I recently participated in a panel discussion about the future of the recruiting industry, and quite frankly, I was surprised with many of the prevailing attitudes and thoughts surrounding the topic at hand. As is often the case, I was the contrarian on the panel, and while I probably shouldn’t have been shocked, it was the fact most recruiters seemed to believe the status quo was fine, the future was bright, and they didn’t see the need for change that perplexed me. In today’s post I’ll examine the future of recruiting from a bit of a different perspective than many in the executive search business…
Those of you who read my work with any amount of frequency know how strongly I believe business is fluid, dynamic, and ever evolving. Furthermore, you are likely just as familiar with my position that a static business, which doesn’t constantly innovate around the changing needs of the marketplace is the same thing as a dying business. While many recruiters and executive search firms may think they’re exempt from the aforementioned business principles governing sustainability, they would be sorely mistaken to be so brazen in their attitude and approach.
The fact of the matter is both employers and job seekers continue to become more demanding in their requirements of one another. This phenomenon is occurring during a time where employment markets worldwide have never been more competitive. My question is this; Does this sound like an environment where service providers (namely recruiters) can stand idly with a business as usual attitude? I think not.
The reality is in maturing and complex market environments clients’ demand more from their service providers. Executive search firms desiring to remain competitive must focus on increasing their value added benefits in order to stay in the game. Those recruiters who have incomplete service offerings, and who don’t completely immerse themselves in understanding the culture and environment at their client companies will find it difficult to eek out a living moving forward.
While my personal practice is focused on providing leadership advice and counsel to Fortune 500 CEOs, as the senior operating executive at our firm I also have oversight responsibility for our talent management practice. From my perspective, I can’t imagine not integrating services throughout the talent management lifecycle. The identification, recruitment, deployment, development, retention, and succession of talent are clearly issues best addressed in an integrated service offering. Approaching talent management in a fractionalized approach is an inefficient and flawed process.
I am so committed to the beliefs espoused above that our firm engineered its talent management practice in a fashion which offers clients a broad array of service offerings. The simple truth of the matter is that it aligns our agenda with that of our clients, and makes for solid long-term relationships driven by much more than placement fees.
Here’s the thing – “recruiters” while filling an important role, simply don’t add the value a sophisticated client will desire in the future. Those recruiters looking to grow their business must transition from candidate sourcing to embracing a comprehensive approach to talent management aligning their interests with the long-term objectives of their clients. Executive search firms not working with their clients pre and post placement have failed to understand recruiting is no longer a business, but simply one component of a much greater process. Anybody can make a hire, but that’s not the end game – rather it’s just the beginning.
Creating a talent advantage begins with smart hiring. That said, it never ceases to amaze me at the number of people who are charged with hiring who possess absolutely no skill at doing so. While I rarely meet a CEO who is completely comfortable with the administration of the hiring process, most of them still seem to accept the status quo…”Who should do the hiring?” is a question more CEOs should spend time pondering. Here’s the thing; Anyone can make a hire, but not all hires are good hires. Smart leaders do more than just hire smart people – they have a smart hiring process and/or methodology. In today’s post I’ll share my philosophy on the best way to insure you hire tier-one talent.
Put simply; talent matters. The problem is that very few people actually possess the talent to identify talent. Identifying and recruiting talent requires much more than screening a resume and having a set of standard interviewing questions to guide you. There are issues of values, vision, culture, context etc., which need to be creatively and intuitively addressed in the hiring process. Sadly, it’s these areas that often go overlooked because the wrong person is evaluating talent.
Further complicating matters, is just because someone has succeeded in the past doesn’t mean they’ll be a success for your company. Likewise, just because someone has failed in a previous position doesn’t mean they might not end-up being a top performer for your company. Assessing talent is in fact a talent… Adding even more complexity to the hiring process is that not all those capable of identifying talent are capable of recruiting the talent by sealing the deal…Think about it, does the person in charge of your hiring process have the experience and charisma to convince a top performer at another company to take a pay cut to work for your company?
While CEO’s can’t personally be in charge of recruiting, it’s important to realize CEOs still own responsibility for the outcome – the buck always stops at the desk of the chief executive. No matter the size of your enterprise, I don’t believe recruiting should be the sole domain of HR (other than for lower level positions). Rather in most instances, I believe HR should be a part of the hiring team. The following commentary came from Steve Ballmer, CEO of Microsoft when he was asked about his philosophy on hiring:
“I did all the hiring myself for a long time. No one joined Microsoft without my interviewing them and liking them. I made every offer, decided how much to pay them and closed the deals. I can’t do that anymore, but I still invest a significant amount of time in insuring that we’re recruiting the best people. You may have technology or a product that gives you an edge, but your people determine whether you develop the next winning technology or product.”
