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Predictions for 2010 – what have we got to lose?

I just spent some time reviewing a number of predictions from 2009, getting a good laugh, and wondering how many of the predictions from 2010 will be as equally off-base, including my own prediction from last year that given everything that was happening in the economy, and the dearth of remaining corporate recruiting assets, companies would turn to 3rd party providers en masse to handle their needs, and that it could have potential been a banner year.

Not.

I can safely hide behind the cautionary language of “may” or “could be”, but the reality was I thought companies would outsource a significant part of their efforts in order to keep some semblance of hiring capability if for no other reason than to replace workers who hadn’t been temporarily or permanently furloughed. Instead, despite every consultant’s pleadings, including our own, most organizations ran for the exits like rats off a sinking ship, and their scorched-earth policies when it came to laying people off and destroying internal infrastructure in the name of cost control resembled nothing less than theater-goers reaction to the fire alarm. In other words, panic.

In hindsight (or in our case and many others, foresight), we now see many of these actions were unwarranted, and in fact have placed organizations in highly precarious positions, where retention of key personnel will be critical to whether the company survives. They’ve cut to the bone, and when the “bone” leaves, the organization will fail.

Strategically, this is called a “nightmare”. But it’s ok. They can always blame the accountants

So what does this mean for 2010? Since no one gets slapped for making wrong New Years’ predictions, let’s survey the landscape and see what’s coming. Or not.

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The False Choice: Quality or Quantity?

In 20 years of being in, on, around, over, and under the recruiting industry, recruiting services, recruiting technology, and recruiters and their recruiting processes, there typically comes a point where I ask each of them a simple question, the answer to which is universally the same:  do you want quality candidates, or do you want a LOT of candidates?

The answer is inevitable: “Both”. The first thought that comes to mind when I hear this is also inevitable. As my father used to tell me when I wanted to borrow the car so me and my friends could loiter and cause general disconcern among shopping patrons of the nearest mall, “People in hell want ice water, too, son.”

Dad was never one to mince words.

Whatever a client’s seemingly incongruous wishes might be, however, it’s not to say they can’t fill hundreds, even thousands, of openings with quality employees, some of whom may be the best in the world at what they do. But I caution them not to expect to interview fifteen of these types for every opening. DO be prepared to interview only one or two.

That last point seems to be where most clients get stuck. They “get” the concept that quality and quantity tend to be like oil and water, and “agree” in principle, but where the problems come in are from their customers: the hiring managers (an evil lot upon whom recruiters, including me, cast countless aspersions, blaming them for everything from their endless delays in our finely honed process, to swine flu and global warming). “They” expect “more.” Always more.

It’s not entirely their fault, of course, but who hasn’t worked for a hiring manager that if they’d had an open req for “Founding Father” and you’d submitted only the resume of George Washington himself, wouldn’t ask to see a dozen others? We know the type. We all do.

Yet when we survey hiring managers during the course of process audits, we discover a trend. There is an ongoing conflict that one would be tempted to say is both illogical and irreconcilable, but which we maintain is a false choice, one which they’ve created for themselves — quality or quantity.

When we look at managers that had unusually large numbers of job openings that involved difficult-to-find critical skill sets, there was a disproportionate criticism of their assigned recruiting support that maintained they didn’t get to see enough candidates. In other words, they wanted more. The fact that “more” was virtually impossible to come by given the skill sets they required didn’t matter. They wanted to see more. If you could find one left-handed, Mandarin-speaking, purple squirrel with a PhD in confectionery science, than surely there were more.

Likewise, when we looked at managers whose open requisitions consisted of mostly “typical” types of jobs that involve commonly held skill sets, their criticism of recruiting support fell in the realm of “quality”. They wanted more “quality” (however that was defined).

As most managers fell in the middle, with a mix of both hard to fill and easy to fill job reqs, we expected that critiques of recruiter support would moderate, or fall along the lines of either quality concerns, or quantity concerns. Instead, we found their criticism was universal: they weren’t seeing enough resumes, and the resumes they were seeing weren’t of sufficient quality, regardless of the difficulty of recruiting for a particular position.

