The Future of Recruiting? Predictions from 2004 vs. Realities of 2011

Last night I had an interesting chat with Dave Thomas who is the Chairman of CXC Global Board of Directors, ahead of his visit to New Zealand next week to make some presentations to our recruitment community and leaders. 

Dave is an affable, straight-talking South African / Australian who founded CXC back in the early 90’s by accident.  He started out as an accountant, which he despised, so he thought he would give IT a go, which he rather enjoyed.  Moving to Australia he stumbled across a company managing a payroll system that was not legally compliant with Australian tax laws, much to the shock of the company’s global CEO.

Dave spent 28 years as an IT contractor, travelling the world, before ending up in Australia.  So he reckoned that this, coupled with his accounting background, meant he knew a thing or two about contracting, payroll and different tax laws.  Turns out he was right as the company he started to provide a solution to that original employer now operates in over 30 countries worldwide.  CXC Global looks after self-employed contractors, sorting out their GST, taxes, salary packaging, payroll and all that boring administration stuff that gets in the way of actually doing your job.  This has actually provided a path for small to mid-sized recruitment companies to build their contractor books up too, which is something that has traditionally been hampered by lack of cash-flow and accounting or tax law knowledge.

Anyway, this isn’t a sales pitch for CXC, I’ll leave that bit up to Dave at the end of his presentations.  I’m mentioning it because the actual presentation really caught my eye and is probably well worth the attendance of all you recruitment owners, Directors, and general recruitment futurologists out there.  Here is the outline of Dave’s talks:

“As Dr John Sullivan saw it …5 years on”

In 2004 Dr John Sullivan, a world renown thought leader on strategic talent management and human resource practice, produced a paper “The Future of Recruitment” in which he made interesting predictions on the direction of the recruitment industry. Many of these have come to pass.  

At the time CXC Global ran a series of talks based on Dr Sullivan’s paper, and offered our technology solutions to the recruitment industry at large in preparation of these imminent changes.

Five years on, the face of recruitment has changed and the pace of change is accelerating.  Many agencies have adapted their business model, but is this enough? Is it sufficient to take you to where you want to be in 2020?

 

Putting on my cynical hat for a moment, I thought that 2011 would actually be 7 years on from that 2004 white paper.  And keeping up with the cynical theme, I decided to take a closer look at this white paper to see just how prescient this Sullivan fella really was.  Sure he has some good credentials.  A large body of work on HR Strategy, Recruitment functions, and an unhealthy obsession with Metrics to measure the ROI of everything, which I suppose is just a by-product of his being American.  Looking through ERE.net to get the links to this big article it is clear he is a prodigious writer, commentator and provocateur on all things recruitment, talent and HR.  He is, according to Fast Company magazine, the “Michael Jordan of Hiring”…oh and also a Professor of Management at San Francisco State University.

If you have the time or compunction to read through the entire article I have put the separate links here for your reading pleasure:

The Future of Recruiting Part 1

Part 2: Internal Departmental Changes

Part 3: Internet Recruiting Approaches Will Change

Part 4: Websites Shift to the CRM Model

Part 5: Metrics Dominate Decision-Making in Recruiting (see – told you so)

Part 6: Recruiters Will Change

I have to say it makes an interesting read, although obviously far more aligned to the US business style and recruitment approaches than ours here in Australasia.  But he made some big calls back then.  Try these out for size:

“Junior Recruiters.  Since managers using self-service tools will do the most recruiting, the few recruiters that remain on staff will be experienced recruiting consultants who will focus only on key hires”

Has this come to pass?  Demand for my services certainly hinges around finding more experienced recruiters and I get a sense that the days of filling recruitment agencies with young, energetic, have-a-go Graduates has shifted to a slightly more mature culture.  But is this really sustainable as the talent shortages start to really bite later on this year?

