Toby's 3R Rant

Hell is Good Intentions

Toby Marshall — Tue, 14 Oct 2008 00:07:00 +0000

About thirty years ago the western world passed laws to stop discrimination in recruitment against older workers, migrants, women, etc. Advertisers are not allowed to put age or gender preferences on ads. They can‘t even do it in a long-winded way by saying, ‘we are seeking a graduate with three or four years of experience’.

So, many people go to a lot of trouble replying, believing they have a chance. Their age is guessed (often wrongly) and they are tossed on the reject pile. Or the employer has to waste 30 minutes going through the rejection process.

What’s wrong with this? We’ve ended up with the worst of all worlds. Discrimination and a huge waste of time and resources.

We just drove the problem underground, we kept it hidden by attacking the symptom (the advertisement) and not the problem (ignorance and fear).

We fail to confront the ignorant and shine a light on their stupidity. They get away with it. Today, tomorrow ….

This should worry all of us,

Cheers, Toby

The hunt for green apples

Toby Marshall — Mon, 29 Sep 2008 01:06:22 +0000

Imagine a giant fruit and veg market supplying a major city. One that works really badly. Totally sucks.

This market only opens at night and there are no lights to guide the thousands trying to find what they need. It has many hundreds of separate halls, each selling only a few things – some only sell root vegetables, others just stone fruit. And maybe 10 have apples.

Now, you’re trying to find small green cooking apples. One hall, somewhere, has these.

Each of the hundreds of halls is completely separate from all the others and when you go to one, the wholesalers only tell you about what they have to sell.

The people stumbling around in the dark have no idea what they’ll find in each sealed hall until they open the door and walk inside – what a waste of time.

Who owns these ‘halls’ in perhaps the most important market place in any country, the jobs market? Three types exist:

Recruitment agencies, there are thousands and each has a few jobs and a few candidates for sale – usually not exclusive to just their agency.
The many different newspapers with job ads in particular industries or sectors.
Finally, lots of job boards and many community sites that host jobs.

Total chaos.

There is a better market place and it’s here today – one that is brightly lit, fast and user friendly. It’s job boards – monster.com and seek.com.au. They will work if we stop sabotaging them with the thousands of other ‘halls’ that just get in the way.

Without all the clutter of newspaper ads and too many recruiters, you will find the ‘green apple suppliers’ in a few seconds: and then start the real job – spending time finding the best at a good price.

200 Australians have it in their power to make it happen now: the senior people in HR. Maybe a thousand in the United States and the UK, but still a small number of people. Forward this article to them, start making a difference.

Worth it? You do the maths – millions are in the wrong jobs and companies are screaming for skills.

Cheers, Toby

Baffled why nothing changes

Toby Marshall — Mon, 15 Sep 2008 05:12:24 +0000

If someone had an insight to make our economy significantly more productive. And our people a lot happier. And would cost nothing and could happen virtually immediately, of course he would be listened to.

Not.

Instead it’s ‘business as usual’. While one of our most important market places, the market that drives the entire economy, the market for jobs, is a mess.

The internet could fix it NOW. As I’ve shown.

It’s being blocked. For reasons I’ve explained ad-nauseum.

It COULD start next week. With major benefits in just a few months.

Important? Unbelievably so.

Why doesn’t it happen? You tell me,

Toby

P.S. Some possible ‘reasons’ why:

1. People rarely see the bleeding
obvious when it is first pointed out.

2. “These ideas persist not by inertia alone
but also because they are convenient to
powerful vested interests.” J.K. Galbraith

3. Toby is just a blogger. The only people
who publish him are the recruitment
industry press - not the mass media.

4. People get confused as the
issues seem complex.

5. That basic economics is beyond
many business people.

Question Behind the Question – Junk CEO Surveys

Toby Marshall — Tue, 02 Sep 2008 01:03:25 +0000

The questions people ask and what they really want to know are 2 different things.

For example, CEOs are regularly asked:

“Are you suffering from a talent shortage? Do you have a skills crisis?”

The answers are overwhelmingly yes. This concerns me because in a previous Rant I argued strongly that there was no scarcity of talent. That there were hundreds of thousands of skilled people looking for work or for more work. In other countries such as the States and the UK these skilled work seekers number in their millions.

So who’s wrong?

Well the Question Behind that Question, what the CEOs were really being asked, was:

“Can you find the resources you need to profitably achieve your business goals?”

Unspoken and unasked it was what the surveys were really trying to find out. And if a big majority answer “Yes” as they have for years, then there’s yet another ‘Talent Crisis’ story in the media.

But asking “Are you suffering from a talent shortage?” has two QBQs:

“What is your definition of talent?”
“Do you actively recruit from the pools of talented people who are desperate for work? For example older workers, university students, Mums, migrants and expatriates?”

Now if you define talent as Full time; younger than 40; and ‘People Like Us’ ….

Then good luck! You have a talent crisis. That won’t go away.

It’s surprising how many companies follow this narrow definition of talent while paying lip service to being more flexible. Their HR policies say what should be done – but for diverse reasons the people that matter, those making the hiring decisions, ignore them.

Now I’m a simple soul. I see hundreds of thousands of people who are seeking work, better work or just more work. And they are desperate and often bewildered - why can’t they get jobs they know they can do when there is supposed to be a skills crisis?

