Technology has radically changed the world of business. It has also affected the recruitment industry and traditional recruitment agencies face a limited future unless they embrace the changes that are being driven by technology.

Grant Lloyd, managing director at Softline Pastel, a member of the Softline and Sage Group plc, says there are several factors that are leading to a situation where many companies are re-evaluating the way that they recruit employees.

He adds that Pastel People Placements, the specialist recruitment division within Softline Pastel, is of the opinion that internal recruitment is often more cost-effective than using a recruitment agency. Traditional recruitment agencies charge a placement fee calculated between 15% and 17% of the new employee’s annual total cost to company (TCC). If the job carries a R400 000 annual cost to the company and the recruitment agency charges a 17% placement fee the agency’s placement fee amounts to R68 000.

“In these times, most companies would consider that expensive. But to be fair, although it appears to be easy money, people recruitment and placement is an unforgiving, demanding task and the product is unpredictable. Selling tangible products is considerably easier than promoting human capital.”

Networking has never been as easy as it is today and Lloyd points out that social networking sites such as Twitter and Facebook are being increasingly used by candidates looking to change jobs or gain entry to a new field of business.

“The conventional recruitment agencies need to monitor these trends and make use of them,” says Lloyd. “Today’s successful companies have out-of-the-box thinkers and use technology to look forward and take advantage of opportunities.”

He points out that many companies with websites now have a dedicated careers section which enables job-seekers to apply directly via the website for various positions that the company has open. With an effective, competent HR section, companies can save considerable recruitment charges, provided they have the necessary recruitment skills and tools.

“Practical testing of candidates in software competency and skills levels, both in theory and in practice should be part of any company’s recruitment drive. The base for all of this is getting the balance right between theory, academic experience and software proficiency. Candidates with only practical experience rely on software to do it all for them. A combination of academic prowess and practical competency is the best option.”

Predictive Index (PI) testing, which examines potential employee personality, character, traits and culture fit, is also important,” says Lloyd.

“Areas that add value in in-house recruitment are workshops that test commuinication skills, comprehension, life skills, interactive skills and general knowledge. Patience levels, people tolerance and personal interaction skills are also important in correct candidate selection.”

Recruiting correctly first time must be the ongoing goal because making the wrong selection is invariably costly. Lloyd adds that it is also just as critical for companies to retain good employees.

Most in-house recruitment companies lack proper screening tools. One-on-one interviews are not sufficient to determine if the job-seeker is a good fit for the specific job or the company. As long as recruitment agencies are keeping abreast of technology trends and add value to companies by ensuring that they put forward the most suitable candidate, and retain the candidate for the long term, there will most definitely be a future for external recruitment agencies.