World in motion
The past decade has seen huge changes in the recruitment marketing industry and this year has been no exception, with exciting developments both in the UK and worldwide
Date:
20 June 2005
Source:
PM Online
“Nothing very interesting ever happens in this business.” So said a senior and well-respected figure in recruitment communications at a recent forum organised by People Management. Perhaps not, compared with the earth-shattering events that are covered copiously by other media. On the other hand, if you stand back and look at what has happened in recruitment communications and marketing in the past 10 years, you’ll see that the changes have been momentous. “Global”, “internet”, “offshoring” and “outsourcing” are only a few of today’s buzz words, yet they were all at the edge of our consciousness in 1995.
The 12 months that have passed since the previous CIPD Recruitment Marketing Awards in partnership with the Guardian have certainly not been without incident. The agency market has seen start-ups, takeovers and mergers, name changes, rebrandings and office openings (and closures), not to mention a resurgence of recruitment within the business. New newspapers and magazines have arrived, established titles have enjoyed radical makeovers and The Economist’s circulation passed one million for the first time – a heartening sign for offline publishers everywhere. Yet the internet marched on, with generic and niche job boards claiming more than 10 percent of the UK recruitment advertising market, and lots of new employer-branded websites to visit.
Forecasts relating to UK recruitment activity paint a confusing picture at best and regularly contradict one another, as reported in greater depth elsewhere in this guide. Anecdotal evidence suggests that the recruitment communications business in the UK is the busiest it has been for some time, that many who should be in the know are cautiously optimistic about the immediate future, and that rich seams of business opportunity remain untapped, particularly in internal/employee communications. But some people are sounding caution, and there are even a few doomsayers.
To attempt to make sense of it all, it’s useful to start by looking at what’s going on globally.
States’ evidence
If you accept that the UK and Europe eventually follow US social and business trends, it should be instructive to look at what’s been happening in North America. According to Monster Worldwide, annual recruitment advertising expenditure in newspapers and magazines is running at around $4 billion in the US, with a further $1billion spent online. The good news for traditional US media is that their recruitment advertising business is growing. Somewhat less comforting is that the past two years have seen the online share of the market double.
Looking ahead, and as the likes of CareerBuilder and Monster are joined in the job-board community by some serious new competitors, including eBay, the online sector is likely to turn its attention to the hugely valuable local jobs market. Local papers could soon be under threat from the internet as clever new search features are developed.
A study of recruiting trends among 40 major US employers in 2004 by CareerXroads found that hiring was up by 10 per cent on the previous year and 62 per cent of vacancies had been filled by external candidates. Employee referrals accounted for almost a third of external hiring, with online coming a close second at 30 per cent. Although more than half of hirings attributed to the internet occurred via the firms’ own websites, this figure was down from two-thirds in the previous study. Some experts compare corporate websites to the company noticeboard of old and believe they could become less effective as confidence returns in a jobs-led recovery.
The approval of the “.jobs” suffix by the internet’s powers-that-be hasn’t yet taken effect. The industry will also be watching a joint venture recently launched in France by seven otherwise competing recruitment advertising agencies, called jobposting.fr. The service allows clients to post job adverts to 26 boards in one go.
Home front
“It’s a seller’s market” is one of the most frequent comments on the state of play in UK recruitment communications. Organisations are intent on refining the way they attract and treat candidates, as well as doing their utmost to retain the services of valued employees.
“The attraction marketplace is more competitive than ever,” says Graeme Holiday, director of 360 Degrees Advertising. “There’s an increasing recognition among clients that candidates must be treated like gold dust, and that communications need to be consistent and memorable.”
The quality of communication is just as important after people are hired as it is during the recruitment process, according to Holiday. This calls for commitment and, sometimes, a change of attitude from HR practitioners and the line managers they serve. “It’s time for employers to start asking why anyone should apply for a job here and, once they’re here, why they should stay,” he argues.
Agencies have enjoyed higher turnovers in the past year, both in recruitment advertising and in added-value services. Lighthouse Communications, for instance, turned over £4million. Billings accounted for three-quarters of that figure, while interactive, response management, print and internal communications made “significant contributions”.