It was only when I learnt of the QBQ concept that I finally saw a simple way to explain the disconnect between the CEO surveys and the reality of abundant talent.

Now recruiting in these huge under-employed pools requires more than paying lip service to equal opportunity laws. It requires CEOs to address the real question and understand the real problem – HR cannot do it alone.

It requires new skills and focus.

Abacus has had those skills and focus for years,

Cheers, Toby

Why Giant Recruitment Ads Don’t Work

Toby Marshall — Tue, 19 Aug 2008 01:03:46 +0000

The sales pitch for giant Cane Toad Ads comes down to one word: Browsers.

The salesmen masquerading as your consultant then attempt to convince you that that newspapers will deliver them. Which brings us to the ‘browser’ sales pitch:

I learnt this pitch 19 years ago when I worked at a giant recruiter with hundreds of ‘consultants’: it was drummed into us at the weekly sales meetings. We were made to practice it on each other and in front of the mirror. You had better believe that this pitch is the foundation stone of Australia’s major recruitment firms.

The pitch is simple, plausible and seemingly valid: people read the front of the newspaper, and their eye is caught by an advertisement so they become interested in it and apply. They are argued to be better applicants because they are more likely to be happy in their current job and therefore likely to be good at what they do. And of course, would not see jobs where active job seekers go to look - online or in classifieds.

Who could argue with something so self-evident??

No surprises that I’ll have a go. There are 3 counter arguments that rubbish the whole sales pitch:

Firstly one that came to me at 4.30 a.m. on a recent Cold August Night, the hour when all good ideas roam in a fevered brain. In the 3 years since I wrote a version of this Rant in my book, Get Great People, I had thought there were only 2 main counter arguments. This final one is the Big Momma - the last and very large nail in what is now virtually a metal coffin:

That we have moved to a world of Free Agents and the Internet. Where people manage and assess their careers constantly (even if usually not particularly well!). A world where people under 40 (Gen x and Gen Y) consider themselves independent of their employers, even if they enjoy their jobs. That they have a life outside work, or in more extreme cases, that they have a life, and work is just a small component of that. Something that many of us Boomers have also come to believe and live our lives by.

In this world, the Free Agents browse 10 or 20 or a 100 websites a week (even I, a geriatric, am on at least 20 different sites every week). And one of the sites they go to is MyCareer, Seek or Monster. Just for a look. To keep in touch. Because you never know. And what about all those niche job boards attached to professional forum sites: LOTS of browsers on those. And what about the snowballing LinkedIn and Facebook and all the other social networking sites. Full of browsers. Full of recruiters.

And because it is so easy to apply for jobs with just a few clicks they are more likely to make an enquiry than that browser reading the paper in a cafe or their garden.

Now, if the price was about the same, the ad salesman just might have a point. But we are talking chalk and cheese on cost. Not in the same ball park. A hundred dollars versus many thousands.

So, you tell me:

Who are the browsers? Where are the browsers? And, in particular, where do the browsers go, who in this ageist world, are the most sought after by employers? Reckon there are way more of these valuable young applicants on the job boards and social network sites than there are reading the Early General News in the Saturday papers.

Maybe the ad salesman is looking a bit like a seller of dodgy cars - even before we get to the other two reasons ….

Secondly, we read the Saturday pages ‘eyes up’.

If there were only 2 or 3 job ads on a page, and they were designed to attract the eye, no problem attracting eyeballs. That’s the argument of all advertising agencies and media sales people and it’s completely valid.

With recruitment, all the ads are in a block at the bottom of the page. Or, even worse, they are on a whole page by themselves when you get towards the back! Great for browsers!

I can remember the incredible hubris one Friday when I was at a Mega Firm and we had sold a whole broadsheet page of ads - it was all us! We were so proud! We were the champions! But hey, didn’t we forget something: what sort of insane browser browses a whole page of ads!? Maybe a desperate job seeker?

The ads are all the same size and all look pretty much the same - even better they are now in color so stand out like the proverbial dog ba.ls. They are also conveniently located in the bottom half of the paper - so handy for folding the broadsheet in half as I lie in my deckchair on Saturday morning!

So after 30 years of such ads, those browsers know where the ads are - they know to keep their eyes focused on the top of the page. That is where they find what they are looking for: something interesting to read.

I don’t have any major research to quote, but I have talked to a lot of people - it is quite common to read the Saturday papers ‘eyes up’. Don’t you?

Thirdly, the Saturday papers are now conveniently divided into sections.

The sections help readers find the bits they want to read. And in what order they want to read. And of course it helps in selling ads to particular demographics (now there’s a thought: recruiters could place ads in sections that attract who they are trying to employ?!)

With the sections, many of us have developed very idiosyncratic ways of reading. Take how I read the Saturday SMH (apologies for those who don’t live in Sydney):

I start with the front page; quick glance at the back page for some scurrilous gossip; Mike Carlton and Peter Fitzsimons for a laugh; rugby news; the rest of News Review; Spectrum; and sometimes the Good Weekend. And finally, if I get through all that, I turn to the news bits where the recruitment ads are - pages 2 to about 20 - and religiously keep my eyes up. But most weekends I don’t get to it.

Again, no research on readership that I can quote, just an informal survey of professionals; but it is common practice to read selectively. Of course the newspapers do lots of market research, which lead them to create sections in the first place.

