What’s wrong with recruitment…and how to fix it!
This could potentially be a VERY long post because I’m talking about an industry that has many inherent flaws. In my opinion, many of the problems we see stem from some fundamental issues that recruiters have wrought upon themselves and customers unwittingly propagate.
The paying customers’ perspective
Having been a customer myself and in speaking with countless other recruitment customers, I can tell you that their complaints are very consistent.
There’re a lot of them so I’ll list out the top 10:
The recruiters’ perspective
There’s a pretty similar list of gripes here too:
And the sad thing here is the true victim of this lack of accountability and partnership – the rather important people – the TALENT!
What’s to be done
It’s tempting to work through each of these issues one by one and talk about solutions but we’d be treating the symptoms, not the core problems.
It seems to me that most problems stem from the bounty hunter style pricing model prevalent in the market where the fee is contingent upon success. With this model the customer has nothing to lose by being non-committal and farming the role out to multiple recruiters.
To draw an analogy, this model is like giving your tax return to 5 accountants and telling them that you’ll only pay whoever gets you the quickest result. If you did that, what kind of result would you get? I bet any accountant worth their salt would turn it down instantly and if you were lucky enough to get a few to agree how would they approach the assignment? They’d rush it, they’d probably cut corners so they don’t invest too much time in case they don’t get paid. Just like you, they’d be hedging their bets.
So when we do the same thing in recruitment a few important things happen. Because we’re dealing with a number of recruiters this soaks up so much time that it’s too much effort to do a proper job brief. In fact it’s too much effort to call everyone back or respond to the CVs they’ve sent. We haven’t spent any money so it’s no skin off our nose, right? Then the follow-up calls start and we get fed up pretty quickly.
The recruiters know how the game works so they’ll make a call on where your role should sit in their priority list. Most good recruiters will successfully place between 25% to 50% of the roles they work. That means they spend their own time and money on 10 jobs but only get paid for 2.5 to 5 of them (sometimes none).
So recruiters usually look at their jobs and think “what can I definitely place?”. This is where the bulk of their time will (should!) be spent. If you’re not a top priority because you don’t return calls or you have too many recruiters working your role, or your fee is too low, or you’ve been looking for ages and you’re not paying enough money… then guess what, you get a half-hearted effort.
More importantly we’re motivating recruiters based on speed, so it’s in their best interests to try to get the best return from the least amount of effort. This encourages what we call a flick and stick, or spray and pray approach. Basically, this means playing the numbers and throwing as many CVs out to as many customers as possible knowing that the law of averages means that something will stick. The scary thing is, this is so entrenched that Recruiter’s KPIs are actually measured and rewarded based on these numbers! I hasten to add not at 33 Talent for this very reason (check out our ROWE article for more info)
There is a better way!
I think the solution is to throw out the contingent fee model. Instead, work with one recruiter and pay them a portion of their fee upfront. This commits both parties to getting a quality result and puts your job firmly at the top of the priority list. It means that the recruiter doesn’t have to cut corners to get you a CV before someone else snags the fee. It means recruiters can afford to take on half the number of jobs because they know they’ll get paid for all of them. It means candidates aren’t getting calls from 5 different recruiters and don’t start thinking “jeez these guys (Client X) must be desperate!”. It also usually means you’ll be able to negotiate a discount because you’ve removed some of the recruiter’s risk.
Is this risky for you? Yes it probably is, but in the context of all your recruiting over a number of years, doesn’t it make good business sense to spend time up front picking a good recruiter with good references and a strong track record? Then build a strong, exclusive relationship with them until you get to the point that they know your business better than most of your staff. If they let you down, find another agency. You might have the odd false start but over time you will get much better results and you will absolutely save money.
A common misconception
I once had a customer say “But I’m buying a product, if I like what’s on your shelf then I’ll pay, if I don’t then I won’t”. Sorry, but candidates are most definitely not sitting on a shelf waiting for your call! You’re not buying a product, you’re buying a service. You’re paying for someone to go out to market and represent your business. You’re paying for someone to search high and low, ask for referrals, network extensively and generally do whatever it takes to find you the perfect person.
Having said that, the best recruiters invest heavily in their network so they will often be able to recommend someone they’ve already met. But it’s important to recognise, you’re still paying for a service. You’re paying for someone to successfully broker and secure a long term relationship on your behalf that you can then benefit from quickly. Just because they are in the recruiters network when you ask doesn’t mean a huge amount of time (usually years) of effort hasn’t gone into making that the case
If you spent $150K (on say a piece of Software) in your business, would you spend a lot of time with a vendor to make sure they really understood what you wanted? You bet! Why is a $150K candidate any different? It’s a big investment and very expensive if you get it wrong so it pays to invest the time with quality partners to make sure you get it right.
