WHAT’S WRONG WITH RECRUITMENT…AND HOW TO FIX IT!
This could potentially be a VERY long post because I’m talking about an industry that has many inherent flaws. In my opinion, many of the problems we see stem from some fundamental issues that recruiters have wrought upon themselves and customers unwittingly propagate.
THE PAYING CUSTOMERS’ PERSPECTIVE
Having been a customer myself and in speaking with countless other recruitment customers, I can tell you that their complaints are very consistent.
There’re a lot of them so I’ll list out the top 10:
They waste my time
They lie to me
They keep hassling me every 5 minutes
Fees are too expensive
Recruiters don’t understand my business or the role
Candidates aren’t even being interviewed before they’re sent to me
They’ve been looking for months and can’t find anyone
Everyone they send to me are terrible
Too many cold calls
I’m sick of junior recruiters who have no idea
THE RECRUITERS’ PERSPECTIVE
There’s a pretty similar list of gripes here too:
They waste my time
They lie to me
I have to chase them for everything and they never call me back
They cancel roles and they’ve always got 5 other recruiters working the same role
This role is a $150K investment and they won’t even meet with me to talk about their business or the role in detail
Every time I send a candidate they’re “already on our database” or another agency has just sent them 5 minutes before me
They’ve been looking for months but won’t budge on the spec or increase their budget
They don’t give me any feedback on candidates I send them
There’s no customer loyalty and they always step outside the PSA
I’m sick of ridiculously low PSA rates
And the sad thing here is the true victim of this lack of accountability and partnership – the rather important people – the TALENT!
WHAT’S TO BE DONE
It’s tempting to work through each of these issues one by one and talk about solutions but we’d be treating the symptoms, not the core problems.
It seems to me that most problems stem from the bounty hunter style pricing model prevalent in the market where the fee is contingent upon success. With this model the customer has nothing to lose by being non-committal and farming the role out to multiple recruiters.
To draw an analogy, this model is like giving your tax return to 5 accountants and telling them that you’ll only pay whoever gets you the quickest result. If you did that, what kind of result would you get? I bet any accountant worth their salt would turn it down instantly and if you were lucky enough to get a few to agree how would they approach the assignment? They’d rush it, they’d probably cut corners so they don’t invest too much time in case they don’t get paid. Just like you, they’d be hedging their bets.
So when we do the same thing in recruitment a few important things happen. Because we’re dealing with a number of recruiters this soaks up so much time that it’s too much effort to do a proper job brief. In fact it’s too much effort to call everyone back or respond to the CVs they’ve sent. We haven’t spent any money so it’s no skin off our nose, right? Then the follow-up calls start and we get fed up pretty quickly.
The recruiters know how the game works so they’ll make a call on where your role should sit in their priority list. Most good recruiters will successfully place between 25% to 50% of the roles they work. That means they spend their own time and money on 10 jobs but only get paid for 2.5 to 5 of them (sometimes none).
So recruiters usually look at their jobs and think “what can I definitely place?”. This is where the bulk of their time will (should!) be spent. If you’re not a top priority because you don’t return calls or you have too many recruiters working your role, or your fee is too low, or you’ve been looking for ages and you’re not paying enough money… then guess what, you get a half-hearted effort.
More importantly we’re motivating recruiters based on speed, so it’s in their best interests to try to get the best return from the least amount of effort. This encourages what we call a flick and stick, or spray and pray approach. Basically, this means playing the numbers and throwing as many CVs out to as many customers as possible knowing that the law of averages means that something will stick. The scary thing is, this is so entrenched that Recruiter’s KPIs are actually measured and rewarded based on these numbers! I hasten to add not at 33 Talent for this very reason (check out our ROWE article for more info).
THERE IS A BETTER WAY!
I think the solution is to throw out the contingent fee model. Instead, work with one recruiter and pay them a portion of their fee upfront. This commits both parties to getting a quality result and puts your job firmly at the top of the priority list. It means that the recruiter doesn’t have to cut corners to get you a CV before someone else snags the fee. It means recruiters can afford to take on half the number of jobs because they know they’ll get paid for all of them. It means candidates aren’t getting calls from 5 different recruiters and don’t start thinking “jeez these guys (Client X) must be desperate!”. It also usually means you’ll be able to negotiate a discount because you’ve removed some of the recruiter’s risk.
Is this risky for you? Yes it probably is, but in the context of all your recruiting over a number of years, doesn’t it make good business sense to spend time up front picking a good recruiter with good references and a strong track record? Then build a strong, exclusive relationship with them until you get to the point that they know your business better than most of your staff. If they let you down, find another agency. You might have the odd false start but over time you will get much better results and you will absolutely save money.
A COMMON MISCONCEPTION
I once had a customer say “But I’m buying a product, if I like what’s on your shelf then I’ll pay, if I don’t then I won’t”. Sorry, but candidates are most definitely not sitting on a shelf waiting for your call! You’re not buying a product, you’re buying a service. You’re paying for someone to go out to market and represent your business. You’re paying for someone to search high and low, ask for referrals, network extensively and generally do whatever it takes to find you the perfect person.
Having said that, the best recruiters invest heavily in their network so they will often be able to recommend someone they’ve already met. But it’s important to recognise, you’re still paying for a service. You’re paying for someone to successfully broker and secure a long term relationship on your behalf that you can then benefit from quickly. Just because they are in the recruiters network when you ask doesn’t mean a huge amount of time (usually years) of effort hasn’t gone into making that the case.
If you spent $150K (on say a piece of Software) in your business, would you spend a lot of time with a vendor to make sure they really understood what you wanted? You bet! Why is a $150K candidate any different? It’s a big investment and very expensive if you get it wrong so it pays to invest the time with quality partners to make sure you get it right.
At 33 Talent we have built a new suite of models that make this transition easier for clients. One of them, for example, only requires a small proportion up front and then a reduced success fee at the other end which isn’t payable if the Talent comes from an ad as opposed to Search & Networks. This reduces waste and risk on both sides for a win win.
There is an element of Trust required still sure, but there is in any meaningful relationship in life! Whatever your solution, Clients and Recruiters need to start partnering more and at a deeper level to make sure the ever growing disconnects that also effect the Talent (And therefore Employment Brands) start to be bridged and turned around.