Home > People Management > Time To Find An Alternative To Recruiting Without An Agency (Do It Yourself)

Time To Find An Alternative To Recruiting Without An Agency (Do It Yourself)

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I’ll tell you what; every business leader in the UK could do a lot worse than to cast a glance, however brief, at the recent CIPD report, CIPD/Hays Resourcing and Talent Planning Survey 2013, if finding and keeping good people is part of their business plan. Unfortunately, this “War for Talent” doesn’t seem to have an end in sight very soon.

Here are some key findings from the report:

  • Increase in competition for well-qualified talent has risen threefold from 20 per cent in 2009 to 62 per cent in 2013
  • Six in ten organisations had experienced difficulties filling vacancies in the past year
  • Managerial and professional vacancies are the hardest ones to fill (52 per cent of organisations reported difficulties)
  • 46% of organisations overall reported difficulties in finding technical specialists compared with
  • 57 per cent of organisations reported difficulties in finding specialists in the manufacturing and production sector.
  • More than 40 applicants per vacancy in the U.K.

On top of that:

  • Two-thirds of respondents report  an increase in the number of unsuitable applicants.
  • Only 13% of believe that schools/colleges/universities equip young people with the skills their organisation needs to a great or very great extent
  • Main reason for recruitment difficulties was a lack of necessary specialist or technical skills (just like last year)
  • Lack of relevant sector/industry experience was a particular issue for manufacturing and production organisations
  • Interviews remain the most common selection method – competency-based interviews being the most popular across all sectors

Things still aren’t looking too great for the U.K. recruitment track record, are they?

Here’s the thing though.

With the rise of the recruitment agency in Britain over the last 20 years, more and more companies seemed to have turned to outsourcing their recruitment and candidate assessment processes. I can understand why, sure. With the barrage of smooth, smart-talking recruiters in the UK, and the absolute saturation of the market providing us with umpteen recruitment agency choices within a 50 mile radius of anywhere, the temptation for organisations to pass on the time-consuming and complex challenge of finding and selecting new employees has been just too great for many firms.

Recruitment agencies are easier

Coupled with the promise of “top talent pools” and access to “the best executive candidates in the UK,” who wouldn’t try their luck at finding the next Mark Zuckerberg for a “small” sourcing fee? Heck, it’s a lot easier to pass the task on, right?

But just how effective are the processes and systems that your friendly neighbourhood headhunter or recruiter uses? Are you really “saving time and money” by bringing a third-party onboard to recruit your workforce for you?

How much do they actually know about your business goals and strategy?

Probably not much if my personal experience is anything to go by.

If the above stats are anything to go by, then there are some serious questions to be answered about the way companies and agencies alike, are identifying, selecting and recruiting our future workforce, and the CIPD report agrees:

As well as building a strong employer brand and thinking creatively about attraction and recruitment strategies in order to attract passive job seekers, employers will have to widen the pools from which they recruit and develop talent, as well as creating new and varied career paths driven by a culture of lifelong learning. For example, employers are increasingly appointing less qualified candidates and building their capacity to develop skills internally. Inclusive recruitment practices are also an investment in future skills retention, crucial as the war for talent intensifies.

What are the drawbacks?

It is easy to see why so many firms instinctively think that a recruitment agency is the best and simplest way for them to find the best employees. After all, these agencies dedicate their time and energy to sourcing and identifying the most suitable people for your vacancy, and often have a bank of highly qualified and talented candidates at their disposal to delve into at will.

Don’t get me wrong; many recruitment agencies have a real handle on how to connect your job spec with the most suitable candidates for your company, and know how to deliver what you actually need, rather then what they have on their books.

On the other hand, many don’t.

There’s been an intense focus on outsourcing talent acquisition and executive selection in many U.K. industries over the last 10-15 years, which has created the opportunity for a huge variety of recruitment agencies to come to the fore – not all of them as well-placed to find good people, as the next.

With a few sweet-talking headhunters on board and lots of flashy talent management software to woo potential clients, there’s no doubt that these agencies provide some benefits during the recruitment and selection process, but there are hidden drawbacks too.

Unrealistic Costs

Although candidate assessment and smart interviewing takes a great deal of skill and practice, there’s often little justification for the sometimes huge fees that headhunters charge you for a top-level candidate or executive hire – especially considering the success rates outline in the CIPD report. With some still charging as much as £10,000 or more for their recruitment services, with no real accountability once the hire has been made, you have to ask yourself whether that is simply an inexcusable cost in these days of austerity and belt-tightening.

In light of the stats mentioned above, you might also want to ask yourself just how you measure the ROI of your recruitment agency too, and whether your recruitment and retention success rates mirror those of the nation as a whole (which aren’t very good, sadly).

