Singapore Headhunter Article by The Recruitment Guru – Dougles Chan

If you are involved in Recruitment Agencies in Singapore for the last 10-20 years, you will notice that the number of cases and sales value a recruitment consultant can close compared to many years ago is declining every year averagely.

10-20 years ago, a normal recruitment consultant in any recruitment agencies in Singapore will be able to close an average sales value of S$20,000 – S$30,000 per month but in the year of 2012, a normal recruitment consultant that is able to close a value of S$5,000 – $10,000 per month is consider to be quite good.

If this trend continuous to decline, I can foresee that the whole industry can dis-integrated and falls apart. Many will failed, including the bigger players. There are many valid reasons why I have the guts to make this projection:

The Recruitment Agencies in Singapore Mindset

The Diminishing Factor 

Most of the newer recruitment agencies bosses comes from the background of being a consultant before in one or more of the agencies, the knowledge and skills they have learned from their “mentor” are always limited because the mentor never wants to teach them much things, don’t even talk about skill sets. Hence when the knowledge of the new recruitment agencies bosses are so limited, the new consultants under their wings under this new bosses will be even lesser because they are not able to learn much from their current bosses. To make matter worst, these new consultants will think they are so great that they gather together and form another recruitment agencies and hope to make huge income from becoming their own bosses. This cycle goes on and on and eventually the skill set of the consultants gets weaker and weaker.

The Secret Trap

Many recruitment agencies bosses never share their clients and database with their consultants because they are afraid that the consultants will steal their clients and database to use it when the consultants forms a new company. Assuming that the boss has 50 job orders and they are not open enough to share to their consultants, they will not be able to fulfilled these 50 job orders entirely because of lack of time and resources. They are very happy they are able to close 5 case and lose the other 45, that means the other job orders will be lost to other agencies…How’s that for been “Smart”? Get the picture? If he is open enough to throw the other 45 orders to the rest of the consultants, the company will be able to close more cases many time compared to just 5 job orders. (Assuming that the job orders are real and valid.)

The Competitions Factors

10-15 years ago, there were about 500 recruitment agencies in Singapore but in the year 2012 there are coming to over 3,000 recruitment agencies in Singapore, hence the clients have more choices and better pricing, the smaller agencies will have problem even to break even at all, if times are bad, then the agencies will make a loss and eventually have to close shop.

Inadequacy of Skills

A recruitment consultant has to be a great sales person, a great presenter, a great interviewer, a great searcher, a great advertiser and a great negotiator, do you really believe a 2-3 days crash course can make a consultant to be able to become the superman? The hard fact is that it is almost impossible to find someone of such skills because most of them are not trained to be at that level! The entire industry is filled with people that DO NOT have the right skills, no adequate training, no investment done on training and no coaching and mentoring….Could this be the doom and the end of the Singapore recruitment industry?

The CEI Problem

Many smaller agencies will not have the resources and money to pay for the new recruitment consultant and even if they are willing to there is a risk that the consultant may leave the agencies due to some KPI issues or having a better offer. Hence the small players are very cautious and unwilling to pay for the total fees that are amounted to about S$600.00 per consultant. Bigger players with good brand and financial resources will be able to play this “BULLY” game as they are not afraid of losing the S$600.00 because the consultant usually got more to lose than the bigger agencies.

I am The Boss Mindset

Talk to any consultant out there and ask them the question: Would you want to have your own agency when you have the opportunity and the financial resource? I bet 8 out of 10 of them will say YES! Why is that so? Simply because they want to make more money and want to be their own boss, many of them will go for the opportunity even if they were to partner with a few others, simply because they LOVE to be their own boss and apparently they will believe that they are going to be a better boss compared to the current one! (Oops did i rang any bell?) With this mindset, recruitment agencies are usually not able to retain good staff simply because the good ones decided to have their own firm. When there are no good staff, there will be lesser sales and eventually you will know what happen…

The time will come where the entire recruitment agencies system will face a crisis and there will be a total revamp and market will change and the first one to set the trend will be able to dominate the industry entirely. The time will come and when it happens, many players regardless of whether small or big, will face total elimination! Mark my words…it is already happening.

The Death of Recruitment Agencies in Singapore continues…

Update on 23 Jan 2017

In the year 2015, someone saw this article and joking told me he would not want to close his new recruitment agency due to the problems I mentioned above, he invested about $500,000 in a new recruitment agency business in Singapore but eventually shut down his company within 18 months. Sorry to heard about such stories again but for those who did not pay attention to the real problems in the recruitment agencies, which many do not even know what are the problems, they will be doomed.

Comments

comments

Comments

  1. Certainly hope that recruit express will be the first to be out of business… the consultants are generally too sales driven and so unprofessional. They even created internal competition by scouting for the same candidate. What a self-defeating and disgraceful act.

Leave a Reply