Is Recruiting Becoming an Unhealthy Profession?

If you took a photograph of the recruiting Industry, it would look like most people you'd see on the streets every day!

Instead of making it better, technology has bloated the recruitment process. Its a process that now lumber around in HR departments all across corporate America—where the objective of hiring the best talent has been replaced by fast, cheap & easy tactics-with tools that are designed mostly for collecting resumes-administered by recruiters who do not know the fundamentals or have the passion for the work-for organizations that no longer care about their most important asset.

This is an alarming trend and the perfect example of what was predicted back in 1954. Well, it wasn't exactly about the recruiting Industry; it was about the food Industry-but the same thing has happened to the recruiting Industry!

An individual wrote a newspaper article which in today's standard-went viral. He was very upset that the quality in foods was declining because production objectives had shifted from taste to saving money. He said that "science has spoiled my supper" and predicted that this trend of eating low quality foods would eventually lead to an unhealthy American culture.

So, how does the food Industry relates to an unhealthy recruiting Industry?

Back in high school, one of our English class assignments was to read this particular story, formulate our thoughts and participate in a classroom discussion.

After what was written in 1954, discussed in high school and after 20 years of experience recruiting healthcare executives, I have the unique experience to connect our current healthcare crisis to the trend in the recruitment Industry.

Let’s first take a quick look at what was said about foods or you can read the original newspaper article here. The author stated that food is nutritious and very tasty when prepared with fresh and natural ingredients and by someone who knows what he/she is doing. The problems with preparing delicious meals however are higher costs; fresh and natural ingredients aren't cheap and have very limited shelf life. He also pointed out that because humans will accept a lesser taste if it was the only choice available, science played a role in extending the shelf life of the natural ingredients. The products were very appealing to the eye; they came in neat packages with beautiful pictures, but on the inside they lacked quality and taste. Why? Because, they were produced with artificial ingredients & flavors, chemicals and freezing methods for easy transportation & storage and to a greater extent-generate larger profits from a longer shelf life.

Why did people buy crappy tasting food that was loaded of harmful chemicals?

Because it was cheap, easy and fast- it didn't require the knowledge of a culinary genius and meals could be prepared by anyone, in little or no time. When food lacked quality in taste, you’d need to eat way more to satisfy your cravings, was his concern. "A slice of my mother-in-law’s apple pie will satiate you far better than a whole bakery pie" he explained.

So here we are, after decades of eating unhealthy foods, it has taken a toll on the health of many. As a result, our current healthcare system is in shambles and in desperate need of reform, just as he predicted in 1954.

The motivation that transformed the food Industry has also taken place within the recruitment Industry,

Recruiting is a $100 billion Industry with lots of unhappy campers. Over the past 15 years, it too has been transformed by technology to become more efficient, but cost-of-hire has not decreased and quality-of-hire has not increased. Why? Because most of the recruitment vendors are selling the same solutions-that doesn't deliver on quality hires-are bought for the wrong reasons-used by the wrong people-has frustrated job seekers and discouraged the best talents from engaging in the hiring process.

Also, recruitment strategies are far too often marketed as a one-size-fits-all solution. For example, if social media was successfully used by employers such as Apple or Pepsi; then just like magic social media would become the universal best practice recruitment solution for everyone. Vendors are well aware that no two job applicants are alike, no two companies are exactly the same or what works for a large company might not work for a small one or a nationally recognized brand is totally different from a no-name brand; yet they promote social media as the silver bullet solution. Think about it; what would be the competitive advantage to one employer if all employers were using the same vendor/tactics/tools to steal employees away from each other?

Another reason the Industry is bloated is because the products do not satisfy the need. The need is to recruit the best talent, but these products are marketed for hiring talent fast, cheap and easy. Very rarely good is the result when you add fast, easy & cheap to the equation. So why would HR decision makers continue to invest corporate dollars in such products?

Self interest! Humans make buying decisions based on emotions and are later supported by logic. In this case the buying emotions are personal gains through internal recognition that leads to faster career advancement. The logic is buying a recognized solution from a reputable vendor that will save a bundle; specifically dollars saved by hiring internally compared to the amount it would have cost if outside agencies were utilized.

At the end of the day, a dollar saved is a dollar earned; but the hidden cost of hiring marginal talent greatly out-weighs the savings and will ultimately deteriorate the health of that organization in the long run.

And one more thing: With more reliance on technology, most of the skilled human interactions have been replaced with automation, so the need for skilled recruiters has diminished. As a result, the engine now behind these recruitment tools are junior recruiters-managing heavy req. loads-with very little time for the warm and fuzzy interactions (which is of very little interest to them) that job applicants demand. So basically recruiting today consists of robot-like recruiters-using robotic type tools-to process a bunch of faceless robots-to select & hire one robot.

We are included in the group that is adversely affected from the shift in food production from quality & taste to costs & profits. That’s because our choices are limited; we must buy whatever the food manufactures are selling. The end result is the bloating of a healthcare system and the poor health of the people who rely on the system.

