Use of recruitment agencies won’t resume when recession ends

Recruitment agencies are faced with an uncertain future after HR directors warned they were unlikely to use them as much,if at all when the economy recovers.

A survey of 117 senior in-house recruitment professionals by hiring firm Oakleaf found that nearly 70% believed that the recession would have a lasting negative effect on the need to use recruitment firms. Barely one-third felt that smaller, boutique recruitment firms would grow to help fill specialist needs.

Richard Colgan, chief executive of Oakleaf, said he believed the recruitment landscape had changed forever.

“The recession has created a shift in attitude toward the value of recruitment functions, with many being forced to take on a broader remit, including internal talent sourcing, compensation benchmarking and employer branding,” he said.

“Employers are relying more on their recruitment function in an attempt to cut down on extra costs.”

HR directors said recruitment firms would struggle to return to pre-recession activity levels.

Christine Armstrong, head of HR for the non-profit Hanover Housing Group, said she expected the impact to last.

“I wouldn’t be surprised to see the impact of the recession permanently affecting recruitment firms,” she told Personnel Today. “HR will continue to improvise and find a way around additional costs.”

Steve Pearsall, HR director for stock exchange NYSE Euronext, added that although he had continued to use recruitment firms during the downturn, this would change in the coming months.

“We’ll do more intelligent outsourcing of activities like recruitment over the next year,” he said. “Recruitment will be down as it is, but going forward we’ll look to reduce the number of recruitment firms we use, as well as the amount we use them.”

Earlier this year, research found nearly three-quarters of employers were looking to reduce the use of agencies to save costs in the recession.

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