Nine Factors to Shape Recruitment in 2011

This will be the last proper Whiteboard post for 2010.  I say “proper” because I will probably do something next Friday, but being Christmas Eve I really don’t think there will be much interest from you lot.  But I’ll give you something, nothing much, but something nice from The Whiteboard to wish you all a Merry Christmas while you cast sideways looks at your recruitment managers or Directors and wonder just when they are going to crack open the wine cabinet and call an end to proceedings for the year.

I was going to write a reflective piece on the year in recruitment we have just had.  But to be honest, as much as I’ve enjoyed every minute of it, I’m a bit over it now.  It can be summarised like this:

1^st Quarter:  Wow we’re busy again!  What is that plastic box on my desk making weird noises?  What do you mean pick it up?  Hello?  Sorry…who?  Oh yes thanks for returning my call from October 2008.  You’d like some staff?  And you’d like to pay me to find you people?  But we made everyone redundant and there’s no-one left to recruit for you!  Quick let’s build up our teams again – but this time make sure they are bloody good recruiters, none of that cowboy stuff from 2007!

2^nd Quarter:  Ooooh wait a minute.  Double dip, double dip.  Hmmmm…don’t want to be caught out like last time, no siree.  We’re not going to be the ones all the other recruitment firms laugh at for moving too quickly and over-egging the pudding.  This pudding is remaining flat!  We’re making pancakes, none of this fancy soufflé stuff.  Let’s just take it easy.  OK you can join us but you need to prove you can start billing $100k per month from day one or the deal is off.  We still have debts to pay you know!

3^rd Quarter:  Right this is really knackering.  The job board is absolutely buckling under the weight of orders from clients, but those poxy economists are still playing around with their Alphabet Spaghetti and talking about U-shape, V-shape and W-shape recoveries.  And house prices are NOT GOING UP for goodness sake!  But all of my team is exhausted and close to burn out!  Oh what the heck, Australia hasn’t even been in recession officially, and they’re going mental, what are we waiting for?  Let’s go for it!

4^th Quarter:  Wahey!  Record months, record Quarters, happy days are here again!  But let’s not get too carried away.  2009 is still a painful memory and the lessons must be learned.  It’s slowing down now towards Christmas anyway…at least I think it is…oh hang on it’s getting bloody busy again!  Jeez we need a break but how can we say no?  Not after last year!  Keep going keep going keep going.  Friday 24^th is in sight and we can all take a massive…well-earned…collective sigh of relief.

Well done everyone.  From what I’ve heard talking with a huge number of recruiters this year, things have certainly improved and recovered and there have been some stellar Quarterly results posted recently around New Zealand.  But it is also fair to say that most recruiters are knackered – so enjoy your breaks!

Then onto 2011.  Continuing economic recovery and the Rugby World Cup will all provide for a big year for New Zealand business, and as ever us in recruitment will be right in the thick of it.  Here are some thoughts from The Whiteboard on what might be in store for the New Zealand recruitment industry in 2011:

1.       Growth

Simple enough concept for us to all to understand.  But how recruitment companies handle it and harness it and take real advantage of it is going to be the trick.  Those of you in external recruitment will have a wonderful opportunity to get back to pre-recession levels of billings in 2011.  Those of you in internal recruitment will get increasing pressure from line managers and stakeholders to deliver on increasing numbers of roles.  Be prepared to work hard to take advantage of this upswing in business because if you don’t, someone else will.

2.       Competition

2011 will see the introduction of more and more recruitment businesses into the market place.  Some will spring up organically within New Zealand and some will enter from overseas.  What the big players need to realise is that these smaller boutiques can pose a bigger threat to their business than perhaps they could in the past.  With the amount of technology so easily available nowadays, small solo operators can move quickly, efficiently and with great flexibility and will work very hard at developing tight client relationships.  They can also source candidates via a raft of new methods that don’t necessarily rely on expensive job boards and ancient candidate databases.  The old adage of “big likes to play with big” doesn’t ring so true nowadays.  Many HR teams or candidates like to build a relationship with a person rather than a brand, so the bigger recruitment firms need to allow their recruiters to build their own personal brands and not hide behind a chromed, marbled, corporate image all of the time.

