Headhunting: Personnel consultancies become more and more important due to an increasing shortage of personnel in IT

When you are looking for a needle in a haystack, you can increase your chances of finding it by mixing various search options. This is why more and more companies choose to employ the services of personnel consultants to find IT staff.

The shortage of personnel in IT has reached a new low. In Germany, around 137,000 positions for IT experts are currently vacant. That is an increase of around 100,000 vacancies compared to ten years ago. As Achim Berg, the president of the industry association Bitkom, put it at the presentation of the representative study ‘The Labor Market for IT Specialists’ at the end of 2022: “The shortage of IT experts has drastically worsened compared to the period before the pandemic”. During the pandemic, the demand was temporarily slightly lower. 70 percent of the 850 companies from all sectors questioned in the course of the study expect that the shortage of experts will continue to worsen. Demographic change is relentless.

But companies are not short on ideas. In the past, companies used to source most of their new hires from unsolicited applications and applications for advertised job vacancies. As this source now runs dry due to an aging population, a diminishing supply of new talent and an increasing demand for IT experts, companies now seek to broaden their mix of methods for sourcing personnel. “They are pulling out all the stops to recruit new staff”, says Berg. Using several and different channels increases the success of the search. This is why there is a sharp increase in headhunting and active sourcing activities, i.e. the targeted approach of interesting candidates by the recruiting companies themselves. Headhunting activities are provided by external personnel services agencies. In the past year, 22 percent of all companies searching for IT experts used these methods, compared to only 14 percent in the year before that. Necessity is the mother of invention

Around 2,500 personnel consultancies in Germany are offering Executive Search services. This involves demanding and qualified positions. As Wolfram Tröger, vice president of the Federal Association of German Management Consultants puts it: “In a world increasingly based on the division of labor, specialization is key and personnel consultancies usually target their services to particular industries or positions”. Some personnel consultancies also specialize in a combination of position and industry and focus on medium-sized companies. The more specialized a personnel consultancy is, the greater the probability that it will find the right candidate for the client.

The IT-Personalberatung Dr. Dienst & Wenzel, whose consultants are active nationwide and internationally thanks to partners in Europe, Japan and Singapore, is focused on filling specialist and executive IT positions at medium-sized companies. The clients benefit from this consistent focus. “We fill the positions in around 90 percent of all search orders”, says Manfred Wenzel, one of the managing directors. Good candidates expect personnel services agencies to have profound knowledge of the client and the position to be filled. Only then is a personnel consultant able to cater to the candidate’s profile and to offer suitable career opportunities. Most applicants are focused on advancing their careers. The right attitude is the first step to success.

According to Manfred Wenzel, medium-sized companies have understood that they need help from professional personnel consultancies to fill vacancies in times when specialists are in short supply. “There has to be a close cooperation, not just a supply of experts”. As a third party, personnel consultants are more likely to build a personal relationship with the candidates and to gain their trust. Moreover, they have many years of experience in identifying the right candidates in various portals, databases and social networks using professional search software and in approaching them individually to convince them to start the application process. Medium-sized companies in particular are lacking this expertise in their sparsely staffed HR departments. Personnel consultants are experts when it comes to recruiting.

Among the vacancies most difficult to fill are specialist positions such as software developers, SAP module managers or IT administrators. “The demand for these experts exceeds supply by far”, says Wenzel. Applicants from abroad could be an alternative. Unfortunately, many companies insist on a good command of written and spoken German and prefer employees that are familiar with the German culture. Integration programs and compromises on the part of the companies could mitigate the shortage of skilled personnel.

The higher the vacant executive position, the more interested candidates can be found. “There are many young, highly qualified IT professionals who want to climb the career ladder”, says Wenzel. However, identifying the right candidates for the company is equally challenging for both specialist and executive positions: candidates for both need to match the company and the position in terms of expertise, as a person and when it comes to their expectations regarding career and work-life balance. This is often not the case for executives, which is why companies often lose newly hired managers after a short period of time.

Why? Wenzel knows the answer: “Because companies often make grave mistakes during personnel selection and the application process and fail to consider all key factors for a consistent relationship”. In the majority of cases, executives find themselves in a position and situation that is completely different to what was described to them to make them sign the employment contract. Short-term thinking tends to backfire pretty fast.

This is also true for personnel consultancies. Some medium-sized companies may be under the impression that personnel consulting is a lucrative, self-sustaining business, as the same candidates are being placed with different clients over and over again. “There may be some black sheep, but for any reputable personnel consultancy, approaching placed candidates and employees of clients is absolutely unacceptable”, says Wenzel. Personnel consultancies that ignore this rule will lose clients just as quickly as companies that made false promises will lose new employees.