So, three strong reasons that rubbish the browser sales pitch - just tell the advertising salesman masquerading as a consultant to go and spin his B.S. to someone else.

Love to hear your stories of ‘consultants’ trying to sell you ads. Or, even better, a recruiter defending them!

Cheers, Toby

P.S. For more on this topic and some wonderful examples of the behaviour it drives

Secret Commissions and Cane Toads

Toby Marshall — Tue, 05 Aug 2008 04:17:03 +0000

Corruption hunters follow the money trail. They learn who benefits. They explore how far the corrupt will go to protect their scams.

It’s the same with unprofessional behaviour and secret commissions ….

Bob’s story

Bob runs a great manufacturing and exporting business but his accounting affairs got a bit complicated recently, so he decided to get a top flight accountant to sort out the mess – he went to Simon, a partner of a Big 4 Firm. Simon charges like a wounded bull but it’s a big prestigious firm so Bob decided he must be worth it.

Simon recommended some software as essential to solving Bob’s problems, and while it’s WAY more expensive than all the competing products, Simon said it’s the best. It added $12,000, about 40% to Simon’s quote which didn’t thrill him. But what Bob knows about accounting is not worth knowing – Simon’s the expert so he signed the cheque.

Would Simon’s advice have been accepted if Bob knew Mega Firm was trousering 25% of the $12,000? And Simon was personally putting an extra thousand in his own pocket?

Might Bob have explored the alternative products, most costing less than 10% of Simon’s?

Undisclosed commissions are considered dodgy in the accounting profession – but are everyday practice in recruitment.

When a recruitment consultant from a big firm says that solving your problem will need an advertisement at the front of the newspaper that costs $12,000, the reaction of most employers is like Bob’s: It’s a lot of money but he’s the expert and good people are hard to find. Better write a cheque.

And yes Josephine, recruiters do take commissions for selling ads – they buy wholesale and sell at retail. And some have used dummy invoices to conceal the practice from their clients. And some firms have paid their ‘consultants’ up to a $1000 for selling them.

Does that motivate the ‘consultant’ to hard sell an ad? Maybe a little.

What about if their commission structure was linked to selling 3 ads every quarter – and they stood to make an extra $10,000 or even $20,000 a year if they sell them?

How much pressure will the ‘consultant’ put on their client to buy an ad when they are one ad short of their quarterly quota? With THOUSANDS riding on it? The client will feel some heat. Lots. (To feel the pressure, read all about Friday Night Specials - go to the end of the article that opens)

In the big firms, nearly ALL their strategic focus is on selling the giant ads which gives millions a year in free publicity.

But hey, it’s not free publicity! They make a cash profit!

So you’d better believe they care. Reminds me of a pride of lions - with the dominant firms holding the front of the paper (the high ground). The young males constantly challenge them for the prize, inching closer to the front of the paper (the front is better than sex for these lions!).

It’s full on warfare - has been for about 30 years. Winners: large recruiters. Losers: employers!

Their position at the front of the paper underpins everything the big firms do. It gets them huge profile and market position. All paid for by naive clients who believe the ads are useful as an expert told them.

No. Just a salesman.

WHY ARE THE GIANT ADS THE SAME AS THE CANE TOADS that have invaded Australia? They are ….

Bloated, ugly, destructive and shouldn’t blo.dy well exist!

My argument against Cane Toad Ads?

They don’t work; they only benefit the big recruitment firms; they damage our economy; ruin careers and damage lives; and they promote unprofessional behaviour due to the secret commissions paid.

Why don’t they work? We’ll cover that in the next Rant, just assume they don’t for the moment - but if you really need to know, the reasons are here.

Why do they cause so much damage? Well, newspaper ads fragment the market in an area where the internet is perfect for the INITIAL matching of people to jobs. Fragmenting makes it more inefficient so companies find it harder to find people. And people find it harder to find better jobs.

IT’S ALL ABOUT THE THEORY OF MARKET PLACES. An efficient one always has lots of buyers and sellers in one place.

Now this is complicated to explain in a Rant (for a fuller but still simple explanation), but here’s the Very Simple Guide: Think about a boat show – like the one in Sydney at the moment. Not surprisingly, they put all the boats in one place, Darling Harbour.

Imagine the chaos if we scattered them over 10 different locations, with a random mixture of different boats at each?

Well, that’s recruitment. Twenty or more different ‘market places’ for each type of job including: newspapers, large recruitment firms and the internet. The only place ads should be is the internet – and Cane Toads are the main blockage to this efficient market.

Do you think big recruiting firms would spend so much time and money pushing Cane Toads if their rewards weren’t huge?

Come on HR! There are better uses for your company’s money. Stopping the Cane Toad Gravy Train is a giant stride towards making the recruitment industry more effective.

So far there is no magic bullet for real Cane Toads – but their is for the recruiting equivalent. A bullet a mere 200 people have and can fire at will.

Who? The 200 HR managers in the organisations who buy Cane Toad Ads.

Just say no. Today.

It’s worth billions to our economy. And a huge growth in happiness.

Cane Toad Ads are a naked, very ugly emperor with no reason to keep living.

The Recruitment Market Place and Why it Sucks

Toby Marshall — Mon, 04 Aug 2008 04:03:55 +0000

The recruitment industry may be inefficient and charge huge fees, but it’s only a small industry - surely it can’t cause billions of damage to our society?