“Brand Manager.  As recruiting strategies shift away from short-term “paperwork” solutions (such as running ads or going to job fairs) and towards the ultimate long-term answer – a strong employment brand – the employment brand manager will become the most important position in recruiting.”

 

Bingo.  Although many New Zealand companies are still slowly getting to grips with this concept of Employment Branding, great strides have already been taken by the likes of Trade Me, Deloitte, The Warehouse, Air New Zealand and Counties Manukau District Health Board.

“Changes in Candidates Will Dramatically Impact Recruiting:  Resume Spamming.  Candidates can use software to continuously submit their resume to every possible job”

 

This really made me chuckle.  What foresight and this is a definite blight on the life of recruiters nowadays.  What the good Dr got wrong though, was how the candidates that spammed their resumes everywhere would not gain an advantage by doing this, but would in fact cast themselves in a poorer light in the eyes of recruiters.

“Social network referral systems.  As the popularity of social network systems grows, more recruiters and managers will utilize them as referral sources.  These systems will automatically rate the referrals base on the past referral success rate of the person making the referral.”

 

Hmmm.  An amazing prediction given how LinkedIn was in its infancy back then and Twitter was still 2 years away from even coming into existence.  But I am not convinced we have quite worked out how to use these social network systems as a truly effective referral method yet.  It’s still a work in progress but even in the past few weeks I have started to elicit more business and referrals through this method than ever before – so it’s clearly a hot topic right now.

Anyway, I’ve no doubt this will be an informing, thought-provoking and enjoyable presentation from Dave Thomas and I reckon you recruiters of New Zealand should check it out next week.  Here are the details for Wellington and Auckland:

Wellington – Lunch Presentation

Monday 7th February

12.30pm

Level 16 Vodafone on the Quay

157 Lambton Quay

Auckland – Breakfast Presentation

Tuesday 8th February

7.30am

Mecure Hotel

8 Customs Street

RSVP to kirsty.erasmus@cxcglobal.co.nz

Does Boutique Mean Better?

This headline caught my eye as I was walking into Heron’s Flight Vineyard in Matakana a couple of months ago and it really got me thinking.  The article was laminated and stuck on the wall as you entered the cellar door area and essentially it explored whether the product, service and overall experience of a winery and its wines was better from the boutique wineries, like Heron’s Flight, or from the bigger brands (such as your Jacobs Creeks or Villa Marias).

I did linger on the question with regards wineries but unfortunately I am nowhere near enough of a wine buff to be in any position to consider that for too long.  Generally since the GFC and becoming a Dad (twice in quick succession) my decision-making on the wine front is driven by the strength of Foodtown’s wine sale.

No, of course my mind wandered to the phrase “boutique” and its rather over-frequent use in the recruitment industry.  I decided I would do a little research into what you, the recruitment community, thought about this question as it relates to recruitment firms.  In certain sectors the phrase “boutique” seems to conjure up an image of quality, personalized service, exclusivity – accessible by people “in-the-know” with the resources to access it.  Think of clothes shops – Trelise Cooper versus Glassons – or hotels – De Brett’s versus Crowne Plaza.  You see how your mind conjures a certain feeling or image associated with the boutique brands?  There is nothing wrong with the bigger global or multinational brands, but the cache of cool just isn’t there, the desire to consume from something unique and more special and independent.

So how about boutique recruitment companies?  Does boutique mean better?  Or more precisely, does boutique recruitment firm mean better?

For the record I am writing this with regard to the New Zealand recruitment industry, where a boutique firm typically means one that is owned by New Zealand-based Directors with maybe between one and three offices and perhaps between 2 and 40 staff.  A “Global” or “Multinational” would typically describe a firm with a head office, board and shareholders outside New Zealand with a presence in a number of countries.

I decided to look at this from a few different points of view, to give the answer some balance.  So I have considered the viewpoints of recruiters who started out in large global recruitment firms, either in the New Zealand operations or overseas, who have since moved into a boutique firm.  I have also spoken to those that have gone the other way, from boutique firms into global firms with a New Zealand presence.  And I have also wondered how the clients of agencies might answer this question – the New Zealand business community that uses recruitment agencies to source talent – who do they think is better?

