If every company has an internal recruitment team, how will consultancies play their role and how will they survive?

Well, I sometimes think that Now a days every small, large or medium size for that sake, companies, when we call them for recruitment services, they say.."We have our internal recruitment team and they source candidates for us, we don't want vendors".

As recruitment is one of the most important and sensitive part of Human resources. It is not each an every HR person will be great in doing it. And also its a fact that HR people are very busy people in the entire organisation. And again in there hectic schedule to add recruitment, makes them more crazy. Wherein other side a Recruitment consultant is only made for Recruitment job, and he knows that these is the job he will be doing every day and every hour, so he develops his own skills in it.

When each companies are developing their own internal recruitment team to work on the position, then where will be the number of recruitment companies will do. Will they change their own profile or will they get vanished?

Please Discuss.

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Permalink Reply by chandra bodapati on July 21, 2013 at 3:59pm

I know internal recruiters at dozens of companies that are extremely competent at their job. As a provider of innovative candidate sourcing solutions (egrabber) I bounce sourcing strategies with many of these corporate recruiters & TPRs. Many of these internal recruiters & corporate recruiters and heads are considered to be thought leaders in the Industry.

The bottom line, from a corporate recruiter point of view is, if a TPR can not demonstrate they can provide value that is at least 2x more than what they can get from their internal employees, they won't even be considered.

As a TPR you should ask yourself, would you pay several times more to a consultant for a job you can get done internally for a fraction of the price?

I feel TPRs, to be successful in the current environment need to bring higher level of sourcing skills, techniques, knowledge bases & industry insights than those available in the recruiting departments.

TPR's need to be experts in understanding untapped sources of talent people that are in short supply.
TPR;s need to be maintaining a relationship with a LARGE pool of talented people in niche market. & more....

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In short - TPRs that can't provide a unique value proposition should count on seeing a declining business. Those that have a unique access to the talent pool required by corporations can see a multiplication of their business.

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Permalink Reply by bill josephson on July 22, 2013 at 10:59am

Rahul.

Excellent topic and question. I've been recruiting since 1980 at a national firm till 1980, self-employed since then.

1983-2003 specializing in I/T, 2003-present specializing in Defense Engineering, and some involvement recruiting in Medical Devices and Sales.

My perspective is this. TRP recruiting will be around, but the demand for outside recruiting services is definitely shrinking based on my experience.

As you correctly pointed out, most all companies today have internal recruiters who mostly happened to be good TPR's now inside working the corporate side. The ones dedicating themselves to recruiting are good recruiters. The general corporate directive is don't pay fees. The resistance to working with TPR's is fierce. Technology makes increasing numbers of candidates transparent enabling their recruiters to access the same passive "invisible" candidates we were superior at uncovering in the past.

And in this Depressionesque jobs market with many active job seekers the corporate mentality is mostly there's a ton of people out there looking, we have a position, they'll be lined up around the block to interview, so go find us several from which we can choose.

What you and others said is true. They're better able to find the same candidates we can, and why pay us a fee if they're successfully able to do so?

Now the positions they do share with TPRs they've already mostly failed on finding on their own. Typically there's something wrong with the job either an impossible skill set blend, relocation, requiring 95-100% of the skills needed, or compensation isn't competitive. They're referred to as "Purple Squirrel" jobs.

There will be needs for TPR's where the demand outstrips the supply, the urgency is great, and it's a special problematic small boutique niche.

IMO, there aren't many of those sector disciplines to provide steady streams of business for a majority of recruiters, so expect whatever the recruiting number is today, it's less than it was 5 years ago, and less in 2008 than it was in 2001.

In 2018 it will be less than it is today.

Technology, drastic corporate cost cutting, and even offshore outsourcing combined with insourcing of H1B visas will all play a heavy hand impacting the Third Party Recruiting industry.

My five cents, Rahul. There'll be some vehemently disagreeing with me--I know who they are.

