Recruitment Agencies have had their fair share of bad press over the years. The perception from outside of the industry is often high fees and underqualified advisors whose advice and decision making is heavily biased by their hunger for commission. This is unfortunately too often the case.
As a business owner who regularly hires employees for Ronin, my understanding of these frustrations has developed. It always occurred to me that the model of paying a fixed percentage of the recruited candidates’ wages was not a very detailed commercial model. Whether a recruiter in their first week in the industry or a veteran of 20-30 years recruitment experience contributed, the fee was the same. This model is largely dictated by clients or third party RPO firms so the blame shouldn’t fall 100% at the feet of the external recruitment agencies.
The most frequently occurring approach to market that I have experienced is for an organisation to select a group of agencies to agree to the same commercial terms and act as a preferred supplier list. Some preferred supplier lists are tiered to create competition, clients often use their own internal recruiters before engaging the PSL. Running a PSL in this way is almost always approached as contingent (no placement, no fee). Therefore, when vacancies are released to agencies, a race starts, with agencies who secure candidate commitment first being those most likely to secure the prize of a fee. This is the same for permanent and interim recruitment.
The problem with this approach is that it discourages depth of qualification. Recruiters are encouraged to oversell the opportunity, often leading to a high dropout rate further down the line. Average CV’s are submitted in the first few days by multiple agencies meaning a large often low quality Shortlist arrives for the HR / Internal Recruitment Manager / Hiring Manager to sift through. Once all CV’s are submitted sifting and selecting takes time, candidates with low buy in drop out, the best of what is left is interviewed and stood down and the process repeated, perhaps offering lower tier or non-psl agencies to join the dysfunctional process.
The above is of course exaggerated and there are cases of bright people achieving good results via an engaged and well organised PSL. These examples are in my experience, the exception and not the rule.
So, how does all this effect the typical recruitment companies approach to business? Well the phrase I have continually heard in my career is ‘It’s a numbers game’. Throw enough mud against the wall and some will stick. Many recruitment business’s deliberately set out with a strategy to counteract the common client approach to market. Young, hungry, salespeople are hired and spend their days trying to find a backdoor to a hiring manager to drop a star CV through. If they can handle 6 months of 99% rejection they will win half a dozen PSL statuses and will join the race. With no real way of knowing if they are doing a good job or not.
Experienced recruiters who have landed on an established desk early in their career will do well. Great sales people will work their way up the organisation and quickly be detached from the day to day candidate activity. Many of the more intellectual people that enter our profession will become disheartened by not being able to use 95% of their skills and will leave, either to work for RPO’s, Directly for the client or to do something altogether different.
Everything I have described frustrates me about the recruitment industry. I genuinely believe that the people a company hires can have more impact on the organisations success than anything else. Our industry has an incredible opportunity to drive success in business and the wider economy, helping the right people find the place of work in which they will thrive.
So with all of the above considered, what actions have Ronin taken? We know that the industry is not ready for radical change. But we refuse to offer a low value proposition. We do hire and train our own recruiters, but we focus on helping them understand how to analyse candidates and make matches that our client benefits from. When we have client commitment to work as a sole supplier we are able to project manage campaigns and guarantee results. We have embraced multiple selection technologies so that our decisions on submissions can be balanced and objective. We also know the importance of representing our client’s employer brand with the care and attention required to position it above the competition leading to candidates prioritising opportunities that we have thoroughly described to them.
Ronin is not perfect, but we will not comply with mediocrity and we will always have the vision and pride to push for a high value proposition and solution.
Before setting up shop with Ronin in 2007, Mark spent seven years working for large, corporate recruitment agencies. And it was this that inspired him to create a new prototype for his industry, free to adapt to the changing world. “The industry was already changing at a rate of knots before Ronin came into being.”