In other words, if you were a recruiter for a manager that had a variety of openings, some of which were “easy” and others of which were “hard” to recruit for, you took a double hit on the effectiveness rating. All of which, of course, merely confirmed what everyone who’s spent more than a week in a corporate recruiting environment already knows: hiring managers are entirely unreasonable creatures. But it explains why all of our processes, our tools, and our methodologies focus - almost to the exclusion of everything else - on the concept of “more.”

More candidates, better candidates, faster. Oh, and for less money, please. “More” operates in context, however — a context that makes the whole quality/quantity choice even more absurd. Supported by the virtual recruiting DOGMA that somewhere, there is in fact such a thing as a “perfect” candidate for every job opening, and the myth that with more candidates, you have a better chance of finding that perfect employee, recruiters are all but destined to “fail” in the eyes of their customers (”fail” being a relative word here, that speaks more to the attitude of the hiring manager towards the recruiters as a valuable partner in the hiring process than anything else).

Despite these dichotomies, virtually every new fad for recruiters to come along seeks to redefine “success” along the same lines - better, faster, cheaper. More for less.

We would argue that much of what has been established orthodoxy in recruiting circles is in fact self-defeating, and that a clean-sheet approach with a focus on candidate quality (not quantity) is long overdue. We need to develop real JIT recruiting. We need to cease engaging in activities that provide no demonstrable ROI, but which may be “fashionable” at the moment (Twitter????). We need to jettison the baggage of a “personnel department” past, a social media obsessed present, and the siren songs of an automated future, none of which will lead us where we need to be as one of the most valuable strategic assets a CEO has at his or her disposal to grow and transform their organization.

We intend to explore that concept next, and I hope you’ll follow along and join the conversation!

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Turning towards tomorrow

Since we last wrote, the economy has continued to dissolve in what has become an all too familiar news cycle:  Credit is tight, consumers save rather than spend, sales decline, layoffs occur, credit gets tighter, consumers spend even less, sales decline more, more layoffs occur, and so on.

We’ve also inaugurated a new President in an historic occasion that marked a turning point for the country. To address the economic challenges, the new administration has proposed the largest economic stimulus package in U.S. history, which, while welcome, is not likely to do much in the way of actually spurring the economy in the short term, which is when we need it.  Really — how many laid off MBA’s, software developers, and retail clerks are actually going to pick up shovels and start laying asphalt and repairing bridges, the “infrastructure” improvements where a large chunk of the monies are going to be targeted.

But we’re not here to debate that — far greater minds than ours are well paid to address these matters, although we note with some concern that a number of these minds worked for companies that got us into this mess.  What we have found, however, in the midst of this “economic dark night of the soul”, is that companies are beginning to look forward again, rather than back at the wreckage that was their balance sheet last year.  It seems a turning point has occurred, however small.

While no one is predicting roses and sunshine in the next few months, looking out further towards the latter part of 2009, most economists are now predicting at least some timid steps towards a recovery, and with that in mind, great recruiting organizations are already building pipelines of top talent for when they’ve been given the greenlight to start hiring for openings that will be critical by late 2009, early 2010.

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It’s official…

So the news comes out that we’re in a recession and oh…by the way…we’ve been having one since December of 2007, which makes this one a year old already.

Funny…it feels like it started about 6 weeks ago.

So in the midst of this recession, several BILLION dollars of spending has occurred in the areas of executive and retained search, contingency searches, recruitment technology, and recruitment outsourcing — all to facilitate …what?

HIRING!

To dovetail on my last post, we’ll continue to hear all this bad news, but my guess is that spending for 2009 in all of these areas will still number in the multi-billions of dollars, and will in fact increase. Why? Well, typically the first to go in a round of layoffs is the recruiting department for what would seem like obvious, albeit INCREDIBLY shortsighted, reasons. About 90 days later, someone fairly senior in an organization realizes that…”oops….we cut too much”. Then they start calling executive recruiters and outsourcers.