The shift from quality hires to fast, easy and cheap recruitment strategies has caused the bloating of the recruiting Industry by building employers with not the strongest, fittest and the brightest employees, but with the most active job seekers who may not be the best. And with billions of dollars spent to fight this war for talent, it is unfortunate that what is considered an organizations’ most important asset is treated like a commodity-brokered at the cheapest cost.

Fast, easy & cheap is not just about food or recruiting-it has become our expectation and the culture that we live.

“If this is so, the process may well begin, like most human behavior, in the home—in those homes where a good meal has been replaced by something-to-eat-in-a-hurry. By something not very good to eat, prepared by a mother without very much to do, for a family that doesn’t feel it amounts to much anyhow” Philip Wylie, 1954

Ouch..

Comment by Abby Sorenson on May 17, 2012 at 2:42pm: I think this article poses a good point, that hiring has become a cost saving effort rather than an investment in the future. Most companies are looking at the bottom line and answering to a board of investors who want to know why $20,000 was spent additionally to recruit talent when there are in-house HR people already earning a salary, using technology and receiving benefits. It is our job to sell the value of the investment rather than the initial possible savings.

Further I must add that it our industries fault that fees are being driven down and the process has broken apart. We allowed the "Big Guys" to come in and lower pricing and offer less quality. We need to continue to sell against that and provide a true value to our clients and not just a fill.

Comment by bill josephson on May 17, 2012 at 2:55pm: Abby, your first paragraph is the resistance I encounter so only given positions to work on discarded by HR--low success probability. Then it's my decision if I want to work them. They can often do it themselves using technology, specially social media networking.

On your second paragraph I have to plead my own uncertainty. Was/is it large agency competitors, outsourced recruiting firms, or is it market conditions that fees are being driven down? I always thought it was supply and demand.....less demand for our services so our services more commoditized. I could be wrong, and persuaded otherwise.

Comment by Amber on May 17, 2012 at 3:43pm: @Bill - what tools/resources are NOT available at this point to the hiring company? And what tools did recrutiers have before that those companies couldn't have had? (I am not being snide, I just don't know what they are!)

I think one of the biggest factors is for potential or current clients to know and accept why what they're doing is not getting the pople they want. I wish I knew the total story of why so many have specific, internal recruiters but still are paying an outside agency. I can tell you some of the things that don't work with most internal recruiting processes, but cannot explain why hiring companies have not either eliminated them or found a way to make it work.

The job market has not been the strongest these last 4 years or so, I agree with Bill that is a factor in the amount of orders a TPR might get. But some of that seems to be turning around so the orders should go back up.

Comment by Steve N Odell on May 17, 2012 at 3:48pm: @ All- many of our healthcare clients have internal recruiters. Many times they are working at the lower levels, but often competeing with us. Often the client has an internal candidate they are considering along with ours. I see them often choose ours anyway because they were obviously superior to the internal one. For positions that are very critical to the success of a dept. they seem to not care about cost, just the right person. All our fees are 25% or higher. So even though they have the name of a potential candidate can they deliver them for an interview. Ken said " behind these recruitment tools are junior recruiters-managing heavy req. loads-with very little time " (not to get that old internal vs external argument going again). But we all know it's timing and presentation. I can talk to them today and they have no interest and you talk to them next week and they are now interested. No one person is going to be aware of ALL the best people available at that specific moment. Our ratio is for every 4 candidates we get interviewed (not all at the same company) 1 will be hired. So that means 3 were not. It's a #'s game, never forsaking quality for quantity though. In my 42 yrs we have worked a lot of different markets. It is my humble opinion that most still want the best candidate and are willing to pay for it. If they aren't- next. You have to move on to those who will pay and share the same vision for the process.

Here is one big negative regarding technology in our industry--In some of the agreements we get from clients there is a paragraph that if you send them a candidate that is in their database EVEN if they have had no communication with that person in a year or so they will not accept your candidate. I don't sign those. With today's technology a person could have sent a resume to many openings to many companies and have no idea where all they did send it. Jeffery Allen, legal writer for The Fordyce Letter (# 1 publication in recruiting industry) wrote about a tact that has been going on to avoid paying a fee. You send them a resume, they have the "Geek squad" tech minded internals go through Monster, Careerbuilder, etc to find the candidate and then tell you they already have it. Even if you blind it, they can find it. They query "find operation mgr in Atlanta that speaks Mandarin Chinese". It was on the resume. I would like to think that none of my clients would do that. But guys we are populating their database. This is the biggest threat to our industry. I am going to write a blog about the things that we see in contracts these days. Whoever is putting them together, whether HR , Legal, or procurement, it is impeding the organizationin hiring good candidates because a lot of us will not work under that type of agreement.

Comment by bill josephson on May 17, 2012 at 4:22pm: Wow, a couple of superb posts to try to adequately respond to.

