I know what your recruiting clients are thinking – do you?

Everyone says recruiting is changing. The evidence is overwhelming that we are on the cusp of a seismic shift in the way our industry needs to work. It is all changing. Client expectations, candidate behavior, social media, technology.

But how do we sort out the reality from the hype? And what should the ordinary recruiter do to prepare for the future?

Well, a great place to start is to make sure you understand what is different about the way our clients are thinking now. Have they changed their outlook from prior to the GFC? What are their pain points? And how is all this going to affect recruiting, and indeed our industry as a whole?

Over the past six months I have personally been on about 50 face-to-face client visits. In Australia, the UK, Singapore, Japan, Malaysia and France. Typically I have met with the CEO, the CMO, or the VP responsible for Talent and Recruiting.

And I have taken these wonderful opportunities to ask those senior executives exactly these key questions, and more. What are they thinking? What is their attitude to hiring? What is working in terms of recruitment? What is not? What do they plan to invest in? Are they going to use third-party recruiters more, or less?

And I learned a lot. Too much to share completely in this blog, so I chose one compelling theme. And it is this.

The critical thing you need to know, if you did not already, is this. In boardrooms across the world, CEOs, CFOs and HR Directors, have a fierce desire, backed up by real strategies, to drive as much cost from recruitment as possible.

Hiring, its cost, its effectiveness, is under an intense spotlight. Everywhere.

This is driven by good old-fashioned cost-control as you might expect. CEOs are under intense pressure to deliver growing profits as the economies recover. But also something new has emerged.

Increasingly, I now see a very deep cynicism of the value of third-party recruiters. Business leaders are now changing their whole recruitment strategy accordingly. Internal recruiting teams, RPO, talent technology, and a range of direct sourcing tactics.

And for many companies around the world, social media has come as a godsend, because they see it as a great channel to connect with talent directly and cut you (and me) out!

And that is what many intend to do.

Our challenge is going to be to woo those ex and prospective clients back. And to do that we are going to have to prove we can give them something they can’t get themselves, at a cost that they perceive to constitute value.

This is the massive issue for us all in recruiting that I learned from speaking to your clients.

Differentiation and proof of value

And it will send many recruiters who get it wrong out of business… soon

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Comment by Richard Cialone on August 18, 2011 at 11:49am: Drive down cost? Yes. Increase effectiveness? No.

All of the strategies you mentioned (Internal recruiting teams, RPO, talent technology, and a range of direct sourcing tactics), as well as one you have not (BountyJobs) demonstrate the desire to reduce the cost of recruiting. But none of these automatically increase effectiveness (or even keep it from declining). And the reason is that recruiting is still considered a junior level job function.

RPOs are abysmal. Sure, they're cheap...because they put junior recruiters on the case. But it's a commodity business. Forget about any strategic added value.

You can create your own internal capability, but unless you hire experienced, business savvy professionals to represent your employment brand, you'll not be as effective as you can be. It's one thing to use new technology and social media as tools, but the underlying capability of each user is still key to success. But even when there are highly competent recruiters on an internal team, if there's little to no support by leadership and/or the user community, the strategy will fail. I've personally witnessed this in some very large scale companies.

The pervasive use of BountyJobs by companies small and large (including top Fortune companies), clearly demonstrates the commoditization of recruiting in the minds of corporate leaders.

Yet, there are certainly companies that have strong recruiting programs. The question is, are they better than the commodity houses? Intuitively, I think most people would say that they are, but only time will tell. And that's only if someone is measuring results. I'm not certain that's happening.

And among those that believe the recruiting function requires a strong business person, most include external search resources, as long as they can add some value so that "price" does not equal "cost".

Comment by Ken Forrester on August 18, 2011 at 12:06pm: Thanks for letting us know what our clients are thinking about Greg.

So what you are saying that for TP recruiters to show Differentiation and proof of value as you put it; they must deliver a higher quality service at a reduced cost to be of value to clients? What specific ideas do you suggest and does the concept of outsourcing recruitment functions has to be re-sold as a solution?