There are some distinct differences between Boutiques and Globals that showed up in many of the responses and there are clear Pros and Cons for each:

Boutique Pros

 

• Flexibility and Autonomy

 “Flexible and adaptable approach, e.g. more leeway to negotiate on fees rather than dictated by policy and b***s*** from above” 

“Also get a little more freedom at a boutique in terms of how you plan your day, who you target and meet etc.”

“The ability to change processes and adapt to the the changes in the market with one phone call or email. With a global agency you are generally confined within the standard procedure.”

“More entrepreneurial and latitude to set your day how you like, treat you like an adult” 

“Working for a boutique also offered flexibility over hours for a better work/life balance.” 

“Benefits – autonomy, autonomy, autonomy!  Simple as that.”

  

• A greater sense of worth within the organization

“The level of exposure of the business at an operational level. Boutiques are great for learning the behind the scenes stuff and for a broader recruitment experience.”

“Feeling more important to the company and not just a cog in the wheel. Being a more valuable asset.”

“I also saw working in a boutique as an opportunity to have greater participation in decision-making and defining the future growth and direction of the business.”

• More incentives and perks, both financial and non-financial

“We also celebrate success more with lunches and other events which is a nice perk!” 

“More empowering and reward you better financially for your work” 

 

• Closer focus on service levels rather than purely revenue-driven 

“More client driven and higher service standards” 

“Also the opportunity to push the service piece which is realistically impossible in the big corporate recruitment world.” 

“I am also trusted to work very senior roles, and I am given a generous budget to take my clients and candidates out and to attend networking events.” 

 

 

Boutique Cons

 

• Less stability 

“Having worked for owner operated firms/boutiques, I wanted to work with a larger team, with a wider range of resources behind me, and to reduce the individual feeling of responsibility for the bottom line.” 

“Although recruitment is performance-based – whether judged purely by fees billed – or a combination of KPI’s and fees – global recruitment firms do offer more stability.” 

 

• Less resources

“I believe there are some excellent boutique agencies out there but I found that working for a boutique was like working for an under-resourced global recruitment firm.”

 

• Fewer career opportunities 

“I felt a global agency offered me opportunities a boutique agency couldn’t or didn’t.”

 

 

Global or Multinational Pros

 

• Better training and resources 

“Excellent training and ongoing support” 

“Lots more experience to draw on, more people to bounce ideas off and leverage relationships off, huge resources – marketing, processes, etc” 

“Gain more in depth training, on-going professional development” 

“Also the training was second to none and immeasurably beneficial for me when I was brand new to the recruitment industry.” 

“These companies will train you and support you and mould you in to a lean and efficient recruiter.”

 

• Better career prospects 

“If travelling abroad seeking employment it’s often easier to gain employment through working at a global brand” 

“Global firms have the structure to offer career progression and if consultants perform well they will tend to progress quickly.”

 

• Better branding helping to open doors, especially with larger organizations 

“Often easier to access larger clients as larger clients like to affiliate themselves with global structures similar to themselves” 

“Better brand and marketing power and budgets. More people know your name which should mean less selling once established.” 

“Working for a global brand often opens more doors as it is (for better or worse!) generally well-recognised across the market.”

 

• Greater access to candidates with a wider reach 

“More candidates to share and if set up properly there can be communication within different countries of strong candidates moving abroad.” 

“Due to larger operations and marketing consultants generally have access to more candidates – particularly those relocating from overseas”

 

• More structure around KPIs and targets 

“Although KPI’s are often seen as a thorn in the side for recruitment consultants they are in place for a reason and having some accountability makes sure you can’t rest on your laurels – which makes performing and billing to your best more achievable.” 

