Third-Party Agencies: Where Are They Headed?

How have third-party agencies fared over the past five years with the rise of Internet recruiting? Are there more of them or fewer? Are they doing what they did five years ago? How have they changed? What is going to happen to employment agencies over the next few years?

Agency owners and users, from Europe to Australia, constantly ask me such questions during my travels. Everyone agrees that times are changing and the role of agencies along with them. While there will always be a handful of agencies that remain similar to those we have today, most will undergo major evolution.

The employment agency will survive but will clearly have to provide more services and of a different type than they do now. Many will become more of a talent agency that provides their client organizations with strategy advice and employment-related consulting and their candidates with career assessment and guidance.

The new charter is, simply, to provide firms with much better qualified and screened candidates than is typical today. Some of this vision already exists in the exclusive executive search firms where candidate coaching and career guidance has been common for years.

However, this has only really applied to executives and very senior technical staff. I see this spreading to most professions over the next few years. And even the consulting I mention is not new, but it will be much more widespread and more commonly offered than it is now.

These are the trends that I see occurring:

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  1. Agencies will become more niched and specialized. They will seek candidates in a narrow range of skill sets and become very knowledgeable about everyone in that profession in a particular geography. For example, they might focus on Java programmers for e-commerce firms. Large firms may be able to encompass several professions, but each will be treated in a unique way. A big part of the new agency’s role will be competitive intelligence work and candidate pool development. Only the largest of corporations will be able to afford to do this on their own, and therefore the market is ripe for agencies. Agencies will charge a transaction fee for the research they do and the names they supply. Or they could offer to do a full recruiting process at a fixed fee or on a percentage basis as they do today.
  2. They will have in-depth knowledge of the people in a particular niche. They will have knowledge of all the e-commerce Java programmers in the San Francisco Bay Area, for example. And, they will have a sense of their abilities and even, perhaps, have those abilities ranked. They will know each programmer’s accomplishments and past employment history and who they would most like to work for. This knowledge, too, can be sold and packaged for clients. One agency could provide their information and services to another agency.
  3. They will build strong relationships with candidates, act as talent managers for many of them, and collect fees from the candidates for career management. I see the best agencies becoming much like sports talent agents, coaching and guiding candidates to the best jobs and even helping them negotiate salaries and compensation packages. They will offer career coaching on an ongoing basis and even provide additional training or skills development, if they think that will enhance the total “worth” of the candidate to a client. They may recommend certain kinds of development for a candidate or give them feedback on previous performance. I envision this looking much like the arrangement many of us have with a financial advisor. For an annual fee or for a percentage of the portfolio, they will manage your account and provide you with advice and education on financial and tax matters. No wise agency will recruit candidates from current employers, but may provide career advice. There will have to be some procedures developed to protect both clients and candidates.
  4. Candidates will be guaranteed placement. The agencies will not only guarantee a candidate to a client, but also a position to the candidate. As part of this newly emerging career management service, I see a two-way relationship. Because of this, agencies will be much more careful about the candidates they take on and about the quality of their skills.
  5. Agency fees will increase, but only when the value-added is also clear and increasing.

    By doing this intensive knowledge gathering and screening, they will be able to add great value to the firms they service. They will provide very well-screened candidates ready to go to work immediately. The more they can provide, the more they can earn. Some fees may come from transactions, others from commissions or other fees. Whatever emerges will be far more complex and multifaceted than what we find in today’s market. Many small fees may be accumulated via transactions rather than receiving a single commission charge.

  6. Agencies will represent a variety of clients: permanent (regular), temporary, part-time, and contracted. Many employers will want a mix of all these types for different purposes. Some agencies will be placing project teams with specific contracted job durations and scope. The best agencies will handle all of this in, again in a specialized area. They may actively help employees decide to change status and may coach both managers and candidates on how to work together more effectively. Each of these activities may involve fees, albeit small ones.

Firms large and small are already outsourcing much, if not all, of their recruiting to well-qualified recruitment process outsourcing agencies. However, I think there will be decreasing desire for agencies that try to provide candidates for all professions and do not bother to really understand the firms they are placing people in or the people they are placing.

In all my research and discussions, employers want more customized and personal relationships and are seeking more perceived value from the agencies than they are getting now.

Agencies are going to have to develop more flexible pricing and add value beyond simply sourcing and lightly screening candidates. The ultimate path may be in offering consulting and taking over the entire process for clients.

The non-profit Recruitment Process Outsourcing Association has already begun defining standards for this emerging area of recruiting and is setting itself up to be the forum for discussion and for improving the quality and standards of recruiting firms.

The success stories will be about those agencies that can develop a value-added process that benefits both the employers and the job seeker. In doing this there will be great wealth.

Kevin Wheeler is a globally known speaker, author, futurist, and consultant in talent management, human capital acquisition and learning & development. He has founded a number of organizations including the Future of Talent Institute, Global Learning Resources, Inc. and the Australasian Talent Conference, Ltd. He hosts Future of Talent Retreats in the U.S., Europe, and Australia. He writes frequently on LinkedIn, is a columnist for ERE.net, keynotes, and speaks at conferences and events globally, and advises firms on talent strategy. He has authored two books and hundreds of articles and white papers. He has a new book on recruiting that will be out in late summer of 2016. Prior to his current work, he had a 20+year corporate career in several San Francisco area tech and financial service firms. He has also been on the faculty of San Francisco State University and the University of San Francisco. He can be reached at kwheeler@futureoftalent.org.

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33 Comments on “Third-Party Agencies: Where Are They Headed?

  1. regarding recruiters considering charging fees, it is an interesting concept in an interesting world, but currently in many States the recruiting company will need to be licensed and bonded within that State to be able to a process like this.

    Some States like NY will limit the amount of fees that can be charged and if the applicant is not hired the fee must be refunded – but again one Must be licensed within the State of NY to practice business within NY

    Other limitations, if an agency recieves a fee from a company they cannot charge the fee to the candidate and there are limits to wages or industry w/in which the candidates works as well. Charging a Fee Prior to acceptence of offer can also prohibited,

    This also includes the State of Residence of the Candidate.

