How Obama Will Fix the Economy And Re-Invent Recruiting

Ask anyone in the Obama administration about the country’s present unemployment situation and you will probably get the standard talking point answers.

It goes something like this: We inherited a very bad economy, and in the first term the stimulus was very helpful in reducing the unemployment rate. But we still have a long way to go, because there are millions of people still trying unsuccessfully to find a job. And another problem we have to deal with is the four million jobs that remain unfilled.

The reason why most unemployed cannot find jobs as more jobs remain unfilled is because a skill gap exists in the labor market-employers simply cannot find enough qualified applicants to fill their jobs. So, in the second term, my administration will focus on education and technology training to get unemployed applicants the skills they will need to fill those jobs and remain employable.

This is how Obama needs to frame the message to inject confidence in the workforce and as a result will organically stimulate the economy.

Mr. Employer, your business is a lot like a professional sports team. The team that invests in recruiting the best talent will win more business. To employ the best talent, starts with an aggressive recruitment strategy because the global war for talent is real and we need to remain competitive.

This skill-gap problem exists because our present recruitment model is broken; our best talents are not actively participating in our recruitment process. The reason they are not participating is because they are not applying for jobs. And the reason they are not applying for jobs is because they have jobs.

Ask anyone in the recruitment Industry and they will tell you that the recruitment space is saturated with vendors selling recruitment solutions to employers. But when you cut through all the noise, they are all selling the same solution to everyone. What they are all selling is another easier, faster and cheaper way for you to find the type of resumes that you are looking for.

I understand that the recruitment vendors have placed a bigger problem between you and your problem. And I understand that your problem as an employer is that you are leaving money on the table the longer a job remains unfilled, because you cannot find enough qualified applicants to fill your jobs. I also understand that these recruitment solutions are adequate for the individuals that are actively looking for jobs, but they do not go far enough to recruit the ones that are not actively looking for a job.

What is interesting is that headhunting has been the most effective method for recruiting the best talent-the ones that are not actively looking. But today, employers seldom use headhunters. They say it is because the headhunter fees are way too expensive and they do not have the budget. And why should anyone pay fees to headhunters when there are many cheaper ways to find good resumes?

Mr. Employer I understand your situation and I feel your pain. But let me say this; you play a very important role in our economic recovery. Without your participation, our job market will be equivalent to a swimming pool that lacks proper filtration. If it doesn’t have a pump and a filtering device, the water will become stagnated and contaminated with algae. Our economy has become stagnated just like the swimming pool, our best talents are not moving and they will not move because a job was advertised. You need to put headhunters into the hunt and back on your team.

That is why my administration is rolling out a cost effective recruitment method that will allow employers to use headhunters to effectively recruit the best talent- ones that are not actively looking. And at the same time, it would motivate and incentivize the best headhunters to dazzle you with their creativity and as a result, generate more revenue for themselves.

Very shortly we will roll-out this new recruitment model and make no mistake; this recruiting model will re-invent recruiting. It will bring personal touch back into recruiting. It will bring real relationships back into recruiting. It will put recruiting back into the hands of professionals-the ones that recruit for a living.

Will you stand with me?

Comment by Ken Forrester on February 16, 2014 at 6:29pm: Amy, let me clear the air and let you know that I have been a niche recruiter in the same Industry for twenty four years. To survive for this many years would means that I know what I am doing and I have seen some changes in the Industry over those years and I might have some opinions. What you need to do is to take a look at some of the previous articles that I have written on RBC to get a sense of who I am as an individual.

I wrote this particular article in a unique style in hopes that it would accomplish two things.

There has been a concerted effort lately to return the RBC site to a watering hole for recruiters in the trenches, so I thought an article written in this manner would stimulate conversations by getting readers emotionally involved and assist in bringing back some of the colorful characters that once made this site entertaining and informative.

Second I see an opportunity that headhunters could capitalize on and I wanted to bring this to their attention. Maybe someone with a different way of thinking on how agency recruiters could play a larger role with employers in solving this problem.

The opportunity is that a skill-gap exists and the solution that the Obama administration has rolled out is not a short term solution. The problem still remains that millions of people cannot find jobs while millions of jobs remain unfilled. There are quite a lot of recruiting solutions on the market today, yet employers are leaving money on the table instead of growing because they cannot find enough qualified applicants to fill their jobs.

Since no one has stepped forward, I will assume that most are satisfied with the way things are-and that is fine with me.

Comment by Amy Ala Miller on February 16, 2014 at 8:36pm: Wait - so the opportunity is that a skills gap exists, and the problem is that employers are leaving jobs unfilled. How do agency recruiters (no matter how successful or tenured) fix that? Start teaching coding courses? I'm not trying to be flippant, I'm truly trying to understand.