Another agency, JWT Specialized Communications, has enjoyed double-digit growth over the past couple of years. It has been moving towards an integrated employee communications and marketing services offering. “We have been taking strategic and tactical initiatives,” says Alasdair Goulden, sales and marketing director. “They include the acquisition of graduate marketing and digital solutions agency Empower Communications and the expansion of the response management division.”
RAA Sprague Gibbons reports that business has been good over the past year too, citing the state of the economy as a reason for the increase in advertising. “We’re hearing from clients who have been quiet for some time,” says its managing director, Peter Gibbons. “We’re also pleased to see that more IT roles are being advertised again.”
Andrew Wilkinson, European chief executive of Monster Worldwide, has seen a change in the nature of the jobs being advertised. Last year he reported an upturn in sales recruitment. Now, looking at the type of vacancies on the Monster board, he sees the market has moved on.
“No single sector is growing at a phenomenal rate and there is still intense competition for good salespeople,” he says. “But, as we move through the economic cycle, we are seeing more demand for people in IT, engineering and healthcare.”
Andrew Young, managing director of ThirtyThree, also points to the market’s cyclical nature. “The recruitment industry seems to be enjoying a mini-boom at the moment, reflecting a general pick-up in the economy,” he says, pointing to specific sectors where strong performance is making a difference to the overall picture. “In accountancy, where regulatory changes have been accompanied by skills shortages, demand has been exceptional. And, if you look at the IT press, you’ll find plenty of full-page adverts from the big names in IT and telecoms.”
But Young feels today’s good times are a “temporary blip in a picture of long-term decline”. He says that, although volumes of recruitment advertising in key marketplaces such as The Sunday Times are better than they have been of late, they are nowhere near the levels seen in 2000.
“The structural factors driving decline have not gone,” he argues. “The internet revolution is progressing steadily, the rise in freelance and contract working patterns continues and the labour market is geared towards highly skilled knowledge workers rather than the high-volume, low-skilled jobs that lend themselves more to direct attraction methods.”
The public sector has been one of the mainstays of recruitment communications throughout the downturn and it continues to account for a significant chunk of the market. And recruitment to tax-funded organisations and the third sector has remained buoyant, despite the best efforts of the efficiency experts, who see recruitment
advertising as a particularly easy target.
Clients have typically been looking to cut their recruitment advertising budgets by 5 to 15 per cent, according to Simon Pearson, founder and chief executive of Pearsons. His firm, which has an 80:20 public-private split, entered the agency top 10 last year and has grown by a further 25 per cent since then. “Prospects remain very good in the public sector because the importance of recruitment has risen as HR people have become more highly valued and recognised,” he says.
The challenge to agencies has been to achieve more with less, which has accelerated the move online and increased the use of other lower-cost media such as text messaging. “Pearsons tends to win business on its ability to provide comprehensive, multimedia recruitment solutions,” Pearson says. “Agencies are much more accountable than they used to be. We now provide comprehensive response tracking and performance monitoring systems, which are typically assessed twice a year.”
Cost versus value is a long-running debate in recruitment communications, and it raised its head again in a recent article in The Grocer by Simon Howard, founder of Work Communications. He analysed some of the findings of the magazine’s shopfloor survey, which revealed Sainsbury’s as having the lowest hiring cost per head but the highest staff turnover. Asda, by contrast, spent the most on filling each vacancy but had the lowest staff turnover. The conclusion is that the more you invest in recruitment, the more committed your workforce is likely to be. And woe betide organisations that proclaim people to be their most important asset, but then go on to treat them as little more than a commodity.
Brands on the run
Opinions differ greatly on what is meant by “employer branding” or “employer reputation” and its importance to the world of recruitment. Robert Peasnell, managing director of Barkers, reports dozens of recent tenders that have asked: “Can you deliver employer branding?” On investigation, the question actually relates to consistency in recruitment advertising and supporting materials. “We all know that it’s much more than that: it’s reward, induction, development, assessment,” he says. “It’s the total employment experience, not just the beginning part.”