    The Better Business Bureau as well as the FTC have great articles out, which also advise candidates on Paying fees for employment

    The reason States are so cautious about fees to applicant is due to the Protection of the consumer. This had been a common trend for many recruiters, and unfortunately candidates were made promises that could not be met, and many times candidates were left broke and down on their luck AND unemployed..

    So, thank goodness for regulations to help protect these consumers. If more and more recruiters decide to start charging fees, We will start seeing Regulation that was dropped years ago in some States become active Nationwide.

    Hmm, hopefully if that happens that there would be some sort of Nationwide licensing allowing us to work Nationally without having to pay Licensing Fees in All 50 States independently!

    http://www.ftc.gov/bcp/conline/pubs/services/jobsffc.htm
    http://www.bbb.org/Alerts/article.asp?ID=268

  2. Tony –

    From your message, I understand that you did not find the article helpful or agree with it. That’s your prerogative.

    I respectfully submit that it would be more constructive to the community of recruiters who read the article and your comments (which we have published) if you actually pointed out what you disagree with in the article, and why, the way that Wade has. This way, others in the community will be able to hear your well thought out criticism and decide for themselves.

  3. Kevin,

    You are right about the importance of partnership and execution. The future of third party search is in partnership, knowledge and compliant execution. Sarbanes-Oxley like governance issues is changing the industry as well as technology and new product offerings.

    Changes in the industry have been dramatic over the years due to technology. However, the changes in the next few years will be just as dramatic due to increased governance and compliance requirements. Systemic discrimination as defined by the OFCCP, the required recordkeeping requirements, and guidelines for conducting searches fairly will force search firms to become process experts. Firms that can not comply with OFCCP requirements are being forced to run from being a source for government contractors. But they can?t run far as the EEOC is heading into the space with similar systemic requirements.

    The days of being able to hang out a shingle and call yourself a recruiter are closing fast. The future is partnerships that add value, understanding needs rather than just floating candidates and certification of recruitment practices that are compliant with corporate governance. The winner will be the candidate, the company and the corporate recruiter or firm that can meet the challenge.

  4. Kevin,

    It’s a good article but I see a lot of holes in it based on the assumption of ‘Future Trends’.

    1.) Agencies will become more niched and specialized.

    We are already niched and specialized! Although I am a generalist in the sense that I won’t turn down the opportunity for a good old fashioned treasure hunt if the fee is right and it’s a legitimate need….I am really only well versed in the AE&C area…not much use in IT.

    2.) They will have in-depth knowledge of the people in a particular niche.

    See #1, they go hand in hand

    3.) They will build strong relationships with candidates, act as talent managers for many of them, and collect fees from the candidates for career management.

    Sorry but….We already do form strong relationships with candidates and act as talent managers…it’s called MPC marketing…been doing it for years and with the current trend in more jobs than people, anyone that’s not doing it more is foolish, plain and simple. Collecting fees however falls into a completely different realm and will only be adopted by firms that are comfortable and willing to make the investment in that arena…See Karen’s reply

    4) Candidates will be guaranteed placement.

    Not going to happen…..That implies a contractual relationship with the candidate and I don’t know about you, but I’m certainly not going to be the one that dives first into the shark infested waters suggested in having a contract with both candidate and Client! The only way to avoid that would be to charge the candidate the fee which is already being done by some firms as well…again, see Karen’s answer

    5) Agency fees will increase, but only when the value-added is also clear and increasing.

    Sorry again but here’s a reality check for you…..Fees are going to increase regardless. With the growing imbalance caused by the baby boomers retiring, pressure is inevitably going to be placed squarely in the laps of the Corporations in that regard, if for no other reason than market pressure. If a recruiter has an A+++ candidate and one company is paying 20% and another 30%…who do you think is going to get first shot and command the attention and devotion of the recruiter???

    6) Agencies will represent a variety of clients: permanent (regular), temporary, part-time, and contracted.

    They already do.

    In the final analysis, the recruiters who survive and prosper will be the same ones who have done so in the past.

    The ones that are just damn good at what they do. 🙂

  5. I feel the need to say something, and I doubt this will ever be printed, however…..

    After being a member of ERE for several years, I can’t believe the same 4 or 5 self appointed experts have time to write such nonsense. If these people were any good at anything, I can’t imagine they would have the time to write this drivel. I’m even more surprised that anyone has time to read it. The headline of this article caught my eye because I happen to be in this business, so I took a few minutes to read it. It seems little more than broad generalizations. Like those psychics that help police find missing children. ‘the person was abducted near a body of water’ or ‘it occurred close to home’. Are you kidding me. Tomorrow, I look forward to an article on the impending death of the shoelace in American footwear industry. I hope it comes out before the stock market opens. Please.

    I guess my criticism should be directed more towards ERE. If you are going to publish content and charge your advertisers, at least make it relevant. I’ve made money in this business every year since 1988 and I have never read anything from ‘the usual suspects’ as I prefer to call them that will increas my bottom line 1 dollar. Sorry to be so direct, but its time to wake up.

    Tony Cuiffo

  6. While I found the article ‘interesting,’ I am skeptical as to it’s conclusions. Although I have enjoyed some of Kevin Wheeler’s articles in the past, I must ask myself if someone who does not have any Third Party Recruiting experience in his bio (on ERE or his website)is a good barometer of where the TPR sector is headed…especially if you consider that he is predicting that we are going back to applicant paid fees. Also too is the problem of the lack of hard data to support findings. The article seems like it is based on strictly anecdotal findings? Don’t get me wrong, there were some observations I agreed with.

  7. Kevin,

    I appreciate the article. I speak with with my fellow recruiting agency owners about this topic often.