It does.

The damage is caused by market ‘inefficiencies’ or friction. How?

1. It adds huge costs to organisations looking to hire people

2. It means that many people are working in jobs they are not happy with because it takes too much time and effort in this flawed market for them to hunt out something better

Before we look at why this is so, it helps to look at some theory - economic theory, and in particular the theory of markets. Apologies, but economics does have some uses, and occasionally I’m glad I studied something so turgid.

With markets, two things are always required for them to work well:

1. All the buyers are readily accessible in one place, with all the information about the seller’s products also available - creating what economists call liquidity. This ‘place’ can be physical (such as a local market), or in newspapers ads, or increasingly on the internet

2. People can quickly find and use the information they need to decide whether to buy or sell

With these two conditions filled, markets are efficient and will work well. Efficient means the cost of buying and selling is low: there are low transaction costs, and the prices are competitive. In an efficient market, if a seller is charging more, he had better have a pretty special ‘widget’. Or be pretty persuasive.

An example of markets that work well are the old market towns that existed for thousands, of years, where the distance between markets was based on travel times. All the buyers went to the market town, as did all the sellers, and you could look at the produce and goods to assess their quality (and sellers could check the colour of their money).

Modern markets include the Stock Exchanges and Commodity Exchanges. To buy shares you go online to the Exchanges as that is where all the buyers and sellers are.

Good markets are efficient, with only a small gap between the ‘buy and sell prices’.

So why does the recruitment market suck? Because it doesn’t meet the two conditions for a healthy market:

Buyers and sellers are not in the same place, there are many separate markets
Important information relevant to the decision to buy or sell is not readily available and in many cases each side is unaware of the needs (and thus opportunities) of the other side

What are these separate places or separate markets for labour?

The employers are the buyers of labour, and they put their ‘offer to buy’, their advertisements, in many different places. This creates a variety of ‘markets’ including:

National newspapers (AFR; The Australian)
State/City newspapers (e.g. SMH), in the front of the paper or in the classifieds; the papers further break up the market with ads on Monday, Wednesday, Friday and (mainly) Saturday
Regional papers (Newcastle Herald; Central Coast Express; etc) - which have recruitment ads. And often employers or recruiters put them into these papers and the SMH
Industry journals and magazines
Free give-away papers
Job Boards on the internet - heaps of alternatives here; there is incredible overlap, with jobs placed on different Boards. Also the newspapers that own the classifieds give you online ads virtually for free. Incredible amounts of duplication
And lastly, the recruitment agencies. Employers put their jobs in what are effectively hundreds of other markets, the agencies. Many jobs go to multiple agencies, each of whom will then advertise in multiple places. So the same job often appears in 5 or 10 or even 20 different places. What an inefficient market!!!

So all of these are separate and overlapping market places - the overall result is chaos.

The second requirement for good markets is that buyers and sellers quickly find the information they need. With jobs advertised in so many different places it is hard for sellers (of their labour) to find the buyers (the employers), particularly when recruitment agencies are getting in the way. This is particularly the case when so many jobs are ‘hidden jobs’ and are not advertised anywhere – often because the costs of doing so are high and only sometimes because of confidentiality issues.

Like all agents or brokers, information is a large part of what recruitment agencies sell. So naturally they will block the free flow of information. The obvious example is they don’t put the employers name on their ads, so we don’t know who their client is until we apply.

When speaking at conferences I often ask employers about their recruitment advertising: what works and what doesn’t. Many think that online Job Boards don’t work so feel they need to stick with the newspapers for the moment which is understandable.

The main reason Job Boards don’t work is because of the confusion in the market. In fact, online Job Boards have (temporarily) added to the confusion as there are now even more places to hunt for jobs, an even greater spread of localities to search within, adding to the time and costs of buyers and sellers.

One fact is unarguable: The internet is the perfect market place for jobs to be advertised. Online Job Boards are faster, cheaper, your ad lasts for a month, they minimise transaction times, and they maximise information flow. Utilised and developed properly, Job Boards are a thousand times better than the tree destroying alternative.

Recruitment practices need to change drastically for us to have an efficient, productive industry. And part of this critical change will be how jobs are advertised. Internet advertising is clearly the future, and will result in a fairer, more equitable industry with better outcomes for all.

The sooner this change occurs, the better.

Internet Job Ads will work well when 4 things happen:

1. The HR managers realise they have the capacity and the skills to decide to stop newspaper advertising. The exception is for some important and hard to fill job where they need to cast their nets widely: perfect for the newspaper when it is not crowded with other recruitment ads.

2. Employers place online ads directly, not through recruitment agencies, so that applicants can find the information they need. Applicants can then be certain that there are real jobs there, and will be able to make better decisions about the jobs they choose

3. When the Job Boards like Seek and Monster invest in better ‘matching technology’ to make their searches more effective. They’ll invest when the the first two conditions are in place - then Job Boards will be even better at matching and back end processing (however, their current systems still work a thousand times better than the ad in your paper recycling bin!)

4. The recruitment agencies lose their privileged ‘gatekeeper’ status. So the blockages and inefficiencies they cause disappear - minimising the damage of their huge fees, appalling treatment of candidates and highly questionable ethics

So, the recruitment market is absurdly inefficient - how does this really affect you? What are the consequences?