Andrew Young at ThirtyThree says that employer branding is flavour of the month and agrees that many clients have not yet grasped what it really means. “The HR profession seems to have latched on to the idea that it’s some miracle cure for recruitment and retention problems rather than dealing with the underlying issues that influence staff motivation and morale,” he says. “Some agencies are happy to cultivate this myth in anticipation of fat fees for producing glossy new materials.”
Young believes that few organisations either understand employer branding or devote the resources necessary to make it a meaningful part of their overall communications strategy. “Let’s not get caught up in the jargon and hype surrounding employer branding,” he says. “Simply identify the key reasons why people join and stay with your organisation, then promote them actively in recruitment and employee communications. It’s what the BBC and British Airways have been doing for years, long before the term ‘employer branding’ was invented.”
Nick Holker, now at Work, was employed at Barkers 20 years ago when the term was invented. One of his colleagues from those days, Simon Barrow, is credited with coining the phrase “employer brand”, and Holker has been close to the concept ever since.
“Back in the 1980s an organisation promoting itself to specific potential employee groups on a continuous basis, rather than in isolated events of classified advertising, was seen as innovative,” Holker recalls. “As new technologies transformed the ways in which people worked, so new job types were created and organisations began to compete for skills that were by their very nature rare simply because they hadn’t existed before. This led in turn to a need for organisations to differentiate themselves through their actions and attitudes and, crucially, the way they portrayed themselves to new, existing and even former employees.”
In the decades since then, recruitment communications have become a significant channel for marketing individual employers through regular carefully branded and crafted campaigns in a wide range of highly visible media. But Holker is concerned that the current trend for outsourced recruitment processing could mean the end of direct recruitment communications – and of the employer brand as we know it. He believes that, as more and more layers of process come between the job candidate and the employer, and responsibility for attraction is devolved to third-party databases and websites, so the chance for individual employers to differentiate themselves will be lost.
“Outsourcing may be quicker. It may be more efficient. It may even cost less – and it certainly satisfies the current fashion for removing non-core activities,” he says. “But the potential to hook or persuade those candidates who are anything other than jobseekers is negligible. The strongest candidates are often not even looking to move.”
It strikes Holker as strange that the recruitment outsourcing trend should emerge at a time when it has never been easier for organisations to manage their own recruitment processes effectively.
“Although web-based recruitment systems have taken time to mature and require investment, time and resources, they can work extremely well and can deliver considerable savings and benefits,” he argues. “More to the point, they provide organisations with constantly refreshed pools of talented individuals who have made a conscious decision to apply to them.”
One of the perennial problems is that, apart from rudimentary data on attrition rates and the cost per hire, comparatively few organisations track their expenditure by recruitment method, let alone by individual recruitment supplier. Fewer still link longer-term performance or attrition to hiring methods.
Studies from Work and other sources suggest that direct recruits may be twice as likely to stay for the longer term than those appointed through third parties. If this is true, the answer is clear for those who see recruiting the right people as a vital investment in the future of their business, rather than as a short-term cost issue: take the process in-house, couple leading-edge technology with brand-enhancing communications, and then build and control individual talent pools in which no one else has “fishing rights”.
Year of the microsite?
For all the talk of employer branding, the recruitment pages of newspapers such as the Daily Telegraph, The Sunday Times or the Guardian would suggest that precious little of the effort is finding its way into print. As Gareth Edwards, sales and marketing director at aia, asks: “How many ads do you see that lead on brand differentiators or unique cultural attractors?”
He considers most of what appears in these prime media to be a poor advertisement for the recruitment communications industry, because it hasn’t moved on from the copy-heavy, job-spec-driven announcements of days gone by.
“The shame is that there’s no need for it any more. Most of what’s in the ads should be on the web,” Edwards says. “Passive jobseekers need to be hooked in – 20 lines of small type in a box can’t be the best way to arouse their interest.”
Peter Gibbons of RAA Sprague Gibbons is also an advocate of the “press plus web” approach. His agency has been recommending the use of campaign-specific “microsites” over the past year.