There will be some sniffing around from some larger players overseas too, particularly Australia.  Talent International, the fifth largest IT Recruiter in Australia, has already opened its doors here, as has Integrated who are a massive supplier of labour hire over there.  No doubt we will see some eying up from the likes of People Bank and Chandler Macleod too, once they have finished acquiring the Julia Ross business.  My gut feel though is that 2011 might be a bit too early for these guys to make a really bold move.  It will be hard for them to acquire businesses because the current owners will feel they can significantly grow the value of their recruitment businesses over the next couple of years, and will be unlikely to sell their undervalued businesses right now.

3.       Internal Recruitment

2011 will herald a new era for internal recruitment teams but the full effects won’t start to really show through until later years.  More companies will implement an internal recruitment function, and all will do so with the best intentions, but not all of them will get it right first time.  The old system of putting in disgruntled agency recruiters, or starry-eyed HR advisors, to create a department disrespected and misunderstood by hiring managers, is in the past.  Internal recruiters will need to develop systems to engage with the wider business and earn their respect.  They will need to harness new technologies to attract candidates, but more than that it will be about developing and nurturing a passive pool of talent, rather than going out to recruit reactively as and when it is needed.  They will also need to understand employment branding, how to create a brand and culture that people aspire to work for, and how to keep that message consistent and real throughout the business.

Importantly, they will also need to know how to manage relationships with external recruitment agencies.  Whilst many internal teams will be built with the aim of reducing recruitment expense, it is no longer going to yield the best results for your business by simply appointing a panel of PSA suppliers who have offered to drop their pants the lowest on fees.  To access the best talent, much of which will still come via recruitment agencies, the smartest internal recruiters will get more by developing quality relationships with specific recruiters who intimately understand your business and really get the culture.  During 2011 this will start to happen increasingly outside old-style PSA panels, although the PSA supplier relationship will still remain at the fore until later years, especially with bigger businesses.

4.       Flexibility

The recruitment industry has come some way in this regard in recent years, but 2011 will take it to a whole new level.  No longer the sole occupancy of fiery, energetic, young Grads, more and more recruitment desks are populated by more experienced, commercially-astute and business-minded consultants.  With the ability to monitor e-mails on the move and log onto your CRM from home, some firms will go to 9-day fortnights.  New Mums will be able to return to work and run a desk, without leaving their child in day care for the entire working week.  Experienced overseas recruiters, seeking a move to New Zealand for the fabled “lifestyle purposes” will not want to find themselves stuck in an air-conditioned skyscraper for 60 hours per week.  Firms failing to develop a more flexible working style for its employees will lose quality experience and expertise and struggle to attract good quality recruitment talent from overseas.

5.       Contracting

Following on from flexible working practices, the concept of contracting will take off in a big way in New Zealand in 2011.  Lagging behind much of the developed world, this has been slower to properly catch on in New Zealand, but many recruitment companies will look to grow their contractor offerings at all levels.  From a recruiter’s point of view, this is one of the toughest and busiest desks you can run, but also by far the most financially rewarding.  From the handful of $1million+ billers there are in New Zealand, all of them either run exclusively a book of contractors, or have a significant contractor pool to augment their monthly Perm billings.  This is a rapidly growing market and recruitment companies will be ramping up this offering almost universally.

