You might think times would be tough for the recruitment industry when unemployment is high and jobs are in short supply, but that’s not quite the case. Sure, the industry was badly affected by the crash in 2008 but things are definitely improving.
Last year, according to the annual survey by The Recruitment & Employment Confederation, the number of people working in recruitment increased by 13 percent to 91,114 and overall industry turnover rose 25 percent to nearly £24.7bn. Turnover for temporary/contract staffing returned to 2006/2007 levels and permanent recruiting also recorded a massive increase.
Cloud important for recruitment
The nature of the recruitment sector has made it particularly well suited to certain technological advances. For example, the Internet provided a perfect platform for the emergence of job boards and recruitment web sites which proved very popular innovations. Cloud-based computing is also becoming an important factor for recruitment companies.
This is partly down to demographics. According to one estimate, there are around 8,000 recruitment companies in the UK with an average of four employees. After the crash of 2008, when many recruitment consultants were made redundant from larger companies, significant numbers opted to remain in the industry and set up business on their own. For such a large base of small businesses, the attractions of using cloud-based computing are manifest.
Tony Conibear, European business development director at Bond International Software, says cloud computing has helped to overcome one of the big barriers to setting up a recruitment business which he describes as “the necessity to have a physical on-site IT infrastructure in place and the costly capability to administrate and support it”. Cloud computing has given agencies “the ability to rent the entire infrastructure as a service enabling recruiters to focus upon running their business, rather than having to worry about the IT infrastructure and the administrative burden associated with it”.
Richard Prime, CEO at Sonovate, is in a good position to comment. His company provides a cloud-based recruitment platform to help recruitment entrepreneurs set up and run their own agencies. It provides accounting software from Crunch and timesheeting software from Etz while relying on Yammer for interaction between the agencies. Launched in March, it has signed up over 50 agencies and has just expanded into Australia.
“A cloud-based system provides great functionality for a low cost: flexibility, the freedom to access their office wherever they are, 24 hour uptime and increased capability on mobile devices, among other benefits,” he says.
SaaS is definitely proving attractive for small start-up recruitment agencies. Conibear reports that Bond has experienced a large increase in the amount of businesses using SaaS "with 99 percent of start-ups opting for cloud." But he cautions that "while cloud is cost effective, convenient and relatively easy to implement, from a business owner’s perspective the reliance upon the internet is huge, as is the trust which we place in it on a daily basis. Businesses need to be secure in the knowledge that the contract they have signed with their provider means their data is available, secure and protected”.
Another significant factor is the ability cloud provides for recruiters to work from multiple locations. Karl Mendez, CEO at managed hosting provider CWCS, says cloud suits recruitment consultants’ way of working. “Staff at recruitment companies often work remotely – visiting client premises, interviewing potential candidates and working from home. There are many applications that can be accessed from, or placed in the cloud that are ideal for remote working.” Often, their pattern of work can be different too. For example, recruitment consultants might talk to candidates in the evening after work. These are not typical 9-to-5 desk jobs.
Because recruitment consultants are essentially sales people, they do not want to miss a deal wherever they are, so anytime anywhere access is a very attractive proposition. The vast majority of recruitment businesses are owner/manager operations and, as Geoff Newman, CEO at RecruitmentGenius.com, points out, solutions such as SaaS allow them “to focus on making sales and making more money”. Cloud-based computing fits neatly with an industry such as recruitment that “likes to outsource everything. Recruitment companies factor invoices so they don’t have to do the collection themselves and they use serviced offices. They want to focus on selling candidates into companies”.
For Newman, cloud computing has brought about a significant change in the way his company runs its business. Part of the company’s growth since it started in December 2009 has been through acquisition. Each time it acquired a business, it inherited that company’s IT infrastructure and servers and the support contracts that came with them.
The company needed to test certain concepts to enable it to innovate but the cost of doing so with physical servers was extortionate. So it opted to try running those tests using a cloud hosting specialist called ElasticHosts. Newman says the experience was very cost-effective and very flexible to the company’s requirements, making it “much more agile in our development”. Over the course of a year, RecruitmentGenius.com started cancelling all its IT contracts and migrating to ElasticHosts. He describes the process as "effortless".
The ability to spin up and spin down processing power has also proved a boon. Recently, RecruitmentGenius.com was able to process over 27,000 job applications in five minutes on a Saturday afternoon. If it had used traditional servers, the company would have been forced to invest a lot of capital in increasing its server capacity which would have been left redundant afterwards.
Another beneficiary of cloud computing is Gary Williams, operations director at executive search specialist, VadarMoss, where consultants were suffering performance issues with its inhouse systems and difficulty gaining remote access. The firm took the decision to shift its infrastructure, including the Bond Adapt CRM system, MS Office applications, file shares and internal resources to a private cloud infrastructure with Databarracks.
Williams says the move has helped VadarMoss to use technology more effectively and “there is no barrier to us acquiring technology. We can now acquire applications on a cost per user basis that were way beyond our budget for our own environment. We don’t have to be one of the recruiting brands to acquire and use that technology”.
With offices off The Strand in Central London, VadarMoss was significantly affected by events such as tube strikes and demonstrations with days lost as recruitment consultants were unable to make it to the office. Now, they can work as efficiently from home as they would from the office. The company is also a lot more nimble and flexible.
Before the crash, the firm employed 14 consultants. Currently, there are three but VadarMoss has plans to increase that number to ten over the next two years and Newman believes it will be much easier to increase user numbers and bandwidth as the business dictates using the cloud.
Summing up, Mendez at CWCS claims cloud computing makes sense for many companies in the recruitment sector because they are "working remotely, relying on business-critical data, or running multiple or multifunctional websites and requiring reliability, flexibility, powerful infrastructure 'on demand', support and security”. He claims the cloud is “often the most cost-effective, commercially logical option for many recruitment businesses”.
The attractions of cloud computing for recruitment firms
Most recruitment agencies are small businesses. Cloud removes barriers to entry associated with IT infrastructure and support costs
Supports recruitment consultants’ working practices with remote access from anywhere, any time. Many work outside office hours and outside the office.
More cost-effective: recruitment firms want to focus on sales, not IT
Introduces more flexibility with ability to scale up and down to meet short term loads or changes in staffing levels. Reduces risk and costs associated with redundant hardware.
Ability to use applications on a per user basis that most firms could not afford to licence on premise
Reduces disruption and downtime