“These aren’t necessarily large campaigns,” he explains. “Sometimes one press ad refers candidates to a tailored microsite containing more detail. Microsites can often be funded out of the advertising budget – you can take a smaller ad, because less copy is needed, and use the saving to pay for the microsite.”
Graeme Holiday of 360 Degrees Advertising is sure of the way ahead: “The next 12 months will be the year of the microsite. It won’t be enough to announce a position on a job board. The passive jobseeker needs irresistible reasons to consider a new employer, and fishing in the same pool as everybody else will not deliver the results.”
So, have we discovered the definitive recruitment solution? Powerful press adverts – not too big – that intrigue all the best candidates, combined with carefully branded, information-packed microsites that inspire readers and allow a fair measure of self-selection, and that show the way to a friendly, clear and fair selection process. All that’s needed is commitment from HR and line management, creative work that hits the spot and copywriters who can get to the crux of the job.
Pitch battles
“The arrogance in their requirements was breathtaking,” says ThirtyThree’s Andrew Young about two of the highest-profile business tenders of the past year. Agencies still grumble about the time and resources they are expected to invest in pitches. “Potential clients seem to be asking us: ‘Give us all your best creative thinking and share with us everything you know about recruitment media and the job market, but don’t expect any effort from us – or a decision for about six months,’” Young says.
Views on the situation differ. Some agencies feel major companies change suppliers regularly anyway as a matter of policy. So they put more effort into winning business and less into servicing. Others believe it’s better to look after what you’ve got and to be selective about winning new business. Many agencies, particularly the smaller ones, steer clear of formal tender competitions, feeling the demands made are to the detriment of paying clients.
Colin Barnett, who led the buy-out of his agency, Together Communications, from the International Group last year, admits to winning new business by stealth. “We try to stay close to target clients and to be in position when they’re ready to change. We never go near a formal pitch.”
RAA Sprague Gibbons also largely avoids formal pitches. “We have stuck to our guns and not taken part in any formal creative pitches where we do not have a prior relationship with the client. Our resources are dedicated to our own clients, not stretched to the limit working day and night on pitches,” says Peter Gibbons.
A complaint is that the procurement specialists who are increasingly involved in tender processes look only at costs and have no understanding of the value of strategic, branding and creative contributions. (On the other hand, Work’s Howard recalls a case when a procurement director insisted on researching recruitment metrics, which actually proved that direct recruitment programmes offered a better return on investment than outsourced options.)
Clearly there’s something wrong when large, respected agencies decline to pitch for accounts such as Accenture and BA. The new ad agency feature on the Ri5 and People Management websites explores alternative approaches, and will air new ideas from all sides of the industry.
Tomorrow’s world
New challenges always lie around the corner for the industry.
Over the next few years they will include:
● Education. New vocational qualifications are to be introduced for young people aged 14 from 2008. How will they know which way to go if they aren’t informed about their career options? And who is best placed to keep them informed?
● Ageism. A new law will be in place in 18 months’ time, with wide-ranging effects for recruiters. Does it represent a problem or an opportunity?
With such issues on the horizon, the coming years are certain to see just as much change in recruitment marketing as the past one.
Agency league table: the top 10 (billings £m)
TMP Worldwide - £196.7
Barkers - £113.7
Euro RSCG Riley* - £100.5
Tribal Resourcing - £59.9
MKH - £40.3
Work Communications - £29.1
Bernard Hodes* - £25.7
Pearsons - £23.6
TCS Advertising - £18.8
aia - £15.9
*Companies House figure supplied, owing to the Sarbanes-Oxley Act 2002.
TFL travels beyond the comfort zone
Toby Barnes, Transport for London’s head of resourcing strategy, makes the case for putting all recruitment campaigns out to a three-way pitch
The recruitment of high-quality employees is crucial to Transport for London (TfL) – particularly in the light of its five-year investment programme, which will see £10 billion-worth of improvements to the tube, bus, tram and Docklands Light Railway networks across the capital.
