Is the trend in using recruiters reversing?
Hiring recruiters can be expensive. Is the ROI worth it? We are growing, but I am finding that they are not always reliable in finding us great talent. Any shares on your thoughts or own experiences would be great.
Hi David,
Unfortunatley its a common problem, 10 years back i was CIO for the build of Seek, now the worlds largest Job Site. The job sites have fostered a resume based approach which is flawed, it's about determining candidates competencies.
Lets face it even specialist recruiters don't fully understand professional competencies in detail which really is what you need. I say this having worked with professional recruiters for 15 years.
I was so unimpressed with the current market solutions and recruiter performance I built www.SeeraCloud.com to automate the profiling and shortlisting of candidates and their performance management based on competencies, behaviors and skills in the cloud.
Were disrupting the traditional approach :)
You can find me in LinkedIn if you would like to chat.
I like to have an employee referral incentive which is high enough that people want to do it for money. I would make it 10-25% of recuiter's fee. It has worked out well for me.
Contingent recruiters can be an option. Hiring recruiters is an expensive way, but since growing organisations' have a big attrition rates and the requirement of resource power due to which it becomes vital. Its always advisable to hire them. You have a better control on in house then external sources.
This has some draw backs too but this option can be looked into, most of the time this works.
Ironically it would take decent recruiters to hire good recruiters. You might get some tips from the headhunters who hire for marketing firms like Proctor & Gamble.
I think that the use of recruiters is becoming less common provided that they are expensive, not reliable and nowadays most of people change their experience on social netwok websites where it is easier to get professional opportunities
I think there are good and bad recruiters, just like there are good and bad doctors, chiropractors, and lawyers. A good recruiter with experience in the field for high end positions is worth every penny. Note good recruiters will guarantee their placement for over a year or more and can demonstrate a comprehensive vetting process that included assessments, background checks, and comprehensive analysis of the company and executives they are placing the individual into.
I have worked with several recruiters and if you are a company that can win or lose based on your next hire, do your research and find a good one. Sometimes you get what you pay for.
As a performance specialist I have helped many recruiters do a better job of understanding who will be a good match and provide insightful interview questions that expose their strengths and potential limits. Most of the company's I have worked with will continue to use my services for their lower end placements, as it is more cost effective then using a recruiter for everything, but they are getting better results than just attempting to sort through their potential candidates by themselves.
Many of the companies elected to have me train someone in their company on how to use the assessments themselves and no longer need my services, but just use the assessments themselves, to determine the level of passion, presence and processing ability.
There are many levels to placement so the real question is how much time will it take without a recruiter, how much is that time worth? How many lost opportunities are going by as you attempt to fill a position and how much do they cost. Better yet, how much did the last bad hire cost you?
You know, Ive seen recruiters make terrible mistakes. Most are hiring with data and no brains or heart.
I'm not trying to be romantic here but if you want to fill a key position, conduct the process yourself, forget about all the insights crap and find the potential in people with your guts. (If you are interviewing that persons, obviously fills the basic selection requirements)
Good Luck
With the number of recent downsizings, there is a lot of talent in the market and a lot of avenues through which to source talent (like posting openings with Professional Associations, contacting outsourcing service providers (like Knightsbridge, Right Mgmt, etc) & postings on sites like LinkedIn, etc). If you are, however, looking for a very specific skill-set that you know is extremely hard to source and/or a key executive, a recruiter/ headhunter may be worth the investment. As you are in growth mode, you may want to make an investment in building your brand and highlighting on your website why a talented individual would want to work for you - like the challenge, the excitment of being on the leading edge of the growth, etc.
Recruiting is expensive: full stop.
The number of unemployed is over 8 Million (despite Government figures) is the real figure, and if you look at the Job Boards, whether on-line or with agencies on the High Street, you will see that the average application rate is at best 20 per job advertise, at worst over 200. Look at sites such as REED and Government "Total Jobs" are often recycled, i.e. the same job re-published on a different date. So actually the number of jobs which exist are far lower than the Government (of whichever colour) will admit.
Since 1979, there have been more "methods" of calculation and what constitutes as unemployment for statistical ( for Government) purposes have changed, unsurprisingly reducing the unemployed figure shown to the general public. Regrettably, there are stll a number of fools out there who read the tabloid, and semi-tabloid press beleive those "official" figrures.
For a company with a recruitment requirement department have to go through that volume of applicants is going to be very costly in terms of man time within your company. In the mediate term, the amount of time absorbed by a senior member of staff of the recruitment to sift through and interview is going to be costly. However the cost of using an agency may be expesive, but in terms off-set against time involved with a more senior member of staff to interview, the cost of engaging an agency can be easily stripped out against the cost of management sifting through CVs.
Ultimately it will always be a line manager/director who will make the final interviews and make the decision to engage. Equally time management and cost will always come to the fore.
The bottom line is that whether recruiting through an Agency or direct to an Employer there is a heavy over-head. In the long run it is cheaper to use an agency since it is a case of that they only get paid on the engagement of the (new) employee not the number of potential employees, so cheap by comparison.
