It has been forecasted for quite some time now of the decline of agencies due to the above change in approach, growing competition from job boards, and the increasing prevalence of social networking via say the LinkedIn platform. Despite that agencies continue to offer an important route for sourcing the best and most of the time dormant talent. Not only to agencies locate and stimulate candidates to seek a new career, they also help that talent become hireable in terms of interview preparation and follow through.
When going direct organisations are dealing with applicants, which in my experience, the majority of them will not be a fit for the exacting requirement despite having a very good skillset. Filtering, assessing, matching, communicating with the applicants, and managing the candidate experience will use up valuable in-house resources. A partnered agency should mean that you only get visibility on fully vetted and qualified candidates and not applicants.
I still believe that HR and internal teams regard agencies as their eyes and ears for what is going on in market. Market trends/pay scales, competitor activity, and candidate activity (where the person is interviewing) is a much valued proposition and proposition that is owned by the agency. Now that talent acquisition is back high on the agenda of most organisations a collaborative approach to recruitment is what is needed. I completely get it that organisations may need to decrease their spend on recruitment, but the cost associated with a bad hire or not hiring a key role at all far outweighs this. Even the best in-house recruitment teams can gain added value from working with niche/specialist recruiters.