With or without gov't intervention (and God help us if they DO get involved!) How do recruiters get people skilled in the RIGHT AREAS?

Comment by Keith D. Halperin on February 17, 2014 at 2:17pm: @ Ken: You're welcome. "..why do you think agencies are ranked so low on the source of hire list and why do employers imply that they will use less agencies in the future?."

IMHO, 3PRs are EXTREMELY VALUABLE. Highly experienced, trained, and networked 3PRs can provide recruiting that other types of recruiters can't do as well or at all, and for that I think they should be paid 30% or higher fees. The problems:

1) Companies really don't need that type of premiums service very often, and

2) What most agencies deliver from my experience is having newbies dial for job order dollars and try and sell candidates from job boards, sourcers, and RPOs for 15-25%, because the clients aren't aware they could go to those same sources directly for far less than the 15-20%.

My GUESS is that some of the folks who've said they'll use 3PRs less often are learning they don't need to pay 20% fees when the could get just as good or better people for $225/week.

“I will assume that most are satisfied with the way things are-and that is fine with me”

Most of the people who make the rules ARE pretty satisfied with how things are if they’ve got an easy re-election, but the folks that own many of them AREN’T satisfied- they want more, more, MORE!

@ Steve: Most of us (including me) don't have problems with your dispatches from Galt's Gulch in Laissez-Faireyland, so why should you have so much problem with a mildly-political-at-best commentary from Ken?

@ Kelly: "How exactly does CP3 or NBA drafts and trades correlate to this particular topic? Running a professional sports team or league doesn't seem analogous to running (or recruiting for) an organization in the corporate world."

I've observed that talking about sports in recruiting columns tends to drum up some interest.

@ Amy: “With or without gov't intervention (and God help us if they DO get involved!) How do recruiters get people skilled in the RIGHT AREAS?”

Find desperate employers with MONEY.

Example:

Employers who'd

1) Be willing to hire successfully re-trained 50+ year olds at the going rate for that type of skills.

2) Provide/subsidized housing in high-cost areas.

3) Take over under-water mortgages for skilled candidates to be able to move.

4) Commit to "multi-year, guaranteed raise/bonus- no layoff without cause" employment contracts for hires.

5) Minimize the amount of onsite time needed in noncustomer facing jobs (have telecommuting as the "opt out" option)so you can have people work from ANYWHERE

Any others, Folks?

-kh

Comment by Amy Ala Miller on February 17, 2014 at 3:41pm: ok Keith, I'm game. :) Who are the desperate employers with MONEY? And wouldn't those employers (with all this extra money) be more likely to either invest heavily in solid internal recruiting resources OR even engage really good TPRs to pull out already skilled employees from the competition?

Tax incentives already exist for companies that hire long term unemployed, recipients of gov't assistance, etc. Just not sure how gov't intervention helps, but then again I don't think I'm clear on what exactly the problem we're trying to solve is. :)

Amy "devil's advocate" Ala

Comment by Ken Forrester on February 17, 2014 at 5:15pm: Whenever anyone tells me that something cannot be done, I say it is because they are limited to their own knowledge. I have a headhunter friend who once generated over $900K in placements in one year. If that sounds hard to believe to you, then it probably cannot be done in your mind. I’m not saying this about you Amy, but a lot of the recruitment experts that are giving advice today don’t know jack about headhunting or they failed at it. But they are the ones yelling the loudest telling others what can or cannot be done.

Let me ask you this question: let’s say Microsoft lost a bunch of their top talent to Google, Facebook and Apple. They would now need to hire a lot of recruiters (more jobs) spend more money with recruitment vendors (who now needs to hire more people to meet that increased demand) It Microsoft end up filling those vacancies, where did all those the new hires come from? They came from other employers that now needs to ramp up their own recruiting efforts (more jobs) to fill more vacancies. And so-on and-so-on!

An increase in demand for labor, will entice private investors and start-ups to enter the market with objectives of providing job training and other services to help those employers meet their own demands. (more jobs) We need employees to move and move a lot to create momentum in the job market. You cannot put this on the shoulders of corporate recruiters; they are not paid by incentives. What you need are the home run hitters like my friend who generated $900k to get excited about the opportunities to make placements. They can make things happen.

Government does not need to get involved, they have a solution. It is called Connect ED. It is certainly a step in solving the skill-gap problem, but it is a long term solution to this immediate problem.

KB, what do you mean when you say that corporate recruiting cannot be compared with sports recruiting? Dr. Sullivan might disagree. http://www.ere.net/2010/07/12/how-to-recruit-lebron-james-%E2%80%A6...

