For the Times They Are A-Changin’

The market is changing for recruiters and you better be prepared.

If you are stuck in the days of selling the fact that you can “find” talent then you are spinning your wheels, or you soon will be. Clients are more demanding and HR leaders need to believe that you can provide value so that they prove ROI.

Everyone is using social media to build their networks and connect with more people in more ways and in more places than ever before. With information so easily available, almost anyone with a computer can become a “recruiter” and throw a resume, or 10, out to an HR manager in need.

But how does this create value?

The answer is that is doesn’t. It does not save time. Nor does it provide value in the form of a service that they do not have the ability to do themselves.

All of us are now expected to do more with less. Those business leaders who can find creative ways to partner with experts who can help them manage critical processes to improve their business will be the ones who flourish.

So what does that mean for recruiters and the firms who employ them?  If you can’t assess and screen talent, manage the scheduling, work through the offer stage, and creatively market your clients’ organizations then you had better learn how… and fast.

The truth is that we can no longer be recruiters because finding and presenting resumes is a small part of the process. It is what happens after that and how you can manage that process for others where you have the opportunity to make a difference.

How is value created?

First, we need to understand that this new way of recruiting is not just providing great candidates for the company to interview.

I know… I thought that was the goal, too: find the best people in the most creative ways and your clients will keep coming back.

Article Continues Below

This is the old way of doing business, and though it is working now and has for the last 50 or so years, just like Bob Dylan said “… you better start swimmin’ or you’ll sink like a stone for the times they are a-changin’…” He was right in 1964 when he wrote those words and they hold the same truth now to our industry.

I had a conversation recently with another prospective client and he asked me, “What makes you different from everyone else?” Every recruiting agency has a tag line to differentiate and every recruiter thinks they do things differently than all the others. “We are faster” or “We have a great network of candidates who are not actively on the market” or any number of other reasons, but guess what? So does everyone else and these are not setting you apart. They only confirm that you have all the same answers as those before you and can’t add additional value.

Don’t be fooled into thinking that you are different than others unless you truly are. It is different that is starting to matter, not just the perception of being better. And trust me…it is only that, a perception.

So what is the answer? I would not be so bold as to make the assumption that I have the perfect answer. What I can tell you is that if you can eliminate their need to spend time and money on internal process by engaging your services, then you are adding value.

It sounds simple, and most people think they are doing just that. But if a company has to use its resources to screen, interview, schedule, negotiate, and a number of other processes to finish your job…you better get your resume together. It will no longer be good enough to provide talent; you have to provide the talent and the process so that your client only has to do one thing.

We, as an industry, need to distress the comfortable and comfort the distressed; to start thinking in different ways.  The need to innovate and the willingness to step out of the comfort zone, where you have made a lot of money in your career, has never been greater than now.

There is a call to action and it is being shouted in the marketplace every day. But if we are listening to the same old rock ‘n roll and only reminiscing on what it used to mean, then we are not allowing the music to reach its full potential to change our lives or shape our futures.

Do not allow you and your organization to be paralyzed by the discomfort of change because you are holding yourself back from reaching the potential to add new value; your clients are noticing the shift, and so should you.

Geoff Votta is a retained search consultant with O’Neill Consulting Group, a leading boutique retained search firm based in Providence, Rhode Island. His experience includes leading national executive level recruitment efforts for Fortune 500 clients in the following industries: CPG, Food Service, Industrial Manufacturing, Financial Services, and Heath and Wellness. With an unprecedented track record of success in Supply Chain/Manufacturing Operations, specifically TPM/Continuous Improvement talent development at both the corporate and local level, he is quickly becoming an industry leader in all things LEAN. His unique straight-forward approach and ability to quickly diagnose management teams to identify gaps has proven to be a key differentiator for him in his career. He is focused on bringing a higher quality retained search product to organizations unfamiliar with the lower overall cost and greater ROI of the boutique retained search industry. For more information about him and O’Neill Consulting Group, please email him at geoff@oneillconsulting.com.

