Next Level

THE EVOLVING WORLD OF RECRUITING

Search, recruiting, human capital management, staffing, talent acquisition, headhunting, and even flesh peddling are all simply words. Each word conveys a different image, but they all are about securing talent (I always wondered if searching for talent was different from recruiting for talent :-)). Recruiting is, therefore, the profession in which we all participate. Why should the process that one uses or the contractual payment structure of an agreement be used to classify our industry? Are law firms not just law firms, or are they listed by whether they are contingent or retained or represent the plaintiff or the defendant or by the way each lawyer conducts a potential trial? Ultimately, should an approach dictate a classification?

I would submit that, as in all professional services, there are a wide variety of firms in our profession. And while some do retained, others do contingency work, some do permanent, some do temporary, and some do a hybrid of all. Some specialize by function, others by industry, others by level or geography, and some, again, a hybrid of all. In all cases, an employer is paying a firm to secure or “recruit” talent for their organization (the exception is an applicant-paid firm, which is not recruiting but instead helping someone find a job). So, my first contention is that the evolution in our industry is one that began with very rigid lines of demarcation that have since been blurred and will continue blurring until finally our industry will simply be known as the recruiting industry.

At that point, a firm’s classification will no longer be placed into such limiting categories. And while certain divisions, practices, or recruiters may be categorized, the organizations themselves will not be. To create an equal playing field in terms of revenue, contract or temporary firms would have to show their revenue by adding the net margin on their contract or temporary work to their permanent fee revenue to get an accurate comparison. Essentially, the real benefactors of this simple system for classifying firms are client organizations. It is my belief that, to truly be client focused, organizations must be prepared to offer solutions that are appropriate for each specific client and even each specific client need. Why should the level of a search determine whether it should be contingent or retained? Wouldn’t the urgency and the critical nature of the assignment be a better qualifier?

If a construction firm needed to hire a senior executive to replace a retiring executive in the next year or two, might they be better served by utilizing a few recruiters to keep a lookout for potential talent over the next year and present candidates when appropriate? Perhaps, as time evolves, a different approach would be more suitable. Now, if that same firm needed a superintendent to build a new 20-story office building or a hospital to replace an employee who left at a critical time, wouldn’t they be better served by partnering with a firm to hold accountable for identifying, evaluating, attracting, and landing the best possible talent for that urgent and critical need? In that case, it may require a financially committed relationship to achieve that result. With that said, should that same client have to work with many different firms that work only “one” way because a single firm cannot be client-focused enough to offer unique solutions most appropriate for each search? While this industry change will not happen overnight, new words such as container and detergency only provide additional ways of labeling firms by their financial agreements. Many organizations do offer these full-service approaches and try to separate their style of work by utilizing different brands. This is also done to combat “blockage” issues that larger organizations face. This dilemma will continue to be an issue in the future. It will also be an interesting trend to monitor as firms try to grow exponentially.

SO, WHEN DID IT ALL START?

I believe this evolution began in the early 1990s. Prior to this, there were temporary firms that addressed short-term recruiting challenges, contingent firms that worked on positions below a certain level (usually under-six-figure salary levels), and retained firms that worked only above a certain level. Most people had no clue what a recruiter or headhunter was, and many organizations had never used them. Then something changed! Core competencies and outsourcing emerged. Determine and focus on the core competency of the business, and outsource everything else.

This resulted in the staggering growth of our industry, to the tune of several billion dollars through the ’90s! Companies scrambled to take advantage of the trends in the information age and began creating a variety of divisions in response. Some succeeded, but almost all that created approaches and models based on dis-intermediation of the human touch of recruiters failed miserably. The old lines of distinction were blurring. Traditional retained search firms were doing large-scale project staffing business. Temporary firms began building permanent divisions, and vice versa. In the end, many firms moved too quickly – or ineffectively – and failed. Then the same employer-driven market of the early ’90s emerged following the dot-com bubble burst. Ultimately, the industry fell victim to its explosive growth and the length of that particular cycle.