We needed to remodel our approach to recruitment to attract high-quality candidates with the right skills. And it has worked: our recruitment effort has become much more effective, gaining both national and international awards.
Last year we conducted a review that revealed our recruitment process was too ad hoc. Each piece of recruitment happened in isolation, with too little attempt to achieve consistency. This hindered the organisation from securing the right people, as well as making the whole process more costly.
A further challenge was that TfL was, and still is, undergoing major change. As a result, so was the profile of the candidates the organisation was seeking to attract. Creative teams were hired to develop advertising to attract candidates with specialist or scarce skills. A house style was also developed to communicate the organisation’s values to potential candidates.
An account director was appointed in-house to bring knowledge into the business and to manage the creative teams and all related recruitment assignments and campaigns.
To save time and costs, and to secure more effective media schedules, TfL dealt directly with an independent media buyer. For each assignment it briefed three senior creative teams from top recruitment advertising agencies.
While we have invested more in this element of the relationship than usual, this approach has served to deliver high-quality work and has also mitigated any loss of knowledge during a period of rapid change. The overall cost has also decreased, while the balance of media and creative cost has changed from the traditional supplier model.
Service-level agreements were developed and used as the basis of a quarterly incentive to the teams. After 12 months, this approach has proved its worth, and the lessons learnt have been used to strengthen the model. Over the past year more than 45 briefs for individual roles and two major recruitment campaigns have been delivered, representing about 800 positions.
The success has been measurable. The cost per hire is down, minority group representation has increased and the percentage of vacancies filled has improved, as has the time taken to hire when using a creative approach. A reduction of up to 70 per cent has been achieved in the basic cost per hire for customer service assistants. The proportion of women in these roles has increased from 22 per cent to 35 per cent.
Lee Jasper, the mayor of London’s senior policy adviser on equality, has praised the advertising for TfL’s customer services roles – which is now the core method for TfL’s resourcing delivery team at its new shared services centre, which opened in January.
Pizza hut hits the spaghetti western trail
Stafford Long’s joint creative director, Phil Woodford, makes the case for looking inwards
Pizza Hut challenged us to create a branded campaign for its new internal graduate leadership development programme. This scheme is unusual in that it is available only to current employees of Pizza Hut. The plan is to take on 10 to 15 graduates this year.
Pizza Hut already has an extremely large number of graduates and students among its workforce. This got us thinking: rather than seeing the stiff competition as a negative, how about using it to illustrate exactly how special someone has to be to become a future Pizza Hut leader? It’s a strategy that fitted particularly well with Pizza Hut’s wish to differentiate its graduate programme from its long-established management training scheme.
The internal nature of the scheme meant that the target audience would already know all about the firm. This gave us the chance to reflect its fun culture while still presenting the scheme as a serious opportunity. After considering several concepts, we decided to style the campaign around a Wild West “10 most wanted” theme. But where could we find a suitable location for the pictures? Salvation came in the form of Laredo in Kent, billed as the UK’s only fully functioning Wild West town (see www.laredo.org.uk). As a result, posters featuring the menacing “Billy the Grad” and “Lara ‘Hungry Kid’ McCallum” were complemented by a website complete with a spoof spaghetti western movie and the facility to apply online, all set in the fictional town of Grad Creek, Hut County.
Emily Cadwallader, Pizza Hut’s head of resourcing, says of the aims of the programme: “We felt that an internal graduate leadership development programme would help us to retain some of our potential, attract talented individuals in the future and support the business in building a pipeline of future leaders – a key challenge for us, with more than 600 restaurants and 70 new openings every year.”
The campaign went live in February, ready for the first summer intake. The initial signs are encouraging, according to Cadwallader. “The campaign has helped us to tap into the internal talent pool and to challenge some of our teams’ perceptions about a fast-track career in the business. The quantity and calibre of applications has been encouraging. Those who have applied are clearly passionate about our business and culture. They have already bought into the benefits of working in our industry.” But she says it will take a few years for the programme to establish itself fully and be seen as “a realistic career route by all”.