Business Essentials: 'We have to pay through the nose to find a face that fits'

Kate Hilpern reports on an IT firm's recruitment problems
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Trying to recruit good people at a reasonable cost is a predicament that many com- panies find themselves in, not least those requiring technical experts.

Trying to recruit good people at a reasonable cost is a predicament that many com- panies find themselves in, not least those requiring technical experts.

Like many organisations in its industry, software house Management Systems Modelling (MSM) uses a recruitment agency, but its managing director, Thomas Coles, is fed up with the expense, particularly for higher-paid positions. "We have to fork out thousands of pounds for each person."

There's not a problem with quality, he adds. "Most recruitment agencies seem to be diabolically bad, but the IT specialists we work with are excellent. It's just they are very expensive."

MSM has been trading for six years, working mainly with the financial services and education sectors. It employs 20 people, 15 of whom are technical experts - project managers and consultants. "Most of our people, work from our office in Totnes, Devon. The overheads are lower down here and it means we can pay a salary that's high for the area." The location also appeals to applicants. "People like the quality of life down here. Most of our staff don't come from Devon. Our two most recent recruits have been Irish citizens who have relocated."

This is the chief reason why advertising in the local press doesn't work. "We've been successful in filling admin posts this way, but not IT positions.

"Nor do we advertise in the national press. If we had 20 vacancies at a time, it might be financially viable, but not as it is."

MSM has also tried developing talent in-house through a graduate recruitment scheme. "The problem is we don't have the management resources," explains Mr Coles. "Because we are a small company, we can't spend several days a week training people, so we've given up on taking fresh graduates."

Advertising posts on MSM's website hasn't been particularly successful either. "We've only had one or two responses each time and they are not necessarily the right sort of people," he says.

Finding suitable staff is becoming more difficult for employers across the IT sector, he says. "Back in the heady days of the dot-com boom, there was a skills shortage, and that is beginning to be the case again. We are wondering if one of the things we should do is relocate from Totnes to Exeter, where there are more similar companies from which we could poach."

As an employer, MSM offers a competitive package, according to Mr Coles. "Apart from salaries being above average for Devon, the benefits are more comparable with a London employer - including a good pension scheme, critical illness cover and life assurance.

"In addition, we spend on average 12 per cent of our salary budget on staff training, compared to the industry average of 3 per cent."

MSM has a rigorous selection process which Mr Coles believes helps produce the right workforce. Staff turnover is low, with nobody having left in the past year. "But we want to know the best and most cost-effective way to get good people before this stage."

Mr Coles would also like a more diverse workforce. "At the moment, we don't have anything much except white males."


Diane Christie, head of NatWest Mentor Services

"To attract candidates with sought-after skills in a cost-effective way, organisations should look to more innovative methods such as internet recruitment. Websites such as can give you access to good candidates without the cost of using specialists. Another good way is through word-of-mouth recommendations or even by offering your existing staff an incentive to introduce high- quality people to the organisation.

"To attract the widest selection of candidates, consider tailoring your terms of employment to the needs of individuals. Family-friendly firms that provide flexible arrangements such as variable hours and homeworking, along with the opportunity to learn new skills, are better placed to attract and retain key individuals. This translates into competitive advantage and business success."

Tom Hadley, director of external relations, Recruitment and Employment Confederation

"Successful recruitment is not easy and REC data shows that the problem of skills shortages is becoming more acute. In particular, there has been a massive growth in IT vacancies over the last year.

"As a result, employers are turning to specialist recruitment agencies to find suitable candidates. In a tight labour market, this expertise is essential. The fees may seem expensive, but the real cost would be employing the wrong person. The key is choosing the right agency with a real understanding of the company's needs.

"Mr Coles also says he would like a more diverse workforce, which is certainly an area where recruitment specialists can help."

Rebecca Clake, organisation and resourcing adviser, Chartered Institute of Personnel and Development

"The care taken to select the right people has clearly paid off. Many employers would envy your low staff turnover.

"Online recruitment is an obvious way of targeting IT specialists. But people browsing on the internet are unlikely to stumble across positions advertised exclusively on MSM's site. Would-be candidates are more likely to use search engines as a starting point and to make use of commercial job boards - with a speedy search facility to target vacancies matching salary expectations, experience and desired location. Exploring this route could prove helpful.

"Developing existing staff could provide you with a pipeline for more senior positions - at a lower cost than 'hiring in' experience. If time out for training is difficult (as you describe with fresh graduates), consider techniques such as on-the-job coaching.

"As recruitment problems increase, diversity can help you tap into a wider talent pool. Think about the words and images used in recruitment material and how they appeal to groups under-represented at MSM. Could a targeted campaign broaden your appeal?"