I'm a studious reader of sites like ERE.net, SourceCon, TLNT, and RecruitingBlogs. I've read the debate over the demise of agency recruiting. A debate which is filled with emotion, and where sentiments are strong.

Reading the commentary and online debate provides perspective, but to me it's not enough. That's why a recent conversation with a Director of Talent Acquisition [let's call her Jane] stood out. Her story typified the angst employers feel with recruiting agencies. Jane feels like the value recruiting agencies provide is something her organization should be able to do on its own. In her mind it's not typically about the expertise of the agency. More often, it's about sheer volume of effort and a sales transaction.

The conversation was high-level, so I asked Jane to provide more context as to why she feels this way. She detailed how she has been with the company for six months, and that she is evaluating all areas of recruitment. During her evaluation, she has found that one-third of the company's hires have come from agencies over the last year. This amounts to 40 agency hires, and a gold mine for agency recruiters. To the tune of over $800,000 in fees.

During the conversation, Jane's emotion was highest when telling me a story from a chat she had with a new hire that came from a recruiting agency. It was the absolute definition of why employers are frustrated with agency recruiters.

Jane's frustration is driven by "The $20,000 Email".

The $20,000 Email

Like it or not, corporate recruiters view agency recruiters as transactional.

Jane told me she's been asking new hires about their experience being recruited. She asks each of the new hires about their experience so that they can improve the hiring process. She does this across all departments of the company. Her conversation with a recent hire in sales [let's call him Steve] immediately caught her attention.

Steve told Jane that he received a LinkedIn InMail from a recruiter he had not talked to before. The agency recruiter gave high-level details about the opportunity, but Steve had never talked to this recruiter before. This concerned Jane. She decided to dig further.

Jane quickly learned that Steve had little vetting by the agency. The agency recruiter had one conversation with Steve, and did not meet him in-person as part of the process. He also told Jane that, to his knowledge, the agency did not check any references. In fact, they never even asked for his references.

Steve was told that he was going to be "submitted" to the company, and that they expected feedback within a couple of days.

In most cases, agency recruiters base their value on the networks and the influence they have with top candidates. In this case, the perceived value of the agency recruiter was identification of the candidate, the time to write an email, and effort of submitting the candidate.

Search LinkedIn. Send InMail. Conduct quick phone screen. Submit candidate. Stay in touch. Charge $20,000.

That's the narrative running through Jane's mind. Right or wrong, she's one of many Talent Acquisition Directors I talk with who are trying to bring agency spend down.

Obstacles for corporate recruiters

We learned a lot in our recent research for the Top 5 frustrations of corporate recruiters blog piece. Two of the main frustrations we learned about are directly linked to this article: corporate recruiters are managing too many reqs, and their online systems suck. Let's examine.

Corporate recruiters should be selling the company in-person.

Recruiters who are managing an average of 25 open requirements need help. As an experienced recruiter, I estimate that I can effectively "recruit" on 2-3 positions at a time. This includes sourcing, parsing, qualifying, submitting, etc. It's not possible for me to do a quality job from start to finish on more positions than this at a time.

Corporate recruiters have to offset the load, and recruiting agencies are one of the options they have. While there are a handful of corporate recruiters who have a dedicated sourcing team, most do not. Sourcing for 25 open requirements at a time, conducting phone screens, coordinating schedules, etc. is way too much to handle with any level of quality.

The second issue is that most corporate recruiters we talk to don't like their online recruiting systems. This includes the ATS, careers page, email, and various other online tools. The fact that these systems are not efficient adds to the problem. Now the recruiter responsible for all of those reqs wastes time trying to navigate poor systems.

This also impedes the ability to generate inbound leads from the web. Inbound leads which can make the hiring process way more efficient.

The two strikes on corporate recruiters can make utilizing agency recruiters essential to hitting hiring goals.

Finding balance

Great recruiters need to be great salespeople, just in a different context. Just as top sales closers have the best leads funneled to them, top recruiters should do the same.

In-house recruiters need to spend their time selling the company to top candidates. Your best recruiters need to be closers. They should be fully invested in the company, and closely connected with company leadership. This can increase their influence with the top candidates they are working to close.