2009, in fact, could be a BANNER year for any company selling recruiting services!!

Remember you heard it here first

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The Economy - it’s YOU.

Our Mainstream Media

Our Mainstream Media

I opened the morning newspaper to yet another dose of economic cold water, and a host of companies announcing more layoffs (am I the only one that finds it incongruous that companies look for economic improvement by individually doing the one thing that collectively ensures it doesn’t happen?). The Dow was up 500+ points yesterday, but so what? It’ll drop 600 today, or maybe go up by 900 — the point swings have become absurd. Unemployment figures release showed another 550,000 looking for work, and we can anticipate the unemployment percentage to probably top out between 8% and (God-forbid!) 10% before this is all over. For context, the revised “full-employment” unemployment percentage is about 3.5% and the Great Depression had about 25% unemployment.

But really, in a sense it almost doesn’t matter (except to those who’ve lost their jobs, of course). Companies lay people off, not because they are acting in concert with other companies to collectively destroy any possibility of a swift economic recovery, but rather because they operate in a relative vacuum. The decisions are made for economic reasons based on previous decisions — and ONLY those previous decisions — made by that organization and which led up to the point of requiring a reduction.

Or, as we’re still seeing — the need to hire a significant number of new employees right away.

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Employment Branding Matters More Than You Can Imagine

Branding You Know

Branding You Know

I’ve talked about the importance of branding for nearly 10 years, in virtually every capacity, to pretty much anyone who would listen. It is the sine qua non to any successful recruiting effort, for without it, no one is going to know what a great place to work you’ve got and all your efforts depend on the that other kind of branding, the one we all know: product and services marketing . And while it’s certainly true that branding matters (anyone NOT know the “brands”at right???), I think there’s a strong case to be made that employment branding matters even more. More than most organizations can even begin to imagine. Because at the end of the day, your company isn’t run by products and services, it’s run by people.

Yeah, I know…”people are our most important asset”; “people come first”; “our people are our best advertisement”. We’ve all have heard various corporate lines about how valuable employees are, right up until the company stock misses a target, or the jobs can be done more cost effectively in some part of the world that’s wide awake while we’re sleeping. You can bet the term “human capital” wasn’t coined by an HR person.

It is small wonder that Millennials entering the workforce today expect to change jobs 8 (!!!) times or more by the time they hit 30.

Thankfully, not every company thinks this way. And we know exactly who they are - the Fortune 100 Best Companies to Work For List.

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Top Ten Myths Around RPO (Cont.) #7

#7) RPO Doesn’t Work (or so I’ve heard…)

One of the reasons (among several) that I could never be a journalist is that, at heart, I’m a completely optimistic human being. People are generally good, I live in a great country, our economic system is the best in the world, and overall, life moves along in ups and downs, but its movement is always upward and onward. Our rising standards of living, our life expectancies, and just about every aspect of life in general on this planet is better than it was, say, 50 years ago.

Yawn….who wants to read that? Have you watched the Science Channel lately? Have you seen how violently our sun and planets will die, to say nothing of the universe itself in 100 trillion trillion years???!! As if we didn’t have enough to worry about right here and now…

The job of a journalist is, in part, to report the news, and it’s hardly news that everything is going along swimmingly. So by definition, they report on all the things that have gone wrong, whether the subject is the war in Iraq or a highly specialize business function. Which brings me to this latest myth, that the general outsourcing of recruitment services doesn’t work, doesn’t save money, doesn’t produce better candidates, and doesn’t deliver on it’s promise. And should you feel thusly, you’d be forgiven for thinking so, given that what little media you may have read about RPO may not have been entirely positive. Likewise, you may have the same impression based on media reports whether the subject is RPO, EPO, HRO, EBO, or any one of a dozen other “O’s” that comprise the alphabet soup of 21st Century business. Added to the media’s predilection for the depressing, is something more basic to human nature that every customer service department knows well: if you like something, you might tell 1 or 2 other people about it; if you don’t like something, or if something’s gone wrong regarding a purchase, you’ll tell several dozen others about your experience. So word of mouth, the best form of advertising, is a cruel double-edge sword indeed.

