How to Fish Better

It sounds like the beginning of an off-colour joke: what is the only industry where the salespeople control the quality of the product they’re hawking? The answer of course is the recruitment industry. Yet despite this truism, one of Australia’s leading recruiters, author Toby Marshall, is convinced the sector is fundamentally failing employers and jobseekers alike.

Whether in person or in his new book, Get great people: Your roadmap to hiring the best, Mr. Marshall doesn’t mince words about the industry charged with rounding up willing and able workers for eager bosses facing a scarcity of skilled labour. For starters, he doesn’t believe there is a talent scarcity.

“It’s a perceived shortage”, says Mr. Marshall, the director of Abacus Recruitment Solutions. “People are all fishing in the same pond ... People believe there is a shortage because recruitment says there is. But you’ve got to define talent more broadly. You’ve got to fish differently from everyone else.” He says the country’s current unemployment rate of just over five per cent is misleading; the percentage of people who are underemployed (he points out that one need only to work 90 minutes a week to be considered employed) is around 15 per cent.

Mr. Marshall also doesn’t put much stock in what he calls the “non-debate” that is industrial relations reforms — saying that bosses, workers and politicians all seem to be missing the point. The issue isn’t just creating jobs and filling them. “The real issue is creating jobs people actually want to work in”, he says. “People only want a couple of things: we want a job where we can feel useful and feed our kids. Nothing else matters. Everything else is crap.” Yet time and again, Mr. Marshall says, recruiters continue to lose sight of what matters to workers and what employers need.

The root of all evil

The biggest problem with traditional recruiters is the vast majority of them work on strict commission and want 100 per cent of their fee paid up front, regardless if the employees they supply are a good fit or end up staying with a company long enough to become profitable. Mr. Marshall writes in his book that a good recruiter needs to have experience, maturity and industry knowledge, and without these prerequisites their advice becomes questionable. Unfortunately, the driving force behind many recruiters is not to deliver thoughtful advice on which candidates are best suited for which roles, but to make a “sale” at any cost.

“If the consultant’s earnings are commission-driven it can be difficult to receive trustworthy advice”, Mr. Marshall writes. “Over 90 per cent of recruiters are on commission-based remuneration, which undermines the objectivity of their advice. How is your consultant being paid?”

Mr. Marshall writes that it is crucial to find a consultant who won’t force “bodies” or useless ads on bosses who need to hire. Often, many agencies use impressive-looking senior sales people to sell to a company looking for workers, but then delegate the actual recruiting to a junior staff member with less experience and fewer connections.

There is tremendous turnover in the recruitment field — the average tenure of a new consultant is only between six and 11 months. Mr. Marshall says the reason why so many leave the industry so soon is because of the stress of putting sales over delivery.

“Most young recruiters today are young, untrained, inexperienced and under pressure”, he says. “It’s a very bad combination.”

To improve recruiting practices, companies need to find consultants who are willing to take their payments over the long haul rather than expect a full commission up front. Mr. Marshall suggests a 25/25/50 split: 25 per cent when the recruiter starts working, 25 per cent when the recruited employee starts working, and 50 per cent after about a three-month period when it’s clear the employee has become established in the job and a good fit for the company.

Unfortunately, most recruiters baulk at the idea of delaying their commission payments over such a long period. The trend is to keep the notion of recruitment divorced from the notion of retention. In other words, most consultants take the money, fill the job and run.

An in-sourced solution

Mr. Marshall writes in his book:

“The simple truth is: most people can be good employees if they are in the right job and the right company at the right stage in their career. Beware the recruitment consultant who tells you otherwise and tries to convince you they have ‘great people’ on their books.”

One of the main arguments of Get great people is that too often talented workers end up in the wrong place at the wrong time of their careers. How do talented people end up in the wrong job? Mr. Marshall writes:

• “They focus on money and not other important factors

• “They were pushed into it by a recruitment consultant who was keen to ‘sell’ them to the company regardless of fit.”

If companies want to avoid the pitfalls of traditional recruitment, HR managers must realize they have the power to take charge of their own hiring — provided they cherry pick sensible strategies from the recruitment industry and marry them to a broader philosophy about employment. For example: one of the mistakes HR managers often make is buying one-time ads in newspapers or on the web each time a position becomes available. Mr. Marshall suggests doing what the recruiters do — buying bundles of 10 ads and advertising a position four times. A simple strategy, but it works. Conversely, a shift in philosophy for an HR manager involves defining talent more broadly than recruiters do and to refrain from passing judgment on potential employees based strictly on the hard skills (or lack thereof) on their resumes.