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Permalink Reply by Luke on July 22, 2013 at 12:34pm

Third Party Recruiters won't go away, but my guess is that they will diminish considerably. I'm an internal recruiter for a smaller sized consulting company, and when I started I had absolutely no training in recruiting. However, through my company I have access to some of the best subscriptions out there and have been able to become productive very quickly. Since I started I have seen the same success in training a new college graduate. For a company like ours that has a high volume of recruiting needs, $20k+ recruiting fees don't make sense when there are tools out there that can get a novice like me up to speed so quickly. With the tools available on the market, it's really just a matter of finding someone with some initiative and people skills.

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Permalink Reply by bill josephson on July 22, 2013 at 2:59pm

Luke, to re-emphasize your response.
If your employer's satisfied with the quality of candidates you uncover hiring them, why would they use a Third Party Recruiter?

The answer is only if you're working a niche where demand far outstrips supply and talent is scarce, large volume of openings you don't have the time to fill, and needing someone from specific targeted companies unable to penetrate.

And it seems recruiter income will shrink as fees are reduced to the point we're cost competitive to use, over time.

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Permalink Reply by Rahul Sonawane on July 23, 2013 at 8:14am

Well, wht i think is we TPR should be developing some different types of skills which helps us to keep our presence in the market. The internal recruiters are always going to have some or the other limitation but we TPR have bigger boundaries and hence thats our plus point. We can be more innovative then the internal recruiters. Our polished skills and head hunting weapons we help us to keep our presence in the competant market.

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Permalink Reply by bill josephson on July 23, 2013 at 8:56am

Rahul, we can be superior recruiters than our internal counterparts with superior training and execution--you're right on the mark there.

The key is will those superior recruiting skills as a Third Party Recruiter be called/compensated for in the market place, as it's cheaper for companies to utilize their own internal good to very good recruiting staff despite, perhaps, taking longer or missing some candidates providing the ones they do find are hireable?

What I hear most frequently in my pursuit to work with old or find new customers is:
* "We have no requisitions"
* "We have no requisitions we need assistance on as we're able to cover them ourselves for the time being."
* "We don't use recruiters as we have our own internal staff."

* Hiring managers defering to Human resources as "HR calls the shots on whether or not to use TPR's and spending."
* And in the defense industry which is my specialty "the government has decreed that Defense Contractors reduce their cost per hire making it difficult to cost justify using a Third Party Recruiter."

So we can and should be superior to internal recruiters, but they're mostly pretty good and up. Will companies require the services of a superior recruiter when "pretty good" is getting the job done?

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Permalink Reply by Amy Ala Miller on July 23, 2013 at 10:00am

Please tell me more about the superior skills a TPR will have over an internal. I will give you my 2 cents on why I had great TPR relationships at my last job-

1. Volume. If I had more than 50 reqs, it might make sense to call in some extra support. Conversely, we might hire a contract recruiter to come work in house for 3-6 months, so maybe you better watch out for contract recruiters
2. Specialty searches. If I'm working on a completely one-off req with highly specialized requirements, it might make sense to turn over to a TPR who already has a deep network in that area.
3. Confidential searches. If we're replacing someone who doesn't know it, or for some other reason need to keep the search quiet, it might make sense to call in a professional firm.

So pray tell, what superior skills should TPRs possess over their corporate brethren?

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Permalink Reply by bill josephson on July 23, 2013 at 11:03am

Superior recruiting technique expertise.

There's lots to recruiting strategy, specially when it comes to finding/approaching passive candidates that a phone recruiting intensive TPR can be constantly sharpening.

A phone intensive TPR is far more in the trenches gaining proprietary information about companies and candidates than almost all Corporate Recruiters applying them daily getting their respective uniforms dirty every single phone call requiring superior phone dexterity and adaptability, along with seamlessly knowing how to most effectively respond as we can suffer every indignity at any time necessitating thick skin/varied approach.

Not only asking the right questions but knowing the protocol when best to and how to ask pursuing our objective.