    Larry Nobles, perhaps the best recruiter and trainer of our time, talked about specialization quite a bit in his lifetime. It’s a proven fact that specialists earn more and last longer in the business than generalists (particularly in the contingency world). I agree with your line of thinking on this topic. Clients don’t want to pay fees for candidates that they can have their internal recruiters source and hire for. They’re apt to use third-party agencies for hard-to-fill openings and for senior-level needs because agencies, who are specialists, spend their entire work day speaking to people in these niches. Moreover, third-party agency recruiters have the benefit of not being hindered by the administrative tasks and projects corporate recruiters are saddled with in addition to their req load.

    I have also noticed that corporate recruiting departments have become more savvy when it comes to paying fees. Adaptable third-party recruiters will be flexible and creative with their fee agreements, but not so much to underprice and undervalue their services.

    Once again, I appreciate your willingness to write about this topic because it’s an important one for both third-party agencies and corporations. Consultative third-party recruiters have been and will continue to be a value-added compotent to the hiring process because their services are highly specialized and tough to learn. We all know not everyone can be a successful third-party recruiter, but the people who will survive long-term in the third-party business will be ones that see corporations as clients and hiring managers as partners.

  8. Okay, I am going to come to Kevin’s defense. Recently I have had the opportunity to interview several noted individuals regarding this very topic.. including Kevin. The interviews will not be published for about another month or so on Recruiterlife.com

    What I find interesting is that almost everyone I interviewed shared a very similar view to Kevin?s regarding the added values that companies will come to expect from TPR’s recruiters.

    Companies have been taught well to be able to accomplish much in regards to the recruiting process, so TPR’s will need to prove their salt.

    Already many companies are requesting TPR’s to be certified, again based upon my interviews by individuals who are in the ‘know’ – they are also expecting recruiters to be more knowledgeable of the law as they realize the implications that can occur from a recruiter being audited and the fingers pointing back to them

    They are requesting more ethics as well, as recruiters are the ambassador of the company

    Yes, they are also preferring recruiters who do specialize in a niche. A niche shows you understand the industry, have a network of individuals to recruit for and from, that you wont just be shoving tons of paper their way.. Folks, the companies want quality not quantity. We have taught them and they are saying they want better quality from the standard let?s just shove paper.

    They want a TPR recruiter to be a full blown extension of their recruiting department

    It is important to realize that companies will Judge their recruiters, they have implemented metrics to see how frequently we call back, what the candidates think of us, are the candidates prepared for the interviews, do the candidates really know everything they need to know before they come into that interview. They judge us not only on the quality of the resumes produced, but also if you send too many, and how many fit. They judge us by the length of how long those candidates stay within the positions, if they were promoted and much more.

    Again, I interviewed at least 7 industry leaders thus far, ALL of whom agreed with the new branding that recruiters will need to assimilate for the companies to want to continue to work with them.. As one of the noted leaders said, if recruiters don?t get their grips around this, we will find that recruiting will become harder to penetrate, it will be harder to get and maintain clients, and indeed we will find in a few years less recruiters in this industry and only those who are able to incorporate more professional recruiting styles will remain in this industry..

    Now I want to make it clear charging applicants was not discussed in any of the interviews.

  9. Kevin is surely correct about the TPR industry changing. Having been in contingency recruiting since 1979 I can say our industry has been through many changes over the years. Those that have made it this far are the ones that have changed with it. Those that have embraced the changes instead of fighting them are the ones still around.

    Sure, the Internet has had an impact on our business, but so has offshore outsourcing, 9/11, economic conditions, corporate websites, internal recruiting efforts, snow in Texas…just to name a few.

    Regarding Kevin’s predictions…only time will tell if he is right or wrong but there is one aspect of the future that will not change. When companies cannot find the person they are looking for they will pay a fee. Simple as that.

  10. I couldn’t agree more with Tony and Wade. Consultants, such as Kevin Wheeler make their livelihood by re-stating the obvious. Very few have been successful practicing in the industry they now purport to be ‘experts’ in. One could almost believe Kevin dusted off a 1980’s report on the future of third party recruiting for the lack of new material. Specialization, develop relationships with your candidates; become an expert in your discipline; come on, most good recruiters have been doing this for years. I am an ex-recruiter who now runs a website directed at recruiters and employers and I have written comments to Kevin on two occasions, pointing out, in my opinion, inconsistencies or inaccurate information about several of his articles. I have also invited him to view our website. I never received one reply nor to my knowledge has he taken the time to review a website that is in an industry he pretends to know a lot about. Let us not be fooled, the ‘consultants’ who write articles for ERE and other publications do so to drum up business, and as is evidenced in this case sometimes know very little about the topic.

  11. Mark,
    agree with your comments.

    There are also some comments I agree with regarding the writers of articles who proclaim to have knowledge of this industry without ever once having been a recruiter. Kevin Wheeler is not one of those.

    Now, I did not agree with everything in this article, but as one of those few recruiters who managed to stay in this industry without trotting off to do something different and have seen it through more than one recession, it is fair to say that how the industry is today, is a far cry to how it was 10 years ago.

    Like in any industry that comes with excessive baggage, port of easy entry which can create confusion and lack of understanding there is no wonder why the Industry Guru’s who speak to the Employers each day.. Our clients.. are saying the same thing..

    Recruiters need to wake up and realize that what was good yesterday will not be considered great tomorrow.. We cannot implement the same practices and think hey this is going to work

    Okay, this article my not pertain to YOU, but look around us, we read posts by many individuals who have presented really questionable techniques, and think hey, it’s okay, because I am a recruiter and I am just doing my job.

    It is okay to submit candidates without first consulting with them the candidates or even the client; it is okay to not need to understand the labor laws of this industry cause I am a recruiter, and I am just doing my job; hey it’s even okay to discriminate, cause again I am a recruiter.

