The ‘war for talent’ demands a shift in the contractor recruitment industry. Both sides are losing out as a result of traditional third-party processes, which are time-consuming, ineffective and expensive in relation to other service industries. Employers pay huge fees to hire from fragmented, vendor-driven talent pools which often fail to meet their needs. Contractors lack access to the majority of open, relevant roles in the vacancies market while facing ever increasing amounts of recruitment ‘spam’. It’s no surprise that a fifth of all vacancies for professionals in the UK remain persistently unfilled1. Taking inspiration from the Agile and Lean mentality as applied to software development, we believe that the recruitment process can be improved, through automation and smart technology, to reduce reliance on third parties.
The Traditional Recruitment Model and the War for Talent
When you hear the terms ‘recruitment’, ‘recruiter’ or ‘in the recruitment process’, what words come to mind? Common responses include ‘slow’, ‘long-winded’, ‘unreliable’, ‘expensive’, ‘unavoidable but necessary’, and even ‘laborious’. All of these adjectives are in some way correct. Certainly the processes that surround traditional recruitment haven’t measurably changed for a long while, despite changing needs. As a result the industry has generated mixed feelings, many of which are not positive.
The recruitment industry has given rise to a tangible war for talent, and the evidence suggests that the war is not going well. Existing strategies are failing both employers and candidates. Employers are paying huge fees while not getting a view of the whole market; instead they see a vendor-driven market and those candidates more likely to make the third party a good fee. Similarly, candidates do not get access to all – or even most – of the roles in the market at a particular point in time; they get a view dictated by agencies and other third parties.
The impact of this market failure manifests itself in many ways. Talent leaves the UK market, while employers postpone or even cancel projects, relocating them to labour markets which can deliver the talent they need. A fifth of all vacancies for professionals and associate professionals in the UK remain persistently unfilled, an astonishing statistic revealed in the UK Commission for Employment and Skills Survey 2011 – one of the largest skills surveys in the world – alongside a wealth of compelling evidence of an increasingly hard-fought war for talent between UK organisations.
New strategies are required that maximise the prospect of victory for both of the allies – employers and candidates – in this on-going war. It would be fair to say that in many cases employers and candidates would rather deal with their target audiences directly; that is, without reliance on third parties or recruiters. Yet the task of efficiently and securely connectly highly skilled talent with clients whose needs are pressing is a difficult one. So, can the recruitment process be streamlined to make it leaner and more direct? Can we create a visible improvement in process for this multi-billon, strategically significant yet, highly un-governed industry? We believe the answer to this question is a resounding yes – in fact, the change is already happening!
Applying the ‘Agile and Lean’ Mentality
In the software world, development cycles are becoming increasingly agile, as companies try to operate in a lean manner to minimise risk and to realise efficiency gains. ‘Lean and Agile’ in terms of technology and development broadly means ‘adaptive, lively, responsive and nimble’. Agile development is helping dynamic software teams to engage federatively and ultimately be more productive; our question is, can these trends be applied to recruitment, and if so, what is the outcome?
So what is meant by a ‘Lean or Agile recruitment’ strategy, and how does it impact on the parties involved? Currently the industry is reactive and fairly stagnant. Employers list requirements and follow traditional routes to fill these them. What is required is a more pro-active and iterative approach, and this means nurturing and understanding the mentality around how users handle personal data and what technology we use in our daily lives as enablers.
The recruitment industry is shifting and there is a visible desire for a more Agile and Lean recruitment process. This desire is primarily being driven by employers due to austere times in the global economies, but candidates are also clambering for alternatives to the current time-consuming and inefficient traditional models. The key third parties contributing to this step change are those fractions of the recruitment industry who understand a change is required, and seek to provide a viable service that is both sustainable and profitable.
