Toby’s 3R Rant

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:

1. Weekly Prospect Calls: 50 (= Cold Calls)
2. Monthly prospect & client visits: 28
3. 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

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.

Imagine you’ve just been given the task of creating the perfect Executive Recruitment firm. What sort of consultants would you want to put in front of your clients, the employers – what would be their dream team?

You would probably want your new team to be able to positively answer the 9 Tough Questions for Recruiters – see http://tinyurl.com/3ep3y

The recruiters would need some work and life experience, so be at least late 20s or older. Then you would want them to understand the needs of Australian employers, particularly in the industry sector they work in. And you would want them with a couple of years recruiting experience in this market so they have good local contacts and local knowledge.

No. Let’s not do that! Let’s fill over half the team with hard selling young Pommie travellers! So what that most will wander home or off around Asia in the next year or two?

Nightmare team? No – the reality in most large recruitment firms, not a bad dream.

Now I’ve known for a while there are many young English, Irish and Scottish recruiters in Oz. But until one foggy morning 2 years ago when the Rose Bay ferry was cancelled I didn’t understand the extent of the problem.

I cadged a lift from a charming young lady who was heading back to her car. She asked what I did – “I’m a recruiter and an author, and I’ve just written a book about the recruitment industry and all its problems”. And what do you do? “I’m an internal HR manager for Mega Recruitment Ltd.”

So I asked what challenges she was working on. “My biggest is working on how to reduce our reliance on ‘backpackers’. It causes big staff turnover which disrupts our clients. The problem is they are great at sales: if they can survive in London where employers literally hang-up on recruiters, they can do it here where they at least listen. So a lot of our revenue is dependent on them.”

Wow!

Now before I bag these young travellers, I must say many are lovely guys - it’s not their fault that big firms lure them over for a few years of well paid foreign sunshine.

One young Pom is a mate who works in the same mega firm as my indiscreet HR lady. Last week he estimated the Pommies number 60% to 70% of his firm – which concurs with other estimates. It is certainly over 50%. Just ask any group of HR or Line managers where all the cold sales calls come from.

So after two years we can say the young HR lady failed in her challenge!

What’s the real problem of the backpackers from the employer’s perspective? Well they lack life and work experience and don’t know much about our culture or local ways of working. They learn at the expense of their clients and add to the woeful reputation of our industry.

But there is a bigger problem – the mayhem they cause in the 6 to 12 months before they leave.

There are many who believe that the transaction recruitment model, where you brief multiple recruiters for the same job is not all bad. Their argument is a touch naive, as they believe that recruiters will still do a good job in this ‘dog eat dog’ world of no loyalty, given they want future work from employers (see http://tinyurl.com/3zy2rp for why this argument is flawed).

Clearly they have never been to conferences with a bunch of recruiters who’ve had a drink or 2 - how they discuss their clients would make your hair curl. They of course see their behaviour as justified – they are just reacting to how their clients treat them.

Whatever, as my daughter would say. For the sake of getting on with the argument, let’s join Alice’s Wonderland and assume they are right, that contingent recruiters do care about the long term relationship. Then, what is the Care factor of the young backpacker when they are going to be on the other side of the world in 6 months? When they are paid big commissions which are due when the new employee starts work?

They have got their commission and somebody else has to find any replacements where they have stuffed up – remember, it’s the only industry where the salesman has control over the perceived quality of the product. Would you have acted any differently when you were 26 and working in London or New York?

Mayhem. What a tragedy for employers and the reputations of all recruiters, including all the quality firms.

Next week: What the people who train recruiters train them to do. No prizes for guessing it has little to do with recruitment skills and a lot to do with how to sell bodies.

It’s a hot February night in 1994 and a bunch of recruiters are drowning their sorrows in a bar overlooking the Sydney Opera House.

It had been a long day at a Human Resources conference where the last session was on ‘Working with Recruiters’. This had morphed into ‘Let’s bash Recruiters’ – 3 senior HR managers politely but bluntly dumping on the industry.

One sorrow drowner was an industry veteran and Peter said something 14 years ago that stayed with me:

“Most employers see our role as just finding people – simply sending in resumes. The real value we could provide is reducing the RISK of making a wrong hire.
But in our industry 95% of recruiters offer their services for free so employers don’t know this is an option. That this is a service that could be included for the same price they ultimately pay.
It’s very hard to sell our services and seek a commitment when employers can just ring these contingent recruiters, pay them nothing and they start work. But as we know, such recruiters work for themselves and not in partnership with their clients - it’s all about the fees.
The big firms attract a lot of candidates because of those giant advertisements their clients pay for. So they are good at getting candidates and sending them out to many clients at once.
No wonder recruiting has such a bad reputation!”

