3 Lessons Corporate In-house Recruiting Organizations Can Learn from Staffing Agencies

On average, 118 people apply for any given job — and of those 118 candidates, only 23 actually get an interview. This conundrum begs the question: are employers building the best candidate pools? Staffing agencies and corporations face an identical challenge — attracting the right candidates to begin with.

Enticing a precise type of person to fill one very specific role is like searching for a needle in a haystack. You will end up with strict criteria, and an endless list of names of people who miss the mark. To fill your candidate pool with greater potential, take a page from the staffing agency playbook. Start with these three ideas: 

Forget position-based recruiting. For decades, employers have been sticking to a job requisition protocol that limits a position to candidates with very specific qualities or experiences. The legacy systems behind this requisition-based process were originally justified to decrease new-hire data entry into payroll, an outdated value proposition in today’s competitive world.

Ditch the requisition recruiting that boxes candidates in (or out), and trade it in for a more open system that attracts talent based on relationships. Relationship-based recruiting allows recruiters to spend more time on seeking, engaging, and qualifying the right candidates.

Rethink your recruiting team structure. One advantage staffing agencies have over in-house recruiting is the specialization of roles and responsibilities. In the staffing agency setting, roles are clear cut because one member, the recruiter, can focus on attracting and engaging candidates with the best fit based on skills, while another team member, the sales executive, focuses on understanding skill sets required by the client. In-house recruiting departments should restructure to specialize by splitting recruiting teams into two parts.

While one group focuses on building strong relationships with candidates and creating a talent pipeline, the other group can focus exclusively on understanding the business needs of hiring managers. This allows one party to attract the best candidates, sometimes even snagging them from competitors, while the other finds matches for the right internal teams.

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Connect recruiting with revenue. Staffing agency recruiters are acutely aware of the direct tie between great candidates and growing agency revenue, since talent is their product. Direct employers, where candidates are not the end itself but a means to an end, should also evaluate the connection between recruiting and revenue. In the knowledge economy, sales can be directly tied to hiring for many businesses across many roles, whether salespeople, consultants, or service delivery personnel. According to a top Salesforce.com staffing analytics provider, the expected value of candidate pipelines is a critical KPI for overall staffing agency performance.

Similarly, when more companies draw the connection between their ability to grow and their ability to hire the right people, then the role of the in-house recruiter will change. Even more than staffing agencies, employers have the potential to measure recruiter performance by tracking each individual recruiter’s placements over time for their success within the company. By measuring and paying recruiters for performance, which corresponds directly to employee success and company growth, corporate in-house recruiting will strengthen their strategic value and deliver true competitive advantage.

People will have 11 jobs between the ages of 18 and 34, according to the U.S. Bureau of Labor Statistics. We could greatly decrease this number and increase overall productivity by filling candidate pools with the right type of candidates from the beginning. How many workers are unhappy with their current jobs? Over half of workers surveyed in the spring of 2014 claimed to be dissatisfied.

To match people with the best jobs for their talent and passion, we must reinvent the practice of recruiting. Corporate recruiting teams should take a page from their staffing agency counterparts: Rely more heavily on pro-active relationship-based recruiting, restructure to focus on attracting the best candidate pool, and relate recruiting to revenue through measurement and reward. Employers will land the best candidates only when they rethink how they’re getting applicants in the first place.

Miranda Nash is the president of Jobscience, which takes modern technologies and front office techniques and delivers them via SaaS to help forward-looking staffing agencies and companies recruit top talent. She has been a hiring manager, a candidate, an entrepreneur, and C-suite executive who has developed a deep appreciation for the art of recruiting.

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7 Comments on “3 Lessons Corporate In-house Recruiting Organizations Can Learn from Staffing Agencies

  1. Of these points I think the third is absolutely necessary. ERP systems absolutely need to account for the revenue impact of vacancies and turnover. Where I think this article doesn’t get it right is points 1 and 2, which I don’t think necessarily follow even if 3 happens.

