Is there any point applying for jobs through recruitment firms now?

The sands have been shifting with regards to financial services 'recruitment channels'. Once upon a time, banks did a lot of their hiring through financial services recruitment firms. Now they don't.

UBS is a case in point. When the Swiss bank presented its first quarter results last month, it said recruiters were used to fill no more than 10% of its jobs in 2012, down from 16% in 2011. Even William Vereker, the big-name M&A banker whom UBS has reportedly hired from Nomura, is said to have been brought on board without the intervention of headhunting firms. UBS declined to comment as to whether this was the case, but it is not the only bank to hire directly - at our recent round tables for banks' heads of recruitment, recruiters said they do 70-75% of their hiring themselves.

Where does this leave recruitment companies and headhunters? In a difficult place is the predictable answer. When the PageGroup, owner of recruitment firm Michael Page, published its first quarter results this week, its share price fell by almost 7%. Gross profits were down 13% year-on-year in Europe, the Middle East and Africa profits from finance and accounting searches globally were down by 7% - more than any other sector except marketing, sales and retail. Meanwhile, recruitment firm Robert Walters has diversified away from its banking roots and now generates 85% of its profits outside of the financial services sector.

Top headhunters are struggling too. Global revenues at Heidrick & Struggles fell 18% in the fourth quarter of 2012 versus the same period of 2011. Kevin Kelly, Heidrick's chief executive officer, cited "challenging economic conditions and lower confirmations," as the source of the disappointment. More generally, banks' in-house recruiters say headhunting firms are being stretched by banks' unwillingness to pay so-called retainers, in which headhunters receive an upfront fee while they set about identifying suitable candidates. "We still offer retainers, but we're only paying one for every three-or-so candidates," the head of recruitment at one international bank told us at a recent round table event.  In the past, banks paid retainers for every candidate, he added. Retainers were typically equivalent to a third of the overall fee, said the head of one recruitment firm - and that fee was calculated on the basis of a third of a candidate's total first year pay.

Why recruiters say candidates should apply through them

Recruitment firms are fighting back, however. Senior recruiters at Selby Jennings - a financial services recruitment firm, and at Michael Page, said there are several very good reasons for candidates to apply for jobs through recruiters. These include the facts that:

1. Left on their own, candidates can go astray

"We often find that candidates develop a distorted view of the market based on hearsay, misdirected advice or limited personal experience," Steve Yendell, managing director at financial services recruiter Selby Jennings, told us. "Engaging with a specialist recruiter provides candidates with an impartial overview of the market, as well as an objective analysis of particular career moves in relation to desired career aspirations."

2. Some banks only hire through recruiters

David Leithead, managing director of Michael Page Financial Services, said that whilst some banks do a "fair amount of direct recruitment," others do "almost none."

This being the case, Leithead warned that, "a jobseeker who decides not to use a recruitment firm is seriously limiting their options." He did not say which banks prefer to use recruiters, however.

3. If you don't use a recruiter, you'll have to negotiate your salary all on your own

Most candidates have a "strong aversion" to negotiating their own pay, said Leithead. If you use a recruiter, you won't need to confront this issue.

Recruiters provide candidates with, "critical support in negotiating fair compensation models," said Yendell.

4. Recruitment firms will allow you to access lots of jobs at once 

If you make yourself known to a recruitment firm instead of applying directly for a job at a single bank, you will be able to access a broader array of potential employers.

"Recruiters provide candidates with a far wider spectrum of opportunity," pointed out Yendell. "Once someone decides to look at opportunities, they almost always want to consider more than one option, and recruitment companies give them that access," said Leithead.