Editor’s note: Today and tomorrow Fordyce presents two very different and contrasting perspectives on recruiting as practiced by American search firms. The articles were first published in our print newsletter The Fordyce Letter.
Today’s article is by Adrian Kinnersley who heads the fast-growing UK firm Twenty Recruitment. He has developed a familiarity with US recruiting methods and culture since opening the first overseas office in New York City in 2011.
After seeing what he had to say, we asked Kathleen Kurke, then president of the leading, invitation-only organization for independent big-billers, The Pinnacle Society, to offer her opinion. Her view appears tomorrow.
An Englishman in New York: What the UK can teach the US staffing sector.
A contentious statement I know but in 2011, as a British contingency recruiter opening up an office in New York City, I was amazed at how low a status the third party recruitment sector has in the US.
While in the UK the professionalism of the contingency recruitment industry has come a long way, and is now seen as a viable graduate career option, in the US it appears recruiters, along with real estate agents, are the bottom feeders in society. Any decent recruiter seems desperate to be seen as a search consultant in order to gain any kind of credibility or social kudos. The skills and culture gap is therefore massive. So at the risk of offending you (which is not my intention) – here’s what I think the UK can teach the US and improve the perception of recruiters along the way.
Have industry specialist recruiters in vertical markets – In my experience, this concept is largely alien in the US and so consequently the market is very fragmented with recruiters chasing leads rather than building relationships, and unable to offer much of a value added consultancy service to their clients. A contingency recruiter working in financial services will typically be trying to source a PA at the same time as a director of product control, and a manager in operations. They will also probably be dabbling in some other random area such as a role for an accountant in a media company, and consequently there is no real depth of knowledge to use to advise or influence a client.
The local NY market, in particular, appears to be more focused on the geography they work in rather than an industry or vertical market. Rarely have I had a client or candidate ask what the companies on their block are doing. They are more interested what their competitors are doing or what opportunities there are in the industry in which they have experience. It seems strange to me that the recruitment companies / staffing organisations aren’t organized in a manner that provides clients and candidates with what they want, but more conveniently from an internal management perspective.
Pay a salary and commission rather than a draw – From my experience of trying to staff our New York office, the prevailing NY compensation structure within staffing is a draw. It would also appear to be fairly common to have multiple, individually negotiated pay deals in one company. This creates a very unstable and transient environment with an “it’s all about me” culture, very little coordinated team work or cross-selling between individuals, teams, departments or offices. It also makes it much more challenging to provide a career structure that enables management rewards and a focus on building out the business.
Surely it is better to encourage your top performers to contribute to building out the business and training them to become future leaders than encouraging a land grab for clients, and having a small number of individuals (who are) billing the lion’s share of the revenue in the business constantly pushing for a better draw.
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Our model is to provide a standard commission scheme that applies to everyone in the business, an increased base salary according to the individual’s level, seniority and responsibilities in the business, and the ability for everyone to gain share options providing a long term view. There are also additional bonus structures for managers who are contributing to building teams in the business based on overall team performance. This has the effect of transparency, thus reducing politics and staff turnover. This in turn provides a better service to candidates and clients who get continuity of their contacts and therefore repeat business.
Embrace 360 degree recruitment – Why do companies want to pay several people to do a job that one person could do i.e. give someone a cut of a deal if all they have done is take down a job spec from a client that gives them 10 jobs a month anyway; and then another cut to a resourcer (sourcer) who finds the candidate, probably a cut to a team manager as well. Why employ three people to do one job; it just doesn’t make commercial sense.
A 360 recruitment model, when also applying industry specialization and vertical markets, puts faith in the recruiters that if they are capable of having a credible conversation with a candidate, they can also have a credible conversation with a client. This also means the person who has taken the job brief is selling the job to candidates and managing the entire process. This increases control of the process and revenue per head.
I’ve often been told that this leads to people leaving and doing it on their own as they know the whole process. Whilst recruitment is undeniably an entrepreneurial industry and some people are going to take the step to have a go on their own, I would contest that folks wired that way are going to do it whether you’ve exposed them to the whole process or not. In our opinion we believe that if you train people how to do the job properly, provide them with a great culture, fair and meritocratic career progression, and the ability to gain a share of the business they are in they tend to stick around a lot longer than folks who only get to engage in a small portion of the job. If you invest in your people they will invest their career in the business.
Learn from your service culture – Whenever you go to a restaurant in the US you get great service. Why? Because most of the people waiting on you rely on tips. In recruitment we rely on commission – but in the US the service levels are beyond bad. Maybe this is because in contingency recruitment not every candidate or client results in a deal so everyone just gets treated poorly, and a scatter gun approach is viewed as more profitable. However, if every client and candidate is given a quality service whether you are filling roles or not it will be easier to do business with them next time, and / or up-sell for exclusivity, retainers, preferred supplier, etc. Every candidate could also be a client at some point and vice versa, so leaving them with the view that you are the person to deal with next time round is key.
Professionalize the industry – OK, this is a big one. But seriously, some of the experiences I have had beggars belief. Clients have told us they have to set their own interviews and the recruiters just give them the candidates’ phone numbers. We’ve also been told clients have had to close offers they have made as, in the recruiters opinion, the offer isn’t good enough! Another recruiter we were interviewing told us that he ‘creatively’ closed deals by offering the candidate half his fee to take a job – this was paid by post-dated check, which the recruiter then cancelled. Trade bodies in the UK would have a field day with examples like this; they are outrageous.
We have found, unsurprisingly perhaps, that the quality of service expected by clients is very low, which is making it incredibly easy for us to differentiate ourselves. We are in an increasingly globalizing world, and the expectations placed upon recruiters are inevitably going to increase and / or margins decrease. To coin an American phrase, it really is time for the staffing industry to wake up and smell the coffee!!