6.       Salaries

During the GFC most base salaries in recruitment were trimmed back by around 20%.  Whilst there has been pressure during 2010, many recruitment firms have managed to hold true to their principles and newly austere approach.  This is already under severe pressure now, but in 2011 it will break.  Firms determined to keep base salaries the same will struggle to attract the top talent and will need to develop very generous commission incentives to retain high performers.  Here is a guide to current base salary levels in New Zealand recruitment (mainly Auckland and Wellington):

–          Candidate Manager        $35k – $55k

–          Trainee Recruiter             $40k – $55k

–          1-2 years Recruiter          $50k – $65k

–          3-5 years Recruiter          $60k – $80k

–          5+ years recruiter            $70k – $90k

There are occasional exceptions to the rule but to go outside this…you will be exceptional…see what I’m saying?  Anyway, expect to see these beefed back up 10%-20% again by the second Quarter of 2011.

7.       Probity checks

During 2010 the recruitment industry came under intense media scrutiny around the quality of background checking undertaken, particularly in the instance of Stephen Wilce and Momentum Consulting.  Whilst the recruitment firm was in my opinion unfairly made a scapegoat for the Defence Force’s own ineptitude, it has nevertheless made many in recruitment significantly ramp up their compliance.  So in 2011 we will see many recruitment firms introducing credit checks, education checks and criminal checks along with the standard employment reference checks.  Much of this will be outsourced, but will actually serve as a significant improvement to our overall service offering anyway, so hopefully some good will come out of that difficult period.

Although impossible to monitor, more and more clients and recruiters will also be conducting “informal” background checking through social media channels such as Facebook, Linked In and Twitter.  Whilst the legalities around this remain a little hazy, it is something that will be a major feature of how recruiters handle their candidates and how clients make hiring decisions.

8.       Social Media

Which brings me nicely onto the eighth factor – and the one on everyone’s lips – the influence of social media and social recruiting.  2010 saw the uptake of Linked In in a big way by recruiters looking to build innovation into their old-fashioned sourcing techniques.  In 2011 the same will happen with Twitter and, to a lesser extent, with Facebook.  Whilst internal recruitment teams will start to use Facebook more and more to tie into their careers site, nurture that passive talent pool mentioned earlier, and deliver a human side to their corporate image, I think that agencies will struggle to find any significant Return On Investment to their Facebook efforts.  Twitter will be a different story.  By the end of 2011 most recruitment firms in New Zealand will have some kind of Twitter presence.  However, like Linked In, only a handful will actually harness the real power of this social media channel, most will get it wrong.

Using a job portal to automatically load your job ads onto your website and various job boards is a useful, time-saving tool.  But letting it dump all your jobs on Twitter is not clever, and will actually do more to tarnish your brand than promote it.  Companies using Twitter to solely advertise their jobs are not getting what Twitter is about.  Twitter is the vehicle by which you can do what I suggested earlier, and promote your personal brand.  Develop your online relationships with clients who will come to better understand you as a person rather than just a corporate entity on a PSA panel.  This will engage them and make them want to do business with you.  You do this by being honest, authentic and real in what you Tweet.  Talk about things that will interest your followers, and include links to interesting articles you find, and build a reputation as an industry expert.  OK you can chuck the odd job on there too, but doing it constantly will switch off your audience and make Twitter into what many still regard it as – a waste of time.

Some recruitment firms will also start implementing Social Media Policies, a set of guidelines for their employees on how to behave on the net, how to protect the company image, and how to protect their own interests if those employees decide to leave and take a load of contacts and networks with them.  Once again, most will get this wrong, and many won’t even bother until later on in 2011 / 2012.  Social Media is constantly evolving, so make sure your policies are designed that way too, and get the input and consultation from your own staff on how this policy should look.

9.       Corporate Social Responsibility

What used to be the domain of large multinationals, often headquartered in the USA, is now catching on with smaller, more local firms too.  As profits rise and firms look to give a little back, as well as elevating their perceived image in the wider community, 2011 will see an increasing focus on CSR with many SME kiwi recruitment firms developing new approaches.  Some clients such as Office Max won’t even let you recruit for them unless you have a dedicated charity your company works with.  Kelly Services have started offering all employees a ½ day off per month to undertake charity work of their choosing.  2011 will see a new era whereby clients will start to decide on suppliers based on their CSR policies, and recruiters will chose who to work for based on this too.  I think there will be a lot of well-meaning efforts made in this regard by recruitment firms in 2011, but again many will miss the mark of what this is about.  Make sure it is something supported from the very top down, communicated by company Directors, and make sure there is a CSR dedicated champion in the office who co-ordinates these efforts as part of their daily responsibilities.

