Replies to This Discussion

Permalink Reply by Mike Avillion on June 12, 2008 at 9:07am

I foresee the major challenge in the next five years facing the recruiting industry is saturation.

With the exit of many baby boomers from the mainstream workplace I see an influx in those individuals trying to penetrate the recruiting industry. It only makes sense that someone with 25 yrs of industry experience and industry contacts would want to try their hand at recruiting. Many Baby Boomers have not had the opportunity to save enough for retirement, so they will have to supplement their income in some way.

I also see that many larger companies will look to these individuals as subject matter experts and have them work for their organizations in a recruiting capacity. It only makes sense that someone with 15 to 20 years of tenure at a Fortune 500 company would then be utilized in this way. The company would no longer have to pay benefits or 401k; those individuals would purely be consultants with deep connections in that organization.

To those of us in the industry, that could mean a number of different challenges.

One, it may drive down fee levels. Since these people are transitioning out of their true careers and looking for supplemental income, they may not be as aggressive on sticking to industry standards for fee agreements.

Two, there will be less opportunity. With the saturation of the recruiting profession, there will be a lot bigger walls built between recruiters and HR departments. As it is now, corporate recruiters already experience an overwhelming amount of sales calls. I only see that getting worse as the industry becomes more saturated.

Three, the reputation of Third Party Recruiters may get even worse. With individuals entering the industry without the proper training or mentoring, they are bound to screw up tremendously. This will only prove detrimental to those who are already established and perpetuate the negative connotation that TPR’s have today.

This issue can only be solved on an individual firm basis. Your firm must continue to establish strong ties with clients that will be able to withstand these issues. You must continue to utilize the great training resources and blogospheres that are out there to further your firm's expertise. Continuing to provide world-class service in an ethical manner will pay dividends in the coming years.

Permalink Reply by Art Pitcher on June 12, 2008 at 2:29pm

In my opinion, the biggest challenge facing the recruiting industry in the next five years is the transition in mindset among both clients and candidates from valuable service to readily available commodity.

From a candidate perspective, we are viewed more and more as a necessary evil (see http://lifewithrecruiters.blogspot.com/ for an example of this) while from a client perspective - especially since the introduction of the internet and job boards such as monster.com, we are viewed as paper pushers (resumes) and shotgun hunters (throw it against the wall and see if it sticks).

The most important thing we can all do, again in my opinion, is to reinforce the value of our services by proactively facilitating the recruitment process throughout it's full lifecycle. Understanding the intangibles of a job order (the environment, the culture, inter-office dynamics) as well as the necessary skills and experience (beyond buzzwords) is a great start, but also developing a strong relationship with the candidate from first to last call.

Just as companies have very specific tangible and intangible needs, candidates also have specific tangible and intangible needs. Because minor details are missed on both ends, the credibility and value we - as FACILITATORS - bring to the table is jeopardized.

I represent my candidates, for the most part, for life. I know when they have major events in their lives and I track them - such as wedding anniversaries, job anniversaries and birthdays. Even though I may only work actively with them once in 4 years or so, I do my best to stay in touch. Then, when I deliver them to a client at some point, I am able to assess the culture for a fit, the environment, and of course I am crucial throughout the negotiation process.

These services which used to be standard inclusions in our buisness are now rarer than the purple squirrel, and with large staffing conglomerations going for high volume/low markup business on a regular basis, of course there is no perceived value in our services.

The way to combat and change this perception is to first, understand and believe in the value you bring to the table and the services you provide. Next, take your time to understand EVERY step of the process and make sure you are developing relationships along the way. Finally, stand behind your word. A commitment is a commitment. Just because you might have a large volume of clients or job orders to are trying to address, ALWAYS address quality over quantity. One good, detailed job order is worth 100 website cut and pastes.

So what's my solution to this perceived problem over the next 5 years? To continue to take pride in my work by doing my absolute best, not taking shortcuts and forcing my clients to see the value I personally bring to the table.

There will always be people with less pride willing to do it cheaper, but I can promise you this - no one can do it better.

You are all winners for being here.

Art

Permalink Reply by Joshua Letourneau on June 13, 2008 at 8:38am

Gerry, your response here is insightful and well-thought out. I must also say that it was an absolute pleasure meeting you in Las Vegas :) [Note: This is not any kind of answer for the contest, but more a discussion based upon the video content. :) ]

If I may, let me take a moment to comment on your notion of America not building necessary "bench strength" to compete on a global scale. First off, let me say distinctly that I agree with the fact that our educational system needs to improve . . . and indeed, our bench strength needs to be revitalized. In fact, I'd recommend anyone truly interested in this subject take a moment to read Geoffrey Colvin's article in 7/2005 Fortune Magazine titled, "Can America Compete?

The above being stated, I would like to suggest that there are other factors at play outside of our mean talent-level, bench strength, educational system, etc. This is what I mean: The U.S. is still the world's largest consumer society, however that consumption advantage is slipping. If you were to subtract all of our current woes, such as rising gas & food prices, the degradation of the U.S. currency, high unemployment, etc., the middle classes within China and India would still be expanding, not to mention West Africa, etc. During a trip to Hong Kong in 2006, I met with the VP, Marketing for a China-based consumer electronics company . . . at which point he showed me a global map of their consumption hot-spots, none of which included the U.S. When I asked "Why?", he emphatically stated that the cost and barriers to entry are insanely high, not to mention how saturated our markets have become with more and more product choices falling off the shelves.

The other element I'd like to briefly speak about is the lack of normalization of post-secondary education worldwide (let's not even get into early education, secondary education, etc.). When I say 'normalization', this is what I mean: As I recruit internationally when I can, I've learned that a B.S. from a truly accredited U.S. institution in many cases is the equivalent of a M.S. in China. I visited 20 companies over a 5-day period in early 2006 there, and each had an employee base that included 40%+ PhDs'. Yes, 4 in 10 . . . with 8 in 10 having their Masters Degree.

To conclude here as I imagine this is getting long, let me say that the U.S. has now become what many might term "the tail that wags the dog." In other words, the U.S. (more specifically, North America) is a true catalyst globally, but our consumption advantage is no longer what it used to be. In speaking with a Marketing exec at Coca-Cola China, he mentioned that at merely 10% market penetration in China, they were reaching more consumers (maximum market penetration) than all of the U.S. combined. Think about that - it's staggering. It's the reason that so many companies are drooling over the prospects of selling into the China market . . .

Just thinking out loud :)

Joshua Letourneau
Mg Director, LG & Assoc Search / Talent Strategy
BLOG: www.lgexec.typepad.com

Permalink Reply by Rob McIntosh on June 13, 2008 at 1:29pm

To me it is a simple answer with a complex executional problem.

Recruiting has become a high volume reactionary based transactional model with very little proactively on behalf of recruiters and leaders (Note: Not painting all recruiters and leaders with the same brush here though).

If we don't change the paradigm soon and start getting proactive, strategic and work with leaders as business advisors and focus on developing targeted relationships with the talent pool, then unfortunately technology or cheaper resources will do the transactions for us.

To get to this place we have to ultimately solve the breath vs. depth dilemma first. The slide included is what I use in presentations (internally and externally) to frame what I see is the biggest issue we face in recruiting today. Once you start to address this problem you start to move from post and pray reactionary cost center recruiting in the eyes of the business, to a dialog that focuses on proactive add value profit center thinking and actions.