Comment by lisa rokusek on August 18, 2011 at 1:23pm: I sense the trend, and indeed I feel it daily. However, I do think that this is nothing new. The downward pressure has been real for a long time. It might have been real since there were recruiters. If my clients can do it all themselves they will. For me, our business is about being there for the times that they need us, not shoving ourselves down their throats. A tool in their toolbox. Since success is about timing and placement and positioning - we are often still a useful tool. The outside perspective still has value and our reach is difficult to replicate.

Comment by bill josephson on August 18, 2011 at 5:50pm: Lisa's right. Lots of recruiting winds in our face.

Technology works against us. Internal references work against us. Internal recruiters work against us. Only getting the tough assignments works against us. Downward fee pressure works against us. Passive candidates using the interview process receiving offers used as leverage to correct the problem in their present employment works against us. And that mindset of plain not wanting the expense of using a recruiter works against us. The shrinking of jobs due to the awful economy works against us. Offshore outsourcing works against us.

I maintain business keeps getting tougher. But if you hang out here long enough you hear the "best year ever" comments. Keep finding people your clients can't find while serious about hiring. It's, IMO, our only shot.

Comment by Greg Savage on August 18, 2011 at 6:13pm: Richard, agree with your comments, especially about RPO. Bounty Jobs we don't have in my part of the world. Obviously something to watch for "

Bill, I feel you have hit the nail right on the head with this comment of yours"Keep finding people your clients can't find while serious about hiring."

Lisa, I agree, the desire to cut recruitment costs is not new. What I feel is a little different now is how seriously this is now taken, and how its now a CEO-level business imperative. Before, I felt there was lip service paid to cutting recruitment costs and in the end the default action was "just call a recruiter". I feel now that serious money and manpower is being allocated to the issue of talent.

Ken, I feel the only real way forward is building staffing business that can consistently deliver talent that our clients cannot find themselves. Now that sounds obvious, but in a world where companies are allocating resources to find their own talent and in a world of social media which allows talent to connect directly with employes like never before, that means successful recruiters need to change their tactics. I am no expert in this. We are feeling our way in the dark like most, but in our case we are investing in an aggressive social media strategy to build talent communities in our niche. We are investing in our global data base of specialized talent and communicating weekly with those talent -active or passive. We have also invested in automated marketing technology which allows us to track candidates behaviors across all our platforms, be it our website, blog, FB page or twitter feed. We are shifting our marketing spend from clients to talent via events sponsorship, special interest groups etc and we are learning more about digital talent search tactics. Through these and other strategies we plan to move from only working with active talent to tapping into a larger pool of passive candidates, convert them over time to active, and thereby have something our clients really want and will pay for . UNIQUE candidates that they could not find or engage with themselves. We have them becuase we are specialized, expert and we work it 365 days of the year. That's the plan anyway!

Comment by lisa rokusek on August 18, 2011 at 6:49pm: And Greg, I didn't mean to demean your point. There is more downward pressure. Hell I feel it every day. As far as social - I know its power, and I know that employers have access to many more candidates than ever before, but that access is a double edged sword. The ones that can't successfully do the dance all the way to the close will still need us. Not all, but hopefully enough for good recruiters to work smart and have a nice life.

Personally I am starting to get a little exhausted by social technology. I was facebooking and twitterering and blogging long before the norm and I am starting to feel a fatigue these days. I think a lot of candidates will as well.

I don't disagree with you at all, but I don't think internal recruiters (even good ones, and there are many) won't totally replace us completely. The trusted 3rd party really is a necessary function for many reasons. But only when it is trusted and good.

When we see people not updating their Linkedin (or checking that email very often) the phone will become more popular again. For some of us it never stopped.

Comment by Greg Savage on August 18, 2011 at 6:59pm: I think we are on the very same page Lisa. I too and tired of SM and if it was not such a monster for me now (In that I have a big following on twitter, my blog etc) and it did not deliver results, i would gladly can it totally! Also agree that internal recruiters etc will not replace our industry per se. I just feel us 3rd part recruiters need to adapt and evolve. Some will, some won't. Thanks for reading the blog and your comments. Appreciated

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