Or is it a tragedy unfolding? I have heard a lot of rot about recruitment recently. Before I tackle that, let’s deal with the elephant in the room so that we can have a reasonable debate. Recruiters who cold call a company contact they have never spoken to before, and say anything like ” I have just the candidate for you” are not recruiters, they are not consultants, they are misdirected opportunists and their approach, along with any ensuing outcomes owe more to chance than anything else.
“Too true” I hear hiring managers say, “hear hear” they exclaim. The problem is, there’s an elephant in your room too. If you have a PSA panel with multiple recruitment providers on it that you always brief, or if you routinely place contingent roles in the hands of multiple suppliers, you get what you pay for in terms of quality and service, not much, and then you make a donation to the “lottery winner” mentioned in the first paragraph.
So, let’s recalibrate. I’ll start with the business issue. People are expensive. Too many people, the wrong people or the wrong combination of people can and do cause businesses to fail. Not only that, when the business fails, it still has to pay them out of the ashes of its former glories. Yes, we reward the architects of our commercial downfall. On the other hand – the right people can take any business in to the stratosphere.
Businesses put $1m+ business propositions into the hands of ill equipped managers, who often have little interest in the science or the art of selection and who subsequently outsource the work to the lottery panel above – job done! The trouble is, it is well and truly done, its done before it’s started.
“But not many jobs pay $1m” I hear some say. That’s true, but it’s an $80,000 job that is a $1m proposition. Here’s the maths – we want $3 in gross profit for every $1 we pay in employment costs (check any decent company’s P&L if you doubt me) and we’d like someone at that level to stay for 3 years to get a return. So, $80,000 x 1.5 for all oncosts x 3 for GP X 3 for tenure equals = $1.08m.
This is a serious business expense. It needs to be treated as such. When I had senior executive corporate roles, as a rule of thumb, a $1m commitment needed board approval, often from international head office, and a damn good business case. So, recruiters who “float” candidates they may not have interviewed, to contacts they have never met, are holding a flame to your cash. However, hiring managers who don’t engage in the process deeply and thoroughly (whether with an external recruiter or not) and focus on speed over quality are doing just the same thing, that’s apart from the ethics of asking a “professional services” company to work for nothing unless, of course, they get lucky.
There is a trend to “recruit in house” because “it’s cheaper.” Is it? Is recruitment your core business, how do you get a return on the extra salary costs? What do you do about your Fair Work (or other employment law obligations) when you need to cut your own headcount? Are internal recruiters often just people who could not cut it in the service industry? How do you get best practice? If you want the best people, how can you get the best recruiters – they are all working for themselves!
“Recruiters just place an ad online and then flick me the CV’s” Really? I actually heard corporate recruiters at a recruitment industry conference own up to doing this themselves because they could not be bothered to learn or to manage the multi-million dollar HRIS recruitment module. Someone is confusing the meaning of “applicant” with “candidate” here. In fact, the good recruiters will tell you that the source of the candidate is irrelevant – it’s the ability to evaluate the applicants and find real candidates that matters. We get paid if an internal candidate is successful, because we do the work and add the value. Can the internal recruiter you love, or the external recruiters you disdain provide a process that can map discrepancies and consistencies from a job brief, through boolean searches, at least 3 interviews, psychometric assessments, bench marked statistically of course, and references and then explain them? If they can, they are real recruiters and fully deserve their job or their fee. If they can’t, why do you keep taking $1m risks with them? Here’s my most recent reward….”Thank you so much Andrew, this has been such a wonderful experience and hopefully we have found a winner.” (Sydney based client)
“We can do search internally” is another one. ‘We’ve got this smart young team that can find anyone on the internet!” Let’s take a reality check here. My 19 year old computer science undergraduate son can too. However, and let’s get real here, a “Google Search” – however long and complex the string, is barely even a part of the Executive Search process. “Sometimes, they do have a bit of trouble relating to the $500k executive with 20+ years experience” the source of this anecdote went on to say. REALLY. NO KIDDING!
The point of all of this is that recruitment is a prime discipline for outsourcing which is getting the same kind of discretionary expenditure scrutiny that marketing received in the 80′s. It should be outsourced because it’s a support function, it’s not core business. It’s a soft target for accountants who look at the here and now and don’t evaluate the investment risk and opportunity. Recruitment Process Outsourcing (RPO) provides the best of both worlds in lower cost and outsourced expertise, and guess what, real recruiters have been using social media effectively for years. Lottery winners and losers just dabble.
If you are interested in the tip of our iceberg – by all means take a look at ours by clicking here – but whatever you do, stop playing Russian roulette looking for $1m silver bullets, you’ll eventually shoot yourself in the foot.