However, in the past few years, the pendulum has swung back to a candidate-driven market and a war for talent. Having learned from the last buildup, clients and recruiting organizations alike are now realizing the importance of certain criteria in recruiting firms, and the fee agreement is but a small part. Effective results based on market knowledge is the mantra of all. The biggest criterion that companies now seek is the specialization of the firm or recruiter in their area. This means that the recruiter knows not only the industry but also the functional area of the search, the level of the position, and the geography of the assignment. Gone are the days of simply selling a generalist mentality of a great search process.

If a hospital needs a new CFO, they don’t just want a recruiter who knows healthcare or one who knows accounting and finance or one who works only on senior leadership positions. They want one who specializes exclusively in healthcare finance, and knows the geographic area and the position level well in their market.

The second criterion that companies are demanding is flexibility. They want firms to work at various levels and want flexibility in their agreements (terms, fees, and guarantees). Many understand the need for an up-front financial commitment and additional progress payments for performance milestones. However, they do not feel that it is always appropriate to potentially pay 100% of the service charge and get no results and have no flexibility in offering other solutions. This time around, they will have not only the needs but also the knowledge of what not to do.

The third major criterion that clients want is a track record of previous success. If a pharmaceutical company needs a vice president of clinical research, they want someone who has successfully completed a similar search and will want to conduct a reference check.

Only when clients conduct their due diligence will they ultimately learn who truly delivers. Perhaps then the classification of firms will be based on specialization, flexibility, and track record. Perhaps, in addition to overall revenue, firms would list the revenue in each industry and/or function as well. If a firm has too much volume in any area, then perhaps they won’t be able to take on more clients, causing other firms to grow their capabilities. Although it is heresy to some, I am sure, I do believe that bigger retained firms could serve their clients better by offering contingent solutions without compromising the “integrity of their brand.” After all, if calling a company and telling them about a talented individual who you truly believe could make a profound impact on the bottom line of their business is an approach that a current or potential client could benefit from, then why not do so? If letting clients know that they would have to pay you only if the candidate is a good fit, and this is an approach clients want (as evidenced by their willingness to do so again and again), then why not offer these options as well? When a client wants to engage a firm to operate in a true management consulting function, in which the firm is 100% paid for the conducting of the search and not results, then search professionals should learn how to respond. However, paying part of a fee for results (like second payment or short list or final payment on hire) is partial contingency and partial retained. Again, the labels do not matter.

What does matter is the ability to educate the client as to the different approaches and guide the client in making a professional recommendation that best suits their needs. We all have so much to learn from one another. I have talked at staffing conferences, retained search conferences, permanent search conferences, and human resources conferences, and will do so at an upcoming human capital conference. There are many differences, but there are also many more opportunities to learn from each other. The dialogue can help our industry only if we always keep the focus on what is best for the client!

In the great words of Dennis Miller, this is just my opinion and then again I could be wrong!!!!

Ironically, this month’s tip from the trenches is titled “Remember: Recruiting Is Selling.” This is another example of words and labels.

Consultants are paid to give advice on a particular course of action. This is what effective salespeople do, too! At times consultants give bad advice and even have bad intentions – and so do salespeople. So, it is the individual or the practices that the individual engages in that matter most. A wolf in sheep’s clothing is still a wolf, and vice versa!

Shawn Desgrosellier is the author of the following piece. He is a managing director at Kaye/Bassman and shares responsibility for overseeing the firm’s Western Region within the Construction and Real Estate Specialty practice. Shawn began his career with another leading executive search firm and for over eight years directed the CPA and Financial Management Practice as vice president. He joined Kaye/Bassman in 2000. Shawn has been consistently ranked in the top 10 in a national network of 4,000 recruiters. He has a track record of maintaining long-term recruiting partnerships and completing large-scale hiring projects and repeat search engagements with key accounts. He is currently transitioning out of his practice into a full-time leadership role with responsibilities for overall Kaye/Bassman sales leadership and training. He produced $1.6 million in search revenue in 2006. Until next month from me, enjoy this tip from the trenches from Shawn:

Remember: Recruiting Is Selling

As we continue to push forward in a candidate-driven market, there are many challenges we are all faced with in the recruiting business. The first and foremost challenge is the identification of candidates and gaining commitment to consider career moves.

