Bursting the IT Recruitment Bubble

Are the largest users of IT skills artificially inflating rates and creating an environment where the best candidates are prevented from accessing the best jobs? The evidence ñ a commoditised IT recruitment model which devalues skills whilst inflating prices ñ suggests that the answer is yes.

Though there is no logical reason to deliberately engineer this scenario, it does appear that the recruiting models used by the larger employers are inadvertently driving up rates whilst making it almost impossible for the best candidates to connect with the most appropriate roles.

The primary reason a situation like this has been allowed to develop more or less unnoticed is due in no small part to the industry predilection towards blaming a ëskills shortageí for any fluctuation in the market. In reality while there are some shortages in specific, highly technical areas, the majority of the industry is extremely well served with high quality personnel. Failure to secure these people for key roles is due only to the widespread adoption of nonsensical, multi-tier recruitment processes that prize speed of CV delivery over candidate quality and agency margin over total cost of recruitment.

The result? Candidates may tick the requisite boxes but their skills are untested, they are rarely a cultural fit, and agencies are encouraged to artificially inflate prices to achieve some return from paltry margins. Contractor turnover is high; candidates are unsatisfied; and UK business is wasting a fortune on recruiting staff that cannot support key business initiatives.

Yet specialist recruiters can offer high quality, relevant and assessed candidates at a lower overall cost, despite applying a higher margin. It is time to stop the commoditisation of IT recruitment, argues Richard Forkan, Head of Recruitment at Plan-Net.

Volume Control
For any organisation IT recruitment is a tough call. To get it right complex skill sets must combine with market expertise, effective team working and cultural fit. It is little wonder that HR departments, even those with teams dedicated to IT recruitment, struggle to understand requirements.

With IT investment on the up and a year on year increase in contractor recruitment many HR teams have thrown in the towel, opting instead to sign up with third party managed services organisations to provide an interface with the IT recruitment industry.

Does this make sense? Probably not. These organisations are working on minimal margins and that means minimal service. So, when a carefully crafted job description arrives on the desk of one of these companies it is circulated to a great number of the larger IT recruitment companies who then scramble to get their candidatesí CVs on top of the pile in the shortest possible time.

In this unsophisticated, first come, first served model, the only candidate qualification is a basic word search box ticking exercise. There is no technical verification and certainly no candidate interview to consider personality traits and likely cultural fit.

In reality, organisations would attain the same quality of candidates by undertaking their own basic search on a job board. But that is what a single digit margin will deliver.

Margin Model
The result is that not only are organisations patently failing to even see the most relevant, appropriate and talented people but agencies, in their bid to make some money from this volume business model, are in no way motivated to negotiate contractor rates downwards, in fact, it is in the agencyís interest to allow the contractor to earn as much as possible as their margin is a proportion of his/her pay. HR departments, following corporate governance to the letter, are also apparently unconcerned about the overall cost of each individual hired ñ as long as the margin does not exceed the agreed rate!

These organisations are regularly employing low quality candidates at several hundred pounds per day rather than a lower priced candidate from a specialist recruiter that has been assessed, checked and interviewed to ascertain fit because the specialist recruiter has a higher margin! The result is that a business could be paying 520 per day for the wrong person, rather than 475 for a qualified candidate because the decision is based on margin alone.

This is patently madness. Not only are organisations now regularly recruiting the wrong people, but they are paying through the nose for the privilege. No wonder there is a perception of a major skills shortage!

Candidate Failure
Furthermore, good candidates are increasingly eschewing these high volume relationships ñ and with good reason. There is a real danger that their CVs could be forwarded to every vaguely relevant job ñ possibly without consultation and in some cases sent out on spec as part of new business initiatives.

Not only is this fundamentally devaluing each candidate but it also raises the very real danger of a CV finding its way onto the desk of the current employer. As a result, an increasing number of good candidates are opting to work with specialist recruitment companies who undertake rigorous assessment and interview and discuss each job application with the candidate before submitting a CV.

These organisations command higher margins but can offer candidates at lower daily rates than the mainstream agencies. Furthermore, they can often deliver the most senior and/or technical candidates at a lower daily rate than the volume agencies because the candidate is being forwarded for a job that meets specific aspirations ñ such as geography, career development or industry sector and employer profile.

As a result, the overall cost of recruitment can be actually lower, despite the higher margin, and the organisation has recruited a person that fits in every way from skill set to corporate culture.

Cross-Roads
Of course, this process cannot be achieved within the 24 hour timeframe increasingly demanded by the commodity IT recruitment agreements. Any in depth analysis of job requirements, assessment of skills and series of candidate interviews will obviously take a little longer. Organisations will have to accept that it takes time to deliver the right person.

However, the likelihood is that the person will stay somewhat longer than the typical rush-recruited contractor who is not a fit in either skills or culture, thus minimising the expensive turnover of contract staff and associated team disruption.

Yet with a large proportion of the UKís financial institutions now following commoditised recruitment practices, IT Managers and Directors have little or no access to the best skill sets. They are understandably frustrated by the fact that they are unable to approach specialist recruitment companies to get the right skills because HR corporate governance bans the use of any agency charging more than the agreed tiny margin.

The commoditisation of recruitment simply doesnít work, and recruiters and employers from the other job sectors woke up to this fact a long time ago. IT is the only area where recruitment is being treated this way, a perverse situation to occur when its demanding, highly technical nature means we should be leading the way rather than lagging this far behind.

IT skills are complex; to get the right people demands excellent screening by people who understand the requirements ñ a service that is not available from the giant IT recruiters who currently exert a stranglehold over the market purely due to the volume discounts they are prepared to accept.

The IT recruitment industry has a bad reputation ñ and in many cases, rightly so. But by abdicating responsibility for IT recruitment and opting for service-less minimal margin agreements with agents, organisations are exacerbating the problem and effectively creating a marketplace where the fast delivery of over priced, irrelevant skills has merit.

The only way that organisations are going to access the right IT skills required to support key business initiatives is to take a stand against current practices and demand more control over recruitment. Great IT skills are out there and they donít cost the earth. The only thing standing in between IT and the right contract staff is commoditised recruitment practices. Isnít it time to treat these skills seriously?