Do you believe in recruitment? Really believe in recruitment? I do…

I consider myself a man of ok intelligence… I reckon I sit somewhere on the scale of genius between Dr Stephen Hawking & Lloyd Christmas… depending on topic and whether or not alcohol is involved… If we were talking about… ummm… I don’t know… say… Melbourne Cup Winners since 1861 I go ok…

believe11861 – Archer

1890 – Carbine

1968 – Rain Lover… etc. See… pretty good hey?

Transcendental meditation, on the other hand… ummm… not so knowledgeable.

But you don’t have to be a rocket doctor to understand that to be successful in any sales based industry (and a big sorry to those who believe that recruitment isn’t primarily a sales based industry… it is… you’re wrong…), you must… above all else… believe in the value of the service you provide.

Ask yourself a simple question… You are a recruiter right? (That’s not the simple question… yes, it is a simple question, but not the simple question to which I was referring…).

OK… so you’re a recruiter… you know the standard terms of business of your company. Here comes the simple question… Do you believe in the value of the service you are offering?

The reason I ask is this… As some of you may know my core business is rec2rec. We believe that most in the rec2rec space aren’t providing real value… so we have invested a great deal of time tackling that issue.

Firstly, we created a differentiator. A different sourcing channel based on social media recruitment communities and this crazy blog. Secondly, we ever so slightly reduced our fee. Not because we don’t believe in our service… because there has been a market correction and we were over-priced… simple.

Finally, we introduced a solution where we only charge our clients 75% of the fee. Pretty cool hey? Then… following the guarantee period, and if our candidate hits expectations we invoice the remaining 25%. It’s like a bonus for keeping up our end of the deal…

Anyway… the way we see it… we are sharing the risk, allowing our clients to better manage their cash flow while their new hire comes up to speed and really attempting to partner with our clients… the little diagram below probably explains it a little better…

Terms of Business (1)So, we promoted this solution via Linked In & Twitter. It was accepted pretty well by most… But we did receive a pretty strange response from a Senior Manager within the Recruitment Industry… I’m paraphrasing here…

 

‘nice marketing, this is offering discount, more value would be paying a fee upon successful completion of probation where the 3 parties agree specific measurables? If the ” hire” out performed measurable the fee could be made higher?…’

 

‘Hmmm…’ I thought. ‘Is this guy suggesting that we place people into his business… and then invoice nothing… nothing at all until probation is completed… 6 months in this case?’

I must admit at this stage I was a little miffed, but I shrugged it off… surely I misunderstood?

Not too much later… a colleague of the Senior Manager within the Recruitment Industry who posted the above comment decided to add his 2c worth…

 

‘If the candidate pays his/her way after 6 months, happy to pay the fee, If not they can have the candidate back free of charge. As (name deleted) says happy to share the risk, a lot of crap out there.’

 

So, there we have it. Not one, but two senior recruiting professionals – both from the same company – suggesting that my business should provide staff to them… free of charge for a period of six months… Then… and only then… if my candidate is successful I am rewarded by being allowed to send an invoice.

I did ask them if that is how they transact with their clients, but surprise surprise the answer was no…

Do you see what I am getting at here? The simple fact is that if recruiters can’t see the value in the service we are providing, then they really can’t believe in their own service… can they?

Maybe I’m having a Lloyd Christmas moment, I’ll leave that up to you to decide, but if you are a recruitment business owner, who can’t see the value a good rec2rec holds for you as a business in growth mode… then I would suggest you don’t believe in recruitment at all… Thoughts?

PS. Any recruiters out there please take 5 minutes to complete our Recruitment Consultant Census. It helps us track trends & bench marks within the industry…

Craig Watson

3 thoughts on “Do you believe in recruitment? Really believe in recruitment? I do…”

  1. Craig, I always enjoy reading your blog. We also had the opportunity to work with each other in a previous company and I know how passionate you are about what you do.

    The problem (for the lack of better word) with recruitment industry is that it is filled with rubbish and invariably it makes a lot of businesses apprehensive about the value that a recruiter can offer them.

    I am on your side in that if my client pays me for my service then I should pay you for your service.

    The trouble is that the recruitment industry in particular suffers from lack of top performers. There is a reason we have one of the highest turn overs in our industry.

    My final thought is that, if you have relationships with agents who can perform well both short-term and long-term and you can consistently prove this then your candidate will literally pay for their fee. But be mindful that the industry is under a lot of pressure and the businesses need to be careful in who they hire and how much they pay.

  2. WHY WE DO NOT HAVE A GUARANTEE:

    I believe in recruitment, unfortunately, others do not and either have ridiculous guarantees or lower their fees. Talent wins and companies who want to win, should be willing to pay top dollar for people who can secure that talent. If you want Michael Jordan to play for your team, then you need to pay Michael what he wants. Too many companies want to be top players in their markets but do not want to invest in a process or strategy that will generate the results they would like to see.

    I work on an engagement fee and contingency fee basis. The engagement fee process has companies put skin in the game in a process that is 94% successful with results typically being generated within 5 weeks, while the contingency process involves a commitment process with no guarantee. While companies want people to guarantee their decisions, after the following dialog, they can understand the logic behind our no guarantee process.

    Our guarantee is that we work on a contingency basis. If we are not successful in our search work, then the customer pays nothing. Contingency work is the ultimate service guarantee because we accept all the financial risks and we absorb the cost of the lost hours, telephone bills, postage, support staff and administrative time. Even when we have located the candidates you want to see, we absorb losses resulting from hiring freezes, internal promotions and other potential deal breakers. Who could ask for a better guarantee than that?

    Most of our clients think we sell people. We don’t. What we do sell is a service that locates, screens and presents candidates for our client’s evaluation. We can not guarantee that which we do not sell. We sell a recruiting and referral service which is guaranteed by our contingency arrangement. We can not guarantee the client’s hiring decision, orientation, training and management abilities. If we don’t perform, the client doesn’t pay. Sometimes we do perform, but the client still doesn’t pay because of freezes, approvals, etc.

    There are two areas in which our clients receive monetary value from our services:
    1.) During the recruiting process,we save time and money by doing the endless task of finding the right candidate while our clients’ managers and others involved in the process are paying attention to their business.
    2.) Our clients make money from our efforts based on the money generated for the corporation by the people we place there. Corporations expect a four to five times return on the salary they are paying. The salary is based on the ability of the position to return money to the company, not the person.

    Our involvement with the candidate is only during the recruitment process. Once the client has made a hiring decision, they have indicated to us that our service has been successfully rendered. After that point, we can not be held responsible for the retention of one of their employees. If we are going to be linked with the candidate after he or she becomes an employee, then we should be paid for the employee’s performance as opposed to an agreement which has us pay for that employee’s non-performance. We are either irrevocably linked to that employee, or we are not. If I am linked to, and financially responsible for this candidate’s performance, then I will guarantee him for a period of one year. At the end of that year and on every succeeding anniversary date, you send me another check for the fee you have paid which will represent my portion of my candidate’s successful performance.

    1. Edward, that is as good a sales pitch for contingency that I can remember seeing, so well done on that.

      But, that’s all it is – a sales pitch. What it doesn’t reveal to the client is things like what you’ve said to the candidates to get them to the interview, how you’ve assessed them for culture fit (if at all) and what other companies you’ve introduced those candidates to in order to maximise your chances of making a fee.

      Contingency is, by its very definition, a candidate trading service, not a recruitment service.

Leave a Reply

Your email address will not be published. Required fields are marked *