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Is it time for a BIG recruitment debate? follow this blog post

I’d like to open a debate on the merits of direct recruitment strategy, the use of agencies and why job boards don’t do a better job.

At the end of last week I had a long conversation with my mother of all people, who had in some daily tabloid read about the basics of recruitment, how it works and fits together and why it works the way it does. She took a lot of what was said as gospel and instead of considering asking her son who’d work in the industry of recruitment for the past ten years she came up with the following overview of recruitment.

  • Why do firms use agencies? They are expensive, and their fees often prohibit the very process they are trying to create (to recruit someone)
  • Why do job boards not work directly with employers? Surely cutting out the middle man would make life a lot simpler for everyone, if specifics were put in place
  • And finally, if the market dictated the recruitment trend then how come so little has changed in the downturn, and why hasn’t someone come up with another idea of how to do recruitment?

My response was initially a rather typical ‘I work in recruitment, and I know what I am talking about’, but actually she got me thinking…

As I understand it, Mr. Alfred Marks one day decided that if there was a demand for a person and a person wanted a job then he could get paid for introducing the company and the person together. In essence this is recruitment, but why don’t we compare this to booking a holiday, a flight, ticket, buying your supermarket groceries, car insurance, even clothes?

When I was a child and went off on our family holiday we used to wander down to the high street and walk into one of the ‘Holiday Shops’ and the woman would ask us (in a rather funny voice, with a rather funny tan) where we’d like to go, when we’d like to go, what we’d like to do and ultimately how much do you want to spend? Result was often a rubbish holiday that never lived up to expectations.

So, who’d have thought about LastMinute.com. LateRooms, Expedia, BA.com?

Just last year, my wife was about celebrate a significant birthday.  Two days before her birthday I turned to her and asked what she’d like to do?

Her response?

‘I think I’d like to go to New York.’

‘OK, darling… when would you like to go?’

‘Thursday.’

‘As in two days time?????’

‘YES.’

So, there I was at the desk, cup of coffee looking very recruitment consutltantesque looking for flights, hotels, etc… on the internet!

So why do we now use the internet? Why do we in the main no longer wander down the high street? Why do we no longer use an ‘agent’?

Well, the internet gives you so much more; it gives you detail, offers, exclusive deals, I could view the room I was booking, I could even choose where I wanted to sit on the plane, I viewed the hotel inside and out and I am making an informed decision based upon the criteria I want; not that of a third person that is driven by the desire to sell me the one they want to.

So I suppose the debate is:

‘Is it time to review the way that recruitment works?

And if a business was really committed to recruiting the absolute best, the absolute most suitable would they really put their recruitment in the hands of a third party that absolutely can not communicate the message of the business as well as someone that works there? Surely a website/jobsite/resource that has a large market share in a sector can offer you the choice, the control and the ability to recruit the best people at a more cost effective rate?

And I think that the following quote sums this issue quite well:

‘If you always do what you’ve always done, you’ll always get what you’ve always got.” Anthony Robbins.

