Why Recruitment Agencies need to become pigs
Bear with me on this one.
It must be searingly obvious to anyone who works in the hiring business that recruitment agencies have received quite a lot of flak over the past few years – some of it caused by oafish sales tactics and some of it by their diminishing ability to deliver a viable recruitment service in the face of the burgeoning inhouse recruitment sector.
So, how did we get here?
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.
No surprises there.
Now that HR finally woke-up to the fact that for recruitment to really work they need to bring onboard their own inhouse recruitment specialists, those initial predictions are starting to look like they could at least partially come true.
Where it all goes wrong.
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, but it could equally apply to any generalist agencies. It will probably be less relevant to those agencies that specialise in niche skills that inhouse recruiters can’t easily find and engage with. Yet.
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
Those kinds of rewards for doing very little work can become addictive. I know because I’ve been there.
You might argue that placements made this way are payback for all that other work that didn’t result in a placement fee. But that’s not the point. And it’s definitely not the point to the company the agency made the placement with.
Thereafter, everything the recruitment agency does is geared around collecting certain types of 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 do any meaningful work on.
Both are (and have been for years) being set-up for probable disappointment.
Which brings us to the flak recruitment agencies are getting today.
Wear it and own it.
So the old model isn’t working anymore because there are a lot less HR people desperate for candidates to appease their critical and time-poor Line Managers.
And there are a hell of a lot more candidates who’ve grown cynical about responding to job ads that they’re not even going to get a response to (let alone a shot at an interview) all because they know there’s a strong likelihood the agency has little sway with the hiring company.
So what are HR people, Inhouse Recruiters, Hiring Managers and SME owners more likely to need these days when they do need to use an agency?
My experiences as an agency Recruiter, 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.
If you’re an agency recruiter, most companies now want you to commit to filling a particular job, regardless of the salary level. Just like companies who have an inhouse recruitment team expect those recruiters to commit to filling their jobs.
They would rather have one external recruiter that is totally committed to filling one of their open jobs than 10 of them all saying they’ll “have a look around and fire over some CVs” with one of them getting lucky.
But that commitment is a two-way street. The company also have to commit. When they do, many will gladly pay some of the fee upfront – but you have to sell the benefits of why it’s in their best interests for them to make that commitment.
When this happens, what you’ll have is a real client rather than an ad-hoc customer – and the latter pretty much defines what a typical buyer of recruitment agency services is.
These clients will 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 this value to be evidenced by you working hard for them.
They want you to share some of their pain because that’s how real relationships are formed – both in business and socially.
The work.
So instead of asking for jobs, saying that you “have the best candidates” (which 8 times out of 10 you don’t) and punting out a few CVs of candidates you’ve not met, why not try actually selling something for a change?
Don’t sell them the line that you’re not actually selling them anything (which is what contingency recruiting basically is) – 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.
Sell them on the fact that you’ll produce superior attraction materials to help prise out the best candidates from jobs they may no longer be enjoying.
Sell them on the fact that you’ll genuinely assess who the best candidates are, manage all of them professionally and offer the client a realistic guarantee period when they hire one of them.
If you sell a real recruitment service, many companies will want to pay you upfront. I know this because I’ve doing exactly this since 1999.
And that, in turn, will enable you to deliver much more and create a relationship where the client will never want to talk to a competitor agency – because you’ll now be enjoying a 100% success rate rather than the 20-30% success rate you currently have.
Then once you have just a handful of these real clients, your sales pipeline becomes more forecastable. Then management starts getting a bit happier too.
Now you’re a real recruiter who solves problems from start to finish rather than someone who trades candidates on the fringes of a hiring process you have zero control over.
Some of these jobs will be quite easy to fill too – the difference now being that you’ve actually spent real time working the pre-agreed recruitment plan and worked all of the sourcing channels so that now your client is no longer simply buying a candidate.
No, now they buying something much more valuable; they’re buying the confidence that they’re probably hiring the best candidate currently available.
The client will love the fact that you’ve actually worked on their vacancy rather than plucked a candidate from a database or made a handful of phone calls or worse, ran a job ad that only desperate candidates would ever respond to. And regardless of whether you do this or not, many companies see this as the extent of what many recruitment agencies do.
The relationship will be sealed when they don’t wince when they see your bill.
Which brings us back to the ‘pig’ thing…
Recruitment can be viewed as a plate of ham and eggs. The chicken is involved, but the pig is committed.
Most recruitment agencies need to stop being the chicken.
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