The future of recruitment looks cyber

I was delighted to receive the following suggestion from Greg Gunn for today`s column. Actually it was more of a direct question and it read: "What is your opinion of electronic recruitment and the possibility that it could replace traditional recruitment as we know it today?" My reply to him, followed by his reply to my reply, makes up the content for today`s discussion.

Electronic recruitment is somewhat generically related to other forms of interaction which require a brokering process, eg travel, real estate, used cars, and the whole slew of other categories covered in the classified advertising arena.

The role of the middleman is going to be radically re-defined by e-commerce.

In all of these areas, the role of the middleman (be it a broker or agent, or classified advertising medium) is going to be radically re-defined by e-commerce. But most analysts now agree that these roles will be re-designed rather than totally obliterated.

An interesting example comes from the travel reservations industry. Sabre, like Galileo locally, has about 10 000 travel agents in the US on its reservation system, all of which access the Sabre database via a proprietary Sabre network. The threat of disintermediation on the horizon spelt doom not only for the travel agents, but also for Sabre, since the airlines could just as easily disintermediate Sabre AND the travel agents at the same time (I am exaggerating of course). So Sabre did something creative. It constructed 10 000 "customised" Web sites for its 10 000 agents, giving them the same functionality of a Web-based "ticket auctioneer", with special tour offers, low cost seats, etc. Add to this the ability to push market to the travel agents` customer base in a personalised fashion and the economics of switching away from your regular travel agent become very different.

Coming to recruitment, there is obviously a lot of functionality in online matching, and huge cost economies that can be gained, as compared with traditional routes. On the other hand, there may still be substantial psychological barriers and personal service is always going to be important. In fact, we as a company use a response handling technique for our own recruitment, which is an alternative to the traditional "agency" technique. Our supplier (Vertex) arranges newspaper advertising for us (ie it is a pull-based system rather than pushing candidates from an existing database), and then actually does the first round of interviews for us, and we only see the short-listed candidates. We find this method not only far more effective than an agency approach, but also prefer to outsource the first part of the screening process entirely. This frees up our own executive time for other things.

Apart from non-Web alternatives such as this, I think traditional agencies are going to be severely challenged, and will have to adapt or die. Expect a massive grouping in this industry (including mergers), as former competitors suddenly rally together to fight a common dragon, and create their own Web-based recruitment systems. Expect the people in the agencies to re-define their own roles substantially, and perhaps trim down their routine admin staff in favour of Web site designers!

"From what I know about the industry, and I have only been involved for the last six months or so, we are seeing a rapidly growing market with a few key players vying for top position. I think it is just as intense and competitive as the current ongoing battle for viewers that the large portals are waging against each other. When you start becoming intimate with the South African Internet, one quickly realises that we don`t exactly have a huge market here, so I believe the battle lines are being drawn.

"The industry as a whole is still pretty young and I think you could probably divide it into two main streams, namely the current players (recruitment agencies and print-based advertising media), and the new breeds (online recruiting sites).

"I think we are already seeing the consolidation and amalgamation you talk about. One just has to look at the number of buyouts and takeovers to realise that this is also happening at a rapid pace. I do wonder just how much the present state of our economy is influencing this trend?

"Interestingly enough, the majority of the agencies out there do have some sort of Web presence and all seem to be venturing into a form of online recruitment. However, with the bulk of these companies it is still very much the case of `Yes, we do have a Web site` but `No, we don`t think the Net is our primary means of sourcing candidates`. In these organisations, you are likely to find resources directed and applied in line with this thinking.

"Recruiting sites are springing up all over the place. I hear even DiData has ventured into this market with the purchase of one of the players. These sites basically provide a central jobs pool where job seekers can view opportunities. Some even have a CV or skills database that subscribers can access to source people.

"I do get the impression that in some industries, particularly the IT sector, traditional print advertising is not delivering the results it used to and there is a strong drive to find alternative avenues to source good people. This sector has been quite receptive to the online recruitment concept and there are a number of agencies using the job sites out there. The failure of print advertising could be the result of the brain drain, but I wonder with the trend toward sourcing information directly off the Net, if we are not beginning to see the first form of maturity in our online communities. I would hope so, as it would tell me that we are starting to achieve critical mass, which can begin to sustain the vast amount of online offerings that are beginning to appear. Being involved in the industry, that would be good news.

"I am not so sure whether these online job sites will replace the current market. I tend to agree that we will see the industry`s role changing. Why would companies use agencies when they have the option of doing it themselves? I think it boils down to a case of adding value. If that role is purely to save time, then value has been added and, like yourselves, companies will continue to use their present suppliers. What is happening, though, is that we are seeing the recruitment process moving into cyberspace. For now it is limited to sourcing and advertising, but I think as the market grows and these online employment networks develop and mature we could see electronic recruitment playing a major role in the future."

Gregory Gunn greg@jobfinder.co.za

Thanks, Greg, for an interesting debate. For any others with some good ideas don't forget we are keen to hear from you (brian@bmi-t.co.za or andre@bmi-t.co.za).