So there you have it, the 9 factors that will shape our industry in 2011.  One thing I would love to see more of in 2011 is more comments and discussion on The Whiteboard, which is really what this should be about.  I am humbled by the numbers of you out there reading this and talking to me about it when we meet, but it would be great to get your comments on here too.  This is a Whiteboard for you to write on as a recruitment industry, not just for me and my personal thoughts!

So if you fancy starting now, how about rounding this up to 10 and suggesting what could be the tenth factor to make a major impact on our industry next year?

Momentum Hits Back After Wilce Inquiry Goes Public

At last.  Yesterday saw the public release of the very catchy sounding report “The Circumstances into which Mr Stephen Wilce was employed as Director of the Defence Technology Agency”.

For any of you who have been living under rocks lately, this report is of significant interest to our New Zealand recruitment community because of the role played by Momentum in the sourcing and presenting of Stephen Wilce as a candidate for the role.  Placed by Momentum back in 2005, Stephen Wilce muddled through 5 years in the job before an expose on 60 Minutes last month revealed him to be a fantasist making wild claims of Olympic bobsleigh exploits, representing Wales against the All Blacks and, my favourite, playing guitar on the British folk circuit (is that something you’d actually make up to try and impress someone?!)

How much Momentum charged for their work depends on what website you read, ranging from $25,000 in the Herald to $70,000 in Stuff.

The New Zealand Defence Force realised what an almighty and embarrassing mistake this was and immediately went about the honourable process of seeking to lay blame elsewhere.  So, despite assembling an expert interview panel themselves and deciding to make the appointment, they have been trying to suggest it was all Momentum’s fault for not conducting adequate reference and background checks.  Momentum denied this, saying that it was not their responsibility to conduct reference checks as the NZDF had agreed to do this as the hiring process unfolded.

You might have read my comments on this in earlier blog posts but I have always sided with Momentum on this.  This isn’t due to some form of nepotism or bias towards them but really because I see this as an issue affecting all of us in recruitment, and this is something that could have happened to any other firm out there.  The fact Momentum’s reputation has been severely tested does not just affect Momentum, it affects all of us in recruitment.  People outside our industry are quite happy to tar us all with the same brush, and you will have all experienced this first hand.  They don’t care if your firm isn’t Momentum, they would happily believe that because of these stories, it probably means that all recruitment companies fail to conduct proper background checks.

Let me ask you your impressions of finance companies when you hear about Blue Chip.  Or your impression of used car salesmen when you hear about one dodgy one on Target.  Even your impression of professional footballers when you hear about John Terry…err actually that might be a bad example as they probably are all like that (apart from the saintly Fabregas).

But joking aside, it has been disappointing for me to hear about other recruiters smirking into their flat whites at this controversy, and barracking Momentum from the crowd at the Seek Awards.  Get off your high horse, this attack on Momentum’s reputation isn’t just a pain in the backside for them, it affects all of our reputations out there in the wider business community.