11 comments

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  • 1 point 37 days ago
    Jeremy, you are definitely right that corporations aren't willing to pay the $$ that an outside recruiter has been known to be able to earn. That will always be the challenge in finding corporate recruiters with external experience that were actually top producers. My situtation was unique and for personal and family reasons going the direction of corporate recruiting was the best avenue. However, in the future I strongly believe that we are going to start seeing agencies dwindle. And the ones that are the true head hunters and truly real sourcers will prevail. And those that rely on their own networks and resume databases are going to fail, if they haven't already. Right now there are far too many agencies out there and not enough clients. I get at least 5-6 calls from new third party recruiters every day, wanting to prove they are the best. I've given a few a try but they are all the same. We don't need 1500 agencies out there falling over all the same candidates. We just need a handful of awesome ones finding that unique candidate no one else could find. It is obvious that the technology that is out there has allowed corporations to use many of the same tools that the agencies are using without costing them anything. There are tons of articles and blogs posted out on ERE about how technology is changing and how it is changing the way third party agencies engage with companies to prove their value. Agencies are going to have to work harder to earn that $$$$ that they have been used to earning over the past decade. So for some the corporate recruiting road may become more appealing. Corporate leaders are starting to open their eyes and see more value in in house recruiting and I think HR professionals are going to be pressured to do more recruiting or hire internal recruiters.
  • 1 point 38 days ago
    My opinion.... No matter the technological advancements, job boards, linkedin, etc......it'll be very difficult if not impossible to replace good old fashioned recruiting. Why you ask? Some skill sets will always be very challenging to recruit/hire. Posting an ad will only give you about 20-30% market penetration at best. Internal HR will always be limited by resources and have major bandwith issues & internal recruiters have a tendancy to be generalists. There is very little option to compete with a true recruiter that has 10+ years of niche industry expertise and an extensive network of specific talent. They have the industry expertise to properly qualify & the reputation so that A Players really will call them back. For some roles, it is going to take some recruiter making 500+ calls to proactively identify the Non-Active market. Will internal recruiting groups ever pay their internal group the kind of compensation a GREAT external headhunter can make? I highly doubt it......
  • 1 point 38 days ago
    I completely agree that the way we recruit has to change. And I also agree that companies should move more toward an internal recruitment function. But the internal recruitment function has to take on a more external recruitment mentality. I was hired by my company as an internal recruiter 3.5 years ago. I came from working for an agency. They hired me because of my headhunter mentality. They wanted to use that to find ways to cut costs. I am a head hunter at heart. I have saved my company several hundred thousand dollars over the last three years. I have reduced our time to fill from 60-90 days to almost 30-40 days today. I also use outside agencies when neseccary as well. So I don't believe getting rid of agencies all together is the way to go. But I do give agencies a challenge. I only use agencies that I know do direct sourcing. I know the games, I know the tricks so they can't pull a fast one on me. I source from all the same places and only bring in an agency when I just simply don't have the time to devote and need extra help. But at that point I have also exhausted my own sourcing efforts. I think this is the way all companies should do it. Agencies shouldn't be paid for getting an easy hire. Posting a position on a job board and forwarding it on to a company is crap. Sourcing on Monster and Careerbuilder or other resume databases is also lazy. Corporations should be empasizing and training HR or hiring professional recruiters to manage the recruitment process in house. That is the best thing my company ever did and it is the best investment they ever made.
  • 1 point 38 days ago

    Stephanie, 

    I think you're very close to hitting the nail on the head. 

    We'd all love to have a third party do our crappy jobs; I want an accountant to do my tax return, a cleaner to clean my house, a valet to park my car, a walker to walk my dog, and a driver to take me to work. 

    The truth is in times of change and hard times and times when you monitor when and how you spend money people and companies make hard choices. 

    My thought is that this is the first time in recent memory that companies have had to consider how they spend their $'s and if you're going to spend it, you want to know that it has made a difference, it gives you a return. 

    A tax specialist that reduces my tax is good value, a walker that walks my dog because I am lazy is not. 

    If a third party is to be used it is my belief that its for a person when normal, generic methods have been exhausted. 

     

     

     

     

  • 1 point 39 days ago

    James,

     

    Yes, you CAN book your travel, but do you WANT to book your travel?  There are people out in the world that would rather bath with a skunk than book their own travel.

    And I personally know PLENTY of HR people that CAN recruit, but dont' WANT to recruit. 

    And this is why there are still travel agencies, tour guides and "group travel".  This is also why many companies have a blended strategy of internal recruiting, job boards, referrals and external recruiting.

    Leasa

     

    PS.  I still don't think my grand-mother understands what I do for a living.  :-)

     

     

  • 1 point 39 days ago

    Leasa,

    Thanks for your comment. I think this follows on from my comment to Bob below.

    An HR person can do it, but has so far chosen not to do it. I think anyone that doubts Goldman Sachs ability to entice their own staff is silly.

     

    So, what's in it for them - and here lies the crux. HR people dislike recruiters, recruiters are a way of making money from fulfilling a task that is actually quite simple. Lets be honest we've all had the placements that bring a wee smile to your face with how easy it was. HR people know this, and in the main they think this happens more often than it does.

    So - perhaps here is the question; 'How do recruiters add enough value to their client in order to justify the cost per hire model?' - HR will soon realise that a CPH model is expensive, adds very little value and when they can spend $500k a year on training, development, etc (all the stuff HR people like) I am sure you'll see the eventual downturn of main stream recruitment.