Perhaps half the Australian population is working in the wrong job: either working for the wrong company, or just doing something they don’t want to do. What research backs this up?

This estimate comes from talking to hundreds of people in the recruitment industry and thousands of job applicants over many years. And, if anything, the figure is likely to be very much higher than 50%. It doesn’t mean they can find something hugely better, just better. People often know what better means, but just can’t find it. They also might know what they would like to do but are insecure about moving when the market is so ‘opaque’ in case they make a mistake.

The negative impact on our economy of this collective misery caused by so many being in the wrong job is huge. We have discussed the impact of doing what you love – it gives you energy and enthusiasm and your contribution to the company is much higher. Your productivity - that magic thing that makes economies grow - grows.

Imagine if most Australians were in jobs they were even slightly happier with.

The impact on our economy would be extraordinary if people could more easily find a job that matches their skills and passion: there would be a huge and permanent lift in productivity. Permanent, because people won’t chop and change jobs so much if they can easily find out just how green (or brown) the grass is out there.

And companies will pay people wages closer to their true value. In this new world, employees can more readily explore the market if they are not getting their value from their current employer

Economists do get a lot of things right (just don’t believe them when they claim wisdom on such matters as the timing of interest rate changes!). They know that an informed market is an efficient one.

The recruitment market is very ill-informed and therefore very inefficient.

Why Large Recruitment Firms are so Desperate to Sell GIANT Advertisements to their Clients

Toby Marshall — Mon, 04 Aug 2008 03:59:33 +0000

Do large newspaper ads work and are they value for money? In the days before My Career, Seek and Monster the answer was sometimes. Today it’s NEVER.

Australia is unusual in having large numbers of expensive recruitment ads at the front of the papers. Some countries have a few but nothing to the extent that we do. We have a mass of recruitment agency-controlled ads and all are large and expensive. And these ads are bought in blocks by the recruiter ahead of time - and at wholesale prices.

Why is there incredible pressure to sell mass media ads at the big firms? There are at least five reasons:

It’s great free advertising - the ads raise the ‘profile’ of the firm, making them top of mind with clients and applicants. Their clients are unknowingly paying for their corporate positioning - or perhaps they do know but just feel they have no choice.
Applicants who are not suitable for the advertised role (that the client paid for) are sold to other companies. If he can’t get a quick sale, the recruiter gets new resumes that he can ‘reverse market’ to lots of other employers at the same time.
Many firms buy the ads wholesale, and sell retail. Some even put hidden ‘production costs’ on top of the retail price - they get two hidden fees. One firm I know adds 15% for ‘production costs’ as part of their normal business practice. This brings in a lot of $$s their clients are never told about.
All space is pre-booked. What page your agency’s ads run on is decided by how many you sell each week. On a regular basis, the newspaper assesses each group’s usage. If yours has fallen, another recruitment firm may be allocated some of your space. Or, even worse, you swap places in the paper - they come forward and you slide back to the pages few readers reach. Talk about strategic pressure to keep selling.
At least one of the major firms in Australia pays a hidden commission to their recruiters for each ad sold. As at mid 2005, this was $900 pretax. Quite an incentive for them to persuade their clients that an ad is the best solution. An even bigger incentive are the bonuses for reaching their ad sales quota for the quarter – which can earn them $10,000 or $20,000 extra.

Try this question on ‘consultants’ who are pushing a mega ad onto you:

“Ok, you clearly believe this expensive ad will find us good people. Are you happy for a panel of recruitment experts to evaluate it’s effectiveness at the end of the campaign, and then allow them to publish their conclusions? And if those are negative, will you rebate me some of the cost of the ad?”

Tough question! Should sort out the women from the girls!

Who would be on the Panel? Me for one and happy to find some more volunteers.

The panel’s brief? Assess the costs versus the salesman’s claims, and identify where good applicants were actually sourced.

For example, how many came from Search if the role is a senior one - and ask for their research files to see if they actually did any Search. Easy for them to claim they did, so asking for proof will keep the basta.ds honest.

The panel would then publish their conclusions in the mass media (or after August 16th at www.recruitershamefile.com) - in most cases this would be deeply embarrassing. Of course just asking the question makes it unlikely you will have wasted your money. Only a very brave or foolish ‘consultant’ would persist with selling you an ad on these terms - or one who was totally convinced that in this particular case it would work.

The pressure on the ‘consultants’ to sell these ads is intense, and the main focus of their internal weekly sales meetings. Directors often prowl these meetings intimidating ‘consultants’ - where I used to work, they walked around the table where we all sat waiting for our turn to be picked on! When I started my career over 19 years ago this was the practice - from talking to people who have recently left the large firms, the not-so-subtle intimidation may have become even worse. At least in my day my commission cheques weren’t linked to having to sell ads and no-one slipped $500 into my pocket when I did.

So, the large ads benefit the agencies and the media. Not the sucker that paid the bill.

How do they get away with selling so many expensive, wasteful ads?

There are four reasons why this incredible con continues:

1. Their sales pitch is built around the plausible sounding ‘attract the browser’ argument – the absurdity of this argument is shown below.

2. “They are a big, successful firm who are experts in recruiting - they know about these things, and if they tell us we need to spend $12,000, then we had better do it.” Remember, most managers or professionals only recruit once or twice a year and few know much about the secretive recruitment industry.

