Banks will move away from in-house recruitment again, says Robert Walters
It is no secret that the fortunes of recruitment firms across the world have been under pressure since the global financial crisis. The GFC left many people without jobs, forced banks to slash headcounts, and cut costs by expanding their in-house hiring activities rather than using external recruitment agencies.
But, says Giles Daubeney, COO of Robert Walters, a recruiting firm with operations in more than 20 countries across the world, this does not mean the end of the agency model, as he believes that humans "are intrinsically lazy".
“Large financial institutions will continue to outsource hiring, particularly the bigger and better firms and especially as the market becomes more competitive, and economic conditions around the world improve.”
His view is supported by a new report from IBISWorld, which said last month that in the US alone, the improvement in the labour market is expected to cause the recruitment industry's revenue to increase 2.6% in 2013 as unemployment drops.
Overall, however, in the five years to 2013, however, revenue from recruitment agencies in the US has fallen at an annualised rate of 1.5% to US$16 billion, and this scenario has been echoed in many markets around the world.
Daubeney, who joined Robert Walters in 1988, believes the biggest change affecting the industry in recent years has not been a shift away from RPO but rather the increasing use of technology.
“Technology, however, has not necessarily made the industry any better, because this is a business that is primarily about people. What has become very important now is the referral network, and as the market picks up, and good people become increasingly hard to find, clients will need help staffing up.”
Daubeney acknowledges that the past four years have been tough, but he says that he has started to see some ‘movement’ in the City of London, and at the half year, generally more positive sentiment.
“The end of our first quarter (of the current financial year) in September will be the acid test, but we believe there has been a swing in the number of job mandates. And the real indicator is that the time to hire has sped up noticeably.”
Looking at conditions in Asia, Daubeney says that one of the biggest challenges facing many employers in China and elsewhere is staff turnover, with candidates switching for salary increases that range between 15% and 50% above their current earnings.
He says business must shoulder some of the blame for paying these salaries, but he also acknowledges that the situation is driven by supply and demand.
He points out that that in Singapore, for instance, the shortage of skilled locals is partly due to the number of nationals – estimated to be 200,000 – who are now working outside the country in London, the US and Australia, among others.
Daubeney says that the situation has become so dire – in terms of finding sufficient numbers of skilled locals in a country that effectively has zero unemployment - that some large financial institutions may be considering relocating their entire operations.