Inefficient Processes

Despite massive leaps in the field of strategic candidate assessment and selection, the processes that most recruitment agencies use are outdated and inefficient – which could explain why they still charge such a high amount for their services. Recruitment is about targeting the right markets with the right literature, and using reliable data to match the requirements of a position with the qualities and profile of the candidate.

Despite knowing this, many recruiters still still rely on basic job boards, lacklustre and generic job adverts, and candidate assessment tools which are inefficient, time consuming for all, and have little guarantee of success. (See CIPD report for details). Knowing what we know about the lack of skills and competencies within the UK workforce, and the fact that six in ten organisations had experienced difficulties filling vacancies in the past year, we must ask oursleves why competency-based interviews are sitll the most popular tool across all sectors??! (N.B.This doesn’t just apply to recruitment agencies )

Unsuitable Candidates

Many traditional recruitment companies have a tendency to initially build a pool of a few good candidates in advance and then try to pawn them off onto you, paying little attention to whether or not they meet the demands and requirements of the position. Instead, they focus on the fact that they are “great candidates” and “really nice people,” and enter into a process of “selling” the candidate to you.

This approach is not only detrimental to your business, but it’s also damaging to the candidate who rejoices on getting a new job, only to have to leave due to stress, sickness and overload, 60 months down the line. He may have been a nice guy with a “great track record,” but he didn’t have what it takes to achieve success in the role. That’s the crux.

Suffocating Contracts

The contractual side of working with agencies is what puts people off the most. Many companies require you to sign long term contracts with binding agreements for every hire you need to make. The issue here, is that you don’t necessarily need an agency to recruit for every role within your company. Maybe you have a role that you’d like to fill with an internal candidate, or a recommendation from another partner?

Without a long term contract you’re free to flex your muscles in this area. With a long term contract, you’re stuck with the agency fees for low-level vacancies and executive vacancies alike. In addition, if you can manage to identify a top notch candidate yourself, especially an executive position, then your ROI will prove to be far greater than using an agency, and you’ll have broken the spell of the recruiter too.

Time to bring it all back home

Recently, I’ve been talking to a lot of business who are beginning to really analyse the cost-effectiveness and true ROI of using a third-party recruitment agency. On top of that, they are increasingly exploring other recruitment, selection and assessment methods that are available, and that actually empower them to be able to do the job as well as, if not better, themselves.

What’s really happening, is that they are choosing to bring the entire hiring and interview process back in-house, because they know just how instrumental this process is for boosting bottom-line factors such as innovation, organisational excellence and sustained growth.
In short, recruitment processes must become more strategic, more long-term and more focussed on supporting business goals with the right hire, and not simply on filling vacancies to remove the heat.

Economically this makes perfect sense and it makes strategic sense too. By developing their own skill set and assessment process in this area, they ensure that they develop a reliable and accurate – and, above all, replicable – recruitment policy for years to come, which is actually aligned to their business goals and growth course, and can be adapted and flexed as required to suit the demands of a changing workforce.

Internal recruitment works!

As well as rethinking external recruitment processes, many company are also focussing their sights much more on searching their own current workforce to ensure that they are properly utilising the skills and talent that they already have access to. Mining potential talent internally is easier, less costly, and far less hit and miss than constantly recruiting externally.

Here’s what the CIP report has to say on the matter:

highly skilled professionals are still being cautious when considering a new role so employers are facing a competitive market when trying to attract people to fill skills gaps. They should step up to this challenge by retaining and training their existing workforce with career development and progression initiatives, and by looking at broader talent pools to ensure they have the skill set to drive business growth.

Having a talent pool with details of current and past employees can help highlight any rising stars or employees that may be showing promise or potential in a specific area of your business. There’s also a lot to be said for carrying out employee assessment tests on all individuals in the workforce. Many companies are now using these tests for external candidates but it is important to create as full a picture of your own workforce.

If you do have an internal talent pool that you are keen to draw from, knowing as much about your workforce, their personality types and what motivates each one of them to achieve success, will play a great role in ensuring that you can find the most suitable people for each of your roles.Just because someone comes to your firm in one role doesn’t mean that they can’t perform more effectively or efficiently in a different role at another time. Hey, that’s what employee development is for, right?

Of course, having all of these different components and reviews of employees is one thing but being able to pull the different strands together is another. This is where many firms are turning to using in-house talent management software to store the relevant data and information about each employee and to be able to turn it into something that can provide value and benefit.

While the work and support of recruitment agencies can be of benefit to many companies and for many types of vacancy, it’s certainly not the right solution for all firms and all positions. Coupled with the often astronomical costs involved in working with some top-level agencies and the lack of accountability for bad hires by the agency, the recent stats from the CIPD really should start alarm bells ringing, if they aren’t already.

Is it time for a rethink on how you source your future employees and workforce? Is it time to D.I.Y?

 

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Find the full CIPD report here for download:   http://www.cipd.co.uk/hr-resources/survey-reports/resourcing-talent-planning-2013.aspx

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