The fact down and dirty over the phone recruiting is what some TPRs do ensures they'll be superior at it than Corporate types more on the Internet. Just like if we're both basketball players and I'm taking 500 practice shots a day whereas you're taking 50 while playing a simulated basketball game on the Internet, I'll likely become a more accurate shooter than you.

The issue is, is that your shooting success, if the company's "winning" hiring employees, may well be enough to not require a better shooter's services costing additional money.

Good or very good is good enough. For the added cost great simply isn't required.

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Permalink Reply by Amber on July 23, 2013 at 11:08am

I'm not sure it was meant to say that TPR's actually DO have superior skills, obviously anyone internal or external might have better "skills" then the next person. I think from a TPR viewpoint, the reasons a company with an internal might hire us are:

1. Yep, Amy - exactly. Volume is a common reason for sure.

2. "Sensitive" searches - again Amy hit it right on. The search that a company might not want to be widely acknowledged is another reason we get hired.

3. New teams - I know a lot of TPR's will disagree with me, but I have several clients that have changed/added internal folks to recruit (or manage "Talent Acquistion"). They hire us to help fill immediate needs while team ramps up. I have never been hesitant to provide advice / assistance to the new teams or their managers. (If asked!) I don't see this as working myself out of jobs, I think it will help the client choose me when they have a position they need help on.

There's not really special skills that only a TPR can have. There are sometimes tools, methods, or resources we might be able to use vs. an internal. Some companies have a lot of procedures, processes, etc. that can hamper an internal that are not applicable to a TPR. Of course, sometimes those get in our way, too!

Internal recruiters, job boards, SM, etc. are there. Every time things change, there has to be a fundamental basis for a company to need a TPR. If you're a decent recruiter, you'll keep getting work.

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Permalink Reply by Amy Ala Miller on July 23, 2013 at 12:27pm

@Bill if being really really good on the phone was the superior skill then I'll let you have it. l think I can hold my own cold calling and probing for info but the reality is a lot of key talent I'm going after will be PISSED if I start blowing up their office (or God forbid) cell phones. There's a heck of a lot more to closing a deal than being good on the phone and more than one way to recruit a candidate. Gaining proprietary info is important, but who says companies don't have internal teams focused on that and making said information available to their internal recruiters? Is it HAVING the information that's valuable or simply being able to retrieve it? I say a bit of both.

@Amber this is why so many of your clients love you I'm sure. :) You have a very common sense / team perspective that I love. If I were in the market for TPR help you're exactly the kind of partner I would want to work with. And I'm not just saying that because we're friends lol.

From a corporate perspective - the more I hear TPRs blather about their superior skills and how they'll always be better than me because of this that or the other the less I listen to ANYTHING they have to say - including their sales pitches when they're cold calling me.

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Permalink Reply by bill josephson on July 23, 2013 at 1:23pm

Amy, you missed the point I'm trying to make.

If a TPR outreach effort is 150-200 calls/day their skills as a recruiter will likely surpass any Corporate Recruiter's whose outreach is far less. Only makes sense the more you do anything repetitively with training the better you'll be at it than others doing so far less. You could be the best recruiter out there.

But what I'm saying is superiority's immaterial when "less" is good enough. Getting the job done is what matters. Doesn't matter how good a TPR recruiter is or if superior to you. Bottom line is are you finding the people your employer needs you to find?

If the answer is yes, the company doesn't require employing the services of an outside superstar with fee cost when able to get the job done with their own resources. If you're able to access the same or enough quailty candidates to fill your opening, you don't need to utilize a TPR no matter how good a recruiter they might be.

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Permalink Reply by Matthew Harvey on July 23, 2013 at 1:49pm

Bill, how does a TPR make 150/200 calls a day and do everything else they need to as well!?

When I did some telemarketing work whilst travelling I was only managing about 80-100 and that was mind numbingly boring and the conversations were short.

I would rather make 10-30 productive calls a day than that kind of volume.