Why work with a recruiter?
Every professional services firm has had to undergo change over the last few years. In a relatively low growth world, firms have tried to reduce costs and to bring more functions in-house. In some cases it’s understandable. Marketing, for example, has become a 24/7, digital environment, and firms need agility to respond to the demands of the modern world. However, we’d argue firms shouldn’t in-house every function.
In theory firms could in-house most things, but they’ve come to the conclusion in many cases that they don’t want to wash their own windows, as they don’t want to be a financial services firm with a facilities management business in-house. We work with a number of private equity firms and one enduring theme of their modus operandi is that they encourage firms to focus on their core business.
However, we’ve seen some in-housing of recruitment functions and below is our case for working with external specialists.
From executive search firms through to agencies, most firms have a particular industry experience and in some cases functional expertise too. Each firm has over time developed deep talent pools of hard to find skills, and they have invested in building long term relationships with candidates.
This means that they are ideally placed to advise a client on the competitive landscape, and help firms hire “passive” talent, i.e. those attracted to the right opportunity, rather than those who are actively seeking a new role.
Professional recruiters meet a large number of clients and candidates, and they gain an incredible insight into the industry and where it’s heading. They have also seen which people strategies have worked in the past and which have failed miserably. In-house recruitment teams are often cut off from this network and therefore quite quickly lose touch with market trends.
It’s sometimes good to have someone who has no day-to-day involvement with a firm take a look at a talent problem. It’s easy to get involved in internal politics an external adviser can provide a different perspective.
Firstly, there are some incredible in-house recruiters. However, it’s hard for firms to retain the talent within their in-house recruitment teams. They are often small functions, peripheral to the decision making capability of a business, and offering upward progression is hard. Unlike their counterparts working in a recruitment consultancy or search firm, talent acquisition specialists only work with one client. Whilst this can be rewarding, it can become stale. Take a look on linkedin at how often talent acquisition professionals change jobs and it indicates support for this theory.
Again, it comes back to what should firms be managing. Should leadership teams in an asset manager focus on developing their investment talent? Yes. Do they want to deal with performance issues of their recruitment team? No. Within the agency world, good people can flourish and build a career.
The average cost of a bad hire is estimated to be 2.5 x their annual salary. For another view of this, please visit this Forbes article. Whilst direct hiring can make sense for very large firms, the cost for a 100 person firm having an in-house talent acquisition specialist outweighs the benefits. In fact, it would cost most firms far more than using external recruiters, unless the firm was in a significant growth phase. Again, does one person have the knowledge and network to help you hire the best?
An outsider will help firms attract candidates from different or a wider range of talent pools.
Established in 2010 by Simon Roderick, a recruiter with 20 years City recruitment experience, Fram Search is a specialist financial services recruitment consultancy. We focus on permanent and interim recruitment in the UK & internationally.
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