The modern recruiter landscape: Why it pays to be niche


The last few years have been quite a ride for recruiters. We’ve seen the lows of the pandemic turn to the highs of the ‘great resignation’, and teams needing to navigate some pretty choppy waters, thanks to economic uncertainty fuelled by world events.

In tandem, the recruitment landscape has been undergoing changes, with a shift in the way clients view both the use and value of external recruitment support. But if there’s one thing we know about successful agencies, it’s that they are hungry for growth, driven to succeed and able to flex, no matter what market conditions they’re hit with.

Amongst our client base, here at 3R, we continue to see the most agile, niche recruiters achieving the greatest impact and in many cases bucking global tends with their results. They’ve been doubling down in their efforts, successfully competing with bigger agencies and reaping the benefits of specialising.

Here Kim De'Ath is taking a closer look at what’s happening in the recruitment sector and why having a niche is so important.

1. Recruitment industry health check

2. The changing role of in-house recruiters

3. Consultants must be specialists

4. Niche recruitment sectors that are on the up

5. Client Preferred Supplier Lists (PSLs)


1. Recruitment industry health check

According to the Recruitment & Employment Confederation, the recruitment and staffing industry contributes around £42.9 billion of direct Gross Value Added (GVA) to the UK, employing over 200,000 people in more than 30,000 businesses.

After a rather subdued period of late, there are indications that the recruitment industry outlook could soon be on the up, with businesses showing steady optimism when it comes to their hiring and investment decisions.

While significant variations will always be found across sectors, skillsets, and locations, both permanent and contract recruitment is (slowly) on the rise, with perm roles in particular remaining steady.

But how are agencies feeling?

With a highly competitive jobs market and limited talent pool, it’s no surprise that a survey of recruiters by Saffery has revealed that 85% of firms believe the biggest challenge they are facing today is a shortage of candidates.

Growth remains a key focus for many agencies and for those expanding into new territories overseas, just over half (51%) say that North America has seen the greatest growth in placing candidates over the past year, with about a quarter (23%) saying the same about Germany.

2. The changing role of in-house recruiters

One of the biggest changes we’ve seen in recruitment in recent years is the evolving role of in-house HR teams. Amongst larger companies, Talent Acquisition specialists are now commonplace and are increasingly competent in using online tools (such as social media and job boards) to fulfil their own requirements.

This means companies who may historically have been reliant on agencies to fill many of their perm vacancies, are now using them a lot less. In tandem, smaller companies with more limited resources, who are also faced with the competitive jobs market, have a greater need for external help in unearthing candidates with the specialist, technical skills they are seeking.

Agile agencies are evolving too, and with far less holding them back, are able to compete with bigger agencies when it comes to contract recruitment, by having access to flexible, unlimited funding provisions and tech solutions that can support contractor management.

Recognising this, a key trend amongst the most successful agencies is diversification, which allows them to dial up or dial down in different ways, depending on sector trends and the broader economy. For example, while agencies will often focus on perm or contract, there can be benefits to having both streams within the business. Yes, the approaches are very different, but switching and re-training is possible, and skills can be learnt.

This can help prevent an agency being pigeonholed in just one category, opening doors, and allowing it to stay nimble to market conditions – even able to spot an opportunity and a solution for a client before the same vacancy has even had a chance to be assigned to a big agency!

Another advantage is that there is often far less red tape and internal hoops to jump through for niche SME recruiters, which means the agency can make process changes at speed, to accommodate specific requests and needs.

Key to staying agile and competing with the bigger agencies is having the right foundations in place, including the support of knowledgeable suppliers who add value, along with the specialist technology and tools needed for growth. We know that something agencies value about our solutions, here at 3R, is their ability to help increase efficiency, aid flexibility and scale alongside an agency.


3. Consultants must be specialists

As touched on, one area where clients continue to rely on the support of recruitment agencies is to fill highly skilled, specialist contract positions - those which are project critical and where the roles are imperative for an end-client’s growth.

