Adapt to the Internet or Die– 5 Excuses Why Recruiters Don’t Use the Internet

Adapt or die is the core tenet of evolution. Unfortunately, too many recruiters, those in agencies and those inside corporations, are adverse to using the Internet. I am reminded of the parallels to the automobile vs. the horse at the turn of the century. In the early days, the car was thought to be little more than a noisy, inefficient and very unreliable substitute for the horse and carriage. Many companies bought a few trucks, but kept plenty of horses as backup. The average person couldn’t afford, and couldn’t see any value in the car — it was a rich man’s toy! Don’t let the Internet be your car! Here are the most common excuses that I hear as to why recruiters don’t adopt the Internet or don’t aggressively pursue candidates via the web:

Resumes on the Internet and job boards represent only a small fraction of the total. While this may be true today, the situation is changing Quickly. A report issued by a well-respected bank has estimated that there are more than 30 million job transactions each year. Probably about 50% of those take place on the web through job boards, home pages, and online searches. At an annual average salary basis of about $31,000 and a 6.5% cost per electronic transaction, the average Internet fee is about $2,000. That adds up to a market potential of $30 BILLION! While many of these transactions are centered around information technology professionals and other technical professions, the other fields are catching up. Financial services, insurance, and manufacturing are increasingly turning to the web. It seems sheer folly to ignore a market with this much size and market potential, especially when it is an expanding category.

Our core business has never been stronger — and without the Internet! We are in a cyclical period for job growth. Demographics and the economy have combined to make this a great time to be a recruiter or a job seeker. When this changes, those using the Internet will have a much more favorable cost structure and I believe will weather the cyclical market easily. The beauty of the electronic marketplace is its low cost and its ability to deliver screened candidates directly to managers without the need for numerous (and expensive) intermediaries to do the interviewing, screening and adminstrivia. While tools to automate these processes today are somewhat experimental, limited in capability and expensive; they will pay back their costs many times over as we head into the next decade. Early adopters will have the benefit of an accelerated learning curve and get the premiums that these services will command in their first few months or years of service.
You can’t hire low level employees or CEOs online. The largest recruiting firms such as Korn/Ferry International and Heidrick & Struggles are making huge investments in databases and screening tools for senior level executives of all types. More of them will learn that the Internet offers a confidential, just-in-time method of job seeking. That is what these firms are banking on. Even lower level employees are discovering that the Internet can be a fast and inexpensive way of looking at what is available through services offered by America On Line (AOL) and other portals. The beauty of this is that clever recruiting firms can make money off of these people — a group never before part of the commission or fee chain — because of lower transaction costs and the automation of the web.
Technology is not our strength. We focus on finding quality people through our superior contacts and network. Then you must get technology savvy — quickly. Your network can now be worldwide in scope and you can communicate with vastly more people more often by leveraging the Internet. The old ways of recruiting are effective, but they are very inefficient, costly and hard to up- or down- scale.
Even IF the Internet becomes a big deal, we can catch up quickly. We can simply hire the e-recruiters that are out there and hook up to the net. Most carriage companies did not catch up and become automobile manufacturers. Most failed. A few were acquired by the upstart auto guys. It is very difficult to accelerate the learning curve in technology. New technology requires new mindsets and approaches. It requires experimentation and a willingness to make mistakes and then move on. Hiring e-recruiters is a small part of what it takes to be successful in building an Internet-based recruiting business. Traditional recruitment methods are dying. They are highly cyclical and difficult to scale. The reason traditional recruiters have been successful is because of the poor distribution of information that has existed in our industrial society. The recruiter was a re-distributor of information about people and jobs. As information about people and jobs becomes more evenly distributed because of the Internet, traditional recruiters will find less and less that differentiates them enough to charge very much for their services. I believe only a handful will survive economically without embracing the web and using it to their advantage.

I hope all of you are actively learning how to leverage this tool to your own economic advantage.