    It is also okay to do what ever it takes to fill that position with who ever it takes, it is about quality man, cause I am a recruiter, and it is about the numbers. We argue about replacement guarantees, and our fees, what we didn’t do to deserve it, yet we deserve it anyways, because gee didn’t we send in that paper? Yet was there actually a relationship established? There have been recruiters who have posted negative comments on public forums about H.R and I scratch my head in amazement.. gee, I wonder, don’t you realize your future potential customer could be reading this – and we wonder why Clients don’t have Loyalty to TPR’s, which by the way they do!

    We have forgotten the Human part of Human Resources. We seem to have forgotten Customer and Services in Customer Services..

    What I heard from the Guru’s is that the companies want more from us than just the placement – they want knowledge, expertise, experience, and they mostly want us to bring higher standards to the table as we ARE the ambassadors to their company.

    If you don’t believe them, then I have a question, when was the last time you asked one of your biggest clients, and your smallest how they Viewed their recruiters. What metrics they used to attest to quality of recruiters, why did some recruiters get more loyalty than others?

    Don’t ask about Your performance using your canned metrics, find out about theirs. It may shock you to see what they determine is important. Fair or not it is what the clients are wanting, and if we want to embrace progress then maybe we should consider this reality.

    Then one day go to an H.R convention, or meeting.. you may get an awakening. A very disturbing awakening. Disagree, or maybe learn from this article, but one thing is for sure, times are a-changing, the wind is a blowing, and are you going to be prepared?

    Karen

  12. There is a lot of self promotion that goes on here at ERE but at least it?s in the way of contribution. It?s because of this contribution, good or bad, that creates discussion and makes us all come back for more.

    What irritates me more on this topic is when all the discussion forums get basted with the blatant promotion of an event like some forthcoming rock band tour. For me it devalues the platform.

    I would rather read articles that I like, dislike, agree with or disagree with and be able to comment about rather than be put off even browsing the discussion headings because it?s flooded with the blatant marketing of the same event.

  13. Personally, over the years I have found the site to be a valuable resource for new ideas pertaining to recruitment. While I may not agree with all of the authors, and some articles are not relevant to my interests, at least the site gives me the option to pick and choose what I would like to explore. This exploration has greatly contributed to the development of my opinion on where recruitment is headed, and how I should position my company to take advantage of opportunity and be profitable.

    As per Mr. Wheelers article, we are currently utilizing some of the ideas that he has mentioned, we may consider some of the others and we will not utilize the ideas that do not fit with our specific recruitment approach. The opinion is his, and the informed choice is ours. I appreciate him, and many others, taking the time to share information that I can selectively use to improve my recruitment methodology and improve my business. Thanks in part to them; I DO know where recruitment is headed for my firm.

  14. Wowzie Anthony,
    In rereading the posts, guess the only person who could be considered advertising anything would be me. My friend, that really is interesting that you would have thought that my intent was to promote considering that if I had been pushing anything-

    Would have added that Kevin had been interviewed by me in my first post and would have been more agreeable of his article, than I had be
    There would have been more information about the who?s, what, when, and where
    This information would have been posted on other of the groups and Forums, plastered everywhere if there was a desire to promote a show, rather than focus on the points.

    What was said regarding my upcoming Show was kept to a minimum for that reason ? so as not to try to take away from the message, and to say that there are others who agreed with the context of what was stated in this article; that recruiters will need to implement change if they wanted to continue to be successful ? though the resources for change were quite different than what was presented here.

    Now you have brought this up, would like to ask a question ? see, this ?show? was done to allow recruiters to gain a valuable resource from those who are considered ?leaders? in this industry. Not only the authors of ERE, but individuals who have earned their stripes.

    Now, if I had Not been the Host of the show, would it have been promotion? Would it be promotional to say ?hey folks, I just found a great resource out there that has someone asking the Guru?s the questions we all want answered? Wow, I was really impressed? Would that have been promotional?

    If so, then why? and when is something informational or promotional? Would love to hear insight on this topic?

  15. Actually Karen, I was referring to the Lou Adler tour of the East Coast that got blasted for two days last week in the forums related I assume to the East Coast.

    You should know me better than that by now 😉

  16. To Karen:

    I certainly agree that TPRs(a NEW term since I last recruited decades back) should be aware of what HR (another NEW term since I recruited…it was ‘Personnel’) thinks, so to speak.

    However, let me share with you what an old Engineering Recruiter thinks about HR looking at what we think as well.

    Back in the stone age, before HR was populated by individuals who could not spell ‘Engineer’, they simply disseminated a job description and then got out of everybody’s way. ‘Technical’ Managers and ‘Technical Recruiters’ communicated directly with each other and the result a ‘submittal/fit’ ratio was 2.3 to 1!

    The ‘Technical Recruiter’ understood each and every milestone of the ‘Product Life Cycle’ in RD&D (front end), such as Research, Conceptual Design, R&M, QA, Test, etc. as well as in Manufacturing (back end), such as Facilities, QC, Milestone test, etc.

    Also, we knew the fundamental aspects of products whether electronic, E/M, electrical, mechanical, machine, MT, S/W, F/W, etc.

    Then, HR types with absolutely no knowledge, nor the desire to acquire such, were ‘inserted’ between us and the hiring manager…no communication allowed!

    Results? submittal/fit ratios out of sight (One Hiring Manager complained that he received over 100 resumes for a front end Test Engineer from HR with NO FITS! HR had no concept that a front wend Test Engineer was an entirely different animal than a back end Test Engineer.

    My recommendation is that your suggestions re Recruiters should be implemented, but ALSO HR should return to hiring non- exempt types from the ranks and exempt types who can and will learn, possibly from an internal (or external….maybe I’ll structure one) training program so they knew what their people did and how it affected the company’s product and/or service.

    THEN, you can begin to develop an employment process that provides rapid response, low acquisition cost, low attrition rate, low submittal/fit ratio, respect, and dignity (to both Employer and Employee).