Topics

14 Comments on “For the Times They Are A-Changin’

  1. Thanks David. One of the most important things that we use to differentiate is a project costing approach rather than using arbitrary percentage fees that do not represent the actual cost of completing a search. There is a great deal that goes into being able to execute this approach effectively, especially as a strictly retained firm. It is one way that we have gained a competitive advantage.

  2. Great question, David. Geoff, your company website claims near 100% success rate. That’s awesome! Is it true, though? Keep the insights coming.

  3. It is true Larry… we are selective and we won’t take on a search without clear understanding of needs and expectations from all stakeholders, timelines and deliverables, and making sure that our clients know what we need from them in order to meet and exceed their expectations. If we do not have their complete cooperation or if there is a breakdown along the way, we will stop the process immediately and get everyone back on track. If you know how to truly OWN the process there is no reason that any firm shouldn’t have a high success rate.

  4. Congratulations again on your success and it seems to be predicated on the cooperation from the client. I’m sure that is critical but why would a retained client be anything less than cooperative? And what do you mean by ‘OWN’ the process?

  5. Thanks Larry. In order for a firm like ours to accurately cost a project we need to have the agreement from the client around time lines and their sense of urgency. If a search drags out for 3 months and we have built the costing model on agreed upon time lines of 4-6 weeks, then we could end up losing money. Everyone wins if the client understands we will do the work, find, evaluate, screen out, qualify, reference check, etc. so that they will get 3-5 candidates and those people WILL BE the best of the best. Now they have to just make a hire. It takes a tremendous amount of trust.

    In order for us to have that level of trust and cooperation we need to own the process. From start to finish we do all the work. All the client should have to do is meet the candidates and make a hire… period.

  6. 4-6 weeks is exceptional! Is that start to finish or presentation of 1st round of candidates? Also, I’m not clear on what you mean by ‘OWN’ the process.

  7. What is the best way to handle a breakdown in the lines of communication? Is there a designated point person to reach out to and what sort of data do you provide your clients during the process?

    Are your fees based on a percentage of annual income or based on your companies costing model?

  8. Thanks for the questions David.

    A few points that you have brought up here.

    1. Breakdown in Communication: The best way for this to be avoided and addressed is to make sure that you have every little piece of information that you need up front so that there is no need to continually refine, or recalibrate on the fly. Having several info gathering sessions and setting up the expectation that if there is some stone that has been left unturned we will be reaching out and it is critical to our success, and theirs, that they make themselves available ASAP to address the issue immediately. Breakdowns tend to happen when clear goals and expectations are not set firmly upfront.

    2. Designated point people: There is never one single stakeholder in any project. Making sure that all the stakeholders are engaged and interacted with through the info gathering process is critical. Also, making sure that you have access to ALL stakeholders prevents any lag in getting critical information on fly when needed. Everyone involved should be accessible. Of course, the hiring manager needs to be available as the first point of contact. If he/she is not, then the urgency on the client’s end is not there and maybe it is a deal that you should walk away from.

    3. Data: We typically provide weekly reports and have a 10-15 minute weekly update call. Our goal is 4-6 weeks from start to hire. In order for that to happen we should not waste our time or our clients time throwing huge amounts of info or resumes at them regularly because our value is in getting past that to what people are capable of doing and how they fit the intangibles rather than what they have done in the past (resume). Data and information is only as good as how it is used and we know how to use the data not just gather and regurgitate.

    4. Fees. In the past, we have been focused on the percentage fees, like everyone else. It is much more cost effective for our clients if we use the project costing model. Hiring managers understand that every project is different and that the costs associated are different. If the rest of business is run this way, why should talent management be any different? There is no factual, data driven evidence for the arbitrary fee based on percentages. Our clients find it refreshing to hear that we will give them a price, based on costs, and that the needle wont move based on the higher level of talent usually associated with higher salaries. There is a conflict of interest, or at least a perceived conflict, in the percentage model. That is, you will negotiate the salary higher during the compensation discussions because that will result in a higher fee for you and your firm.

    At the end of the day there is no silver bullet or universal prescription and we build every search or project for the needs of our clients. We consult and manage talent… not recruit and regurgitate.