“The only thing I miss, and this might sound weird to most recruiters, is the pressure on activity levels from management. When that pressure isn’t there I have a tendency to get in to bad habits, to avoid making the difficult calls, for example.” 

 

Global or Multinational Cons

 

• Lower pay, particularly commission levels 

“Money – low base and poor commission structure” 

“At the global company I was getting a very low cut of the fees I was bringing in, and I knew there was more money to be made in this industry.”

  

• Micro-Management 

“Micro management, inflexiblity around how you manage your day, too rigid” 

“I had become frustrated with stringent KPI’s and the inability to work creatively in the recruitment process.” 

“There is a bigger, more unrealistic expectation on performance being in a larger organisation.”

 

• The pursuit of revenue and profit over long term client or candidate relationships 

“An air of arrogance and insensitivity with clients and candidates individual circumstances, not really into preserving long term relationships but rather about the sale now and then”

 

• Transactional recruitment practices 

“Approach is flick and stick, rather than consultative” 

“There were strict protocols and a ‘one size fits all’ approach to recruitment and this made it difficult to provide a personalised approach that would best fit the clients’ requirements.” 

 

So there you have it – straight from the horse’s mouth – the horse being a range of different recruiters who have experienced both Global and Boutique recruitment environments and were kind enough to offer their opinions.

I also asked this group which environment would best suit a consultant brand new to the recruitment industry and a resounding 87% recommended starting your recruitment career in a Global firm.  The main reasons given were around the more robust and structured training offered in the Globals, with one contributor putting it quite nicely: 

“The big multi-national.  Why?  Boutiques are clueless at training people and I can nearly always tell recruiters who had the basics beaten into them – makes them more rounded and better able to play the corporate game.”

(For the record this came from someone currently in a “boutique”!)

For those of you interested in what clients of the recruitment industry have to say about this question, whether they think “Boutique Means Better”, they had this to say:

“From our perspective we feel that there is a place for both.  The reason, they both bring different strengths to the table.  The larger agencies have a great reach and spread in terms of the market and with larger organisation such as our which have a national and international focus, the ability to tap into that wider market is key to us being able to attract individuals to our organisation. 

The boutique agencies have the benefit of being specialised in their particular for the market, so where you are looking for a specific industry or skill set they have the advantage over the larger agencies.  This is where there knowledge really comes into play in terms of networks and channels to tap into.

We have a mixture of both on our panel and they equally perform well in their given spaces.”

 

“I don’t have a particular preference over global or boutique as I think a lot of it comes down to the relationship you establish with your key contact in the agency and their ability to provide you with quality candidates as opposed to continuously firing any CV at you.”

 

“There are positivites for both Global and Botique agencies.  From a Global perspective it would be the strength of their brand in the marketplace and their ability to attract talent because of the brand, this includes attracting talent returning to NZ. 

The other strength in Global is that they’re often able to provide a service across a wider range of roles e.g. Finance, Operations, HR etc as opposed to Boutique which usually focus on one area of the market.  The strength in this is that these agencies generally get greater exposure to the business because they’re given more roles to recruit for and therefore they have a better understanding of cultural fit for the business. 

In my experience Boutique agencies generally have a better pool of passive job seekers than Global Agencies, they maintain relationships with candidates which can go on for years and this will ultimately benefit clients.  They seem much more relationship focused and with both candidates and clients and are usually more aware of the importance of cultural fit to a candidate’s success in an organisation.  From a candidate perspective I think they provide a far more personalised service and are genuinely interested in finding the right role for the candidate.  To me the strength in this is that candidates will refer other passive job seekers and the agency ends up with a larger pool of quality candidates for their clients.”

 

These clients come from large commercial businesses in the Construction & Engineering, FMCG and Financial Services sectors.  I appreciate your comments.

So where does that lead me in summary?  Clearly there are arguments either way and I would say probably not enough to definitively argue that Boutique Does Mean Better.  As is often the case, you have to judge it on a case by case basis, and be honest with yourself about what you are really looking for in your next, or current, role.