At 33 Talent we have built a new suite of models that make this transition easier for clients. One of them, for example, only requires a small proportion up front and then a reduced success fee at the other end which isn’t payable if the Talent comes from an ad as opposed to Search & Networks. This reduces waste and risk on both sides for a win win.
There is an element of Trust required still sure, but there is in any meaningful relationship in life! Whatever your solution, Clients and Recruiters need to start partnering more and at a deeper level to make sure the ever growing disconnects that also effect the Talent (And therefore Employment Brands) start to be bridged and turned around.
Absolutely spot on - as a client and a candidate and as an ex-headhunter I have been saying for ages that the contingency model stinks. Recruiters call themselves consultants but do consultants work on a no win no fee basis - and do any of the clients? Nope.
The analogy I have always used is that recruitment agencies are the estate agents of the HR world.....and as a client we get the service we deserve if we don't want to pay for the time and expertise until a candidate is landed. HOWEVER, sadly it is also my experience as a hh working on a retained basis (33%) that clients can still be pretty shoddy in terms of devoting time to briefings, feedback and coming back to you in a timely manner. At least you have been paid some money, although the candidate experience is not good.
Perhaps we need to push harder to get recruitment taken seriously within organisations - hiring managers and internal recruiters need to be far more professional. And not just because they are missing talent but also because it is just that. Professional.
Thanks Mitch Sullivan
Thanks Julia Briggs - couldn't agree more.
I read the article and would love to comment. I work in legal and I have tried to get a retainer up front and the answer has always been no. It is frustrating to be working on a opening and call an Attorney have them say is this for X and you say yes and than the candidate says I have already been called on this by two other recruiters. With the market the way that it is my clients don't see the need for paying a retainer and as long as we as recruiters are willing to go along with it than the clients see no reason to change. Maybe I am wrong but if all recruiters went to a retainer type fee than the clients would have no choice but to operate that way as well. As long as recruiters are willing to do a contingency based service I don't see things changing a whole lot. I have only been recruiting since 1998 but things seem to have changed, again maybe it is how the job market is but when I first got into recruiting I remember when clients had an opening except for the occasional butthead most companies were sincere about filling the opening and if you presented a good candidate they were willing to interview them. Now, it takes forever just to get a response on the resume forget about the interview process. I had a client send me a separate notice saying they were paying a premium above the fee for Attys with a computer science undergrad degree. I had sent them such a candidate...IT TOOK THEM 3.5 WEEKS..WEEKS mind you to get back to me to tell me that the candidate did not quite have what they were looking for. I have now learned that I do not place a candidate with just one client I now with the candidates permission market them to several firms and who ever gets back to me first is the one that gets the candidate.
When I have a good candidate I will reach out to the Partner that best matches the candidates background and talk with them about my candidate. By the way I do interview my candidates before I present them. Any way once I have done that very seldom do I again get to reach out to the Partner I am now dealing with the recruiting coordinator. Frustrating with a capital F. If I try to speak with the Partner that actually has the need I will get a call from the RC telling me that I need to speak with them and not to "bother" the Partner. I have a few partners that I can reach out to when it comes to dealing with a candidate but not to many and I try not to abuse the privilege.
Don't even get me started about the guarantee period. My clients will start billing out the Attorney usually within the second week of their start date yet I am to guarantee that the Attorney will stay any where from 6 months to a year. Which means that they earned back the placement fee within 3-4 months of the hiring.
Thanks for the article..it was thought provoker!!
How long does it take for comments to be approved for viewing?
Firstly, thanks for the comment! Secondly sorry it was delayed, I live in Sydney so was asleep!
Re your comment, I wouldn't worry about changing the market, I would only focus on changing how you engage with clients and getting them to understand your value and why you work retained. If they understand and want that then they will begin the trust cycle. Some come to it quickly and others slowly - and sure others never at all but these simply put, aren't my clients.
As you say, the proactive marketing of talent can be done the contingency way and I engage with the clients on the no retainer list in this way.
Have a great day!
Robert, why is it necessary for you to moderate comments before they are published?
Hi Mitch, that's a loaded Q :-) It is of course not necessary. I must have set it up that way originally and whilst slightly annoying I just haven't looked in to how to change it.
PS: I have taken the hint, found where it lies in settings, and amended. Thanks for the push...