This is a candidate-driven market, and the more candidates you can contact, develop rapport with, and gain commitment to interview, the more placements you will close.

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Here are a few ideas that can help you CLOSE MORE SALES:

1. Think Like the Candidate

Your recruiting process should be a mirror image of the way that candidates want to buy from you, rather than a model of how your firm would prefer you to sell. The best sales skills in the world are useless when you are trying to sell the wrong way to the wrong people in the wrong organization. Do you truly understand your customers? Think like the candidate, role-play as if you were being contacted by a recruiter. What do you think you would want to hear or know about before you committed to sharing your information, sending your résumé, or agreeing to interview with a client? Now think what THEY would want to hear about or know as well!

2. Marketing “You”

Develop a program that allows you to keep in regular contact with your candidate base, and I mean now! Have you developed an email campaign to describe current searches and also highlight market trends or compensation issues? If you read news articles about your industry that are relevant to a candidate, do you forward a PDF of the information to those candidates? How often is “your” name in front of the “candidate community,” and what “marketing of you” are you doing to penetrate the candidate market deeper? Develop a two-minute overview of who you are, what you do, and why someone should consider talking to you. Rehearse it – practice generates confidence and confidence generates more SALES.

3. Mission Accomplished

When you are engaged to fill a new search, you must clearly determine your process before you begin. You must work with diligence, expedience, and thoroughness in searching the RIGHT targets, and you must work toward your objective each day until you have at least three candidates presented to the client for the specified position. The number one mistake recruiters make is the lack of preparation, and the second-largest mistake is not recruiting until you have enough qualified candidates before you move on to another assignment. AVOID THESE MISTAKES AND WORK AS LONG AS IT TAKES AND AS HARD AS YOU MUST TO HONOR YOUR COMMITMENTS TO YOUR CLIENTS AND CANDIDATES!

4. Solutions

Are you solution oriented? When you contact a prospect, do you sell features and features only? Do you offer solutions rather than simply vague benefits? Think SOLUTIONS! Features tell and solutions sell!

5. Stop Thinking and Start Selling

Be in the moment, when the phone rings, when a prospect answers the phone – stop thinking and start living in the moment. Allow your training and instincts to act upon the sales call. The more time you spend engaged in selling, the better off you are going to be. A practice player is someone who practices more than they engage in the selling process itself. If you want to be a great recruiter, SELL, SELL, SELL as often as possible. Focus on the desired end objective of every phone call and then conduct your call in support of that objective. Begin with the end in mind!

Nothing is fully learned until it is fully applied. Business is good if you make it good. GO GET IT!

A personal note: I must again thank you all for your overwhelmingly positive emails, phone calls, and rave reviews about our first candidate DVD series. We just filmed seven hours of material for our new client/marketing DVD series, and it is even better than our currently available candidate one! I also look forward to meeting many of you at the upcoming Fordyce Conference, which looks to be one of the best recruiting learning opportunities in recent history. I hope you will derive value from my presentation at the conference. As promised, every article will open with a topic related to enhancing the skills necessary for leading a search firm and close with a topic related to enhancing the skills necessary for running a search practice.

Jeff Kaye is president and CEO of Kaye/Bassman International and Next Level Recruiting Training. This former Management Recruiter National Recruiter of the year has helped build the largest single-site search firm in the country, with annual search revenue in excess of $18 million. His firm has won national awards for philanthropy and workplace flexibility, and has also been named the best company to work for in the state of Texas in 2006 and 2007. Kaye/Bassman has retained over 30 search professionals whose annual production exceeds $400,000. Kaye/Bassman has retained 100% of this group in 2006 and 2007 to date. The same training that helped build this successful firm is now available through Next Level Recruiting Training. To learn how to take your practice and business to the NEXT LEVEL, please visit www.nlrtraining.com to view their product and service offerings. You can also send Jeff an email with a thought or question to jtk@nlrtraining.com.

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