    (Oh, and remember that clients are only half the story... job seekers hate us too - money grabbing, forceful, aggressive, unreliable, target driven, commission focused) - so surely if they turn their back on us, become proactive we might just be a wee bit screwed!?!?!?

     

     

     

     

  • 1 point 39 days ago

    James,

    I invite you to question one of your assumptions.  That the "third party can not communicate the message of the business as well as someone that works there." 

    In my experience the most skilled (inhouse or third party) recruiters do exactly that.  John Sumser made this point in a recent debate on Recruiting Blogs.  The recruiters role is to understand the job and the company's culture, and introduce it to people who are unfamiliar with it.  

    Sometime job seekers are not self-aware or methodical enough to select the right cultural fit for themselves.  Sometimes managers are not skilled enough at interviewing to make this assessment.  Many internal recruiters are not skilled at this. And Google is really swell, but can't do that yet.

    So that leaves third parties as the tour guide.

    I agree that the recruiting industry is ripe for innovation, but let's not start the great debate on a questionable assumption about third parties.

    (side note:  Please update your profile, I had a hard time looking you up to better understand your perspective on this debate).

  • -2 points 39 days ago

    Bob,

    Thank you for your comments. I would like to reply as I think perhaps our line of thinking is not too dissimilar.

    My question is this; is recruitment prime for innovation? The analogy with flights, hotels, etc.. is simply that - an age old problem was replaced with a clever idea, an idea that offered the cheapest prices and biggest range of holidays, flights to people who were in the market.

    Third part recruiters require one thing; for you to label yourself a 'job seeker', once you've branded yourself that, made the disconnection with your current employer you'll well on the way.

    Recruiters in the main are disliked, everyone knows a bad one, has used a bad one or has a fear of finding a bad one. They are not trusted, they have spread through the likes of Linkedin like a cancer looking for its next victim.

    Indeed there are some groups that even label the door 'No recruiters, we're not interested'.

    I also think my assumption is right about employers selling the message better than a third party. (and I will continue to draw a line between search and contingency). Contingency recruitment based firms are some of the biggest in the World; the ManPowers, Adecco, Kelly Services etc... they are not skilled, they are numbers, they are bashers, they are throw enough some of it will stick people.

    Can you really suggest that with the development of the employer brand and the arrival of budget cuts that employers will not only have to recruit themselves but they will see the underlying benefit of doing so?

    Imagine an HR person that saves $500k a year on recruitment but can reinvest that into training, development? No HR person likes paying big invoices to people that work in recruitment?

    So, perhaps this is the debate we're after??

  • 1 point 38 days ago

    Bashing the "ManPowers, Adecco, Kelly Services" with your own filtered biases does not bolster your argument. In balance, though, the rest of the article is food for thought, even compelling.

  • 1 point 38 days ago

    Neil,

    I don't consider my statement of fact to be a bashing of the above named recruiters. I do believe however that their attitude towards their own recruitment, staff training and development will ultimately underpin what they have tried to do. 

    I have worked for them, and recruited for them in the past and their attitude is utterly awful (in the UK at least) and my debate stems the entire recruitment industry - inclusive of Search and Contingency recruitment.

    I believe that if an investment bank is recruiting a new CEO that there needs to be a third party to bridge that gap between employee and employer, but that is not the bulk of the industry. Recruitment in the main is an industry that serves the masses (look at top 10 firms in the World) for the masses and whilst specialists add massive weight to the quality of the industry the 'commercial recruiters' who serve middle society (less than $100k) are in real danger of imploding upon themselves. 

     

     

     

     

  • 1 point 37 days ago

    James, the theme of your article rings true. I agree strongly with much of what you've stated.  

    I took issue with the "ManPowers, Adecco, Kelly Services etc." piece. I too have worked at some of the largest global staffing firms. I'm working for one that you mentioned right now. I'm surrounded here by truly outstanding people, who are doing great work in very innovative ways.

    In any global services organization, the approach varies by geography, market served, etc. Calling the recruiters of three organizations "bashers", based upon your experience with some of them is painting with a very broad brush. One man's opinion, based on incomplete data, is not a universal 'truth'.