At the height of the boom, there were recruitment companies on every corner. When the crash came recruiters were among the first casualties. Those that survived had to trim their sails significantly.
For Dublin-based recruiter, RFC Executive, this meant scaling back from 12 employees to three. It also set founder Rob Ferry thinking about how he could differentiate his business in the marketplace.
"My first experience of living through a downturn was in 1988 when I was a private client dealer at NCB, " he says. "I was one of the last people in and one of the first people out when the cutbacks came." From NCB, Ferry went to the Professional Placement group as a recruiter in the accountancy sector. He subsequently became a director of the company and managed his way through the upheaval sparked by the currency crisis of 1992. Marlborough acquired Professional Placement in 1994 and Ferry established his own company in 1998.
Ferry’s view is that there is “no silver bullet” solution to surviving in tough times. “The way to get through is to do a lot of small things right,” he says. “For me it was cut back within reason, come up with a new product, look for new markets and make the most of the web and digital media. Focus on what works in your business, map out a strategy and tweak it as you go along – it’s a process of continuous improvement. In difficult times you really see what a business is made of and having sound core values is at the heart of it. When it feels like the rug has been pulled out from under you, return to your values and stay focused.”
Ferry says his company’s core values are integrity, discretion and empathy. “We only work in areas where we have competence and can add value. We put a lot of time into understanding the culture, character and values of our clients and we are fully transparent about costs.”
RFC has “morphed” a few times in the last 16 years mainly in response to changing market conditions. Today, a key focus for RFC is managerial jobs paying €60,000-€160,000.
“When we started out the emphasis was on attracting big electronics companies to Ireland so we became one of the bigger players in the engineering sector,” Ferry says. “When the multinationals left for more attractive locations, we moved into HR and supply chain on the recruitment side and into talent management and executive search.”
The arrival of internet-based jobs boards in the early 2000s shook up the recruitment sector. “The boards started pulling traffic quite strongly and this raised an issue for me as to how I could give my clients better value for their money, not least because the market had become highly competitive,” Ferry says. “I did a strategic review and decided I couldn’t compete with big players servicing volume markets with low margins. We needed to move up the value chain and look at new products. The question was what could we add on to our existing international executive search service?”
Ferry went to the US to see what was happening in the industry there and was struck by the success recruiters were having in the €60,000-€160,000 salary bracket with the so-called container or hybrid recruitment model. “Big executive search firms are expensive and typically charge a third up front, a third for the shortlist and a third on appointment. Recruiters charge on a contingency basis as in no foal no fee. The container model breaks the mould by mixing the two,” he says. “Our version of this model maps out the required skill set for the chosen sector for an initial one-third fee and only charges balances on successful appointments. Too often recruitment can be hit and miss with no definitive result. If a hire goes wrong, it can cost a company up to 1.2 times equivalent of the salary on offer.”
Ferry adopted the hybrid model because he says the middle ground between executive search and contingency recruiters was not being served. “We saw a gap and went after it and that’s why we’ve made out the far side of this recession. It has taken a little bit of time for people to ‘get it’ but we are getting traction and have recently taken on two additional staff.”
With organisations now using social media to hire staff, will companies such as RFC eventually become redundant? “Recruitment is about people,” Ferry says. “Social media is a potential competitor and you have to keep on top of how it is affecting your business. But while it can ‘do’ skills and facts it can’t tell you anything about a potential employee’s motivational fit and whether or not they will be a cultural fit with an organisation, yet this is critical to the success of a hire. For example, on the surface HP and Intel look quite similar but culturally they are very different. Working out which candidate would suit which organisation takes human interaction.”