    JCA

  17. John:

    Pretty much the same thing happened in IT recruiting.
    The talk was then of HR having ‘a place at the table’ and doing a bit of corporate empire building just like procurement had done the decade before.

    Thing is: I’m certain, though I have no proof, not having ready access to actual numbers, that the new HR regime is far more expensive and inefficient than prior practices.

    The light speed changes in the market (all technology driven) mask the inefficiencies and costs—for the moment.

    Empire building does require external conditions in flux.

    The current relative stability in technology (that?s a Karen sized post on it’s own) will let the facts catch up with the practice very shortly. Don’t be surprised to read that some major corporation has decided to outsource it’s recruiting to local TPR’s as being optimally cost effective.

    Bill Wager
    Hunter Green
    40 Exchange Place
    NY, NY 10005
    212-742-0990
    billwager@hunter-green.com

  18. Bill W:

    If a corporate imperative came down mandating ‘outsourcing’ (is that a verb?) of the recruiting function of HR to TPRs, and such a practice became popular, where would one find TPR staff with the EEE (Education, Experience, Expertise) necessary to understand the vertical position on the org chart and horizontal position in the Product Cycle, as well as the day to day functions required of the candidate, to handle such recruiting?

    I notice that my comments and use of terms, acronyms, etc. did not generate the type of response I have wanted to see all these years from recruiters on both sides of the aisle, namely, ‘What do you mean by that?’, ‘What does THAT mean’, ‘Explain that to me’.

    I coined the term years ago (and this is going to get me in a heap of trouble) about most non-technical people in the recruiting process being ‘Pools of ignorance surrounded by dikes of arrogance’. They never ask, they never understand, and they keep recruiting by buzz words on those totally subjective, and subject to wild interpretation, job description lists and resumes.

    JCA

  19. Ever since I entered the search/staffing business
    twenty (yes t-w-e-n-t-y) years ago this year … there have been pundits and forecasters and prognosticators predicting the demise of recruiting.

    Holy Hogwash Batman!

    If that’s the case … why is it companies continue to call our office every week?

    The truth is while the very large Fortune 500 do have the financial and technological resources to perform a superior job of candidate pipeline development (they have to — they’re business depends on it) … and subsequently need us on a more selective basis only … there is always a near endless stream of new companies and small companies that are rapidly becoming large companies that need, demand, appreciate, and are grateful for a professional, competent, recruiter’s services.

    That’s the way it will always be until the big meteor in the sky collides with earth or the next ice age comes. Until then … I plan to enjoy the party.

    As I glance back ten years … I take notice that some 50-60% of the companies we did business with are gone. Extinct. Poof. Vanished.

    Yet I’m still here in the most stable profession in the world. Why? Because I’m not tethered to any
    specific industry, company, malfeasance or economic hiccup as much (although we have our specialization) and can deliver our services to any industry we choose to introduce ourselves to.

    The average life span of a company as analyzed by Forbes recently is 12.5 years.

    Twelve and a half YEARS!! That’s IT!

    In fact less than 10% of Fortune corporations ever make it past their fortieth anniversary!

    Go back to 1900 and only two companies survive from that era today. The rest are in the dustbins of history having created wealth only for those that got in and out of the shares at the right time.

    Judging from my vantage point – Companies are collapsing faster than any of the good recruiters I know! Much faster!

    Why are we not prognosticating why all these companies are failing??

    The true myth and illusion promulgated among America’s college students is that corporations are a ‘safe haven’ or provide ‘stability’.

    Once again: Please reference ‘Holy Cow’ exclamation above.

    Then these students are hit with their first ‘layoff’ and are struck like a deer in bright headlights as to what the heck just happened because they actually believed this garbage society handed them.

    We as a society spend too much time instilling the benefits of ‘working for a coporation’ in our youth and not enough energy promoting the benefits of entrepreneurship and financial independence.

    As a large company plateaus or begins the gradual descent into oblivion or obsolescence … which according to extensive statistics they all eventually do and many do so much earlier than later (Home Depot/Lowes sound familiar anyone?) that space is instantly filled with two or three other new companies that value what we can deliver – Valuable Talent.

    – Frank G. Risalvato
    Proud to have chosen a profession
    where no one can ever fire or lay me off
    EVER AGAIN!!!

  20. John,
    You raise an excellent point. There are TPR’s and there are TPR’s. If a TPR is to be successful in managing outsourced recruiting functions, it is crucial to the success of the corporation and its recruiting outsourcing partner to build a solid relationship. If the outsourcing partner does not fully understand the philosophies and cultures as well as the mission of the organization, the relationship is doomed to failure. How could they ever articulate effective in talent management if they didn’t fully understand all of this? Again, knowledge both vertically and horizontally of the client becomes even more important.

    Education, experience and expertise are extremely crucial. Agencies that are members of industry organizations such as ASA, NAPS, even SHRM are constantly exposed to changes in policies, procedures, etc. We are constantly educating ourselves because we are just as exposed as the corporation when it comes to employment laws, etc. Good staffing partners will educate themselves on their clients, their industries and why people would want to work there. Expertise is built over time. My company started as a light industrial and administrative service firm. Over almost 40 years, we have built expertise in a number of other areas.

    There are TPR’s out there that are willing to ‘skim the cream from the top’. But there are organizations (such as mine) that strive to learn all we can about our clients so we are effective and they realise a solid ROI on their investment with us. As a result of these actions, we still have a solid relationships with our first clients when our business opened in 1968.

  21. Mark and John excellent responses, Frank unfortunately I think you misread the objective positions of what is being said here.

    This isn?t about the Demise of the recruiting industry, but thankfully a refreshing purging of as John so Eloquently put it (LOVED that by the way) of most non-technical people in the recruiting process ?those? sic.. being ‘Pools of ignorance surrounded by dikes of arrogance’

    Again we will come back to another quote of John?s regarding the EEE ? experience, education, and expertise has been lacking tremendously in this industry for many years, painfully so. Considering the incredible responsibility, influence and considerable impact that people in the position as recruiters can ultimately have on clients and candidates alike, the only thing that comes to my mind is ?why has it taken so long?? ?