As companies struggle to do this directly, clients can clearly see the value being added by specialist recruitment consultants, helping build strong relationships and even commanding higher fees. They recognise they will benefit from the help of experts in particular niche fields, who will have well-established networks of contacts to call on.

Niche recruiters have sector specific knowledge that means they are across key trends, locations, fee/salary levels – so they can find the right person, in the right place, for the right cost. Understanding the need and finding quality, competent candidates at speed is another advantage.

This shift in demand is fuelling a recruitment landscape where agencies that have a niche - be it an industry, discipline or geography - are flourishing.

Being niche can also help with an agency’s growth and expansion. The international nature of the business world today means that companies of all sizes are no longer constrained to just one location. They are considering overseas markets and may have global offices and positions to fill. Niche recruiters can become trusted partners to help them do just that, with specialist technology helping break down any barriers for the agency.

Consultants can become geo/location specialists. For example, they may get to know client businesses in a particular area, understand all geographical trends and stay fully across all relevant workforce laws of that area, country, or state.

4.    Niche recruitment sectors that are on the up

The Future of Jobs Report, produced by the World Economic Forum, identifies the top 100 roles that have grown fastest, consistently and globally, over the last four years – known as the “Jobs on the Rise”. These jobs span across various sectors and industries, including most notably healthcare, education, technology and finance.

This growth is naturally driving many key niche sectors for contract focussed agencies to jump on, especially for emerging, highly technical and skilled roles, where the talent pool is limited. Here are just a few examples:

  • Technology - Including Machine Learning, AI and Gamification
  • Infrastructure and utilities - Including skilled and technical roles, such as engineers and project managers within fields such as renewables, water and defence, with sustainability being another fast-growth area
  • STEM - Including the areas of tech, data, cybersecurity and SAP
  • Fintech - Including software developers, operational personnel and data analysts
  • Life sciences - Including biotech, pharma, personalised medicine, and scientific and research tools

6. Client Preferred Supplier Lists (PSLs)

Client preferred supplier lists are reflecting this shift in demand. If an agency has a proven ability in a particular specialist area, then the door is always left ajar! Many large organisations are actively structuring their PSL to include a blend of large generalists and smaller, specialist suppliers.

Niche SME recruiters can make it on those lists! The barriers to competing with larger agencies continue to fall, with smaller agencies now having access to the advanced funding tech and tools they need, along with the ability to supply whole workforces of contractors (without big overheads), putting them in great shape.

Just remember, it is never wise to put all your eggs in one basket. Best practice for agencies is to develop a diverse portfolio that includes a mix of both PSL and direct company contracts. This lowers the risk of potential problems, for example, were a PSL relationship to be lost, or a major client to hit hard times.

In summary

The recruitment industry continues to face many new challenges but opportunities for growth are there. For ambitious agencies, it is important to recognise how the role of the recruiter is evolving, and where agencies can most add value. Rather than generalists, what clients are seeking is specialist, niche support from agile teams who can flex with their needs and add value greater than their fees.

Alongside this, they are seeking personalised, customer centric services and human-led support, backed by reliable tech and professional processes. True experts will talk the talk and add further value. They will ask the right questions and can be left to get on and do a good job – understanding the sector, the brief and delivering what’s needed.

The most successful agencies keep sight of the bigger picture at all times. They are engaging in long-term foresight, involving research and planning, and carrying out robust prioritisation. They will control risks and look to improve efficiencies, with clear contracting and control processes in place, allowing them to deal with uncertainties up-front, or to walk away if they need to. Importantly, they’ll have great support from trusted providers and a supply chain they can rely on.

About Kim De'Ath

Kim PP

Kim has worked in recruitment for 20 years as a recruiter, as a rec agency start-up support specialist and a core member of the team that built 3R's contractor management platform. She truely understands the day-to-day challenges of growing SME recruitment businesses from all angles.

As Director of Client Experience, Kim also understands what it takes to attract, satisfy and retain contractors and clients.

Connect with Kim on Linked In.

Related Articles

Contract Recruitment,Industry Trends

Talk to us today

Being ex-recruiters, we're always happy to talk! 

Get in touch with our experienced team to explore your bespoke solution.

Back To Top