Why recruitment agencies need to become pigs
Posted by Mitch on 14th March 2012
Bear with me on this one.
It must be searingly obvious to anyone who works in recruitment that recruitment agencies (and more specifically the people therein) are receiving a lot of flak at the moment – most of it around their oafish sales tactics and their diminishing ability to deliver a viable recruitment service to either the company or the candidate.
With the advent of the Internet came a lot of predictions that it would spell the end of recruitment agencies. That didn’t happen because the job boards loaded their pricing in the agencies favour and recruitment consultants got better at using the Internet than HR people.
Now that HR are finally waking-up to the fact that they don’t know much about recruitment and have started hiring inhouse recruitment specialists, those initial predictions are starting to look like they could finally come true.
So, what can a recruitment agency do to start reclaiming its relevance and its margins?
Well, that is a huge question that can vary depending on the sector it serves and the candidate types it trades in - so for the purposes of this piece I’m going to assume that the agency-type in question is a broad vertical market specialist and places permanent candidates. It could equally apply to any generalist agencies.
Recruitment agencies have long been addicted to the thrill of what I call ‘the easy placement’. That happens when:
- They receive a job from a company (often with minimal commitment)
- They happen to either know of a suitable candidate or find one quickly
- Interviews happen
- That candidate gets the job
- An invoice is then raised for anything up to 20K
Invariably the company then assumes that the agency has some kind of magical insight – which of course it doesn’t.
Those kinds of rewards for doing very little work can become addictive - I know because I’ve been there.
Thereafter, everything the recruitment agency does is geared around collecting candidates to increase their chances of getting lucky – much of this activity is wasted and nearly all of it is advertised on job boards.
But it only takes a couple of placements like that every month for that business model to take root.
Cue more companies getting cold-called and being asked for a chance to throw a candidate or two at some of their open jobs and more candidates responding to adverts that the agency is never actually going to work on. Both are being set-up for disappointment.
10 years of that and we arrive at the flak recruitment agencies are getting today.
So the old model isn’t working anymore because there are a lot fewer HR people who are desperate for candidates to appease their critical line managers.
So what are HR people, inhouse recruiters and managing directors of SMEs more likely to need these days?
My experiences as an agency employee, search-business owner and contract inhouse recruiter is that these people need (and more importantly, want) commitment.
Let me say that again loudly - THEY WANT COMMITMENT.
So, if you’re an agency recruiter, most companies want you to commit to filling a particular job - regardless of the salary level.
They would rather have one external recruiter that is totally committed to filling one of their open jobs than 10 of them saying they’ll “have a look around and send over some CVs”.
Many will gladly pay some of the fee upfront too - but you have to sell the benefits to them. And unlike the old days, chances are your client (for that is what they now truly are) will want to know how you filled it.
They want you to take problems away from them – not add more by sending speculative CVs and pissing-off their target candidate audiences. They want value for money and they want you to work for them. Hard.
They’d also like you to share some of their pain because that’s how real relationships are formed – both in business and socially.
So instead of asking for jobs, saying that you “have the best candidates” (which 9 times out of 10 you don’t) and punting out a few CVs, why not try actually selling something for a change? Don’t sell them the line that you’re not actually selling them anything, sell them on the fact that you will not stop working until you fill their job.
Then sell them on the fact that you will work to a pre-agreed sourcing strategy, that you will genuinely assess who the best candidates are, manage all the candidates professionally and offer them a realistic guarantee period when they do hire someone.
If you sell this properly, enough companies will pay you upfront to do the work, which in turn will enable you to deliver a much better service and have a sales-pipeline that makes forecasting your business easier and more reliable.
Some of these jobs will be quite easy to fill too - the only difference being that you’ve actually spent real time working a pre-agreed recruitment plan. The client will like the fact that you’ve worked on their vacancy rather than plucked a candidate off a database.
The relationship will be sealed as they don’t wince when they see your bill.
Which brings me back to the title of this article.
Recruitment can be looked at as a plate of ham and eggs. The chicken is involved, but the pig is committed.
Most recruitment agencies need to stop being a chicken.