Hopefully the generous contributions above will provide some insight and guidance and I will welcome the thoughts of anyone else out there in the recruitment world.

KPIs with my FMCGs

This week’s blog is kindly sponsored by Bonnie Scarlett Rice who was born on Wednesday evening and who is also the reason why I am only now starting to resurface back into the blogosphere, and the real, world again.

I must admit it’s been quite a full on week and hard to keep my mind fully focused on the world of recruitment.  I did have an interesting encounter down the local supermarket yesterday, though, that made me think about all those “Key Performance Indicators” we are always banging on about in recruitment.

It seems to be a widely universal belief that “KPI’s” (ok I’m going to stop with the inverted commas all the time now) are a necessary evil in recruitment.  I personally entered the world of  recruitment from a heavily sales-orientated company headquartered in the USA so KPIs (see) were nothing new to me.  In fact I was probably unable to function in any professional capacity without them.  So when I was presented with a weekly breakdown of my personal stats, ranging from BD calls, candidate calls, interviews, CV send outs and client visits, up to actual temp margins and perm fees, I was delighted.  In fact it fired up the competitive spirit in me and made me want to beat the averages and top the tables in as many categories as I could.

I am also aware they are not everyone’s cup of tea.  In fact I would say that nearly every recruiter I interview says they don’t like to be managed to strict KPIs and would rather have the autonomy and flexibility to run their desk as they please.  I suppose it boils down to how strict are the KPIs and how closely are you managed to them?

So it was with a certain amount of wry amusement that I arrived at the local supermarket check-out on Thursday to find the lovely Rose sitting waiting for me, reading through a sheet of paper with a resigned look on her face.  Rose is the kind of checkout operator that restores your faith in people.  She greets everyone with genuine warmth and makes every transaction and conversation feel personal.  If I could have her bleeping my FMCGs through the till each week I would (expect usually I’m working and not staggering about bleery eyed after just becoming a Dad again).

What Rose had been presented with was her weekly KPIs (or “report-thingy” as she referred to it – which I felt was just as useful a reference as KPIs).  The report measured her on factors such as speed of transactions, number of customers, accuracy of till balancing all the way down to the number of delete keys she hit on each shift.  I could tell from Rose’s face that things weren’t good.  Interestingly enough, I could also tell that she cared.  She gave the impression that she didn’t and that all this new-fangled reporting was a waste of time, but it was clear that underneath it all she really did mind how her KPIs stacked up with the others.  I could tell because, for the first ten seconds of my time standing at her counter, she was engrossed in reading through the report, and this usually total-customer-focused person had had her usual care and attention diverted.

I think this was a shame.  Not just the fact that her performance was broken down into a computer generated management tool.  But that the report was casually handed to her – mid-shift – without a word or comment from the supervisor.  And also that the report gave absolutely no indication of her ability to generate warmth and loyalty in her customers.

There is a lesson to be learned there by recuritment companies.  You wouldn’t find Rose working in an agency in the first place, she’s not that type, but the same rules obviously apply.  Yes, KPIs are a necessary evil, particularly in the ultra competitive world of recruitment, but make sure they actually make sense, that they are relevant to the job you are actually doing, that they promote and encourage the right kind of behaviours (not forcing people into making time-wasting client calls for the sake of achieving a number).

But most of all deliver them with humanity and respect.  Whatever recruitment leaders might think of certain team members, if you manage people to KPIs, the chances are they do care deeply about those numbers, however they may appear on the surface.  So bring out the report in a one-on-one and talk it through with them.

It would be great for someone like Rose to receive a KPI as part of her “report-thingy” about the numbers of satisfied customers she deals with on a daily basis as she would beat her colleagues hands-down.  And I just know how that would make her feel.  But how could you measure that?

I’m keen to hear of any recruiters out there exploring some innovation with KPIs.  We have seen and experienced what does and doesn’t work, but who is trying something different and getting great results from it?