Is candidate sourcing really your critical value-add?

I've just watched a very interesting interview conducted by Shane McCusker with Greg Savage about the future of the recruitment industry. (If you don't know about Shane it really is worth checking out his blog - http://www.intel-sw.com/blog/ -the recording of the interview can be found here as well).

Greg is pretty well known in the industry and his influence spreads far beyond his native Australia, so I was interested to hear his views and I would encourage you to watch the interview. He pulls no punches about the current state of the recruitment industry and sets out in typically non-nonsense fashion what the consequences of current poor practice have been for the reputation and success of the industry. I agree with much of what he says. Except in one pretty fundamental area.

Greg's view is that the successful value-add for agency recruiters in the future will be finding talent that their clients can't find for themselves. Now I understand why he says that. Corporates are increasingly moving recruitment in-house, and the growth of digital has 'democratised' the networks that used to be the preserve of recruiters.  I know of many recruiters who would feel that they are in competition with their own clients to find talent.  So yes, it is important to find talent that they can't find for themselves.

But this has always been the case, even in the pre-digital age.  If a client could make an appointment using their own networks they would. They just weren't very good at it then.  But they are good at it now, and they will get better at it in the future.  And that's the point.  At some stage, if not already happening, corporate in-house recruiters will become at least as good at finding candidates as agency recruiters. Why wouldn't they be? Do you really want to base your future success on being able hold back the dual tide of increasing availability of information on one side, and the increasing skill of corporate teams to access it on the other?

But recruiters are not paid to find candidates.  Recruiters are paid to find the right candidate.  Whether you work in-house or for an agency, the value-add for your hiring manager is to be able to find candidates he or she wants to hire.  Recruiters have got to be able to say "You will want to hire this person because..." The critical skillset is and always has been to understand the nature of the role you are trying to fill and to assess and present candidates against that requirement. Hiring managers want to work with recruiters who understand their need and meet it.  They don't actually care very much about where or how you find your candidates.

In much of the comment I read around the industry, the strong impression I get is that sourcing talent is seen as a critical skill (boolean, social media, talent pooling, market mapping etc), and that assessment of talent is either an assumed competence in all recruiters (!) or just not considered as important.  Of course, acquisition of good candidates is an ongoing challenge for recruiters (it has never not been the case) and there are more and more ways to find and manage relationships with candidates.

But in a market where increasingly everyone has access to the same basic information, differentiation and successful operation will come to those recruiters who can evaluate that information most effectively to produce the best match-ups between vacancy and talent.

Storing Up Trouble For The Good Times

I saw this in an ad that turned up in my inbox recently.  The ad was for a recruitment manager for a professional services firm:  "You will have had experience in a similar role in a professional services organisation."  Nothing particularly unreasonable or earth-shattering about that, you'd think.

In fact, if you analyse most of the roles advertised in recruitment at the moment, or in many other fields for that matter, the bottom line is that recruiters are looking for candidates who have done pretty much the same job in a near-identical business.  The only reason that the ad I quoted above caught my eye is that it came out and said as much!

Now it's hard to be critical.  Recruitment can be risky, and in a candidate-rich market why shouldn't hiring managers and recruiters be looking for the safest, lowest-risk option available?  In addition, from the recruiters' perspective, candidate selection isn't overly taxing, inasmuch as you are looking for experience on the CV, rather than ability in the individual.

And that's really the point here. Although it's difficult to see from our current gloomy economic perspective, markets do change, and when the labour market tightens, recruiters are going to need something much more creative to get top quality candidates to move.  Why should established employees in one company move to do exactly the same job in another?  When the flood of CVs that used to pour in to job ads is reduced to a trickle, how will recruiters whose role has been simply to filter ad response fare? How well will they cope when assessing candidates on more esoteric criteria than simply what's written on the CV?  How competent will they be at persuading top quality, highly sought after individuals to join their companies in the face of stiff competition from other organisations?

These questions might not be on the agenda for recruiters at the moment.  They should be!

Social Media in Recruitment Isn't Working - Just Ask A Candidate

Another week and another social media conference goes by. Another chance for the ever-increasing number of social media experts to tell recruiters how to attract and engage with candidates, create talent pools etc.