I think a good professional recruiter is an excellent option as answered below...Establish a relationship based upon trust just like any other vendor or employee...I think as Jack Nicklaus stated "all business relationships must work equally well for both parties in both human and financial terms..."
All thing depends on your home work or we can say that design well define formula for your required person and pick the person according to your own formula not recruiter organization,...
David - you ask a great question and there is a short and a long answer. The short answer is that any recruiter you have been working with that does not provide GREAT ROI is simply the wrong recruiter. If your talent acquisition partners are not helping you to find great talent, then they are letting you down. Eliminate them.
The longer answer is more complex - you only want to use recruiters for positions where the need is for great results and your team is not capable of doing a "best in class" search. People are your most important asset, and so the savings that results from not using a recruiter is nothing compared to the cost of a bad hire. So don't cut your nose to spite your face but be smart about determining which openings are "search worthy."
Contrary to most thinking, contingency search is much less likely to produce great results. Contingency may feel like the smart move, but in the end, the contingency recruiter is in a race to find the first person they can who satisfies minimum qualifications - your "not great talent" issue. Retained or committed searches are built to identify great talent and provide you with a choice of people who exceed minimum qualifications. If you need great talent, go with a committed search partner.
If it is an important hire, and you need passive candidates (people who are not active on the job market), the ROI for using the RIGHT committed search partner will be huge. Get the best person and never look back.
To do so, find the right search partner first.
Two different questions: what is the trend and is it worth it? As employment markets change in supply and demand the trends move. At the highest levels it seems to me they are as prevalent as ever. At the "lower C" levels, Directors and Managers there is no question that my clients see different results and as the "value" of the employee decreases so does the use of recruiting but that may not make sense depending on your internal HR capacity, quality and process.
If you want success with recruiters I would suggest two best practices. One is to find a relationship with an expert recruiter who you get to know and trust and who will be there repeatedly with your needs. They are usually specialists in an industry or market segment so a vertical specialist is more likely to have repeatable success than a given firm but in any case they can be worth the money by cutting the hiring cycle time and reducing "mistake" hires. (And I would suggest some kind of guarantee of 90 days that gets you a second chance if you all miss on the first.)
The second, perhaps is a trend, but only when you are looking below "C" level, to consider engaging a recruiter who works hourly rather than a %of annual compensation. There can be fear of paying without results but if you use a referenced recruiter, as I did recently for a client, and are willing to lay out the criteria and have some accountability for their estimate, results and have regular conversations it can be a more cost effective way, especially with difficult hires.
My client had hired a traditional % recruiter but as it became apparent the position was hard to fill and not his highest commission he worked it far less than the hourly guy who was held to his forecast results and paid in stages.
I think like any form of outsourcing, recruiting makes sense if this isn't your core competency, something that will take up so much of your time that you are distracted from your business, or is something that is a variable need that you don't want to dedicate internal resources to.
There is also a large variability in quality of recruiters (like real estate agents), but not a large variability in pricing. Do your homework to find the right person for your business.
I have been the beneficiary to a few recruiters and I have had success in my career. However, many treat the candidates like a side of beef on an auction block.. The relationship with the recruiter means everything. The last recruiter I worked with did a great job with me and for me. The position he obtained on my behalf lasted for 16 years!!! With experience I gained, I was able to start my own business. Make sure the recruiter is marketing the person, not just the concept to fit into the overall idea of what the job is about.
Recruiting needs time, energy and effort. And yes a lot of "recruiters" are not good at all. What I do is first look at my network and ask around. If unsuccessful, I go to third party. But if you can avoid using recruiters, do so.
Recruiters are conservative.
And because they fear losing your contract, they tend to rule out the wild cards - the very people who could add the X-factor to your business - and charge you a hefty fee for bringing you the able, yet predictable candidates.
If you include a practical task within your recruitment process, you can easily filter candidates yourself. Just be careful the task isn't actually a shameless attempt at extracting professional work for free.
Don't forget, recruiters are salespeople. They will tell you and the candidate whatever it takes to close the deal. How do I know this? Nine years of working with them!
No disrespect to the really good firms out there but the most of them are realy not knowing what they are doing. Swapping cv's and advertising with jobs and vacancies they even don't have in their orderbook. A lot of misunderstandings in the vacancy text and desired requirements. "Selling" the job with terms as manager or director whilst it is just a midlevel job. Standard thank you mails with the rejection and explanation that you just don't have the experiences enough; especially in fields in that you are a pro. What a lot of recruiters don't know is that their behaviour is reflecting on it's principal. So as a potential principal be wise, and if you realy want to use a recruiter, choose the right recruiter and discuss with him how to act (service wise) with the applicants. Remember the applicant of today can be your client or principal tomorrow and sure he will remember how he or she was treated.
Just about every company I'm working with at the moment has outsourced some or all of its talent acquisition (yes, horrible buzzphrase). Especially if you're growing fast, this would be the way to go.