Let’s not fool ourselves. We are not a loved profession. Clients often use us begrudgingly, some even with open hostility. I have sat in client board-level meetings and heard with my own ears, the resentment felt towards our industry. I have listened, squirming, while clients plan to avoid using recruiters and any third party staff providers.
Even before the downturn, the evidence was all around us. The rise of internal recruitment teams, the clear strategy to reduce use of outside agencies, the development of employer branding strategies, the money spent on corporate recruiting websites and on developing internal recruiting software. And of course, the increased use of referral programmes and rewards for internal hires.
Increasingly, clients do not see value in what we do. Research tells us they think we are too expensive, they don’t like our pricing and they are pushing back on it like they never have done before. Clients think we are too slow and they also believe all recruiters have access to the same talent pool as each other, and also as they do. In some cases they are right.
And then the recession came along and just added fuel to the fire. Now employers talk openly and aggressively about cutting recruiters out of their hiring strategies altogether. In a recent Tele-Seminar I did, hosted by Mark Whitby , we had 500 people on the call, and a big percentage of those wanted an answer to this question…
“How can we convince clients to use our services instead of doing it themselves?”
Well, the first thing to understand is that this move to eliminate the use of recruiters gains momentum during every downturn. The market softens, clients see more talent availability, the CEO demands spending cuts, and suddenly every employer is confident they can save a bundle by doing all their hiring themselves.
It’s a well-worn pattern. And it is a threat to recruiters. Well, it is if we allow it to be. Our challenge is to make sure we offer something different. Something clients can’t do themselves at all, or can’t do themselves at a reasonable cost to their business.
But its also important we are articulate enough and confident enough to communicate to clients the three primary reasons why doing the recruitment internally is a costly and self-defeating exercise.
- Getting the client to understand their true cost of trying to hire themselves
- Explaining to clients the true significance of our value-adds
- Explaining to clients about passive candidates and how we access them
Most employers have never really analysed how much it costs them to take on recruitment themselves. They look at our fee, recoil in shock, and say it must be cheaper doing it internally. We have to be skilled in communicating to clients the full range of both direct and indirect costs that make up the real cost of hiring. Direct costs include many of the obvious things, such as advertising, the cost of executive and support staff time on screening, interviewing debriefing and reference checking, These add up fast and can way exceed the cost of any agency fee on their own. But you also need to factor in indirect costs such the opportunity cost of the senior executive spending time reviewing 50 resumes instead doing the job they are really employed to do. During the last recession I had a chart, ready to present to clients, outlining all the cost of “going it alone”. I had dollar figures against each activity, and very soon the cost of recruiting by the company far exceeded that of an agency fee. And what if the chosen candidate turns the job down or leaves after a few weeks? What is cost to the company of doing the whole exercise again?
The second theme that a skilled recruiter needs to communicate to a client who may want to avoid using our services, is the ability to showcase the many value adds that good recruiters offer their clients. This may include salary surveys, compensation advice, and market insights, but it will extend further to helping to define the role being recruited, acting as an advocate for the client with hard to hire candidates who are spoiled for choice, and playing the role of third party mediator to ensure an offer will actually result in an acceptance. These are invaluable components of our service, which are built into our fee – we don’t charge more for them – but many clients do not have these benefits explained and highlighted by the recruiting firms themselves.
Finally, passive candidates. And this is the clincher because when all is said and done, it’s access to great candidates that drives clients to use recruiters in the first place. Employers can naively believe that by placing an ad on a job board they have “done what any recruiter would do”. Not so. Job boards, by definition, only tap into the active job market. Nothing wrong with that, but it’s the cream of the entire available market that every client really wants to choose from. And only great recruiters are using all channels all the time to farm the talent pool. A good recruiter is always sourcing, 365 days a year. And while job boards may be part of the talent sourcing mix, there will be a huge range of other tactics, including social media, networking, database search, research and head hunting, and many more mechanisms designed to ensure the very best talent are unearthed.
When you think about it, it really is no contest.
A good recruiter saves a client time and money, provides a raft of benefits and value-adds that go way beyond actually providing resumes. And on top of this we ensure access to a talent pool that is increasing difficult for employers to reach.
Your job? Believe in our value and communicate it hard!
- Posted by Greg Savage
- On August 25, 2009
- 6 Comments