But here's the problem.  In this avalanche of 'this-is-what-you-should-be-doing' information, who is representing the views of the candidate? In the social media recruitment equation, candidates are customers and they have a voice.  They are the ones who need to be attracted and engaged with. Which companies ignore the opinions of their customers? Well, in recruiting terms, it seems most of them.

I am currently a candidate looking for a job, so I have some real insight into the motivations of job-seekers, and what companies are offering in the social media recruitment space. And, frankly, from the candidate perspective, the scene is not good.   There are some real problems to overcome.

Communications

• Most corporate websites are firmly in the grip of the marketing function. The objectives of the marketing and recruitment arms of a business with regard to social media comms are different. Candidates do not want to be inundated with corporate PR, but they are.

Content

• Usually a mix of corporate news and retweeted/shared articles which can be found elsewhere.  A lack of genuinely insightful and original content of interest to a potential employee.
• Recruitment output is often limited to tweeting/sharing job postings.  By their nature, most will be irrelevant.

Time Constraints

• People who are out of work want to get back into work quickly.  People who are in work and want to move do not have a lot of time to conduct a search. Job-seekers do not want to have to follow/like/share/link to large numbers of different sites or pages to have irrelevant jobs posted to them.  They want to see lots of relevant jobs in one place. That's why they go to job boards.

Lack of Discretion

• Engagement with social media sites can be in the public domain, and increasingly employers are likely to take a dim view of some of their employees' online contacts. (In the interests of balance, a big tick in the box for Google+ Circles in this regard- but are there really 100 million active users?).

Passive Engagement.  

• There is still a sense that simply having a Facebook page etc will give you a presence and attract candidates, an "if you build it they will come" approach.
• There seems be be a lack of commitment to engage from the employer/recruiter standpoint. The onus is still very much on recruitment as a transaction, and on the candidate to seek out and apply to a role.
• Why, when in such a scenario the recruiter has full access to CV & contact details from many candidates who have shown an interest in the company, is nothing positive done with this information?  Telling unsuccessful candidates to keep looking on the website for new jobs does not convey the idea of an organisation actively committed to building a pool of talented individuals on which to call in future.

Lack of Trust

• Candidates ARE interested in a potential new employer's reputation and culture, but they rarely either look for or get this information from a corporate-sponsored site. A general internet search on corporate reputation is much more instructive.

Corporate Fear

• Candidates, both passive and active, can and do join groups where they can share experiences, information and problem-solving techniques with like-minded professionals from the same sector.  But which corporate is going to sanction a site where it may be sharing information with someone from a competitor company? I haven't seen one.

LinkedIn and Twitter are my major social media of job-seeking choice. I use the LI job board (!), but also in the same way as a recruiter, I can use LI to identify and contact people direct who I think might help with my job search and exchange information that I think is relevant and over which I have some control. The social media recruitment model just doesn't seem to be as targeted.

If I, as an active job-seeker, see no incentive to engage, what chance do companies have of attracting the passive job seeker, that Holy Grail of the recruiting world?

The irony is that all the building blocks for successful social media recruitment programmes are out there.  It is just that nobody seems to be asking the most important people, the candidates, what will attract them in.

Challenging The Orthodox: #2 Recruiters' Fees

A long time ago, back in the mists of time, an executive set up the first ever recruitment business and said, "What are we going to charge for our service?  I know!  We'll charge 30% of the successful candidate's salary."  And so an industry standard was born.

I have absolutely no evidence to support this scenario, other than that it reflects the totally arbitrary nature of the arrangement.  However there are two facts of which I am pretty certain:

• FACT ONE: Recruiters are no more capable of producing a rationale for charging a percentage of remuneration as a fee for their work than....
• FACT TWO: ....employers can produce a rationale for paying it.

Does it reflect the amount of work that goes into the recruitment process? No. For example, recruiting for employers who are lower quartile payers is often more difficult than for those who are upper quartile payers.  But by linking fee to salary, the fee is automatically lower for what in theory will be a more difficult project.  

A difficult job can take longer to fill.  The recruiter's fee may diminish as a result, or exclusivity may be lost. In some cases, the harder you have to work, the less likely you are to get paid at all. Or, conversely, you may make one phone call to the right candidate and fill the position.