    It is time to pay attention because no longer should we continue to think that recruiting will be able to continue to be a hodge podge type of industry, where anything goes, and without having to bear the responsibility of the public safety and welfare. With issues and concerns of Privacy, discrimination and Labor law issues that have been increasingly growing due to the easy, open entry, no bars held.. this industry has been gaining a black eye increasingly

    There are many who will dispute this and say, oh, it really isn?t that bad. Actually, it IS THAT bad; recently had the opportunity to come across a list of Recruiting companies that had been indicted for many forms of fraud, corruption, embezzlement and other labor laws. This list was compiled by an attorney who does investigate this industry. Well, I gotta say, not only was I felt that I had just landed into a sewer but was shocked not only by the crimes these individuals committed, but how many of them had been indicted. Penalties ranged from a couple hundred thousand to TENS of millions of dollars with extensive Jail time.

    Recruiters deal with a tremendous of this nations population, and the internet has had the ability to make those numbers even higher than ever had thought possible – and since we are dealing with Employment, the most important factor in anyone?s life, for how would they support their families if it were not for their job ? well, of course what we do for a living up quite a few notches.
    Today, as I write this the Real Estate industry is going through a high level of legal scrutiny, and as I watch that with awe and shock, it makes me wonder, with all the new regulations and concerns of privacy, not if but when, if we continue as we have been!

  22. John:
    You asked if ‘outsourcing’ was a verb.
    No, outsourcing is corporate double speak, probably created by an engineer’s manager.

    Now that we’ve clarified that, let me tell you where to find the TPR’s to handle that workload — the yellow pages.

    I, or anyone with the intelligence of a bunch of keys, would expect that a hiring manager, or internal recruiter in a specialty industry, would have the mother-wit to outsource (there’s that verb again!) to a tpr who understood the particular cant of that industry. (I look forward to your disquisition on the error contained in the term ‘particular cant’)

    If you choose to deal with people who do not understand your language or your industry and so, meet with failure, one would rather tend to attribute that failure to your poor selection rather than to the recruiter who accepted the assignment, who is guilty of bad judgment to a far lesser degree

    Would you entrust your car to a mechanic that referred to the engine block as ‘a biscuit’? or dipped it in milk?

    If I have misunderstood you in any way — quite possible, of course , engineers being so facile in English as to be able to distinguish verbs — and we poor recruiters being so naturally dense as to not know the difference between a widget and a wodget — I would welcome your clarification.
    Bill Wager
    Hunter Green
    40 Exchange Place
    NY, NY 10005
    212-742-0990
    billwager@hunter-green.com

  23. William:

    I have, as I said, been out of many decades (old fogie). It used to be that the hiring manager (techie) talked directly to external recruiter (techie) who spoke with the candidate (techie)…great communication!

    There were NO techie types in most ’employment agencies’ (there were a lot of ex-used car/siding salesmen), and only a few in personnel (primarily in non-exempt).

    BUT, personnel had enough sense to allow techie to techie communication so as to minimize (a verb?) submittals/fit ratios.

    Then, with the advent of the personnel ‘organization’ complete with VP’s, Directors, Managers, Supervisors, etc., and their mandate that there would be communication techie to techie…that everything would be routed through personnel, and the new breed of personnel contained NO people who could spell techie, it all fell apart.

    Now, I’m going to do as you suggest. I’m going to open the YP or the internet, and I’m going to search for recruiters who understand/comprehend the techie world and who do not operate on buzz words, and who know the product life cycle, and the functions both horizontaly and vertically, and who do not submit a bag boy from ‘Ralphs’ when the requirement is for a ‘Packaging Engineer’, or submit a ‘Metropolitan Transit Driver’ when the requirement is for an Engineer experienced with buses’

    If I sound a bit negative re my memories of the ‘old days’, let be bore you with an example or two:

    The ’employment representative for a printed circuit board repair facility who, after two years, did not know what ‘solder’ was!

    The ‘personnel manager’ for a medical test equipment manufacturer who, after six years, did not know what function test equipment peformed!

    Finally, the one that triggered me to quit the biz…the one who worked for a, electronics manufacturer./…she had over 100 resumes submitted by seven ‘agencies’ for two test engineer positions and not ONE resume fit. When we submitted ONE EACH for the two positions, and both fit and were hired (one is still there today, 18 years later!), this young lady stated that we were not to be used because we were ‘unresponsive’ by not submitting more candidates! If I wasn’t there to see it, I would not have believed that such TOTAL ILLOGIC could exist in any human brain…but those are just three of literally hundreds (maybe thousands) of cases experienced over 33 years!

    You seem to care about what you do. I might bet you are an exception.

    JCA

  24. Karen:

    Thanks for the recognition of what I was attempting to say in my rambling style.

    Re the legal issues, we own a legal services firm, and upon re-rentering the recruiting business, are already busy with all the myriad of forms and procedures necessary to comply with legal issues that were unknown back in the old days.

    Also, I see that your firm specializes in HVAC (Yes, as an old timer, I know what the acronym means), so I assume that you either came from an HVAC background, or were trained by techies, or trained youself.

    When we hired non-techies, our training consisted of prouct cycle orientation from Conceptual Design to post product LS (Logistics Support…a MILITARY term ‘captured by civilians), to facility/plant visitations/tours with explanations as to who did what and how, and what a lathe/micrometer/CAD was used for, and this training continued until the ‘Recruiter’ could properly determine the REAL job specs, not this buzz word nonsense, and could articulate those specs, in a cohesive, narrative format, to the candidate, and finally could determine whether the candidate was truly qualified.

    Resumes are, as I have said many times, anachronistic, subjective (frequently formatted by some personnel type) and loaded with unrealistic views of the candidate’s qualifications.

