Many will agree, it appears the economy is defrosting and we’re seeing the first green shoots of a recovery in the recruitment outsourcing industry. Recently, I’ve read several optimistic blog posts written by firms and individuals that offer hourly and project based recruiting services. While obviously still cautious, all are indicating a recent uptick in their businesses. Some even claim to be busy.
Recruiting outsourcers were among the hardest hit last year when the economy officially stalled. “It was like someone flipped a light switch last October”, said Michelle Rich, a Bay Area technical contract recruiter who is currently working 7 openings. “The work just dried up all of a sudden.” For those of us that survived the implosion of the tech bubble earlier this decade, this pattern comes as no surprise. Unfortunately, contract recruiters and recruiting outsourcers are historically the canaries in the coal mine.
The upbeat outlook of hourly recruiters appears to be substantiated. September figures published by the Recruitment and Employment Confederation (REC) and KPMG showed the first rise in new starts for permanent hires in 17 months. Temporary and contractor hours, often seen as a barometer of the health of the recruitment industry, are up nearly 30% since the beginning of the year. At Newton Software, we’ve added more customers in the last 6 weeks than we did the first 4 months of the year. Many of our new customers, nearly 40%, employ either an individual contract recruiter or some sort of hourly recruiting service to manage their recruiting process. And, more and more, we are hearing about our friends and contacts in the contract recruiting sector landing new assignments, a trend that we hope continues into the holidays and beyond.
So, what gives you ask? Why are the recruiting outsourcers seeing increased activity? Jonathan Chenard, GM of the Union Hill Group, a client of ours that provides hourly contract recruiting services sums it up pretty well in his most recent blog post .
- Employers don’t want to commit to a full time recruiting resource – yet.
- HR is getting hammered with resumes and now that there are jobs to fill, they need recruiting support.
- Employers are looking to do things as inexpensively as possible and hourly recruiting is a cost efficient and often effective solution.
Jonathan also points out that HR groups have gotten lean over the past year and are being asked to do more with less. Hourly recruiting services offer more flexibility and cost controls to HR folks looking to manage recruiting programs that are as dynamic as ever.
I’ll be the first to admit, times aren’t great yet. Many predict that the recovery will be jagged and slow. But, there are signs, both anecdotal and data driven, that show the worst is most likely over. For the recruitment outsourcers, it appears the growth cycle has begun and if history repeats itself, they will be the first in the recruiting industry to fully recover.