We returned to our drinks and frustration, but those words stuck as they explained the problem so neatly.

Size mattered 14 years ago but here’s the thing …..

Online a small recruitment firm is now as big as it wants to be. If you can work the search engines and networking sites and specialise in a field, you can compete with the big firms. Boutiques can just as easily find candidates.

In this brave new world, what do employers REALLY need from recruiters?

They need a warts and all discussion of the shortlist and advice on who is really the best candidate. But employers get unbiased advice only if their recruiter gets paid something regardless of who gets hired or even if no-one does.

You don’t pay your accountant or architect contingently, why is a recruiter so different?

Well there is often a good reason - many are just sales people and expert advice is beyond them. How to find those who don’t just sell bodies is next week’s Rant. It’s certainly not the ‘English backpacker’ who is so pervasive and damaging in our industry: their motto is “sell hard, not here next year to clean up the mess!”

The world has changed and there are more recruiters who work in partnership with their clients. There are MANY more who would like to help their clients reduce the risks of hiring the wrong person – they know hiring is hard and teamwork is critical.

Employers now have the choice to work this way. To decide not to brief multiple agencies for a single job (we’ll look at how that destroys your Employment Brand in a future Rant).

Why pay for a service and get less than half of it? In fact, why pay the entire fee when the person starts – what about the recruiter holding some back for retention? Abacus does this – why don’t more employers demand it?

Next Week: Recruiters who don’t just throw bodies – how do you find them?

Sue was the one everybody wanted.

Definitely someone ‘most likely to succeed’. Talented, smart, great academic results, ambitious, mature, organised, sociable and she loves her touch rugby team. Just an all round great kid who will have a great career despite the setback of her first job.

When she graduated, she received 5 job offers from leading employers and chose a good bank with a well supported graduate program. Sue quit after just 20 months.

If you believe that the whole point of Graduate Recruitment is hiring your future leaders and specialists, then Sue and thousands like her should be setting off alarm bells in major corporations.

Before you read Sue’s story remember it’s not all doom and gloom; there is a simple solution. If you would like to discuss it, call our office and schedule an appointment to talk on the phone or meet.

Sue went to a great high school that she loved. She was a prefect and was heavily involved in the school community. Having received great results in her final exams, Sue enrolled in the 5 year program, Commerce/Law.

She lived at home while at Uni, and her parents fully supported her study which was often fairly intense – her goal was to graduate with a distinction average (and she did). With their support, she only needed to work about 8 hours on reception at the local gym, just to get spending money. “My job was to ‘smile and swipe’. Not too challenging!”

Her choice of commerce law? Well, it was what the smart kids all did, her family were keen for her to do it and she had the grades, so why not?

There was a lot of friendly competition among the ‘smarter kids’ in the course about who they would work for when they graduated and who would get the best starting salary

Like most of her Uni friends, Sue’s parents were not wealthy, and in 5 years she piled up a scary debt of student loans. So, they were all keen to get a big salary and move out of home!

In their second last year, placement in summer vacation internships was the goal. The big firms were out on campus casting wide nets and spending big to get the best to come and join them. They know that without such a program, they won’t have a chance to hire the best the following year – this is the first of the 2 ‘Piranha Feeding Frenzies’ (the second being the intense competition to get the best onto their graduate programs.)

Why just the big firms? Well, they can spread the incredible marketing expense of their Summer Intern program over a large intake. Small to medium sized firms don’t get a look in as it’s just not cost effective.

Sue and her friends got some offers but it was very hard for the students to work out which company was best – though highly educated and intelligent, their knowledge of the corporate world consisted of their own simple fantasies and assumptions.

Not their fault. They have never worked in a professional role. And it’s sure a lot more complicated than it used to be. So many varieties of jobs, so many new careers that didn’t exist 10 years ago. Sue’s parents tried to help, but were also clueless – they own a small business and had no corporate experience.

“So, I chose the big and well known brand, the one who had all the smiling young people at this great breakfast they put on at a luxury hotel. Not to mention the Ipod nano, and other sweeteners offered! But also, ‘Big Bank’ only takes the best students – I had great grades, and I thought why waste them. My parents supported the decision, as the Bank is really well known and profitable.”