There's always a lineup at In-n-Out. That's good inbound lead flow.

The lesson to be learned in "The $20,000 Email" is that inbound lead generation is critical. Jane's perception is that she essentially paid $20,000 for a good candidate lead. Her team had to do the rest of the work.

Jane agrees that paying for good candidate leads is the right thing to do. However, she doesn't believe that $20,000 should be spent on sourcing a single candidate for a role they hire for consistently.

The problem most companies experience is that they do not take a systematic approach to sourcing candidates. In-house recruiters struggle to find time for identifying good candidates, connecting with them on a personalized basis, and tracking them for future hiring needs. This creates the $20,000 opportunity for the agency recruiter.

The angst I hear from employers about recruiting agencies is frequent. The question is...is the angst more about the recruiting agency or a product of their frustration with their own recruiting department?

The answer lies in having a balanced approach. Even the best in-house recruiting departments will need the support of agency recruiters for certain searches. They may also need agency support when utilizing contract labor.

The key is to set up an inbound talent lead engine. This can reduce sourcing costs, and allows in-house recruiters to spend more time selling top candidates on the company.

Of course, that's not an easy thing for recruiting leaders like Jane to achieve. But the fact is that in-house recruiting leaders are looking for ways to reduce their agency spend. There's no debate about that.

[From Ongig.com]

Views: 1453

Comment by Jerry Albright on August 12, 2013 at 5:19pm

Jane is way off base. 

Comment by Linda Ferrante on August 13, 2013 at 9:42am

Excellent article, Jason.  You have articulated (or rather, Jane has!) one of the most frustrating aspects of this industry: the seek and send or the find and forward.  There is virtually no effort put into the 'recruiting' of the candidate, yet the company thinks there is!  When we speak with potential new clients, we ask a lot of questions pertaining to their perception of recruiters and if/how much value they bring.  Our process is pretty extensive, so the concerns Jane had wouldn't come to fruition here, but the initial concern is relevant.  I welcome our clients to talk to our candidates about the process!  If the candidates feel short changed in anyway, we need to know that as well!

Great article.  I'm going to forward it to my partners.  Thanks again, Jason!

Comment by Amber on August 13, 2013 at 11:27am

Even if that was exactly how a candidate was found, why does it automatically mean less value was received? If it is the right person for the role, and Jane's "crackerjack" team couldn't (or DIDN'T) do it then why blame the agency? Sounds like Jane better learn how to train her team. OR maybe she can set up an inbound talent lead engine.  If that's all it took to place someone, they could easily handle even those 20-25 reqs at a time! 

Companies who want to reduce the use of agencies need to look at the internal recruiters who know what their doing and do the same.

Comment by Stephen Nehez, Jr. on August 13, 2013 at 11:37am

The frustration outlined in this article is all about the trimmings.  The value-add items outlined by Jane would be things that are negotiated up front.  The core job of an ... let me be very clear ... agency Recruiter, otherwise better titled "Headhunter", is to find people, screen them, and introduce them to the company.  Period*.  (*  Unless other things were negotiated up-front.)

I daresay the frustration is rooted (deeply) in the "money value".  Frankly, in my humble opinion, there are (I'm taking a deep breath here and treading lightly) some who are annoyed by the fees paid to agency Recruiters BECAUSE "all they did" was find the candidate.  The secret mantra for some who are not agency Recruiters yet observe our actions is as follows:  "Anyone can do THAT."  (Meaning...find a candidate.)

But, see, that's the trick.  Isn't it?  Finding the person and getting them to agree to apply for the position (or to the company generally). 

Last month in my office of four Recruiters, exactly 10,105 phone calls were made and this resulted in over six permanent (i.e. not contract) placements.  Anyone, and I mean my peers or otherwise, can criticize this statistic and we continue to do what we can to develop efficiencies.  Unfortunately, e-mail, voicemail, waving flags, blowing off fireworks, or whatever sourcing/"fishing" technique MUST be coupled with a phone call to the potential candidate.