Keith, you are always the smartest guy in the room. Thanks for your response.

Comment by Keith D. Halperin on February 17, 2014 at 5:31pm: Thanks, Amy.

There AREN’T desperate employers with money, or we'd see all sorts of money related-enticements as we did during Dot.com Boom. Instead, we see a bunch of whiny, entitled Founders, CXOs, Sr. Execs, and Hiring Managers moaning and groaning that they don't understand why the best of the best won't crawl over broken glass for their underpaid jobs at their pathetic wannabe/has-been companies.

As I said late last year:

"With the exception of the "Fab 5%" (and some highly in-demand skill sets)- you can find very good people for the positions, if the hiring managers are reasonable about who they will hire. The "War for Talent" is a con job- there's wars for "excellence on the cheap" and "purple squirrels" but not for solid people who will work hard and long at a reasonably paid and benefitted FT job. If your company needs excellence- be prepared to pay for it (or at least have SOMETHING excellent for 'em), and if your company really needs a "purple squirrel" or some skillset that can't be obtained at ANY price- you've got a bunch of idiots over there getting themselves into that situation and you better get out FAST before the whole thing tumbles down around you....”

I don't think we need tax subsidies/government-run training to hire the long term unemployed- I think we need to create 20 million, FT decently paid well-benefitted jobs fixing up the $1T+ infrastructure (roads, streets, highways, bridges, tunnels, airports, seaports, rail, telecom, schools, parks, smart grid, energy efficiency) that benefits EVERYBODY. Even Adam Smith *thought this (public works) was a good thing for governments to do, and if we did it, we'd be like a big-*** Singapore, COMPETITIVE AS **** compared to the rest of the world. Folks, if you can come up with some alternative "non-make work" plan to create 20M+ good jobs, we' re listening:.....

Cheers,

Keith

* The Wealth of Nations

Book V: On the Revenue of the Sovereign or Commonwealth

Adam Smith

Chapter I: On the Expenses of the Sovereign or Commonwealth

Part III: On the Expense of Public Works and Public Institutions

The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain. The performance of this duty requires, too, very different degrees of expense in the different periods of society.

After the public institutions and public works necessary for the defence of the society, and for the administration of justice, both of which have already been mentioned, the other works and institutions of this kind are chiefly those for facilitating the commerce of the society, and those for promoting the instruction of the people. The institutions for instruction are of two kinds: those for the education of youth, and those for the instruction of people of all ages. The consideration of the manner in which the expense of those different sorts of public, works and institutions may be most properly defrayed will divide this third part of the present chapter into three different articles.

Article 1: On the Public Works and Institutions for facilitating the Commerce of the Society And, first, of those which are necessary for facilitating Commerce in general.

That the erection and maintenance of the public works which facilitate the commerce of any country, such as good roads, bridges, navigable canals, harbours, etc., must require very different degrees of expense in the different periods of society is evident without any proof. The expense of making and maintaining the public roads of any country must evidently increase with the annual produce of the land and labour of that country, or with the quantity and weight of the goods which it becomes necessary to fetch and carry upon those roads. The strength of a bridge must be suited to the number and weight of the carriages which are likely to pass over it. The depth and the supply of water for a navigable canal must be proportioned to the number and tonnage of the lighters which are likely to carry goods upon it; the extent of a harbour to the number of the shipping which are likely to take shelter in it.

Comment by Amy Ala Miller on February 17, 2014 at 7:03pm: well fellas I think anything is possible... :) to your point about Company A losing employees to Companies B and C - it happens, but the thing is A is going to want to hire similarly qualified peeps from Companies X, Y, and Z which does nothing (that I can see) to address skills gaps, long term unemployment, etc. That's all. Whether candidates are being wooed by internal or external recruiters is probably irrelevant. They're still the same candidates with a certain skillset.

Comment by Keith D. Halperin on February 17, 2014 at 9:12pm: @ Ken: Thank you very much.You are very kind.

-KH

Comment by PAUL FOREL on March 1, 2014 at 2:21pm: Ken, Hello....

I tend to believe your 'concern' that LI, Monster, et al are negatively impacting the recruitment business is contingent on whether one is in the Employment Agency business or that of Executive Search.

In the case of the latter, I simply say, 'Bring It On' since your 'Big brand companies' can't touch me.

Frankly, the more complicated and omnipresent the 'tools' [which are actually crutches] of recruitment manifest themselves, the easier and more assured I am of continuing to have my job.

As far as 'irrelevancy' goes, it will be the Employment Agencies that will be the first line of casualties as the world -as you envision it- evolves.

Also, please realize that once that 'skills-gap' concern of yours is resolved, you will be earning fewer fees.

Count your blessings while you can, Ken.