Now, ‘Big Bank’ puts a large effort into its summer program – they spend well over $20,000 per intern. When costing it, most firms just include the direct costs like the intern’s salary, brochures, the corporate booths on campus, the free gifts etc.

What they don’t include is management and staff time. To quote one leading banker who has had interns assigned to his Division: ‘they just get in the way; they take up too much time, and we are all so busy. The program is just about marketing and pandering to these kids: there must be a better way to get the best ones to come to us when they graduate. I refuse to take them in my area anymore.” (Manager of a department in Macquarie Bank, anonymous so HR doesn’t murder him.)

In Sue’s words: “They were all really nice to me and gave me heaps of time to tell me about what they did, and let me sit in on meetings – I didn’t understand much of what was going on! The jobs I was given were pretty simple – including the coffee run, filing and copying. The boss was terrific, but I was only there for 9 weeks and he was away for 5 of them on holidays or travelling. He apologised for the lack of supervision, but also for it being a really quiet time being Christmas and January so there wasn’t much for me to do.

“He did give me a research project to do, but I could tell it wasn’t anything important. And he didn’t have time to review it or give me much feedback.

“So while I got to know them quite well, I don’t really know much about what they do.”

And of course, the bank has no idea of how productive Sue is, or how she will perform under pressure. Just that she is willing and keen to please.

For a better way to learn about your future graduates, Know/Act/Profit First by going to http://tinyurl.com/55kemu and learn what a few innovators have started doing.

For a media article exploring the problem and the solution in greater detail - http://tinyurl.com/5entbe

Next Week:
Sue Graduates and gets 5 offers: Why did she resign from a great company so soon?

Cheers, Toby

In February, an interview with Toby Marshall was published in Shortlist on the Talent Scarcity Myth. This is an industry magazine, and it drew a lot of Comments as for many in the industry, the belief in scarcity is like a mantra (not surprising given all the conferences and articles.)

For example, Julie Mills - CEO, RCSA (the Australian industry body representing agency recruiters):

“Claims by [Abacus] that the real issue is underemployment, not skills shortages, is not what the RCSA is finding in its activities with recruiters, job boards, candidates and clients.

In dealing with recruiters of all levels, every day, and around the country, the message I am getting is clear: finding employees with the right skills set is getting harder.

[Our latest Research] found that 91 per cent of agencies are devoting more time and resources to finding candidates than they did a year ago.”

Which of course, is my point: they are fighting the wrong war (see below).

Julie then goes on to quote the usual demographic shifts that have been talked about for 10 years or more.

Another good response was from Stephen Hinch, the Chief Marketing Officer at Manpower. It draws on the excellent and detailed research that Manpower has done in this field of long term demographic shifts.

As with Julie, the problem is the conclusions he reaches. That somehow market forces are not automatically brought into play to mitigate temporary skills shortages. In fact there are about 6 linked forces that stop shortages being anything other than short term (though they can last a bit longer in remote, relatively isolated places like Western Australia as John Kirkby rightly points out.)

The many excellent articles by Ross Gittens in the Sydney Morning Herald explain better than I can how these forces work. Basic economics. Any scarcity is temporary.

My original article essentially argues that long term shortages are impossible. It was also an attack on McKinsey’s ‘War for Talent’. Catchy phrase, made them a lot of money, but wrong. It is not a war for talent, it’s a war for resources to get the job done. Subtle, but an important difference.

There are plenty of resources to get the job done amongst the under-employed and elsewhere. Employers just need to think different. Some are.

Now, I didn’t write the original article on Shortlist, and it only touches on issues explored in my books and articles.

Abacus is arguing for a fundamental shift in approach by employers who want to think differently about scarcity. And stop constantly proving Einstein’s definition of insanity.

To stop taking their lead from recruiters, 90% of whom have the same business models:

Transaction focused; upfront commission driven; and responding to, not leading their clients.

So I agree with Julie Mills:- transaction recruiters and their clients are experiencing scarcity. They soldier on in McKinsey’s phoney war for talent.

Mobilising the 5 groups of under-employed is not just a nice thing to do. With labour markets, even a small percentage increase in supply has a BIG impact.

However, our interest is not with all employers: Only those who want to lead the pack with different strategies.