3. Some ads actually do work. They do catch some browsers - it is just that they are atrociously wasteful in terms of the ‘cost per appropriate applicant’ - surely the only valid measure of value. And given the Mega recruitment firms obsession with tracking and reporting on activity and results, it might surprise some people that they don’t track this. If they do, no surprise that they don’t share it.

4. Finally, who is to know whether the ad worked anyway? The applicant who finally got the job could have come from anywhere, and rarely is any tracking done. Remember that big firms have a high profile because they sell so many ads with their logo and other branding taking up a huge chunk of the expensive space. So applicants come to them directly, even if they didn’t see the ad (and that would be fine if they were blo.dy well paying for it).

The ‘browser’ sales pitch

Who could argue with something so self-evident??

No surprises that I’ll have a go. There are 3 counter arguments that rubbish the whole sales pitch:

In this world, the Free Agents browse 10 or 20 or a 100 websites a week (even I, a geriatric, am on at least 20 different sites every week). And one of the sites they go to is MyCareer, Seek or Monster. Just for a look. To keep in touch. Because you never know. And what about all those niche job boards attached to professional forum sites: LOTS of browsers on those. And what about the snowballing LinkedIn and Facebook and all the other social networking sites. Full of browsers. Full of recruiters.

And because it is so easy to apply for jobs with just a few clicks they are more likely to make an enquiry than that browser reading the paper in a cafe or their garden.

Now, if the price was about the same, the ad salesman just might have a point. But we are talking chalk and cheese on cost. Not in the same ball park. A $100 versus many thousands.

So, you tell me:

Who are the browsers? Where are the browsers? And, in particular, where do the browsers go who in this ageist world are the most sought after by employers? Reckon there are way more of these valuable young applicants on the job boards and social network sites than there are reading the Early General News in the Saturday papers.

Maybe the ad salesman is looking a bit like a seller of dodgy cars - even before we get to the other two reasons ….

Secondly, we read the Saturday pages ‘eyes up’.

With recruitment, all the ads are in a block at the bottom of the page. Or, even worse, they are on a whole page by themselves when you get towards the back! Great for browsers!

I don’t have any major research to quote, but I have talked to a lot of people - it is quite common to read the Saturday papers ‘eyes up’. Don’t you?

Thirdly, the Saturday papers are now conveniently divided into sections.

With the sections, many of us have developed very idiosyncratic ways of reading. Take how I read the Saturday SMH (apologies for those who don’t live in Sydney):

So, three strong reasons that rubbish the browser sales pitch - just tell the advertising salesman masquerading as a consultant to go and spin his B.S. to someone else.

Love to hear your stories of ‘consultants’ trying to sell you ads. Or, even better, a recruiter defending them!

Spurious Advertising research by Mr Ad Salesman

Ad salesmen have a standard pitch that goes like: “Mr client, only a tiny percentage of applicants who end up on the final shortlist are ever on a recruiter’s database. The best candidates are not actively searching for a job - we need to attract them to apply with an advertisement that catches the eye as they are browsing through the Saturday morning papers.”

A regular speaker to our industry runs a firm that sells giant ads. At a conference 3 years ago he asked the 110 recruiters in his audience: “What percentage of those who are ultimately short-listed were previously on ANY agency’s database?” I proffered a guess of “less than 10%” - obviously he wanted a low number and I wanted my ‘gold star’ for the right answer!

Now he is one of the doyens of our industry and has been financially very successful. Most of what he was telling us was great stuff about how to be a more productive as a recruiter - overall a great presentation which was well received.

He triumphantly and emphatically came back with “research shows it is less than 5%”

Extraordinary and a great sales tool if true so I wanted to track it down. But as I doubted it was true, it would have been aggressive to challenge him publicly (I was also on the speaking programme, though with a much smaller role) – after he finished I asked “could you tell me where to find this research?”

The answer and his body language were classic: He looked down, started to turn away and said “Oh, it’s old research, not sure where it is now”. And continued to turn away, and started speaking to someone else!

And no, he didn’t know me (it was before I published my book), and I had had a shower that morning.

Now, that got me thinking. Firstly, doing such research would be virtually impossible, as it would mean tracking each candidate’s job search. Very time-consuming and also candidates might not want to admit how hard they’ve been trying (and by definition, not successfully). Also, having just been rejected by an agency they may not be favourably inclined to help an agency do research. It would also be very expensive - who would care enough to spend maybe $50,000 with a research firm?

Easier to invent a figure that sounds plausible in front of an audience that wants to believe it.

Takes some chutzpah to create facts that are so easy to challenge, particularly when you are being paid a hefty fee to provide expert training. But …. maybe not. No-one else seemed to notice.

Secondly, on reflection, I believe the figure is actually much higher, more like 20 or 30% - remember it was any agencies books. But, as with the presenter, I have no evidence, just a feeling from years in the trenches – and I have no particular axe to grind. I don’t sell $12,000 ads that are virtually useless.

Thirdly, his usage of the words ‘old research’ is interesting. The world of advertising has changed a lot – if the research is so old that he and can’t find it, maybe that is another clue that it ain’t true, in the unlikely event it ever was.

If you want to sell expensive ads, and he and his company do, “less than 5%, proven by research” is a seductive sales pitch. Shame it’s a bald faced lie.