    Anyway, good luck with your HVAC recruiting…if you know what HVAC means, you are probably way ahead of what I think is out there in recruiting!

    JCA

  25. Mark:

    I am not quite certain that we are speaking about the same thing, but, I could be wrong. I certainly have many times before.

    In several replies, there seems to be more emphasis on legal issues, company policies and procedures, industry practices, etc. than on old fashioned nuts and bolts.

    Those other items are necessary, but only in support of the basic undestanding/comprehension of what a specs calls for and what a candidate can do.

    Karen mentioned HVAC. Now, I know more of what I DON’T know than what I DO know about HVAC. I know that HVAC stands for ‘Heating Ventilating & Air Conditioning’. I know that this function can appear when the plant is being constructed and when it is being re-conditioned and when it is being expanded and/or re-configured and during routine maintenance, both preventive and necessary. This covers the horizontal.

    I know that there are HVAC Project Engineers (in Facilities and in AE firms), HVAC Design Engineers, HVAC Designers, HVAC Technicians (Systems to Component level), HVAC Installers/Assemblers/Mechanics (On site and Field types), and so on.

    This covers the vertical.

    I know that there probably are CAD or CAE systems out there especially for HVAC (Maybe ‘CADDS’ or ‘Pro-Engineer’…don’t know, been away a long time).

    This covers the ‘tools’.

    The above are the items of PRIME importance…the other are secondary and tertiary.

    Are we on the same track?

    JCA

  26. Frank:

    As Karen said, maybe the point was missed by one or both of us. I merely pointed out that personnel (Oh, sorry, it’s now ‘H.R.’…sounds like bodies stacked in a warehouse!) had crippled the Recruiter’s ability to maximize (that pseudo verb again) probability of successful, one hit recruiting by interdicting the process of techie to techie communication while, from what I have seen, they themselves have no techie understanding.

    As we said in the military, ‘Lead, follow, or get the heck out of the way’.

    If HR Internal Recruiters were competent, TPRs would be out of a job! So, I ‘ain’t’ knocking them, cause their incompetence is necessary to the TPR Industry…BUT, as HR can’t lead, and can’t follow, they could make the process more effective (and less expensive) by getting out of the way.

    Recruiters will always be around. The cycles go up and down and all around. I have seen EE’s picking apples for a living in the early 60’s, and demanding stock options 20 years later…go figure.

    Hang in there and keep commenting…it’s darn healthy for the industry!

    JCA

  27. Would like to clarify, there isn?t any concern about the demise of this industry, and based upon the conversation that is taking effect here, the focus is more that companies are becoming frustrated at the anything goes behavior of recruiters and are expecting more than just candidates but full blown relationship, right arm of the recruiting/employment function of the company.

    Recruiters will be around, but companies will be more selective in the who they use. They will expect more from their third party vendors, and will want more than a vendor relationship, but a full partnership, loyalty, professionalism, knowledge, diligence, and of course expect them to live up to higher standards.

    Has this started yes, indeed. Listen to the H.R managers on these forums, read not with criticism their concerns, but with understanding and respect. There are companies who will expect their recruiters to have full knowledge of the laws surrounding the industry, will expect more ethical behaviors of their recruiters and some have started even asking for recruiters to be members of associations and become certified.

    Think of it along the lines of wanting a CPA, versus a regular joe bloe recruiter to slam with paper, and not really understanding the full basis and scope of the jobs

    What Mark is saying is online. As an HVAC recruiter it is more than knowing the word Centrifugal, or what a PM is.. But it is understanding what the Companies function is in the HVAC world, exactly what their management style is like; understanding what part that particular role plays in that particular company, and what they do on a day to day basis, who they talk to, when, and why; understanding hiring processes; what is the structure within the company; understanding the dynamics of this particular company; why they are looking, how long; the training they provide, how, when, why.

    It is more than just send us resumes and help us fill positions, but instead Companies are beginning to expect recruiters to compliment their existing in-house and outsourced recruiting resources by understanding the needs of and how to work with the hiring authorities of the companies, and understanding the hiring objectives through understanding their corporate environment, style, motivators, and culture.

    John, as an HVAC recruiter, working in a Niche within a Niche there is a reputation that must be maintained, both with clients and candidates. When a candidate is placed within a company, it is with the intent that the candidate is going to be there permanently. Does that happen all the time, no, but of course the goal is there. It is also important to understand the why a candidate did not work out, and work with my clients to understand what may have been missed, to help make the next placement that much stronger. Do I take on some of the responsibility of the placements, to a degree yes, as what I do does play a part in it, but is also imperative that understanding where the role of the client plays in it too, so that the next candidate will be a better fit, or to help make suggestions as to how to better improve the process in the future.

    As Kevin had mentioned recruiters will need to change their views as to how they do business and If They cannot live up to these expectations, but continue to be the one hit Charlie, there will be a welcome ?purging?, where the will be?s will be distinguished from the wannabes.

  28. John,

    I may be on a different tangent too, it has been known to happen. If a recruiter can’t deliver a candidate that fits the bill, then there is no reasone to maintain the relationship between the internal recruiter and the TPR.

    I agree with you that knowledge of law, hiring practices, sourcing, screening, etc. all support the efforts of both the internal recruiter and the 3rd party recruiter and in many cases, knowledge of this from the TPR has kept the hiring process legal because of a lack of this knowledge by either the hiring manager and sometimes, the internal recruiter (it HAS gone in the opposite direction too).

    But how crucial is it that a TPR must have worked in the industry that they are servicing? I have have met hundreds of TPRs that are servicing particular industries but have never worked in them. A recruiter worth their salt is going to educate themselves on that industry so they can be effective.

    You are right, if the recruiter can’t deliver the goods, whats the point? The market will weed these TPR’s out (just as it will internal recruiters). Those who understand the market they serve with survive and thrive.

    So yes, I believe we are both on the same track.