    Hopefully this helps… thanks for the questions!

  9. I find your pricing model extremely compelling. Based on estimates only, is your method typically higher or lower for say a $140k position? You folks must be uber selective when taking on new clients. Your website lists 6 members in your organization w/ 1 being administrative. How do you manage to be so successful with such limited manpower?

  10. @David

    We will almost always be more cost effective no matter the position or the salary range. We understand the role and knowing what resources we would need to employ to complete the search we would quote a price that reflects the actual cost of completing a search.

    For instance:

    For a Dir Level search at $140K you might see a retained search fee of 25% minimum (less for contingency but lets compare apples to apples). That is a $35K fee, minimum, not taking into account bonuses or other first year cash comp considerations. Now if all is said and done and the person that you hire is the best of the best and you end up paying them $150K (because they are the best) plus 15% bonus that is $172,500 @ 25% fee that is $43,125.

    I am fairly confident that we would find most searches at this level to price out somewhere around $30K, maybe less… you could pay that person $140K or $160K, same cost to you. In order for that to work however, we would need to know that the client is ready to make a hire in 4-6 weeks. The only way that I can save a client money and cover my costs and turn a profit (this is still business and we all have to eat) is if I can hit my timelines and the client holds up there end of the bargain. I WILL find the 3-5 best candidates for a client to bring in, interview once, and make a decision… “which of these superstars do I hire.” everything else will be done… screened thoroughly, references checked, totally picked apart, sold on the opportunity, ready to go!

    All of that sounds great but if the client doesn’t view us as an extension of their team and trust that we are playing for them and are coming in to field the best team possible than it can all fall apart. It is a very delicate process but one that works extremely well!

    We are a boutique firm with a lot of talent internally. Our process allows us to do more with less and in turn pass some savings on to our clients. I am not out to make a million dollars (though it would be nice!) at the expense of others. Everyone on our team plays a critical role and even with a smaller staff we are able to support multiple searches for multiple clients simultaneously.

    We are selective with our clients and the searches that we conduct but not because we lack bandwidth. We know what it takes to win and we partner with those clients who like to win, the right way, and we make sure that every deal is in line with our pace of play. We have never once turned down a prospective client who sees the value in a quick, accurate, efficient process.

  11. The key is to understand the difference between this service and traditional search.

    For a traditional retained search… 2-3 months minimum you should absolutely be charging a fee based on percentages and and if you need to manage a process and resources for that long, and oftentimes longer, than you are nuts to be negotiating a 20% fee. I argue that there are different products for different needs and you can’t compare this to the percentage model because it isn’t managed the same way.

    This cost based pricing model is dependent upon the cooperation and understanding that 4-6 weeks the search is done. Nothing is certain of course and inevitably there are circumstances that could drag a process out. But if executed successfully this saves the client money and time and you can greatly increase your business. You need to know every cost to your business… to the penny… to make this work.

    I don’t believe that this model is right for every search or for every client. You have to be very good at identifying those positions and those clients where this is feasible. The way this is done effectively is through a 100% up front retainer. Not every client can do that and therefore this model isn’t right for every client or search.

    This doesn’t compare to the traditional model because it tends to break all the industry standards… especially the arbitrary percentage fee. This is a newer service offering and we have found the sweet spot is the 100-150K positions because the talent pool is rich and they can be completed relatively quickly. I do not think that this would make a whole lot of sense for VP level roles… though it can and has been done.

    As I mentioned in a previous post, every search is unique and our approach may change depending on the search. We have decided to approach our business with flexibility and creative problem solving, even to the mundane, age old problem of recruiting.

  12. Sandy… I would welcome a meeting to help you understand the difference between the service models. It seems that we keep getting caught up on the same issue phrased differently.

    I noticed that you are located in Providence… interesting.

    Perhaps we could arrange a time to meet?

  13. In fact Sandy… by the looks of it Larry Painter and David Jefferson are also here in Providence… very intersting!

    I think that it would be great for us to all connect.

Leave a Comment

Your email address will not be published. Required fields are marked *