Five Things Lost For Candidates And Companies With Online Recruiting

With the advent of online recruiting, actual recruiters have often been cast aside by companies. While they are saving money, there is a huge hidden cost.  Here are five things that are being lost both for companies and people.

1)    The Quality of candidates is suffering

The best candidates often are not online and do not use the online recruiting sites. So, for the most part, companies only receive the résumés of the people who are actively looking online.  Recruiters often know the wishes and desires of their best candidates and only send them when the most appropriate jobs show up.

Although I have not seen empirical evidence, I will bet turnover has increased.

2)    Mentoring

Over the years there are dozens, if not hundreds, of candidates I have been       able to guide and help.  It is one of the joys of recruiting, especially for a single industry recruiter.  There are people whose careers I have actually managed – both junior executives and those well into their careers., including presidents and CEO's. 

Because companies have cut back on the use of recruiting, this benefit is unknown to many young people.

The corollary to that is that many recruiters have left the business and companies have lost the counsel of many who knew their companies well.

3)    Long-term relationships with management have been hindered

Recruiting is a relationship business – both with candidates and companies.

Good recruiters know the principals and hiring managers of many of their clients.  Consequently they know who fits and who will succeed.

Human resources and the network owned company managers, because they are not allowed to use recruiters, are often precluded from taking advantage of this valuable service. 

When a great candidate is spotted for a likely company, it is becoming more and more difficult to market them to that business.

4)    Working with résumés

Effective recruiters can maximize people’s candidacy by interpreting, explaining and often rewriting (or directing the rewrite) résumés.

5)    Recruiters know and understand jobs

Working with recruiters speeds up the recruiting process.  They are familiar with companies and hiring managers and often know the ins and outs of specific jobs so that they can quickly access appropriate candidates.  

Online listings rarely contain enough information and, as a result, companies may receive dozens, if not hundreds, of inappropriate résumés which have to be screened and interviewed.  This is time consuming and costly.  And it often costs companies exceptional candidates. 

Good recruiters are also objective about salaries and are most often able to make deals that are fair to both sides.  People don't like to negotiate for themselves, finding it uncomfortable.  Recruiters can negotiate appropriate salaries commensurate with the job.  This may help lower turnover.

 

Recruiting: Why Recruiters May Not Get You A Job

For all time, companies have relied on networking to hire the majority of employees – best guess is 80% of employees have traditionally come through networking.  Someone known to a trusted employee is generally a reliable reference.  But recruiters always played a considerable role – maybe 10-15% or more of jobs, particularly for senior employees.  About a decade ago, companies began incentivizing employees to make referrals to insure an inexpensive flow of talent. And then along came the internet.

However there is a big problem with this kind of recruiting.  I learned years ago that people send their friends - people in the next office, people they see for lunch, friends of friends - without any real knowledge of their skills or abilities or even if they are a good cultural fit.  They just know each other, sometimes not even well.

Effective recruiters learn how to dig into personalities and strengths to take these things into account when sending candidates.

The best recruiters always had a solid relationship with their client agencies and the HR people who were responsible for hiring.  I can remember having a candidate who I thought would be fabulous for one of my agency clients.  When I called the agency, without a specific assignment, the Human Resources person told me he did not have an opening but would be happy to meet my candidate.  After talking to each other for half an hour, the HR person came up with several possible jobs.  Two weeks later my candidate was working there; that was twenty years ago and he is still there.

Not so much any more. In fact, many of my old clients won’t even return my calls because the holding companies have forbidden them to deal with recruiters.  There are several reasons.

First, the holding companies and the financial people decided that recruiter fees were too high so they eliminated placement people from all but the most difficult searches.  I said to one CFO that I could find them better, more suitable people than those they were hiring. He told me that, especially at junior levels, it no longer mattered – “One kid is like another. If they do well, great.  If not, we will just find another.  It doesn’t really matter.”

Then along came LinkedIn and other placement programs.  My experience is that many of these programs provide résumés based on key word searches.  Some, like LinkedIn, require the candidate to provide enough data in their background for the listing to be useful, which is rare; more often than not, people merely list where they have worked, but not what they have worked on or what they have actually accomplished).  Then, as I wrote a couple of weeks ago, either keywords or junior HR people take over screening résumés.

The problem is that people have become fungible. And, especially at junior levels, companies have no loyalty.