  29. Gee, did I wander into third party recruiter only website by mistake? I use this site for gaining information to help me improve my skills and obtain different outlooks. Maybe, just maybe, I will be able to find something beneficial to incorporate.

    However, in this forum there is a lot of dissention and fingerpointing about who is incompetent or not up to par – mostly from TPRs to corporate recruiters. In this thread in particular, I’ll give the mud slinging award to John. And John, I’ve been around a while, too – before I ever became involved in an HR career, I already knew what you indicated in your response about HVAC. Not from any direct experience, but from a curiosity about the work that people perform.

    I’ve worked in large corporations, small companies, state agencies. Different industries from retail to roofing to systems development to mental retardation to accounting and more. I learn my companies, I learn their culture, I learn who does what and how it’s done and why it’s done and how one function interlinks with others within the corporation. Oh, and I ensure that I know who receives their services, the desired outcomes and who the competitors are. I know who is going to drag their feet and how I can get them moving.

    I don’t think it’s necessary to bash corporate recruiters nor do I think it’s necessary to bash TPRs. Ultimately our goal is to get a position filled. In my private sector experience, if I couldn’t find them, I would have enlisted someone to help me find them. By the way, John, I never used a TPR because I could find the applicants – even if they were ‘hiding’ a little bit.

    Now that I’m in state government without the ability to use a TPR (policies, ugh), there are occasions where I wish I could – because my day is filled with other generalist duties as well. Not because I’m incompetent, John, but because my job is more than recruiting. And that’s how the job is set up, and what I signed on for.

  30. Mark
    Once worked a General Sales Desk, which ultimately got into a specialty (Actually had more than 1 in my career). So, hopefully this may bring the perspective of one who has been there and done that.

    In becoming a specialist there are several things that happen ?
    Strong Knowledge is gained of the industry. In knowing the dynamics of the industry there is no learning curve as to where one finds the candidates, what they will be doing, where they will be working, what titles they will have in different companies. There is understanding who will fit better in a particular corporate environment and culture. Knowledge of the salaries in the competitive companies to help expedite the process; Companies will prefer that fact that one understands more than the buzz words, and that there is no concern about a learning curve, and that they can depend on you for future placements.. Which creates a loyalty with client as well.

    Placements will happen faster and more efficiently due to industry knowledge and gaining the reputation as being an industry expert. We are able to have access to databases and networks that are predominately in one industry.. it allows for great relationship building, and knowing who to speak to, when much quicker. Develop great friendships of people willing to help you out as they know you will be there with information.

    Your clients will also gain confidence on your understanding and knowledge of the trends and Understanding of the Ins? and out?s of the industry. Not only does this make your job easier, but the clients appreciate the knowledge. From this we Gain more positions along the way so that one can fill more jobs.. you will recruit more than one candidate, and now you will have more jobs for the candidates who were not placed with the original job order..

    Name recognition ? candidate referrals are easier to get when a friend believes that they are sending a professional to help another friend out

    Quite often people call me asking if I would consider working with them. Unless they have been in this industry, my tendency is to decline to offer. This isn?t because I am a snob, or don?t want the help. Unfortunately there is no time to help individuals go through the learning curve for one or two positions. Especially don?t want to be distracted whilst recruiting by having to read many resumes that will be sent with the word refrigeration on them. Trust me, guys who fix refrigerators don?t make my day. In fact, most of my jobs will be based upon management, sales, engineers and high level positions, that cannot come from outside the industry as the clients are interested only in candidates who fit like a glove for strategic reasons. The industry is indeed very complicated, and it is one which I am still learning every day even after 10 years.

    I guess we can liken this to the General Practitioner MD, or even lawyer ? versus a specialist. The General Practitioner is good, but would you not prefer someone who is a specialist?

  31. Karen:

    I really enjoy all of the responses to my emails which began as my response to your email, and am herein combining an answer to all of you who have written.

    At the risk of being presumptuous (which I most certainly am), I will state that, after over 100 years of ’employment agencies’ activities (and that is what this activity really is), the employment process is pretty much still the same…except for the insertion of an inordinate number (and more and more as time goes by) of technically* incompentent individuals between the hiring manager and the employee which has further increased the ridiculous number of candidates needed to fill a requirement.

    * I am using ‘technical’ in the broad sense to apply to any job slot requiring any specific Education, Experience and Expertise, regardless of discipline.

    I agree that one does not have to have specific experience to recruit specifically, and that Recruiters should want to learn everything about the functions of a specific slot, and how that slot relates to contiguous slots vertically and horizontally, and how the department fits into the enterprise, and where the enterprise fits into the industry, and so on through the Product Life Cycle.

    Unfortunately, instead of that learning, I still see the widespread use of buzz words and meaningless jargon…sorry for this ‘mud slinging’, which I think of more as ‘personal observations’!

    This lack of learning results, in my opinion, to the current total lack of candidate respect on both sides (and the middle) of the equation. Well, this in no longer going to be tolerated.

    The Recruiting industry is about to finally evolve into a true ‘Profession’ where both sides (and the middle) employ technically competent people with respect not only for each other, but for the candidate as well.

    Buzz words, euphimistic terminology, imaging, branding and all the other terms are going to ‘go south’, and darn soon if our firm has anything to say about it. And as our D&Os have over 300 years combined experience in turn around of hard product manufacturing enterprises, I tend to bet on it!

    Many of the suggestions you (and other writers) have made are the very things necessary to accomplish this evolution, and we here at Bogart really appreciate it…believe me…so, PLEASE continue to write!

    As practitioners of ‘Quid Pro Quo’, please feel free to request anything you need from us.

    I will continue to read all of your wisdom and wit with avid interest, but as we are in a ‘start up’ mode here, I shall, to the relief of some of you (hopefully not all of you), be silent for a while (my associates have a pool as to how long I can keep my mouth shut)….thanks for all the data and, again, continue your writings.

    I ‘gotta go’…I have do have a tee time beckoning and the temp is a balmy 74 degrees….

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