The labour market may not be completely impenetrable, but it is definitely becoming more complicated, especially in the current economic climate. With tens of thousands of graduates set to confront the employment market this summer, indications are that few are confident about their employment prospects. In the public sector market it’s estimated that at least half a million workers will be queuing up at Jobcentre Plus offices once the new government starts wielding the axe; it’s no longer a case of ’if’ but ’when’, regardless of which party wins the election.

Recruiters have not been immune - in response to the global recession, employers are taking on fewer recruits and are more particular about the suitability of candidates when they do employ. The prohibitive cost of recruiting has become a key driver in the recession. In addition the recruitment landscape has changed out of all recognition in the past five years with the rise of the internet, numerous jobs boards many of which are free and the global reach of LinkedIn, which now has more than 60m members.

But it’s not all bad news for recruiters. Their fundamental purpose hasn’t changed. To free up time and gain access to a large number of potential candidates, many employers still rely on agencies to fill jobs, but it is becoming more evident that few recruitment companies have advanced at the same pace as the market. Many employers have always seen recruiters as a necessary evil, not unlike estate agents, and the levels of service across the industry have been variable to say the least. It may be a sales-driven process but employers and candidates are right to be cynical about the level of service and attention to detail that a commission-driven industry is bound to offer. A bad experience isn’t easily forgotten.

Without doubt, there is a huge gap in the market for a new generation of recruiters - professionals who understand the holistic nature of the current labour market, the specifics of their industry as well as a need for increasing transparency and accountability in the 21st century. The industry needs recruiters who are anxious to provide value to both employer and candidate, catering for neglected skills and disadvantaged groups - yes, the over 50s would be a good start! We need recruiters with a paradigm shift, more value-driven than profit-driven to help restore public confidence in the sector.

It really should be a golden age for recruiters as we come out of the recession and companies begin to hire again, but it is more likely that employers will prefer to use their own resources including in-house recruiters, rather than pay agency fees. When I heard last week that one of the large financial recruiters was still trying to negotiate a 30% fee on a £40k job and an exclusive position, I realised that nothing has really changed despite the upheaval of the past two years. When that same agency then rolled over and agreed to a fixed fee of £5k without putting up a fight the client quite rightly told them to go away.

If the industry is truly pumped up to jump start its sector, it will have to review its pursuit of the high volume, high cost and low value-add model, and look at how to transform itself into something that is seen by both employers and candidates to add value at every stage of the process. This transformation can be achieved by proactively adjusting rules and attitudes, systems and processes to support the delivery of excellent service to clients and to realise that the two concepts of value and profit are not mutually exclusive. True, a profit-driven, highly incentivised model may result in short-term gains, but a customer-centric, value-driven model will result in long-term wealth creation, enhanced shareholder value and ensure the survival of the traditional recruitment industry.

Recruiters: you need to take a hard look at your business model and motivation for what you do and change before you become extinct.

Martin Lloyd-Penny, director, IMTB – an interim management talent bank for niche markets. IMTB is a joint venture between accountancy recruiter Mature Accountants and e-Financial Management