There is minimal out-of-pocket cost for companies to use LinkedIn Recruiter, Siftly, Monster, Indeed or any of a dozen other programs.  Mostly those costs are just an affordable monthly fee. But companies get what they pay for; I have tried these programs and they don’t provide much value added service and they certainly do not include any reference to personality or passion.  They simply provide a list of candidates, often unqualified.  In fact, with two of the biggest recruiting sites, I spent time on the net sharing with their managers positions which I had open.  In both cases, they were going to show me how to do it "right" so they could sell me their service.  In both cases, we worked together for about an hour. And, guess what? Neither of them developed a viable candidate equal to the specs of the jobs. Their programs were just not finite enough to produce candidates.  In both cases these spokespeople for their companies told me they would get back to me to figure it out why they were unsuccessful.  I never heard back from either because internet recruiting just isn't fully functional.

That is because, as I have said frequently, the key to recruiting is not business worked on (resumes) but rather the ability to do a job – and that requires that the hiring company define the problems that have to be solved or resolved.  And this information simply doesn’t show up on job listings or on people's resumes as they are put on the web.  In fact, most candidates have no idea how to properly program their own backgrounds for maximum effectiveness.  That is the reason why so many hiring managers complain about the quality of the candidates that they are seeing.

The issue is that it all really comes down to money.  Why pay a recruiter who is familiar with your company and its people (and its problems) if you can get a résumé for free?

As they say, penny wise and pound foolish.

This does not mean that you should not see recruiters or accept their calls.  What it means is that you have to know the limitations imposed on them in this climate.  

Time To Allow Account Management To Do Its Job Again

There is no question in my mind that fees have truly hurt the client/agency relationship.  And while clients pay the bills and now make the rules, agencies are not fighting back.  They agree to fees that are too low simply to gain or keep the business, but have to cut back on servicing in order to make a profit or break even because of those low fees. 

 

I truly believe that the holding companies have allowed this to happen to their agencies in order to gain business and revenues, regardless of profits.  In fact, their agencies may be losing money and losing out to other services from consultancies to freelancers.  The holding companies, in their race to appease shareholders, have commoditized the business.

I know many stories which indicate that this is so.  One that is particularly relevant is the new president who quickly found that his agency was losing money on an account; they were simply not paying enough and, in addition, no one who worked on it liked them. When the president went to the client and asked for a higher fee, the client refused and so, on the spot, he fired the client. He promised that no staff cuts would be made and, in fact,; the whole incident was great for morale.  Meanwhile, the holding company had a fit and told the president that he had no right to fire the client without holding company permission; the holding company needed the revenue, despite the actual loss on the account.  Of course that is absurd. The president explained to the holding company CEO and CFO that he was, by contract, responsible for the profitability of the agency and his own bonus depended on the profits.  He told the holding company that if they wanted the account, they should call the client and get the account to hire another of its agencies.  They never made the call.

It is a great example of what effective account management can contribute.

Now when someone owns you, it is difficult, but agencies have to find a way to get back to their roots.  Account management has been weakened to the point where it is almost unnecessary. The irony is that I never met a good creative person who did not value an equally talented account person. That is why, even to this day, most new agencies are partnered and started with both creatives and an account person.

I am shocked when I interview junior account people who rarely, if ever, visit their clients, even those who are local.  Juniors are no longer taught how to dig into their businesses so that they become a valuable resource for their clients.  As a result, many clients don’t see any value in their junior account people or sharing vital information with their account executives and supervisors.  The more senior account people are so busy just getting work out that they, too, don’t really learn their clients business, so that all they can do is day-to-day service with not much value added.

A few years ago, I asked an account supervisor when the last time she had lunch with her client.  She had been on the account for four years. Her answer was that she never, in those years had lunch alone with her counterpart.  I asked her when was the last time she spent a day with her client – alone, just the two of them, working on a project.  It had never happened.  So I begged her to call her client and just go to visit them (in New Jersey, so no big deal).  I told her to tell her brand person that she just wanted to spend more time with her and get to know the business better and had no specific agenda.  The account supervisor was actually reluctant, fearing that the management supervisor she reported to would be angry and not approve her car rental.  I assured her that it would work out and the auto rental would get approved.

It took a little convincing on my part, but she did it.  And guess what?  She spent the day just hanging. It was a really successful day that resulted in her getting closer to her client both business wise and personally.  And she was actually able to make a contribution at a packaging meeting.  When she got back to the agency her supervisor actually did give her a hard time, but approved the car rental.  The visit was so beneficial that the client involved her in many projects that she had previously been excluded from.  Seven or eight months later when the account was moved to another agency, the account supervisor was the only person asked to move with the account.  She also got a promotion.

There is no substitute for getting to know the client and their business.

The more visible the agency is to its clients, the better the relationship.  And this is the responsibility of account management.  It can’t be done by creative or planners or project management. 

Strong and well trained account management can pay significant dividends.