Every day we are using online services like Linked-In, Twitter, Facebook and other social and business tools for greater efficiency. Similarly we see a drive for recruitment and talent engagement to move further online, often using the same tools. Technology, and specifically software platforms and SaaS based tools, help both employers and candidates improve their recruitment through automation and by offering direct access to a wider online market-place and community.
Significant problems remain, however, and although in much of our personal and professional lives we are used to taking the lead on our data and the way we interact with those offering services, recruitment stays very much ‘post and pray’ – employers post requirements on job-boards while contractors upload their CVs or respond to adverts, and a number of recruiters contact both parties and try to convince you that their particular offering or opportunity is better and more suitable than their competitors’! This process can be automated as long as the data exists in a structured, accessible format online, preferably in specific and closed, recruiter-free environments.
Of course, there are some excellent recruiters out there who have built their businesses with partnership and effective delivery in mind; however the mainstay of recruiters and recruitment firms are driven by profit and the relatively simple business model they operate within. These are not strategically aligned drivers; if anything they fragment the market further as the market becomes dictated by those agencies and job-boards with the largest, most fluid and effectively mined pool of data.
Direct Engagement through Online Services
Introducing software and using cloud-based tools as part of the Agile and Lean mentality can decrease the dependency on biased third parties. Automation of the process can cut costs for employers dramatically as dependence on the human element depreciates; there are key elements in the process that can be completed and in fact enhanced by smart technology. Automation and an Agile/Lean approach to recruitment can deliver access to a wider market, and we have seen the first manifestation of this mindset through employers re-introducing direct sourcing teams onsite to increase control of third party suppliers and tools used to source relevant candidates.
‘Agile’ and ‘Lean’ can actually mean using less resource to achieve the same – if not better – results, and although introducing technology and intelligent software can massively assist both candidates and clients, the actual human mindset of those recruiting also has to change. Sustainable recruitment models, such as a corporate empowering their internal recruitment team to use tools that external agencies have historically owned, thereby effectively sourcing from the same – if not a wider – candidate pool, is a massive step forward. What is required now is for the tools that these on-site teams utilise to become more focused on specific niche pools frequented by closed pools of relevant people. Linked-In have realised that a recruiter not paying for access to their data and mining on behalf of multiple clients is much less powerful than a single corporate paying for no-holds-barred access and targeting candidates with their branded opportunities; of course, the later also provides a significant revenue stream!
Professional networking sites were once hailed as the panacea for mapping clients’ needs onto available talent, directly linking organisational hirers with a pool of experts. But as a result of the law of unintended consequences, many networks have been hijacked, becoming slaves of process-driven ‘sausage factory’ volume recruitment. This has resulted in highly specialised candidates with the right profile keywords being bombarded with unsolicited recruitment spam.
It is worth pointing out at this stage that there are clear differences when considering the contract and permanent marketplaces within this context. The contract market is more fluid by its very nature and much more defined by fixed candidate parameters such as rate, skills, availability and geography, as opposed to the permanent market place where a candidate’s personality and ‘softer’ skills are almost as important to an employer for longer-term, more strategic hires. As on-site recruitment teams take further control of all of their sourcing, they can utilise those tools that give them initial access to the candidate pool and then conduct the softer based screening in-house where necessary.
The point is that the shift in the market is seeing recruiters being substituted by technology and Agile/Lean models. If a recruiter sends an employer ten CVs and attaches the average market fee of 18%-20%, while software can provide these CVs having used algorithms and social referencing to do the first stage qualifying and vetting just as effectively and at a much lower fee, then the choice is clear. Widely used existing models of recruitment, those that see agencies throwing large volumes of CVs at a client organisation in the hope that some stick, can no longer deliver the talent that clients require. Yet these processes persist as long as clients remain unaware there are fresh Agile/Lean models to adopt.
It’s a reality that there will be less recruiters adding significant value as employers and candidates look to use technology to engage directly. Those recruitment firms that will survive will do so by become more niche and more specialist, to truly partner with their clients, rather than trying to fill as many roles as possible from as many different sources.