Jane attempts to join the e-mail and the fee at the hip and this is simply wrong.  I venture to guess that every motion and action in our office is all additive to the end result of the successful placement.  I suppose that would include juicing up on a cup of coffee at 2PM when the eyelids are getting sleepy.  Five minutes later, if you identify a decent candidate, would that be considered a $20,000 cup of coffee?

Fee envy with our clients can only be watered down with successful headhunting.  If anyone can do it, I'm hiring.  Give me a phone call.

- Steve

Comment by Suzanne Levison on August 13, 2013 at 12:03pm

There are clients who only want us to find the right candidate. Then, they wish to take the lead from that point on. Being client centered recruiters, we are invested in the client and their process. There are other clients who want our involvement throughout the entire hire experience. From finding the right match to negotiation of comp package.

Comment by Amy Ala Miller on August 13, 2013 at 12:11pm

so this is what recruiters do....

Search LinkedIn. Send InMail. Conduct quick phone screen. Submit candidate. Stay in touch. Charge $20,000.

Would seem to me that the "stay in touch" part is where the real value / 20K justification should lie. Did the recruiter NOT help close the candidate? Did they never pre-qualify, test for offer acceptance, walk through resigning his current position, talk to the candidate about any competing offers he might be getting? And that's just the candidate facing side.

If the agency recruiter had ONE conversation with the candidate, how on earth did the agency know to send a bill? Clearly there is more to the story here...

Comment by Linda Ferrante on August 13, 2013 at 12:15pm

Now you've got me thinking about this!  Maybe Jane needs to be clear in her expectations of the search firms she's working with.  She's relatively new, right?  6 months on the job?  Once she figures out what she expects from her internal staff, and then communicates her needs with her search firms, THEN she can make an assumption as to the value of that phone call.  

I've always approached recruiting from a 'full service' standpoint, screen resume, phone screen, face to face interview, testing, background check, drug screen, etc.   Our entire process consumes about 8 hours per candidate BEFORE even presenting them to the client.  As far as the fee?  Clients know what to expect and we deliver.  Our successful fill rate is extremely high because of our process. The fee is a non-issue with our clients and our deliveries.  

I can certainly see where the discrepancy comes in when her expectations aren't what being met. That's a whole separate issue.

Comment by Stephen Nehez, Jr. on August 13, 2013 at 1:32pm

UPDATE:  At lunch, it's been reported that Jane questioned the waiter about her spaghetti.  Apparently, the cook boiled 50 cents worth of noodles and tossed it in a buck's worth of sauce (FROM A CAN!!!) and they charged her $9.  Even though Jane was completely satisfied with her lunch, she left the restaurant feeling ripped off.

Comment by Jason Webster on August 13, 2013 at 1:32pm

Thanks for all of the awesome comments! The article is based on the opinion of one Talent Leader, but her thoughts are echoed by others. Ultimately, these leaders are paying the bills and this is their perception.

I absolutely believe agency recruiters bring value to the table. I spent 14 years in an agency myself. The opportunity here is for the recruiters who show more of their work to the client in an effort to be a true partner, and also setting the correct expectations up front. You will win the business of these Talent Leaders in the long run with that approach.

Unfortunately, not all agency recruiters work this way. In fact, my new company is currently in the process of hiring and I get unsolicited resumes/candidates from agency recruiters at least 3 times per week. Each of the emails go on about how great the candidate is, yet I've never talked to this recruiter before. Why should I trust their opinion? Those are the types of instances that give the wrong impression about recruiters.

I appreciate everyone's opinions, and reading the article. Have a great day........JW

Comment by Edward N. Woycenko on August 13, 2013 at 1:37pm

It would be interesting to find out what Jane's background was prior to her 6 months in this position.  Most companies do a terrible job of vetting outside recruiters. The company needs to find out if the recruiter specializes in the industry, what their value add proposition is, obtain references from previous client companies  and lay out the expectations the company has, like meeting the recruit on a face to face basis etc. It doesn't matter what the process was that resulted in the hiring of the individual, what matters is the value the individual brings to the company.  As long as companies view hiring, training etc. as cost factors rather than investments, the best results they can hope to achieve are to be mediocre.


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