I tend to be similar in positioning to Steve in that I believe one of the highest and best uses of time is to make sure we attract the best talent for our company and our client companies. I believe C-level executives can’t afford not to keep their hands in the talent function at some level. In order to ensure you make the best hiring decisions possible, I would strongly recommend you follow the practices listed below:
Hiring is a blend of art and science. The reality is that those organizations that identify, recruit, deploy, develop and retain the best talent will be the companies who thrive in the market place. As always, I welcome your comments and feedback below…
I recently received an email from a CEO asking the following question: “My HR department isn’t producing the quality of applicants we need. Should I use outside recruiting firms?” Since N2growth has a talent management practice which includes a practice group that provides retained search services, in order to be transparent I must disclose my bias before answering today’s question. While I clearly have a strong bias favoring an outsourced recruiting model, the question merits a bit of exploration in order to provide a fair answer. In the text that follows I’ll do my best to manage my bias and provide a transparent and authentic answer to a question I’m sure most of our readers have asked themselves at some point in time.
Let me begin by providing some historical background on organizational behavior which might serve as a useful backdrop for today’s post. While I could go as far back as Aristotle’s lectures on the topic of persuasive communication and self-awareness, to Plato’s writings on the essence of leadership, or even refer to Machiavelli’s work on organizational power and politics, for the sake of brevity and relevancy I’ll fast forward the late 1800’s in America. It was during this period of time we can find the roots of modern HR. It was during the late 1800’s industry recognized people problems were a very real and rapidly growing concern in the workplace. It was also during this time the US Government stepped-in to provide the first real legislative protections for the workforce.
As time has continued to march forward America has moved from the concept of “personnel administration” to “human resources administration” to “human resources management” and now we are moving on to “talent management.” Nomenclature aside, the biggest challenge that HR departments face today is that of multiple and often competing agendas, which in turn tends to cause staffing inefficiencies often resulting in lackluster performance. As with the evolution of most functional departments in the corporate world, with the passing of time has also come some empire building and title inflation. The HR department is no exception to this regrettable state of dysfunction.
Let me ask you to think about your HR department for a moment – How large is it, how big of a budget does it command, and most importantly how productive is it? Upon reflection you’ll find that much of your HR department is likely charged with defensive posturing associated with managing compliance and litigation risk. Other staff members are likely charged with training and administration activities, some have fallen into IT roles developing applicant tracking systems and other support infrastructure, while others perform marketing and research activities surrounding candidate development. How much of your staff is actually charged with recruiting, and how senior are these people?
It is not that HR departments are incapable of making high volumes of consistently great hires, it’s just that most or not organized to do so. If your executive level recruiting is being handled by staff level HR shame on you (see “Who Should Do The Hiring“). Following are just a few reasons why I believe in most cases a company is better off leveraging the services of an outside recruiting firm:
1. Outsourcing allows companies to focus on core business while leveraging a broader, deeper and more senior recruiting talent pool than they normally can manage organically. The real issue isn’t internal vs. external, but internal and external. Talent organizations which collaboratively partner with executive search firms produce better results than those who don’t’. It simply doesn’t matter who makes the hire – what matters is the right hire is made.
2. When payroll costs, ad budgets, job posting fees, research costs, IT costs, lost opportunity costs, etc. are considered it is more affordable to leverage search firms. Why dilute your internal budgets on redundant efforts when you can leverage the budget of a search firm?
3. There are many benefits associated with using an outside recruiting firm including realizing the benefits of a confidentiality buffer which keeps the employer in relative anonymity until they are ready to engage with a candidate. Managing the noise of a high profile search is better handled externally leading to fewer conflicts, political hi-jinks, and the potential for leaks.
4. Recruiting firms have existing long-term relationships with passive job seekers not readily known to most HR departments. A broader talent pool simply results in better talent being acquired. Recruiting firms also have broader access to a wider range of candidates who may not have ever considered working in a particular industry or for a specific employer.
5. No charge replacement guarantees makes using an outside recruiter a very low risk proposition.
6. Recruiting firms normally have access to a broader array of tools and information which can often be useful to employers in terms of efficiency, benchmarking and analytics.
Bottom line – the best results come from combining the knowledge and skill possessed internally with the competencies of external resources. Think collaboration – not isolation. Good luck and good hiring!