Dangling the recruitment carrot

Recruitment houses want you on their books - desperately. They're dreaming up ways of attracting and keeping you that would have seemed bizarre just a year ago. Free shares, free training - some even fly across the world for your wedding if they think it will buy your allegiance.

But what price your loyalty? Whether you're about to leave a permanent job, or you're a veteran contractor looking for the next project, you're being targeted by recruiters desperate to lock you in using a new tool - loyalty schemes.

The arrival of loyalty programmes, contractor care schemes or contractor clubs has divided the agency world. Those waving the loyalty programme flag claim their schemes make a real difference when you have to choose between agencies offering the same contracts. Agencies without loyalty schemes, or those which offer only limited perks, dismiss them as a gimmick that's irrelevant to almost every contractor on their books.

So what's the true benefit to you of the schemes on offer? Tom Bannister, marketing manager at recruitment company DPP International, said: "The recruitment market has to grow up a little, so we repay those who work for us with training credits. It's a congested market. Anything that can help us differentiate ourselves helps."

Russell King, senior consultant at Triage Consulting, agreed: "Encouraging loyalty is a step in the right direction. It requires a different mindset from agencies to putting a bum on a seat."

Others have a different take. "There's no reason to have loyalty to an agency," said Peter Searle, managing director of Computer People. "What a contractor wants is the maximum rate with the minimum downtime." If that means going to another agency when the contract finishes, that's the way the market works, he believed.

"It's the clients we need loyalty from, not contractors," added Sean Wadsworth, managing director of Real IT Resourcing. "If one contract finishes, and we have another one for them, then the contractors will go to that. Otherwise they won't. Loyalty is not relevant at the moment."

No preference
A recent survey by Computer Contractor appears to support that view. The survey looked at how contractors select their agencies and found that 12 per cent of the 421 respondents had no preference. One in 10 said they'd choose 'whichever gets me a job', and more than half found their current contract through an agency they had never used before.

Only eight per cent of those under contract thought the additional services offered by recruitment agencies - including loyalty schemes - were an important factor. In contrast, speed and efficiency were high priorities for 64 per cent of contractors.

Leaving politics aside, if you're looking for an IT contracting job, you're spoiled for choice when it comes to the sweeteners on offer. Spring.com's announcement on 17 January that it would give loyal contractors a stake in the company caused many to sit up and wonder just how far recruiters would go in the quest to keep staff.

The recruiter promised that contractors who work 464 days over a three-year period through Spring would qualify for an option of more than 5000 shares. "Since we launched Spring.com, 12,000 people have registered, and of those the vast majority have signed up for the share ownership scheme," said Peter Waller, director of business development and marketing for the company. "It's far from a gimmick. It's a way to change the relationship with the people you work with."

Spring is also about to sign a series of affiliate deals to offer its registered users discounts on lifestyle products. But Waller doesn't expect change overnight. "In the future, we will see more loyalty. But this will change slowly. Announcing a programme alone doesn't change the minds of intelligent people."

The contractor club offered by IT recruitment agency Certes Group offers contractors preferential rates with two independent financial advisors. There's also cut-price training and a discount on computer supplies with Jungle.com. "We use it to support their working lifestyle," explained Certes' marketing manager Helena Siviter. Having polled contractors, the company will be introducing holiday deals and hotel discounts for loyal workers in the near future.

Spring's share scheme has its critics, however. One of the most vocal is Computer People's Searle. The latter is the UK's biggest contract placement agency, with 4500 contractors on its books. Even with its market share, Searle said he cannot guarantee work when his contractors want it. With each of his contractors signed to 16 agencies, loyalty is a pipe dream. "In three years, half the contractors you are dealing with today will no longer be in the market," he said.

In contrast, Spring's Waller claimed that if its share offer had been made three years ago, more than 1000 of his contractors would have qualified. Instead, Computer People offers discounts from a variety of suppliers, rather than just a few affiliates. "Our partners offer preferential rates on insurance and pensions. We also have five accountants that we recommend. But you choose which one you want," he said. That's the extent of the loyalty scheme from Computer People.

Cut price training
Less glamorous but potentially more lucrative schemes offer cut-price training, or discounts on the margins that the agency takes. "The agency isn't just an agency: it's a partner," said Triage's King. "So as the contractor goes through his or her career, we will give that person more and more responsibility, and in between the contracts, we provide training. So we become a community."

Triage's attitude has been called 'career management'. At DPP meanwhile, half of Bannister's contractors have taken free or discounted training programmes, earned under the 'Expert' loyalty programme, arranged at weekends so as not to cut into work time.

Although loyalty programmes seem like a good deal, the benefits to be reaped by loyal contractors may not outweigh the disadvantage of sticking with one job provider. In fact, many are defensive moves designed to give nothing more than a slight edge over the hundreds of other agencies competing for business.

"Before we launched our loyalty scheme we ran focus groups," said Sean Cheek, managing director of Comms and PC People. "The message that came across loud and clear was that we had to help contractors keep their skills up to date. But when we ran the courses, the take-up wasn't high." Searle recounts a similar experience: "We offered free training to contractors, but only had a take-up of five contractors out of 4500."

Cheek feels that loyalty schemes have a limited function. "Loyalty programmes have a place - it's important that contractors don't feel neglected," he said. "But our most important job is to find them a contract and pay them on time. Loyalty only makes a difference when all other factors are equal."

While supermarket loyalty cards or air miles are essentially a free extra, contractor loyalty comes at a price if you have to stick with an agency that can't give you work. One recruitment consultant, who asked not to be named, explained: "Contractors have no loyalty at all. They are their own limited companies, and if they aren't working they lose £1000 a week. So if I can't get them a job for a week, there has to be a bloody big loyalty bonus at the end of it."

10 ways an agency could win your loyalty
Honesty: Is it telling you what you want to hear so you'll take the contract?
Planning: Does it care about your next contract now? If it does, it should be advising you.
Organisation: Does it know you from one day to the next?
Personality: Does it make an effort to understand you?
Innovation: Does it invoice for you, or prefer to pay you weekly when you need it?
Community: Can it find you an accountant, or keep you in a team?
Finance: Will it pay you on time, or at all?
Training: Will it take the financial burden of training you in a new skill, rather than let a contract go?
Ambition: Will its client list match your aspirations six months from now?
Size: If it doesn't have the contracts you need, is there any point in being loyal at all?