As the markets in Asia Pacific continue to grow at rates from 6 – 23.5% (in the case of SG’s 1st Quarter 2011!) the ‘war for talent’ continues at a pace (this might happen to not be timely due to the recent makets activites but hey ho!). There are consequences for recruitment as a result of this growth which I will be discussing over the next few weeks – attraction, retention, services etc. however, one particular area of contention that needs addressing and understanding is what recruitment actually is (and not)…in any market. Recruitment is a SERVICE. Now this might seem an obvious statement but it actually needs realising and understanding in context.
One of the biggest disconnects in the recruitment industry and one of the reasons it often suffers in terms of reputation and is misunderstood re value is the fact that it is sold as a service but fundamentally, invoiced and guaranteed as a product. I have no idea where this legacy comes from (it was thoroughly entrenched when I came into the industry) but what I do know is that it makes it near on impossible to make clients understand what it is we do I.e. provide a service.
Now I understand the reason for both the a) fee model and the b) guarantee clause;
a) Paying a % of someone’s fixed salary or as a margin on a contract is an easy way to tie the amount to the value of your network and relationship. It should also be exactly relative to the value to the client of the person being hired.
b) The guarantee stops the less than ethical people of this world ramming home the wrong candidates and then buggering off with a fee and no care in the world. It also mitigates the client’s financial investment risk to some degree by making sure a replacement is found asap if the first candidate doesn’t work out.
However as they stand in recruitment, they are both in direct conflict with a service model and therefore fundamentally flawed. When you hire a lawyer for their services you pay them by the hour (well, 8 minute cycles in most cases actually) and they provide a good service if not a result. You wouldn’t ask 6 lawyers to provide their service, decide which service had the most attractive looking proposition and only pay that one and then after 3 months of working with them, ask for your money back (or to do it again free) when they don’t get you the result you were hoping for. And here its time for a disclaimer – I am not talking about low-level service lawyers or recruiters – I am talking about the competent professional levels of both groups – i.e. a like for like.
So there is a disconnect between what is provided and what is charged and misunderstanding of this from the Client side (and sometimes the recruiters!) and wherever there is confusion there is conflict and reputations suffer. This obviously needs to be dealt with and quickly (its been going on too long)
I am not proposing we get rid of a guarantee. However, I do think we need to look at how we charge and that the bulk of recruiters look at what is guaranteed and why.
Consultants and agencies as a whole need to understand this themselves and where their clients are coming from. They then need to be able to sell and justify their service i.e. understand their value proposition – both theirs and their companies. They need to provide training to their sales staff so that they can clearly articulate all this and educate clients.
Clients need to try to understand their service providers so there are no misaligned intentions. They also need to stop focusing on price and consider TRUE cost. They need to stop putting all the onus on recruiters if their Talent don’t stay and start focussing on employment branding, engagement and retention. Judge us on our service, not how you manage your Talent once on board!
Long term there needs to be an overhaul of the model. I have focussed on increasing our project and retained work which has gone from 0% to 64% as a result. This is a good stop-gap. It takes time, training and education to consultants and clients but is much more efficient for all concerned – recruiters, clients and candidates. There are other new and revolutionary solutions you will see coming from me soon. Its time to change!