“It continues to amaze me: most companies hire on skill and fire on fit”, says Mr. Marshall. He points out that to locate people with the precise skills to do a particular job, hire them, and discover that they aren’t a good fit for the culture of the company, and then get rid of them, is a costly and inefficient way to operate. Conversely, to hire workers who are an excellent fit for the company and who have some of the needed skills (or skills broadly related to the needed skills) and then train them to fill the gaps in their knowledge makes much more sense. Yet companies remain reluctant to do this.

The interviewing process is another area that needs a radical shake-up, according to Mr. Marshall. Usually, the person who will be the successful candidate’s direct manager along with his or her own direct manager are the ones who conduct job interviews. “But what do most job ads say?” asks Mr. Marshall. “They say ‘we are looking for a team player’. What does that even mean? It usually means we want a compliant person who will work their ass off for the company.” If employers are serious about getting a team player, Mr. Marshall says; why not invite one or more members of the actual team to participate in the interview? As these people will be working alongside the new employee, they may be able to provide some insight into whether he or she will make a good fit for the team.

Gen Y not?

Much has been written about what the elusive workers from Generation Y (born after 1977) want in a career, and Mr. Marshall holds strong opinions about what it takes to recruit and retain this pool of talent. He dismisses a recent study that shows Gen Yers are primarily concerned with how much money they will be making and says they are no more or less greedy than anyone else.

“It’s hard to pin down anything about this generation, but if you can say one thing about them it’s that they travel in packs”, he says. “They travel in packs and they want to work in an environment that is fun; [essentially] they want to want to work in a good pack.”

By taking some of the emphasis away from hard skills and focusing on relationships between team players, companies will find it easier to acquire and hold on to younger workers. Often, Gen Yers turn to their ever-expanding network of friends, rather than the newspaper or the web, to get the jump on good jobs. Likewise, managers should consider hiring new workers from existing employees’ circle of friends and acquaintances. There may even come a day when companies will be more inclined to hire whole packs of friends rather than just individuals.

Despite their reputation for flip-flopping from job to job, Gen Yers can master loyalty, says Mr. Marshall, so long as companies are willing to focus on what’s important to them. This means keeping the job and the work environment exciting, keeping workers updated on where their careers are going, and paying them well. Many young workers also look for companies that share their values and have a conscience — or at least appear to have a conscience. “Many of these young people are very idealistic”, says Mr. Marshall, “even if they themselves do bugger all about it.”

Some other helpful hints

Whether hiring from Gen Y, Gen X, a semi-retired Boomer, or someone in between, you may find yourself having to hold your nose and hire a recruiter to provide you with candidates. If this is the case, Get great people offers a lot useful questions to ask recruiters before you commission them. They include:

• “What salary range is appropriate for this role? A really strong indicator of whether they know what is going on ‘out there’, in your field. Knowing the salary range will also help you define the type of person you are seeking.

• “Can I talk to some of your long-standing clients? If you get fobbed off on this question it is very revealing — and a real danger sign.

• “Do you provide the applicant’s original resume? This is an important point, as many consultants retype the resumes before they hand them to you. Why? To standardise the resume and put it on the recruiter’s letterhead — it’s branding their company. If they retype, insist they give you the original resume also. The original will give you useful information such as how the applicant writes, how they present on paper, and perhaps some important negative information about them (you will find that the recruiter’s standardisation sometimes loses negatives!)”

In the end, recruiting good workers is a lot like fishing, and if you find you aren’t getting many nibbles, perhaps it’s time to consider pulling up anchor, changing your bait, and casting your line in an entirely different pond.

Toby has worked for nearly 20 years in recruitment. His focus is on creative recruitment to solve his client’s employment problems, and on reducing their risk of recruiting the wrong employee. His formal studies were in economics, and he has an MBA from a top 50 international business school.

In 2005 he published the Amazon best seller, Get Great People – a practical guide on how to recruit employees and the whole topic of Recruitment and Selection. Toby is an active speaker on the international conference circuit. He speaks on Recruitment and Selection; The Changing World of Employment – How to Recruit; and The Great Staff Scarcity Myth.

In early 2007 he created The Ultimate Recruitment Kit for companies – the ultimate creative recruitment guide. His mission: To give all companies, no matter how few employees they have, the information and expert help they need to do their own recruitment and selection and find great new staff. If you like what you have read so far, you can get more information and resources at www.YourRecruitmentCoach.com

If you are in Australia and are interested in Recruitment Services and help with particular recruitment and selection problems, you can go to Abacus Recruitment Solutions at

www.abacusrecruit.com.au