I am particularly glad this report has finally come out because I believe it goes quite a long way (but not the whole way) to exonerating Momentum from blame.  You can download the whole report here but on the whole it is incredibly tedious and I can summarise the main points of interest as follows:

h.            Momentum Consulting Group Ltd (“Momentum”) carried out qualification checks on Mr Wilce in accordance with the then provisions of DFO 16.  Mr Wilce holds the qualifications that he claimed to hold in his curriculum vitae.

i.              Momentum carried out a criminal history check through a subcontractor.

j.             Momentum was obliged, under the contract it entered into with the Crown, to “undertake detailed reference checking” to the standard indicated in its Proposal.

k.            Momentum did undertake referee checks.

l.              The checking undertaken by Momentum met the basic standard then required by DFO 16; enquiries were made of Mr Wilce’s referees and no concerns about his background, integrity or character became apparent.

m.           The checking undertaken by Momentum did not satisfy the higher standard of thoroughness required by its contract with the Crown; adherence to this standard was necessary given the nature of the position.

n.            The NZDF recruitment project team placed an undesirably high level of reliance on Momentum carrying out the proper checks.  The NZDF could not contract out of its responsibility to ensure that adequate checks were conducted prior to appointing Mr Wilce.  Accordingly, the relevant manager, [the then Assistant Chief Development], bears command responsibility for any failings in this regard.

o.            The standard of checking required by DFO 16 at the time was inadequate in the circumstances.

It is with point “m” from this Executive Summary that Bede Ashby, the MD of Momentum, has taken umbrage.  In a press release issued last night he says:

“[Our] proposal recognized that the post of Director of the DTA required high-level reference checks. At no stage in the recruitment process did the NZDF ask us to complete these checks on Mr Wilce.

“If Momentum had been asked to carry out the full reference checks, as the Inquiry agrees was set out in our initial proposal to the NZDF, his claims about his performance in previous jobs would have been tested more rigorously. Although the checks were included in our proposal the client decided to take responsibility for these themselves.

“Variations on the original proposal are common in recruitment processes and this was no different. For example, Momentum completed assessment reports on all 14 members of the long list. This is very unusual but was carried out at the request of the client. The NZDF varied our original proposal by taking responsibility for the reference checks rather than having us complete them as originally proposed. These were among a number of variations agreed with the client during this process and our documents support this.”

So where are we left after all this?  I’m sure it will act as a catalyst to make many of us sharpen up the standard of our reference and background checking even if Bede’s assertion is a fair one in that they did do what was required.  And this is a good thing.  But we also don’t want to get carried away for fear of this happening to us some time in the future.  We are recruitment consultants.  We do not make the final hiring decision for our clients.  Yes we have a duty to assist our clients in making the right decision by providing them with as much accurate information as possible, but ultimately the buck stops with the person making that hiring decision.  As recruiters our skills are best applied in networking, sourcing and attracting the best available talent to a role.  We cannot suddenly become so uptight about background and probity checks that we lose sight of what we really are best at.

My advice would be that if you feel the nature of the role you are recruiting demands a higher level of background checking than the usual 2 or 3 employment reference checks, then put this in a written proposal to the client and offer to undertake whatever they deem necessary.  But then outsource this process to someone that can do it better than you – and charge your client for this service on top of the standard recruitment fee.

Fair enough?

Fraudulent CV Saga starts to lack Momentum

 

Ali Dia arrived at English Premier League Southampton back in November 1996.  He had been signed by the then manager, Graeme Souness, purely on the basis of some hazy video footage and a phone call, purportedly from World Footballer of the Year George Weah, claiming to be the cousin of Ali Dia and recommending him for a place in the team.

Ali Dia was indeed a Sengalese footballer but he had certainly never played for Paris St Germain or his country, as was suggested in the phone call.  Nevertheless Graeme Souness was bewitched, stars in his eyes, and lined the player up to have a run out in a reserve match friendly against Arsenal.  However, due to a waterlogged pitch, that match was called off, and Ali Dia found himself on the bench for a first team match against Leeds that weekend.  After about 30 minutes he was substituted on for the injured Matthew Le Tissier.

He was abysmal.

He lasted 53 minutes before being substituted off again…and he was never heard of again.  Le Tissier recalled the story in a TV interview many years later and said:

“[He] was unbelievable. He ran around the pitch like Bambi on ice, it was very, very embarrassing to watch.”

