’t say companies must work with Xpand, but our focus is on employers of choice, marquee brand names and companies that have something unique about them. In summary, we want to work with employers that attract top talent. This in turn enables us to build a strong profile so that top talent comes to us.

The challenge is of course, every recruiter wants to work with the best employers, so we work very hard to provide the highest quality of service. This extends to candidates as much as clients and we’ve been privileged enough to win SEEK’s Annual Recruitment Awards (SARA) in 2003, 2004, 2005 and we were awarded the top honour of "SARA Legend" status in 2006, 2007 and 2008.

Besides all that, we try not to take ourselves too seriously and I think we’ve been very successful in building a team of down to earth people who enjoy their work and are fun to work with.

Q. What technical skills are hard to find, if any, in this market? Are there still shortages in some pockets of the market?
AR: We have done extensive research across the Asia Pac region to forecast demand and based on the information gathered there will still be strong demand for Security Professionals (Internet Security, Identity & Access

Management) Enterprise Applications skills such as SAP, Oracle & Siebel, and Business Intelligence and Data Warehousing skills. There are certain sectors of the market that will continue to hire and are considered somewhat "recession proof" and these are the key areas Xpand will focus on in the coming 12 – 24 months.

Allen can be reached at allen (at) xpand.com.au