A new buzzword is emerging —"co-opetition", the practice of firms working together in some fields while still competing in others.

This approach could have a number of benefits for recruiters, according to Ann Swain, chief executive of the Association of Technology Staffing Companies, talking at a networking event recently. Swain cited Microsoft's $150m investment in rival Apple in 1997 as an example of co-opetition.

Microsoft put up the cash to develop its own software, such as Office and Internet Explorer, for the Apple Mac.

What is the attraction of co-opetition to recruiters? Increasing competition — and the resulting threat to market share — means that recruiters have to find new ways to enhance their business.

For example, they might cut costs by pooling admin with rivals. And falling profit margins might be arrested if recruiters stop trying to undercut each other and instead concentrate on charging a fair price for high-quality services.

And Swain believes that co-opetition "increases the size of the pie" for the whole industry, but can it work? Are recruiters too used to trying to drive rivals out of business? David Leyshon, managing director of engineering and technical specialist CBSbutler, thinks this approach is appropriate in some circumstances.

"What we've not done well in this industry over recent years is that we've made price the main sales differentiator," he told Recruiter. "This means that firms have been cutting their own throats financially and the client has effectively become a commodity."

Leyshon added that it is "overambitious" to expect a completely co-operative approach in an "aggressive, sales-driven" market, but in some situations, such as parts of managed service agreements, co-opetition can work.

"The concept of partnering can certainly help the industry grow," he said. "As the customer demands more, there becomes more of an emphasis on companies to come together, to supply all a client's staffing requirements.

"We've been asked in the past what we can do to help supply secretarial staff, and we've been very open in giving information on firms who can do that."

Leyshon added that there must be mutual benefits for co-opetition to succeed, and he would need. confidence in partners' abilities to deliver the desired quality of staff. He said he would also need to be sure they had the right level of professionalism and would offer "genuine value" to clients.

The development of bodies such as the Recruitment & Employment Confederation (REC)'s sector groups has already made idea-sharing easier, and challenged the idea that recruiters should never help each other, Leyshon said.

Jerry Collier, investment banking product director at recruitment process outsourcing specialist Alexander Mann Solutions, said his company had joined forces occasionally with Adecco over the last five years, mainly for large projects for clients with a presence in a number of countries.

"Adecco has great scale and has forged its reputation, particularly for sound temporary staff, into a big business. We wouldn't want to try and build that ourselves overnight," said Collier.