The Day the Victory Bell Wouldn’t Stop Ringing - The Completely Useless $35,000 Ad Campaign

I briefly worked at a Mega recruitment firm, back in the day when the internet was just for nerds.

We had a large brass bell hanging in the middle of the office - you rang it when you made a sale of an ad or a body. Crass I know, but lots of sales teams have them and we were in no doubt that that’s what we were - the bell kept the team focused on what really mattered to recruiters!

The bell started ringing one day. And kept ringing. And ringing.

The ‘consultant’ had just returned from visiting new clients - a restaurant chain was opening in Australia and needed 200 staff. The ‘consultant’ had sold the client the equivalent of 4 large ads in the front of the Herald, more than $35,000 in today’s money. He had sold 40% of the firm’s maximum pre-booked space for the week. He was only one of 15 recruiters in Sydney so it was quite a coup - our biggest ad sale in about 4 months.

That night we went off to celebrate with the Managing Director shouting the first drink. Later I asked the excited and merry ‘consultant’ about it, saying it seemed unlikely applicants would come from the front of the Herald - not the first reading choice of many kitchen staff.

His response with a huge smirk on his face? “Hey! My client also paid $2000 for lineage (classified) ads in the back of the Herald and Telegraph, that will fill the jobs.” And the cheap ads did, with barely one applicant from the quarter-page extravaganza.

His client, the poor restaurant chain, had made a sizeable and greatly appreciated donation to our firm’s profile and helped us hold onto our much valued position on pages 5 and 6.

Does it still happen? You bet.

Friday Night Specials - “Have we got a deal for you!”

I cringe remembering Friday Specials from my 12 months working at Mega Firm.

About every 3 weeks, usually late in the morning on a Friday, we were summoned to a quick stand up meeting around the Victory Bell and told “we have some discount ads to offer our clients”.

Our Director would ask each of us for the names of 2 or 3 clients to call - if we were reticent, he would suggest a few names.

We then trotted off to ring them and offer them a discount on ads in Saturday’s newspapers. The discount often started at 25%, getting rid of our wholesaler’s profit. By 2 p.m. it would fall to half price. Occasionally, if it was still not sold, we would have to run a filler ad for ourselves – a big loss so the company hated this.

One Friday I rang a good client with the special offer and got a very aggressive response

“Why do you have all these ads to sell?? Why is there such a panic? You don’t even know what I need! What’s in it for you?”

He was simultaneously both angry and confused - unusually he had been rung 3 times in just 6 weeks. As a good ad salesman who still half believed they worked, I gave him the company line: That we had had a last minute cancellation so are offering our good clients “the opportunity to be at the front of the paper at a great price”. But it got me thinking about these constant specials, and what this new industry I had joined was really up to.

The real reason why Friday Night Specials happened so often? Because on Tuesday we had to commit to how much space in Saturday’s paper we could sell to our clients. And there was always pressure on management to take a couple of extra ads to ensure we maintained our spot at the front of the paper (your position is based on how many you sell over the quarter versus the other firms). So we often had trouble selling the last few spots that our optimistic and hopeful managers believed we could achieve so they would get their bonus (remember, the entire strategy of these firms is based on their position in the paper and the free publicity from the ads.)

The loss to the firm if they couldn’t sell the ads, given the exorbitant prices, was significant. So the kudos you got for flogging these specials to a gullible client was huge - and lasted until the next time it happened. When you had to prove you had cojones once again.

Still happens? Of course.

Now, I can hear some of you say: Ok, guess we got the message that you don’t like the big ads at the front. What do you say about those at the back of the newspapers? The Classifieds.

Not one redeeming feature. Nothing. Zip. A complete waste of money. They just clutter up the job market and make it more inefficient.

Random words that spring to mind: Trees; Stumbling through a dense fog; Slow; Time waste; Dumb

Cheers, Toby

Cold Calling or Consulting: No time for both.

Toby Marshall — Tue, 22 Jul 2008 00:43:13 +0000

Virtually all training provided to recruiters is about cold calling and transaction selling. It’s the focus of nearly every recruitment conference I’ve been to – ‘how to get your billings up’. This Rant will help outsiders understand how the industry got to its appalling state.

With refreshing honesty, trainer Sophie Robertson’s opening sentence states:

“Understand that you are in a sales position, no ifs or buts.”

Which is what all the others say, just not as neatly - though some like Barb Bruno in the USA are pretty blunt!

So what does this mean? That recruiters are trained to cold call meaning they have no time to consult. And remember most work contingently - racing other recruiters to a sale, so consulting is ruled out anyway.

Ross Clennett, one of Australia’s best recruitment coaches has a great e-book (go to www.rossclennett.com.au to get it) that recommends:

Weekly Prospect Calls: 50 (= Cold Calls)
Monthly prospect & client visits: 28
Monthly Float Outs: 20 (= sending unsolicited resumes)

Not much time left for deepening relationships with existing clients after doing these calls and following up. Now, in other articles and talks, Ross and other trainers rightly say that our focus should be on deepening relationships: But where’s the time? You can’t have it both ways.

This cold calling model is different to how my firm and some other boutiques work: where you have 10 to 20 clients who you work for repeatedly. So relationship building visits might be 3 a month, with 2 or 3 visits to prospective clients on top of that.