@Amber, the recruiting advantage I always had was an over the phone ability to penetrate a client's chief competitors finding them talent with direct applicable experience. They would tell me where they wanted someone from--I'd target that company. They were either prevented, or wary, of directly phone recruiting, themselves, out of fear of retaliation, or suit for piracy or harrassment. So there was a wall, real or imagined, preventing them from directly recruiting plus I'd gain access to people unbeknownst to them.

So my chief tool was the phone--and I could direct recruit into specified targeted companies accessing people they didn't know or couldn't themselves.

That advantage is gone as they can access these people from google or boolean searches seemingly able to directly call in, at least with people they can find on the Internet.

@Steve--you hit on a number of issues I daily encounter. Being used to populate a client's database is a huge issue. Being used to unknowingly allow them to compare other talent versus their own internal or external candidates then hiring their own. Sending resumes where the client, due to their HR software package such as iCIMS, wants complete contact information to potentially grab after your fee agreement's candidate ownership terms expire not only populates their database, but enables them to find the person on LinkedIn then networking through them for other related professionals they could contact at any time. Breeding your own competition. You may get along great with recruiter A. But if he/she leaves can you trust recruiter B taking their place? Every resume sent, you lay yourself candidate bare contact information wise.

Sending candidates companies can find on Monster and not having them honor a referral? You bet. it's why I tend to only work with gainfully employed people not having their resume posted anywhere.

Internal Recruiters are definitely competing with you, even when they say they aren't. Giving you the jobs they don't want to fill, or can't--specially deeply flawed or relo jobs with low success probability. I find myself checking a client's employee directory months after an unsuccessful assignment to see if they might have hired one of my candidates--twice they had. Both times my odds of winning were less than 50-50.

I find there's lots to worry about. Lots of ways one can easily get taken advantage of. As Ken Forrester stated, it's about money saving. My concern, aside from finding quality clients truly in demand of my services, is not seeing the rewards of my hard fought labor. And not having a team dedicated to assorted protection.

Bottom line, for those in a vibrant discipline niche where your services are in demand, I commend you. I'm in a parallel universe more along the lines of what Ken Forrester depicts. A tough fight for recruiting market relevance in an environment driven by technology making candidates more visible needing you less combined with ruthless cost cutting measures certainly giving this 32 year recruiter pause.

Excellent posts.

Comment by Steve N Odell on May 17, 2012 at 4:28pm: @ Abby and Bill - " We have met the enemy and it is us". The reason that it is harder to hold the line on fees is that too many firms are willing to negotiate and will sign off on unworkable fee agreements, even when they know it is doubtful that they will be able to fill it. Someone may drop in their lap from Monster. So the client thinks" we have a lot of recruiters that have signed this so it must be ok with the majority of recruiters". I know a guy who works out of his house and had the same client that we were talking to about working with. Lots of bad stuff in the agreement. I asked him if he signed that. He didn't even realize what all was in it. He said ' I sign them them all. If anything happens, what are they going to do to a small guy like me?" So some clients are interviewing people, my question is WHO are they interviewing. Probably not the best because they are not working with the best. They are too focused on price.

Comment by bill josephson on May 17, 2012 at 4:39pm: @Steve--great point.

Those offering cut deals often get a time period to show what they can do--driven by cost savings.

I might not be utilized as I'm a one man show--some companies prefer a myriad of services for one stop shopping purposes whereas I can perform all the functions, but strength is in recruiting so am limited in concurrent services provided.

Again, my number one question about recruiting, amongst all the issues touched upon here, is market relevance. When a company can utilize internal recruiters using technology doing everything I'm doing, why do they need to pay me (Third party Recruiters) a fee? And if you're not impacted now, will you in the future?

Comment by Steve N Odell on May 17, 2012 at 4:39pm: @ Bill- I feel your pain Brother- Steve Finkle(industry trainer) says put together a spreadsheet of everyone who has a TI or face to face and call that company 90 days or so later and ask for the person you had in the process. You find $$. I don't go to that extent but will follow up with some that seem to be hot then fizzle. If you have the typical agreement (1 yr from referral) you do have a very strong case. I will fight for those. Yep, it's happened to me too but I have never had to go to court. It is always been paid when confronted and if I am right. Especially after my attorney wants to do depositions in Texas.

Comment by Steve N Odell on May 17, 2012 at 4:49pm: @ Bill- Oh I am impacted now too. You have to pick and choose which position to focus your time and energy on. We have an 11 desk operation with 3 additional researchers. That is an advantage. Some folks do good in a solo gig. Your best chance of success is doing what you emphasized. This is a phone business. And you are able and willing to use it to make contact and influence/sell them on an idea or encourage them to take a look. I pose "What do they have to lose but a little time but it could be a life changing experience."

Comment by bill josephson on May 17, 2012 at 4:53pm: @Steve--I subscribe to Finkel, have his book, and have heard him directly train--he's very good.

One case the company had a wall of separation between corporate and a subsidiary so were able to pass contact information from one to the other. The other they contacted 1 1/2 years later for a different position. Neither were my odds better to win than lose.

Again, lots to worry about as seemingly we're more and more laid candidate bare