    For point 1, the reason companies use a position based model is because it’s their goal to minimize turnover and increase tenure of employees. This lets them maximize ROI from any training, formal or on the job, and minimize recruiting and other replacement costs. As such, building relationships and maintaining a pipeline of employees starts to become less cost effective for them. For agencies it’s a no-brainer, but agencies exist to fill positions and earn more money the more positions they fill, and they can ‘manufacture’ even more positions to fill from a healthy pipeline of candidates via their sales function. Internal recruiting departments simply can’t do this without trying to get existing employees fired or departments expanded and increasing overhead, which is a hell of a lot less likely to happen than an agency finding another company with a similar need to the pipeline they’ve already built. Attempts to construct internal agencies within corporations will continually run into this problem. The ‘need’ for a pipeline in a corporate setting means unacceptably high turnover and the cost associated with it, and the appropriate thing to do is ask the managers in question why the hell they can’t retain employees.

    For point 2, I see as many people arguing the merits of such a model as not. In my experience having those two functions separated leads to as many problems as it solves, with success or failure being more dependent on the people involved than any inherent superiority in the model itself. The model generally fails when the HM contact is a very ‘sales’ oriented person, because they tend to ignore opportunity cost and regard HMs as ‘internal customers’ with an ‘anything to keep ’em happy’ approach, which is an inherently flawed practice. That works for actual, external customers. Internal customers are actually partners, and keeping them happy at all costs means you may sacrifice the good of the company, and devote inordinate amounts of time and other resources, to keep a few not so competent managers smiling. For actual, external customers, guarantee happiness first and success second, for partners guarantee success first, happiness second. Otherwise they’ll be happy as clams as they sink you, your department, and maybe the business depending on how critical they are with perpetual demands that are not in line with the health of the company.

    Corporate looking at agencies, and agencies looking at corporate, for ideas is not a bad thing, but they are not interchangeable in terms of best practices. As such what works great at agencies will not necessarily even be desirable at corporations, or more to the point not achievable without significant investment the vast majority of companies simply won’t make.

  2. It is worth pointing out that your first suggestion to ditch position based recruiting is not so easy considering many of the federally mandated reporting requirements on EEO statistics. This is even more regulated when your employer is a federal contractor falling under OFCCP regulations. So, before ditching requition/position based recruiting, make sure you don’t throw the baby out with the bath water and can still comply with the internet applicant rule and other reporting requirements.

    1. Good point. Thankfully I don’t spend much time with compliance issues. However, it’s worth noting that at least some of the modern corporate approach is compliance driven as opposed to performance driven.

  3. In my experience, in executive search, where real fitting of candidate to job happens, recruiters are more often also marketers, while in staffing, the job is divided between recruitment and sales teams, but in that situation , the fit portion of the value chain is rather less central. Many corporate recruiting systems are still painfully inadequate in supporting sales-based recruiting rather than processing seekers.

  4. Having spent the first half of my career in staffing agencies and the second half in corporate talent acquisition, I can attest to having engaged recruiters that can talk to corporate leaders as well as candidates is imperative. The mindset that agencies can deliver better or quicker is very misguided. With the proper tools (ATS, passive and/or active, and telephone) any competent recruiter can identify and deliver the same talent as an agency recruiter, executive or staffing, in a more timely manner.

    Additionally, most outside recruiters rarely ask beyond the core technical requirements. As a Talent Acquisition Leader in my organization I have never been asked by potential outside recruiting firms about corporate structure, culture or teams. This is why we don’t us outside recruiters. Modeling a corporate recruiting model after a staffing firm is not only misguided but a waste of resources. Our recruiters are savvy, bright and get the job done. We know our managers and are able to do quite intake meetings and are always proactively recruiting top talent for our organization. Relationship-based recruiting is great, however, candidates that are given to our hiring managers have to have the skills required by the team and the organization.

    1. Sounds like you’ve got a well put together team, congrats! Knowing the crucial differences between corporate and agency recruiting is crucial to getting the best of both, and you summed up the practical impact here: “Relationship-based recruiting is great, however, candidates that are given to our hiring managers have to have the skills required by the team and the organization.” Well put.

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