The world and beyond – Surviving in the economic jungle

Advice, tips and tricks on how to engage with the UK jobs market and commercial environment, from a female executive's perspective

Archive for January 2010

Fee or Famine?

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When an organisation needs legal advice they use a lawyer, and when they need financial advice, they use an accountant. How is it then, that when they need to address the issues of their most important asset – Their people – they often consult their mate down the road?

In the current tight recruitment market (In line with the tough economic climate) there is huge pressure on budgets and everyone’s belt is tightened to weather the storm. But I can’t help wondering whether the risk aversity I see in many organisations to recruitment and the associated spend, won’t in the long term have a direct knock-on effect to their efficiency and the quality of their workforce?

The issue of recruitment fees (And how high they are) comes up in every conversation I have with my clients. And always, there is a feeling that justifying the cost of recruitment is impossible.

I beg to differ.

The general perception about recruitment is that it is an expensive and abusive service, because what goes on behind the scenes is not usually factored in to this paradigm. The process of sourcing a candidate pool, the consultant’s experience to spot a suitable candidate, the time put into phone calls and interviews to screen the candidates all takes place without the client’s knowledge. The client only sees a list of candidates. So all the background work, digging, networking and associated legwork involved goes unseen and therefore, falls outside of the client’s experience of the service.

Partly, it’s our own fault as Recruiters. For us the sales pitch is so important that we forget that clients need to see ROI (Return on Investment) on their spend. And let’s face it: Sometimes, whisking a candidate off the database and into the client, and then slapping a full fee on it, doesn’t really represent best practice.

Ask any junior recruiter why they charge their particular % fee, and they are likely not to have a clue. The fee is the fee, isn’t it?

The fee in recruitment is actually representative of a service charge for the management of a process. This process includes sourcing a candidate pool, and backtracks extensively into the work that actually goes into establishing a contact base or database of potential candidates. Realistically, this source can go back years and it is impossible to quantify the value of such contacts.

But to get back to my original point: The fact that there is a migration away from traditional recruitment services into more value based, solution driven offerings is a positive development. The fact that many recruiting clients still think recruitment is an unneccessary expense that can be avoided through “on the cheap” solutions, is not. The automotive industry seems particularly susceptible to this at the moment, following the dreadful 2009 we all suffered.

The problem is that, due to the many redundancies and business restructures of 2009, the employment market is burdened with much of the dead wood that companies will remove when they have to cut costs. No struggling business is going to get rid of its star performers unless it is absolutely forced to do so.

Businesses are under pressure to deliver turnover, but haven’t recruited for extensive periods due to recruitment freezes to limit cost during these harsh times. Now, as the market is coming back to life, competition for outstanding employees will be huge. Yet, the risk aversity robs organisations from actually limiting spend by  bringing on board excellent new employees through a structured and targeted recruitment process. Instead, they opt for word of mouth and other grass roots methods and  although this does result in job offers, the quality of those hires may often be suspect and retention rates poor.

This traditionalist approach will no doubt haunt businesses in the medium future, when the sweetness of avoiding a recruitment fee is tempered by the bitterness of limited skills and lack of retention rates through sourcing from a limited candidate pool.

2010 – Recruitment with a difference!

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Following the carnage of 2009, the candidate market seems flooded with people looking for work. This was pressed home for me over the festive period.

As all business people seem to do at the end of each year, I was in planning mode and thinking positively about how I was going to launch my business into the Automotive Aftermarket early in 2010. This is a market I know very well and have worked in substantially for many years. So attracting candidates at senior level is not an issue for me.

However, as a diversification and extension of my service offering I believe it is important to address all seniority levels within the target client market to enable a broader solution. This means a potentially higher demand on candidates from my database to solve contingency recruitment problems. And a fresh, up to date database is a real asset in the recruitment world.

So I advertised very broadly over Christmas and New Year for candidates to populate my database in the areas of customer service, branch management and sales. The ads where well written, making it quite clear that applications would be saved in the database for consideration against future opportunities.

I gained over 800 applications in  only 2 weeks!

Clearly, a proportion of this response will not be of sound enough calibre for the database but that still leaves a large number of job seekers, whether redundant, currently employed or soon to be out of work. 

The laws of supply and demand are clear – We see what happens to prices before Christmas. They spiral, only to be cut to rock bottom in the New Year sales.

I stand between a large number of people looking for work, and their potential employers. It makes sense for me to apply the laws of supply and demand to get this cycle moving. In so doing I might hopefully help at least a small number of these candidates into employment whilst also helping my clients to gain good new employees.

I am offering a 30% discount against all new vacancies placed in January, and fulfilled with  a candidate registered during December.

I think this concept might be slightly different to the normal approach in recruitment, and there is potentially a risk of my brand (Currently aimed at senior level search recruitment) to become devalued. But I am aiming this campaign at the automotive aftermarket – The distribution supply chain and motor factoring market where a good deal and proactive marketing strategies go hand in hand. It seems an appropriate approach for this market.

Will it be a successful campaign? I will know at the end of January! For now, my intentions are good and I trust that the market responds well to some creative thinking aimed at generating a three-way win in the recruitment process.

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