In which case, does the percentage model fee reflect the benefit that the client gets from the acquisition? No, because in most cases the employer has no way to measure the contribution an individual makes to the business.  There is no ROI calculation.

Does charging a percentage have any rationale at all?  Actually, yes.  In theory, a more senior position should make a more telling contribution to the business, will be paid more, and thus will be more expensive to recruit than a less senior position.  Intuitively this sounds right, but it is still difficult to prove with raw data.

Many recruiters, including me, have made good money over the years from the percentage model.  But I can't help wondering whether that executive back in the mists of time didn't do recruitment a disservice by introducing this model.  Why? Because it gave employers an excuse NOT to confront the really important question, that is 'What is the value of our human assets?', but instead, in the absence of a measure of value, a simple way of reducing the cost of its acquisition.  

Even if you cannot point to an ROI figure for your recruitment, it is easy enough to argue that the return must go up if the investment goes down.  Picking an arbitrary percentage figure with no business case for justification gave purchasers of corporate recruitment services an easy target to work on, and that figure was only ever going to go one way.

And it assumed that all recruiters provided the same service (because there was no measure of the quality of the service in terms of ROI), therefore good service equalled cheap service.  There are good recruiters, and there are cheap recruiters, but they are not always the same thing!

Work on producing an actual value for human capital is long overdue (which Chairman has not airily paid tribute to "our most valuable asset" at some stage?). But work most definitely is going on - I refer you this article by Jeff Higgins which is a particularly well-developed example.

If such a standard could be achieved then it ought to be possible, amongst many other benefits, for employers to pinpoint which agencies/sources are producing candidates who contribute the most over time, and which agencies/sources provide the greatest ROI irrespective of initial cost. 

By the same token, such data would allow agencies to point to real proof of success; provide a real measure of value add and a firm basis for premium charging; and help to marginalise the cowboys who undermine the market on both cost and quality.

Such an arrangement has great benefits for both employers and recruiters. If anyone out there has any anecdotal evidence of innovative fee arrangements, or companies using sophisticated HR data to value their human assets I would be interested to hear.

Challenging The Orthodox: #1 Cost per Hire, Time to Hire

'Cost per hire, time to hire' is the modern mantra of the recruitment industry. But like many mantras, the phrase continues to be chanted by rote long after the real significance of the words has been lost. We are told that securing and retaining top talent is a strategic goal for all companies. Significant sums are now being spent on developing employer brands, and there is a recognition that recruitment is no longer entirely the responsibility of the recruitment team. If so, how does the cost of recruitment and the duration of the process contribute to achieving this goal?

Cost and time developed as key metrics some years ago as a reaction to the frankly anarchic situation in many companies, where hiring managers chose their favourite recruiters to work with them with no heed to any terms and conditions. HR got landed with the cost and the responsibility for sorting out any problems which stemmed from an internally unregulated process. While that worked for the recruiters, it was never going to go unchallenged by a professional HR function.  There was a genuine disconnect between what recruiters offered, what was charged and what was delivered.

Unsurprisingly, some ground rules were laid down to curb previous excesses.  PSLs were introduced, agencies traded greater volume for lower price and HR got to exercise greater control over how work was carried out. This was an entirely understandable reaction to what had gone before.

But is there any evidence that running a more streamlined process in terms of cost and time has added to the quality of a company's talent pool?  Are cost and time still the most important and most valid measures of an effective recruiting process?

I know that if you ask any buyer of any product or service they will tell you that ideally they want to pay nothing and have it delivered yesterday, so those issues are never going to be unimportant.  And of course they are pretty easy to measure.  No corporate recruitment function is going to pass up the opportunity to point to concrete evidence of their efficiency.

But do these simple measures of 'success' really encourage the sort of recruiting behaviours which will guarantee delivery of the best available talent over the long term?  If a recruited candidate turns into an unqualified success, is anybody going to remember (or care) 2 years down the line how long it took to recruit them, or even how much it cost? Conversely, if after 6 months a candidate turns into an abject failure, any money or time spent recruiting that candidate will be perceived as a waste. It's the result that counts to the client, not the process.

For agency recruiters, there is already an incentive to work quickly because the quicker they provide a solution the nearer they are to getting paid. However, interest and commitment from the recruiter will very quickly wane without interest and commitment from the hiring organisation. Recruiters will move on to work on what may be more productive roles for them.  They, too, have targets to meet.  Speed does not equal quality.

