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Artificial intelligenceUnconscious biasRecruitment process outsourcingLatest NewsLabour turnover

What does the future of recruitment look like?

by Mark Kingston 28 Sep 2021
by Mark Kingston 28 Sep 2021 Shutterstock
Shutterstock

With a record number of vacancies recorded this summer, recruiters are scrambling to identify and hire scarce talent. The industry is evolving in ways that will hopefully make their processes more efficient and agile, writes Mark Kingston.

Activity in the recruitment sector has been nothing short of a rollercoaster over the last 18 months. In the UK, hiring activity fell sharply as Covid-19 lockdowns were implemented, but the downturn was short and sharp. Since summer 2020, the sector has enjoyed a remarkable recovery.

Recruiters across nearly all verticals have been experiencing significant increases in demand, and in many cases over and above 2019 levels. This strong recovery has been accelerated by several factors including the unprecedented level of government-backed financial support, the speed at which employers and employees adjusted to work-from-home and hybrid working models, and an acute skills shortage.

These factors have led many employers to rely on recruiters to identify and recruit scarce talent. Corporates are under pressure to deliver efficiencies so are turning to outsourced recruitment solutions including recruitment process outsourcing (RPO) and managed services. This change is one of the key trends which we believe will dominate development in the recruitment sector in the coming years, alongside the introduction of new recruitment technologies and the recognition of the vital need for companies to create strong corporate cultures to attract and retain the best people.

Even before the pandemic there was a decline in client demand for generalist recruiters that lack sector specialist expertise. We believe that the recruitment market is going to continue to polarise between sector specialist recruiters and those which provide embedded RPO services and in-house recruitment team augmentation.

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At a recent event covering the future of recruitment, Sanderson managing director, Ross Crook, said: “If a company wants to scale up its tech function and needs 50 new hires in the short term, our RPO function is equipped to deliver high-quality candidates at speed, and to do so anywhere in the UK if not beyond. Our RPO and Project RPO services address the bespoke needs of clients in the UK and internationally for both short-term and long-term talent.”

In line with this trend are moves towards more offshoring to low-cost centres where recruiters, finance functions and various other departments are based, and Project RPO models are being deployed to support high growth clients for shorter periods of up to 12 months.

Sophisticated technology

Supporting the evolution of the industry is the increasingly sophisticated technology available in the recruitment sector. Rob Blythe, founder and co-CEO of Instant Impact has said: “Major technological advantages over the next five years will fundamentally change the way recruitment works and every recruiter will have to be agile to harness that.”

Systems such as applicant tracking systems, video interviewing, psychometric testing and project management software are now mainstream and in wide use. Artificial intelligence (AI) will play a more central role in the future but largely as a supplement to the recruitment process for companies who hire for the same role at high volume, and thereby produce enough data points for AI to analyse and generate productivity gains for recruiters.

Technology is also having an impact on the way candidates present themselves to potential employers. Companies such as Not A CV help candidates showcase a range of skills beyond the “traditional” selling points such as qualifications and prior work experience. Their technology platform enables candidates to show examples of their critical thinking skills and demonstrate emotional intelligence, offering employers better opportunities to assess the ‘cultural fit’ of any candidate.

Technology advocates argue that removing human interaction is the only way to have a genuinely bias-free recruitment process, while others (and for now, the majority of recruiters) continue to believe that the human element of a recruitment process is key to successful hiring.”

Tackling bias

More technology in the recruitment process has significant implications for diversity and equality in the workplace given the potential of technology to reduce bias. Technology advocates argue that removing human interaction is the only way to have a genuinely bias-free recruitment process, while others (and for now, the majority of recruiters) continue to believe that the human element of a recruitment process is key to successful hiring. Wherever one stands on this argument, it is clear that technology in recruitment will only become more important in the coming years.

The current talent shortage is also pushing companies to make other changes to their approach to recruitment. In a market so tipped towards the interest of candidates, employers are offering up to 20% uplift in salaries compared with a year ago. Well-resourced start-ups and scale-ups can afford now to pay more for top talent, meaning that in terms of hires they are doing well, while traditional SMEs are struggling to fill vacancies.

The shortage of candidates has also given rise to a new trend in which employers have to actively cater to candidate preferences, offering more flexible terms on issues such as working hours and working from home. Ross Cook of Sanderson has said: “Organisations need to pay special attention to how they treat their employees and examine their workplace culture more closely than before. If employees leave it will be hard to replace them.”

As the worst effects of the Covid-19 pandemic begin to fade, the recruitment sector is enjoying record levels of confidence and activity. However, for recruiters to succeed over the longer term, they will need to be agile in adapting to changing delivery models and working effectively with rapidly evolving technologies. They should never lose sight of the fact that people and talent remain their most important assets.

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Mark Kingston

Mark Kingston is director and head of human capital at finnCap Cavendish.

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