Agency databases - assets or a liabilities?
Contributed by Derek Batchelor
(Derek is the Managing Director of Virtual Resources)
Derek Batchelor was a director of Computer People (then if not now the largest UK agency) from the mid eighties until 1994, during which time he built various contract staffing and consultancy/training businesses. For various periods he was also Head of IT and was responsible for marketing and business planning. Since 1994 he has built a new organisation Virtual Resources, based on the lessons learned from the traditional agency sector, which he sees as increasingly struggling to respond to the rapidly changing dynamics of the market.
Over twenty years and through two recessions I have had a barometer as to the state of the market which has not failed me. I keep track of whom I believe in my experience are the top 5% of all freelance contractors available in the North of England and I see whether they are getting jobs close to home or having to travel away. Signs have been that over the last three months the market has been getting somewhat quieter. My colleagues in the traditional agency sector would also bear this out as a UK trend rather than purely a regional one.
Is underlying demand still there? Yes. Is the market going to collapse? No. But will it come back over the next year or so to the frenetic levels of January 1998 - I don't believe it will over the next two years, but I also believe that there are various fundamental changes taking place in the market itself. The key to success, whether you are a customer, an agency or a contractor is to understand and anticipate the impact of these market changes in order to be a winner rather than a loser.
Over the last five years the fundamental agency business process (that of populating and maintaining a database of skilled contractors) has undergone a transformation. Things will never be the same again. There has been a discontinuity. Ten years ago life was simple in a large agency. You maintained a database of 50,000 people and regularly updated their CV's skills and availability. In order to do so you advertised at great expense in the press, developed a brand name and hoped that this activity meant that when each contractor was photocopying 15 copies of his or her CV to send out, you would also be one of the lucky recipients. In the board room, the SWOT analysis reliably informed you that your database was a strategic strength to be exploited ("representing millions of pounds investment") . No surprise then that when it was mooted that the Internet should be used to collect and distribute CV's to anyone who wanted them, this was either ignored or it was at least hoped that it would be another fad which would quietly die.
Similarly the other main stakeholders, the trade press, who were charging thousands of pounds to advertise just a handful of vacancies, also perceived that allowing vacancies to be advertised at 1% of the cost for a far more effective response was a threat. Yet a big player from either of these sectors could have been the first in to clean up in what has been a phenomenal Internet success story. Instead a small company which was offering a fax back service of contractor CVs to agencies saw the opportunity and was the first to create a huge business.
The essence of this new business is that agencies can advertise full job specifications which are sent by email overnight based on registered interest to potentially 50,000 applicants, at less cost than employing a 'telesales resourcer' to phone 5 potential applicants, let alone 500. For the contractor, they can register their types of jobs, skills, location etc. and at no cost receive details of all advertised jobs in which they are interested. The numbers reveal the extent to which this business process is now the industry norm - speak to one agency and you will have perhaps access to 300 new vacancies per month - use one service and you have access to 100,000 published vacancies from 1300 agencies. As a result contractors have never been so well informed as to the market, pay rates and specific opportunities.
Since the market for these Internet services has been established there have been many other similar services launched, from a variety of a sectors and with a variety of flavours. Once they saw which way the wind was blowing the trade press launched their own services. Vendors of agency software packages have also seen the benefit of selling content. Many large agencies have a Web presence today, however they cannot compete with services which advertise hundreds more vacancies than are being handled by their own sales staff.
At first glance, having a database which is more expensive to maintain and less accurate than using the new business processes, would seem to lower the market entry barriers for new organisations. Whilst this might appear to be true, the reality is illustrated by the fact that we, along with 1300 other agencies, received last week a CV from one candidate; similarly a high volume of response comes from abroad from people for whom securing work permits would not be practical in terms of client timescales. Therefore the vision of advertising one role and receiving beautifully formatted CV's of five qualified, committed candidates in one's Inbox within 24 hours is not quite what it seems. What is certain is that the accumulation of a large database of candidates is neither difficult, expensive or desirable.
What is happening now is that, alongside the formation of more and more generalist Internet services, there are increasingly specialist Internet services for specialist skills. An example of this would be SAPSERVE which has approaching 250 SAP specialists, but similar services are being offered for specialist application areas, as well as newsgroups for the likes of Ingres and Oracle skills which are constantly flooded with job advertisements. The reality is that it is not possible to publish a list today of all the potential good sources of staff by skill which will be current tomorrow. Instead agencies need to employ people who can apply intelligence and intellect to the Internet and constantly track and analyse the various strengths and weaknesses of the various Internet services. Regrettably perhaps, those "resourcing-telesales" people who were recruited in the eighties to essentially telephone-canvass people to check on their availability may become casualties as a result of these changes, in the same way that their box shifting brethren became casualties when the PC distribution market settled down 10 years ago.
What then are the successful strategies for the various stakeholders?
For Clients
The good news for clients is that in preparing their preferred supplier strategy they now no longer need to watch presentations with all those boring pie charts showing how many of the people on the supplier's database have just those skill sets they are likely to need. Comparing capacity/capability to supply involves inspecting the business process rather than analysing out of date data. Clients should be more interested in how suppliers will tailor their approach to add value in the wider process i.e. to support job definition, resource management processes, bid activity; the quality and knowledge of the account handling staff; and the amount of care and attention they will receive. In particular as it has become easier for all agencies to have access to the whole contractor skills market, clients should be on their guard as to how acidulously the people submitted are known, screened or checked out before submission, and supported thereafter by the agency. In my opinion contract staff standards have dropped in the last two years - but maybe this was inevitable as people have started to realise that "Code and Go" as an alternative approach to testing would not be quite so acceptable for Y2K programmes. The fundamental truth is still that good people deliver quality results, manage user expectations well, and deliver to timescale and budget. Good people seemingly cost more, but in the end cost less.
Contract Staff
For contractors, do use the Internet services to identify roles which may be attractive, but do not broadcast your CV. I doubt whether the individual who forwarded his CV to 1300 agencies has been placed and I am sure he got some vitriolic replies. Also when a job looks of interest tell the agency why the job is of interest and then take the time to talk directly to the agency once you have forwarded your CV. A colleague of mine says this can be amusing at least, having spoken to one agency recently who emphasised the importance of him being a "high level felicitator" . However most agencies will give a decent brief as to the client and project environment and will be as keen as you to identify whether your interest is serious. Once you have agreed to be put forward to a role you should be prepared to let the agency speak directly to previous clients/employers for references. Also be careful not to ask for the highest rates advertised and build up your expectations unrealistically. Undoubtedly many contractors have entered the market in the last two years as a result of Y2K work, and the lull anticipated over the next year is likely to mean that some contractors will not find work as easily - if you start to struggle to find work seriously consider whether contracting is really for you.
Agencies
Agencies must seriously evaluate whether their business strategy is based on the past or the future. Having an Internet strategy does not mean having a Web site. Just because you can advertise for people from outside your normal geographic or technical specialisms does not mean that this business will be profitable or that you will do a quality job for your clients. Pay attention to the process which decides who is and who is not registered and how this data is captured and managed. History has proved that almost no generalist agencies will come out of any downturn with an increased market share. This will go to the agency which sets out its stall well and follows this direction through in all its processes. The market will become even more fragmented as a result of the above changes. At the end of the day, success is made by the people whom you employ and how well they understand and apply clients business problems to the contractor skills market, using commitment, innovation and intelligence. Before it was your database and your people - now it's just your people.
| 
