We're not so different

8-Feb-2006

Traditionally, the relationship between outplacement and recruitment has often been a case of ’them and us’. The former worked with those exiting employment, the latter placed people in work. Outplacement companies and recruitment companies charged different fees, and the two activities were kept separate.

In recent years, however, things have begun to change. With Manpower’s takeover of Right Management Consultants, the world’s largest outplacement firm, has come a growing realisation that outplacement and recruitment are two sides of the same coin.

Outplacement firms which haven’t gone down the acquisition route are now getting in on the act. For David Samuell, commercial director of human capital management company DBM, which provides outplacement services to companies around the world, the logic is implacable.

“Outplacement firms have lots of people with skills and talents looking for jobs. Recruitment companies are looking for good-quality candidates. Why can’t the two get together?” he asks.

With outsourcing, company mergers and corporate restructurings all contributing to continued turbulence in the jobs market, the economic climate certainly appears favourable. Add the UK’s incongruous mix of persistent skills shortages and unemployment on an upward trend, and Samuell’s call for closer links with recruitment could well prove to be a winning strategy.

Outplacement consultants are traditionally called in by organisations when they are facing redundancies, to

help staff with their CVs, and interview skills, and to provide coaching and career advice. However, according to Samuell, these days consultants are expected to do more to earn their fees.

“Organisations increasingly want us to help their people with what they want to do next,” he says. To achieve this, DBM uses a network of ’job developers’ who are responsible for identifying suitable job opportunities for those going through outplacement. And that’s where recruitment comes in. “An important aspect of this is building relationships with recruiters,” Samuell adds.

The company also operates an online database of jobs and candidates, which can be accessed by both recruiters and jobseekers. “Recruiters get access to quality candidates who are well prepared for the market,” says Samuell.

Spencer Jacobs, managing director at niche recruiter Forties People, has first-hand experience of the benefits. “Having good links with outplacement consultants helped us to find some good candidates, and as a result we placed six candidates with HSBC,” he says. “We met up with the outplacement company, spent some time with the candidates, registered them, and provided them with a link to our website.”

City recruitment firm JJ Associates has also has built up fruitful relationships with outplacement consultants. “Not only do we let them know what our key areas are, we also provide them with job specifications on a monthly basis,” says Julie Skinner, a director. “If things are more urgent we chat to them on the phone.”

As well as placings, there are other benefits to be gained from such relationships, says Skinner. Quite a number

are used as a way of gaining information about the market, such as who is being made redundant.

“It allowed us to tap into a supply of people who have been suitable employees for a blue-chip company,” says Mike Setterfield, a director of Delaney Browne. His is one of several recruiters working with DBM after Vodafone announced more than 100 job losses at a customer service centre in Newbury, which is due to close in March.

In January, the recruiter attended an open day at Vodafone at which it received more than 30 CVs. “These are prime candidates,” says Setterfield.

Although this the company’s first time working with an outplacement firm, Setterfield agrees it makes senses.

“It is a logical step when a company is making a large number of people redundant,” he says.

A win-win situation
DBM is not the only outplacement consultancy that recognises the value of developing links with recruiters. Paul Armstrong, a senior consultant at Penna Human Capital, says that his company is currently working with both national and local recruitment agencies on 10 projects - and that’s in the South-West and Wales alone. According to Armstrong, each involves “100-plus” redundancies.

One of Penna’s clients is Tesco in Cardiff, where Armstrong says they have been working with local recruitment companies to help support staff, whose roles “have disappeared”. Over the past 12 months, Armstrong says: “90% of employees have been successfully re-settled in other companies.”

Such relationships are wide and extensive, says Bill McCarthy, managing director of Penna Career Transition Services. Even though Penna has its own recruitment divisions, McCarthy says that in any one year the company works with all the UK’s major recruiters - between 40 and 50 in total. “We get a stream of recruitment companies coming to us when we have vacancies to fill,” says McCarthy. “It’s a quick way for them to find people who are appropriate.”

However, it’s not just in mainstream recruitment where links with outplacement can be beneficial. Ian Cooper, managing director of Northampton-based Oakwell Consultants, says that both sides have gained from the “good relations” which his company has built up with headhunters dealing with senior positions.

“It’s win-win,” says Cooper. “The advantage for headhunters is that

“It allowed us to tap into a supply of people who have been suitable employees for a blue-chip company”

they increase the number of very good quality candidates. So the recruiter gets a placing. And we ’lose’ our client as cheaply as possible.” Cooper adds that headhunters are so impressed that they often contact him before bothering to advertise.

Cooper adds that such relationships must be based on trust. “They are obviously keen to protect their vacancy,” he says. However, he insists his company “is not in the business of getting money for filling vacancies”. As he explains: “We are already being paid by the client.”

Bumps on the road to cooperation
Richard Taylor, managing director of executive search firm Barnes Kavelle, which also has an outplacement

arm, says that whereas in the past outplacement candidates were often regarded as inferior to those

already in employment, this view has largely disappeared. “Thousands of firms get taken over,” says Taylor. “It is just circumstances.”

In fact, according to Taylor, outplacement candidates can often be superior. “Whereas someone already employed in an organisation sometimes goes along with an approach from an executive search firm, but doesn’t really want the job, an outplacement candidate is more likely to accept the job because they really want to do it,” he says. However, some on all sides argue that there are still problems.

“The links between outplacement and executive search are almost non-existent,” says Paul Harper, chairman of the Association of Executive Recruiters, whose members operate mainly in specialist niche markets. “It is not a criticism of either side. It is just a fact of life.”

Antony Berg, managing director of recruiter Andersen Leigh Associates has a similar take. “Over the years we have had a few people referred to us by outplacement consultants, but generally we find the candidates to be irrelevant to our requirements,” he says.

A manager of one national recruiter says he contacted RightCoutts and Penna with a view to sourcing people for a major contract with a large insurance company, but didn’t even get a response.

Other recruiters see the advent of online databases detailing the CVs of those going through outplacement

as effectively a free placement service for employers, and a threat to their business.

According to Stephen Mansbridge, managing director of AGM Transitions, a career transition company that also provides outplacement services, one factor is the particular market in which firms operate.

Mansbridge says that while building links does work at the boutique level, “where people of quality are moving in different directions”, they don’t work at the middle management level. According to Mansbridge, headhunters receive similar requests for help in their mailbag every day, but are usually unable to assist.

However, he adds: “Where it’s more a question of volume recruitment, and one company is laying off staff, and another is prepared to take them on, it should work.”

Call centres are a good example, and Mansbridge cities companies such as Reed Employment, Hays and Manpower, who “are dealing with recruiting en masse”.

DBM’s Samuell recognises that he has a battle on his hands to convince the two sides to build closer working relationships. “Recruitment companies don’t come to us as a matter of course,” he says. “We tend to be proactive on behalf of the individual. Recruitment companies take the view that they have placed the ad, and it is up to the individual to contact them.”

However, Samuell says there is an inexorable logic at work. And this could only be the start. The next big trend could be for outplacement firms to be rewarded on more of a contingency basis, he says.

“A couple of companies want us to provide outplacement support, but will only pay when we have

a positive outcome - once the individual has moved on,” he says. If that is the case, Samuell’s vision of the two industries forging closer working relations could be

given added impetus.