Similarly with cost per hire. Recruiters' fees have almost always been paid as a percentage of salary.  This is a completely arbitrary arrangement. It does not accurately reflect the amount of work that goes into a process; neither does it reflect in any way the benefit the client derives from the recruited candidate. There is no more connection between good recruitment and high fees than there is between good recruitment and low fees.  Lowering average cost per hire is not an indicator of higher quality recruitment.

So isn't it time that these two hoary old stalwarts were thanked for their contribution to the improvement of recruitment delivery and shuffled off to the sidelines in favour of some newer standards which reflect the needs of businesses now?

Social Media: Let's Get Some Perspective

The rise of social media is a modern-day phenomenon and the idea that any business, particularly a recruitment business, should want to ignore it is madness.  Clearly, social media is particularly well-suited to recruitment: it provides ease of access to information about individuals and their networks; it provides the ability to exchange information rapidly with a community of interested and interesting individuals; it communicates with people in a way that they want to be communicated with. It is an entirely rational response that an industry such as ours is fascinated by the possibilities on offer to improve performance by leveraging its potential.


But I confess to feeling a little uneasy about the prevalence of social media as the only game in town for recruitment at the moment.  Social media is about candidate sourcing, and that is not the same as recruitment.  Good recruitment consists of 3 main elements: defining and articulating the requirement, sourcing candidates, and assessing them against the requirement. Of these, the first is the most important. In truth all 3 are intertwined and have to be performed effectively to produce a good outcome. 


I suppose it may be something to do with the online company I keep, but my unease stems from the nagging concern that some people think that there is some sort of 'Silver Bullet' solution out there - some killer application, some piece of social-media-manipulating software which will 'solve' all our recruitment problems.  The truth is that competitive advantage in recruitment, as in most other industries, comes from doing 100 things across the entire span of activity 1% better than the competition, rather than looking for a complete game changer.


A further danger is that the real value-add for good recruiters, i.e. their ability to spot the right talent for the right job, is diminished if the perception of the client is that somehow the only skill that counts is how and where you find candidates.


Please don't think that I do not value the potential of social media to enhance top class recruitment, because I do. I am very interested to experiment and to learn how others have used social media to improve the quality of the work they do.  I just know that it isn't the whole recruitment story.


Defining the shape of the hole you are trying to fill is the most critical issue in recruitment.  If you don't get that bit right, everything else you do, no matter how up-to-date your methods of sourcing and assessment, will be misplaced.


The development of an individual company's skill to produce a competency model of 'what talent looks like in our organisation' (and it will differ from one organisation to the next), and the ability to assess candidates effectively against this, is at least as important as the development of social media in recruitment.  I would be very interested to hear about companies who might be taking a more scientific approach to talent acquisition to generate a greater and more long-lasting return on their recruiting investment.  Now that really would be something to talk about!

Active & Passive Candidates - What Are They?

There are no such things as active or passive candidates in the recruitment market, there are only good candidates and the rest. OK, I know that at any one time there are people out there who are actively scouring the market for a new job, and many more who are not. But the point is that this is a candidate perspective, not a recruiter one. Where recruiters can go wrong is in looking for sources of new candidates who are not looking for a new role or may be unavailable to their competitors, i.e 'passive candidates', but can still be delivered to them as if they were 'active'. 

I can understand the problem.  I worked for an exec-level job board where much of our early growth came from companies looking to us as a different candidate pool.  They and all their competitors used the same job boards and came up with the same candidates for the same jobs, for which of course they were all in competition. If we were successful for one agency, it was not long before the competition turned up in force.  Good for us, but the same problem for the recruiter.

But looking for active or passive candidates is missing the point.  And it's lazy recruiting practice. Recruiters get paid to find the right candidate. Sometimes it will be possible to find the right candidates from a job posting, as at any one time some, but by no means all of the most eligible candidates will be looking to change jobs. But to be consistently identifying the best available candidates  means getting of your butt and approaching the people your client would want you to be talking to. You cannot expect a 'passive' candidate to come to you. To find the right candidate you need more than one string to your sourcing bow, and with the wealth of information online there has never been an easier time to do this.  Recruiters - get out there and engage!