During this economic downturn, recession, slump — pick your phrase — we have seen more contract recruiters and search companies take a hit. Not a surprise. Fewer hires, and thereby less to outsource to third parties. As I talk with third-party recruiting organizations, many are trying desperately to branch out into other industries, get new accounts, and market. Many are changing terms and offering discounts. This behavior was expected, and as with the time after the Internet boom, and there are a percentage of these staffing companies that just won’t make it. There are a number of contract recruiters who will also want to go inside.
However, our U.S. economic situation may not allow for expansion of RPO or the conversion of contractors to full-time hires.
- HR transformation (defined as increasing the percentage of HR specialists in recruiting, compensation, OD, and other HR disciplines) has been a trend for several years.
- Many organizations have already made the decision to re-invest in their internal recruiting organizations or transfer to RPO
- Out-of-work contract recruiters and those working for RPO/search firms who were laid off are going to find that their brothers and sisters in corporate recruiting have also been let go. So how is there possibly room for an executive search or RPO veteran on the inside, let alone getting transactional business?
- Hundreds, if not thousands, of corporate recruiters have their goals and objectives directly tied to open requisitions, and with requisitions being down, why outsource?
How did we get to our current situation? How did we so closely link the entire function to transactional work? Why didn’t we align recruiting to business objectives, like procurement, finance, and information technology have done? We had the opportunity to transition to talent organizations built with strategic leaders and rely on partnerships or flexible staffs to do variable work. As staffing experts, we should have known better.
We should have learned from our manufacturing colleagues, who eliminated part-time workers and outsourced shift labor in exchange for full-time efficiency, quality, and safety experts. From our IT colleagues, who stopped programming in house and swapped headcount for MBA business analysts that sit with the business and solve problems. But what is done is done. There are recruiters with no jobs to fill, and thus no need for recruiters.
Our leaders need to retool the function and staff to a headcount level that disregards the number of positions filled annually.
What? You want me to build a recruiting organization and not use the number of hires we have to indicate how many people should be on the team? Exactly.
Let’s admit something first. For years we have been measuring time to fill, cost per hire, and all these different metrics, and benchmarking ourselves against world-class companies. Google does this, and Microsoft does that. Honeywell does this and GE does that. Now we have no reqs open (or considerably fewer open) and we have a bunch of managers looking around saying “what are you doing recruiting?”
Well, most companies don’t have brands like Google or Microsoft, and many don’t have the HR/project management excellence of Honeywell or General Electric. So why do we continue to try to mimic their every move? While mimicking we used inflated numbers and transactional data to build our recruiting operations and now we have nothing to operate on, and thus we are expendable. We became the manufacturing plant that needs to be shut down because nobody is buying cars.
Take this time to look at your remaining group and rethink. Here are some steps to get you started on building an indispensable team, and one that will retain employees in the new economy:
Evaluate the Team
Figure out if there are team members in your organization who were hired based on the simple fact that they can handle managers and fill reqs when open. This group may need some training. Get them trained up on project management, special initiatives, and communicating with managers regularly and regardless of hire. Of course they may feel like they are targets for dismissal now, and may be looking at industries that are hiring and ready to make a switch. So talk to them. Get an understanding of their point of view, and then craft personal development plans as needed.
Talk to Leaders About Their Plans
Get a handle of the attrition and retention rates of your company historically, and ask the CEO and executive suite what the real plans are. Are you letting people go? Acquiring? Divesting? Get a handle on the new volume — not so you can divide up the reqs, but so you can create a service organization that can enable the business. You need to plan on some hiring eventually, and your team needs to be customer-service oriented, and ready for anything in this new economy. Now is not the time to start adding hiring managers to each member of your team; instead, set a tone where each recruiter spends more time with each hiring manager.
Prepare for More Work
Assume that it will be harder than before to perform staffing. The talent marketplace may have increased, but that does not always mean it is easier. Look at the facts: we were already on track for talent shortage with the baby boomers retiring, and that generation lost 40% of its net worth. You think they are retiring now? No, they are staying put, and likely not moving around. With real estate in the tank, few can sell their houses. With more dual income families than ever before, having the spouse leave the other job is going to be difficult. We already have more applicants applying per requisition, meaning more to go through. We are having more conversations with managers about hiring the unemployed or the underemployed. There are more people on LinkedIn, Twitter, CareerBuilder, and Monster than ever before. By the way: remember that we stripped recruiting resources to the bone, so all this extra work has to get done by fewer people. So plan accordingly. Use technology, outsourcing, and flexible staffs to get the extra stuff done. Don’t simply hire more recruiters. Remember you are on a roller coaster.
Keep Driving Initiatives
Lay out all the projects that need to get done in the next 12 to 24 months and assign project leaders with retention in mind. This includes ATS upgrades, university relations programs, interview training, etc. Assume that you are staffing like you used to, so what areas needed improvement then? Start now. Figure out how long it will take and how much your team is capable of doing. If you can do it all, great. Likely you can’t. I may live in a house, but it does not mean I can build one. Use your internal teams, other departments, vendors, partners, consultants, and contractors to augment where your need. Push your team to projects that teach them something, and stretch them, but don’t wear them out. Don’t assign your recruiting team the admin work. Indispensable means you can’t throw them away, but it also means you can’t dump on them. Figure out who is working on what, and get the OK from management, and make those goals and objectives bonus-driven.
Build for Scale
Make a case right now that some of your new core organization will never touch an open requisition. Of course others may have to, so build that in. Now go and get the flexible team (RPO, contractors, rotation personnel, etc) to surround your core team. Maybe those resources are full time. Maybe not. They could be internal or external. My advice is make it easy to turn them on and off, and make the ROI justified. You want an internal sourcing group using search strings and blogs to save on search fees? Fine. Make sure you can still justify it. If you are not hiring executives or have been able to attract executives without hard core sourcing in this economy, then your justification for a full-time internal sourcing team may have changed or is no longer valid. Remember there is great part-time talent out there. One hundred dollars per hour may be expensive, but part-time work for 60 hours a month @ $100/hour is cheaper than a full-time sourcer at $75,000 in salary, overhead, and management.
The watchword is value (it always has been that, by the way). We are under pressure now to drive value in recruiting and prove our existence. It will look different in the coming months, but with planning we can be much better off than where we were.