Re 20 float outs: No thank you! That’s not consulting, it’s acting like an 3rd rate web server! When you have fewer clients who you know well, sending unsolicited resumes is welcomed, and you might do 2 a month - not 20. It’s still sales but the focus is on relationships, not ‘foot in the door’ tactics (see Sophie’s wonderful cold calling scripts in my last posting on Lies).

Which gets to the fundamental problem:

We are virtually talking about 2 different industries.

One where 50 or a 100 ‘clients’ is the norm, based on constant cold calling.

Versus one where recruiters work closely with a few employers helping them reduce the risk of a wrong hire, while still needing to work quickly.

Ross made the following comment on my blog:

“Toby re your assertion that the role of the recruiter ‘is to reduce the risk of making a wrong hiring decision’. I would suggest you are in minority company there …. clients use a recruiter because they want ‘excellent candidates, delivered quickly’”

The chasm here is wide.

Ross is right - I am in the minority but the Rants & technology will change that. His model was right BEFORE Seek.com.au and Monster.com. Recruiters in his transaction model are just selling information: finding candidates and racing to the line in a winner take all race. They are middlemen who the internet will soon wipe out (why it is taking longer than in other ‘Agency’ businesses is a future Rant).

After recommending 50 prospecting calls a week, all trainers go on to say “you must of course focus on long term relationship building”.

Alice in Wonderland. Rubbish. There is no time left AND it requires different skills.

Relationships require consultants, not cold callers,

Cheers, Toby

Industries, like Fish, Rot From the Head Down

Toby Marshall — Tue, 08 Jul 2008 00:54:10 +0000

All professions have their experts - senior practitioners who speak at conferences, train, and provide coaching. What they say and teach affects the whole industry and sets ethical and professional standards.

Unfortunately, in recruitment, many of these experts are teaching the industry how to lie.

Now, I’ve sat in a lot of training courses in my 19 years in the industry and have done my share of speaking from the platform. What fascinates me is that the rot has permeated so deep that recruiters simply don’t notice they are being taught to tell porkies.

If training to lie were in another profession such as accounting, financial planning, or law, there would be uproar. Just silence in my industry.

Let’s look at 3 examples:

Melbourne and Toronto with the speaker delivering the same talk – the audience were all recruiters, over 300 of us. He told us to lie when relaying an employer’s salary offer to a candidate, to ask the candidate what salary they want and to say “I don’t know if they’ll go to that, but I’ll see what I can do and call you back.” Knowing that, in this case, the employer will go to that or more as that was their instructions! Then he suggested a good lunch to celebrate while letting the candidate sweat for a while. This was just one of a number of ways he advised us to keep the pressure on the candidate so you don’t lose them (and our fee of course!).

At lunch after the talks, we all discussed it – most thought he was terrific as there were good sales tips and other ideas. I agreed - there were some good insights from one of Australia’s most experienced recruiters. But did anyone notice the bit about lying? Only one other person in two countries had - and I asked over 40 people.

Even more worrying was that most attendees, including the conference organisers, didn’t feel that this was an issue. That at worst it was just a minor point that could be interpreted differently to how I was reading it.

If you’re an HR manager reading this I’m sure you have a different view.

The second lie was at a session in Columbus Ohio, where successful recruiters were on the platform sharing their experiences so we could learn from them. One of them had a simple business model: scouring resume databases on internet job boards and then calling the candidates directly. Boring but not unethical.

The lie: he and his staff started EVERY conversation with a little ‘trust builder’: “You have been recommended to us by someone who thinks highly of you.” They started every relationship with a lie to get the potential candidate to listen.

It brings to mind the old quote: “The secret of success is sincerity …. fake that and you’ve got it made.” This recruiter and his team had sincerity down pat.

Again, no one noticed, no one cared. Or at least, no one raised their hand and said a loud “Excuse Me! What do you do?!” The lack of action brings to mind the old quote about evil being done when good men do nothing.

Finally one of Australia’s own, Sophie Robertson, who I have never met. What I like about her is her frankness - she is prepared to put in writing what everyone else just does.

Hers is about cold calling to sell bodies – what the industry calls Reverse Marketing and is how many recruiters spend the majority of their days. Sophie’s advice is talk to a candidate, get an exclusive, and jointly pick 10 companies, and call them ALL with 3 variations of the same line: “I have a star candidate who expressly wants to work with your company.” Clearly a lie – how could 99% of candidates know even the sketchiest details about more than a couple of the companies? The cake’s icing: she recommends the recruiters do these calls in front of the candidate – says it will make them “loyal to you forever”. Hopefully at least some have the opposite reaction!

The saddest part: Sophie’s article was posted on Recruiter Daily (see http://tinyurl.com/58vwxm ) and the scathing response from an in-house recruiter was posted anonymously. It is time HR stood up to be counted, but I fully understand why he or she felt the need to hide their identity.

All small lies? In some ways perhaps. Certainly many recruiters will think that. But these and similar examples all contribute to an industry with a dreadful but largely deserved reputation.

If you are a user of recruitment agencies, it’s time to stand up and be counted – go on, post a comment.

Next Rant: Over 90% of recruitment training focuses on sales: if you use agencies and that doesn’t worry you, nothing will!

Want a different approach to your recruitment? Email me to book an appointment or a teleconference on toby@abacusrecruit.com.au.