 

Souness had been the subject of a hoax.  The phone call from “George Weah” had actually been from a student friend of Ali Dia’s and, although he had played at the lower levels in France and Germany, he was nowhere near the level required to perform in the elite Premier League.

This week we have heard how Momentum Consulting have been involved in their very own Ali Dia hoax with the story of Stephen Wilce, placed by Momentum in the role of chief defence force scientist, breaking after an expose of fraudulent CV claims on the current affairs programme 60 Minutes.  Wilce’s claims of armed combat experience and British Olympian sledging exploits were exposed as lies.  He resigned from his post, which he had held for 5 years, the very next day.

Now obviously this is a trifle embarrassing for Momentum, it’s not a great look, but let’s be honest about this – nearly any recruitment company out there would have acted in exactly the same way.  For what is our role as recruiters?  I believe the chief and primary role is to identify, source, attract and present talent to our clients – but ultimately the final hiring decision has to come down to the client themselves and they have to take the brunt of responsibility for poor hires.  This is the kind of role that any recruitment consultant would be unlikely to have real expert, deep, intimate understanding and knowledge of.  Of course you can take a detailed job brief, do some research, and put together some sourcing strategies, but ultimately it is to be expected that the Three-Man Panel of Experts that Momentum put forward their short-list to should be the ones held accountable for failing to identify Wilce’s lies and inaccuracies.

Yet all week long we have heard Momentum being attacked in the media about their involvement in this, almost as if it is entirely their fault.  The chief antagonist has been that walking tabloid Paul Henry on his Breakfast programme.  He had John Key in on Monday – all he wanted to do was attack the recruitment agency – and John Key rightly deflected his ire towards the investigation that is underway for he knows that the deficiencies of Defence and Intelligence Service are going to come out way ahead of any mistakes made by Momentum.  Yet the next day Paul Henry had James Sutherland in from Resume Check – again he insisted on turning the focus on the recruiter – even ridiculously suggesting they be removed from recruiting roles for the new Super City.

In many ways this is to be expected.  People like Paul Henry make a living through sensationalism and he will often deploy the “shock jock” approach to news reporting to boost viewing figures among his scandal-hungry followers.

But what has really annoyed me is some of the smirking, holier-than-though, sycophancy on evidence by other recruiters.  I know tall poppy syndrome is alive and kicking in New Zealand but don’t you people realise that any public attack on Momentum is, as far as the rest of the non-recruitment world is concerned, an attack on the entire recruitment industry as a whole?  They don’t differentiate.  The behaviour of one recruitment firm is a blueprint for the behaviour of the whole industry as far as they are concerned.  If you hear of a car salesman selling a lemon on Target one night, does it just affect your views towards that car dealership, or the industry as a whole?

Earlier in the week I assumed that the level of criticism must be because Momentum had done absolutely no background checks at all, not even reference checks.  And whilst I thought that was not ideal, I was able to recall many occurrences where clients of mine have told me that they will do the reference checks themselves, so I haven’t done them.  I have even worked next to recruiters who have completed empty reference checks consisting of nothing but a full-stop, just so they can get the paperwork through the CRM system and get the invoicing sent out on time.

You know this happens out there.

But in this case I thought, well it’s Defence, if they told me that they would do the background checks then that, to me, would make a lot of sense and I would happily leave them to it.  So what will be really interesting to hear is who was actually responsible for conducting employment reference checks and probity checks?  Momentum or Defence?

I must say I have been surprised by the lack of comment from Momentum, apart from this response from MD Bede Ashby.  Are they adopting a dignified silence?  I for one am eagerly awaiting clarification on all of this because the longer it goes on, the worse it will be for the reputation of us as an entire recruitment industry, not just Momentum.

The final word has to go to Graeme Souness who released Ali Dia from his contract after just 2 weeks at the club (note the speedy response – how bad a candidate can Stephen Wilce really have been if he lasted 5 years in the job?)  “I don’t feel I have been duped in the slightest,” explained Souness afterwards.  “That’s just the way the world is these days.”