Recruitment agencies: Does size matter? An interview with the IOR's Azmat Mohammed

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Unless you've been hiding under a rock since the New Year was rung in, it will have been hard to miss the news about economic growth. Britain is on the road to recovery from the longest financial crisis in a century. Recent findings from the Office of National Statistics reveal the annual growth was 1.9% - the strongest increase in the 6 years since the recession began.

It isn't just larger established businesses that will be benefiting from the economic predictions forecast for this year. Many budding entrepreneurs are using the optimistic outlook as a springboard to success. In 2013, just 29% of SME owners had created a business plan for the next 12 months. Now, it seems, owners are more optimistic - with 59% planning ahead and preparing to put their confidence into action. Entrepreneurship is truly booming across generations – PeoplePerHour has seen a 97% rise in 18-24 year olds registering small businesses and with growing entrepreneurial trends emerging among the over 50's, it seems that now is the time to take the plunge into self-employment.

At Recruitment Buzz, we like to stay on top of recruitment news and so we decided to sit down with Azmat Mohammed - the multi award winning Director General at the Institute of Recruiters (IOR) and he offered to give us his opinion on starting up as a small or medium recruitment business in 2014.

“SME's are the biggest chunk of businesses in the UK” Azmat says, “The larger companies may have a bigger ability to perform large scale operations and a more established brand name but recruitment doesn't work like that. It is effectively agencies within agencies and SME recruitment agencies are just as important.”

With small and medium sized recruitment agencies accounting for up to 85% of all agencies in the UK, should large recruitment agencies feel threatened? It seems Azmat believes that size really doesn't matter. “In a word, no. They still have their place. It isn't about the brand or the size but about the ability of the recruiter. Candidates want the best from their service, regardless of size. Both recruiters and candidates need to be a bit more savvy about recruitment and not be under the impression that the larger the company, the larger the ability”, he said.

Size may not be an issue with regards to the quality of the service provided, but what can the smaller recruitment agencies offer that could be lacking elsewhere? In a sector which is public-orientated can the little things really make a difference? With his 25 years of experience in general business, HR and recruitment, Azmat realises that “Job-seekers want to work with someone who gives them the attention that they want and deserve. A smaller, more niche agency can offer a more personalised service that comes with more time spent together.”

With that said, Azmat doesn't think that a comparison between the sizes of agencies is the right way to go and reiterates his previous point, “It's down to how the recruiter works, how they manage their time and how they build their people” he adds. “I would argue that people who are well connected and have ability will succeed.”

However, a small agency does not come without problems - unless the entrepreneur has an unlikely abundance of cash – a smaller budget may bring restrictions and limitations.

“Recruitment is all about knowledge. A smaller budget could bring difficulties in training staff and implementing a learning and development drive” Azmat says. Like anything in life, priorities should come first and realising this, Azmat offers some advice. “It may be expensive to train, but it should take a primary chunk of the budget.”

Where a large proportion of fees may be spent elsewhere, it seems that social media recruiting and marketing trends can offer some relief for those with a smaller budget. “In marketing terms, social media gives a way for recruiters to be heard with no real money spent. Agencies should concentrate on how to train and manage rather than external marketing” Azmat said.

Along with the stabilising economy, unemployment figures have revealed that the UK's jobless rate fell sharply to 7.1% towards the end of 2013 - a brilliant step forward for Britain. With more people now in employment, Azmat remains realistic; convinced that it will not affect the efforts of recruitment agencies to help find jobseekers employment. He suggests that however low the unemployment rate, there will always be those actively looking for work. He said, “The reality is, we have another 10 years of sustained growth, which will grow slowly and steadily over all sectors. These sectors may see growth at different times – manufacturing may be later whilst services and IT may be quicker.”

What seems to be forgotten a lot in recruitment is that those already in employment could also be looking to find new jobs and experience. With industries seeing signs of development and growth, recruiters are always looking for the best talent -whether it’s those actively seeking or those already working.

“This is a point to remember which is uncommon in recruitment” says Azmat, “Companies want to grow and they need to hire the right people to do it - that is a huge potential client base. Whatever the employment rate, businesses need the right people. Start-ups don't need the economy or availability, but the right skills and knowledge - which will see them succeed. The right recruiter will be better received, the customer will be satisfied and we will see a growing infrastructure. That is what recruitment is about – delivering the right people that will help to grow companies.”

So what advice does an experienced entrepreneur and business leader like Azmat offer to those who are looking to set up or expand an existing recruitment agency? “You need qualifications” he explains, “Don't fall into the trap and think that you can start an agency without any skills or training – whether it is an Agency Recruiting Professional Certificate or a Start Your Recruitment Agency Course - this is something that the IOR can offer you, or your company can become an IOR Centre of Excellence. Also, the reputation of our industry depends on recruitment agency owners taking a leaf out of the HR playbook, ensuring your job adverts look for applicants with a recruiting qualification, or working towards one at least.”

As well as qualifications, Azmat urges people should not get complacent with their efforts. “Don't think that the future face of recruitment will resemble the past 10 years. Be open minded to the change that recruitment has gone through and will continue to go through' he says.

To combat this, he goes on to strengthen his argument for training by acknowledging that “Learning and development are key. If you are not prepared to invest the time and money into it then recruitment is not for you. Recruitment is about helping people and not offering poor knowledge and advice. If you own a recruitment agency then invest in your people! Put existing consultants on a formal recruitment qualification if you are committed to being the best. Show them you are willing to invest in their futures.”

Probably the biggest challenge that start-up's face is budgetary. “You'll need a solid cash flow – this is where a company like Simplicity comes in”, says Azmat. “It is a company that can help with guiding businesses through the potential difficulties that starting up can bring whist also providing the funding that will keep you away from risk”.

The Simplicity team is made up of experts and their aim is to relieve entrepreneurs of cash flow concerns, giving access to literally millions of pounds to fund future growth. They’ll even process your payroll and chase invoices so that you can spend your time more wisely, doing what you do best – winning new business!

There is no telling where the future of recruitment will go, but Azmat firmly believes that if an individual is to become a successful business owner, they should certainly seek advice from professional bodies. He says, “There is no future for recruiters who 'want to give it a go'; that era has gone.”

By combining what The IOR and Simplicity can offer, there is a real opportunity for success. The economy is ready, the industry is ready and the candidates are ready... Are you?

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