So yes, we’re all familiar with the failures, some of them spectacular, around HRO and its variations. No one ever said this was perfect. Far from it.

But what of the successes? The computer manufacturer who by outsourcing and assessing new inside sales reps grew revenue by half a BILLION dollars. The IT firm that shrank time to fill by 50% and will save $800K in recruiting costs this year, or the industrial rental giant that saved over $1M in recruiting costs last year, and looks to save even more this year. Why aren’t these in the news?

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Top Ten Myths around RPO (cont.) #8

Myth #8: RPO Costs Too Much

As we continue down the list of what I’m calling “myths”, or rather misperceptions, surrounding the use of recruitment process outsourcing to augment or replace an organization’s recruitment/staffing function or processes, somewhere on the ranking order we’d have to come to cost. The notion that RPO, by providing so many of the additional resources, and additional infrastructure not currently present in your existing process, would almost by definition be more costly certainly is not unreasonable. In fact, the question is all but universal.

But think about it for a moment…and allow me to really torture a metaphor, if you will. If I’m riding a horse and buggy to work, and this old mode of transportation isn’t cutting it for me anymore and I decide I need to do something more contemporary, I’ve got three choices. I can design and build from scratch my own automobile, assuming I have the money and resources to do so (to say nothing of the expertise required). Or I can cobble together some of the best aspects of this automobile to my horse and buggy, which may cost less, but which will still not give me a great car.

Or lastly, I can go out and buy a car from someone who makes cars. Now as absurd as it may seem, 100% of the people in this world, save for the odd eccentric here and there, go out and buy a car when they want to own a car, and yet 90% of these same people when they are in a senior recruiting position will effectively choose the option to either a) build from scratch their own “car”, or will b) cobble together some hybrid of parts onto their old “horse and buggy” recruiting process, ensuring again that their “car” is neither great, nor even much of a “car” for that matter.

Yes, it’s a stretch, I know. But not so much so that the logic is flawed.

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Top Ten Myths Around RPO (cont.) #9

#9) You’ll lose control

This should probably be ranked number #1 or #2, but since we’re not going in any particular order here on the myths that surround recruitment process outsourcing, let’s get this one taken care of right from the start.

Part of the advantage of using RPO to drive your talent acquisition processes is the ability to allow you to focus on what is central and core to the business. Far from losing control, an RPO engagement finally allows you to TAKE control of these processes, and scale the acquisition process so that for perhaps the first time ever, you can be proactive in these areas, rather than reactive.

Ok, that’s sounds like a consultant wrote it.

In English, it’s simple. When it’s you and six other recruiters, and 200 plus angry or eager hiring managers, all complaining that you aren’t sending the right candidates, or aren’t sending enough candidates, and everyone has as many reqs as they can handle, and your budget’s been held flat or even cut, what do you do?

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Top Ten Myths around RPO

I’m certain there are more than ten myths that surround this always touchy subject within every HR/Recruiting department, but we’ll try to confine it the most pernicious.

One of the most surprising things that I encountered when I entered the brave new world of recruitment process outsourcing was the pervasive antipathy of recruiters to the services of our industry. Now notwithstanding the outsourcing/right-sourcing argument we talked about earlier, when I, or any RPO vendor for that matter, show up for a meeting with the CFO or SVP of HR and there’s recruiting staff present, we can sometimes get same sense of “welcome” that Tomás de Torquemada must have had when entering a new town during the Inquisition. In other words, it can be a bit chilly.

But like many things that are new (if something that’s been around for 25 years or so can be considered “new), I’ve also come to understand that what people don’t like about RPO is not RPO itself, but rather what they think RPO is. It’s the perception more than the reality.

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