Is the Current Corporate Recruiting Department Model Doomed?

Jul 22, 2011
This article is part of a series called News & Trends.

Some points to make before you read this article:

  1. It’s somewhat controversial, but by the end you’ll agree (if you get that far).

  2. If you’re a corporate recruiter or HR leader, put your confirmation bias in the parking lot before reading this article.
  3. You might want to listen to this YouTube video of a webcast (Future of Recruiting Circa 2020) we recently held. It will give you a sense what’s happening now and what will happen soon.

No surprise here, but the answer to the headline’s question is an unequivocal yes. Here’s why the current version of the corporate recruiting department is heading toward extinction:

  1. History repeats itself. The current version of the corporate recruiting department and recruiter came into existence in the 1995-2000 time frame due to technology changes. These same technological forces will fundamentally change the nature of the job in the next few years. In the mid- to late 90s with the growth of job boards, companies realized they didn’t have to pay contingency fees to third-party recruiters for candidates they could find on their own. As a result they began to hire contract recruiters at a pretty stiff hourly rate to reduce costs and increase control. This model proved successful and soon contract recruiters become full-time employees at more reasonable rates. Since cost and efficiency were the drivers behind many of these initiatives, there were never enough recruiters on the staff to handle all of the requisitions properly. In many cases this model is more transactional and administrative, focusing on filling jobs with the best person applying, rather than reaching out and finding the best available person. This strategic error, in my mind, will be the root cause of the corporate recruiting department’s ultimate demise.
  2. The active-to-passive shift is accelerating. According to a massive joint study we conducted with LinkedIn, only 18% of the fully-employed pool of prospects were looking for new jobs using traditional techniques. The 82% who describe themselves as passive need to be engaged with in a totally different manner from the 18%. They are looking for better jobs and career opportunities, they take longer to decide, they won’t apply, they don’t have resumes, they are in higher demand, and they are far more choosey. Most corporate recruiting processes are ill-equipped to handle these differences. Without a major overhaul in processes, tactics, resources, and how job descriptions are written, the biggest pool of the best prospects will go untouched.
  3. Interconnected networks will replace sourcing. Soon, if not sooner, everyone will be connected with everyone else by only one degree of separation. As a result, proprietary talent communities will become unimportant since everyone will have access to the same people. These will soon be overshadowed and ultimately be replaced by 360° talent networks. As a result, those with the deepest and broadest talent networks will win. While developing these networks will be a critical job of the recruiting department of the future, it’s unclear that managing and working the network will require the current set of recruiter skills and competencies. Since the auto-matching of jobs with prospects in these extended networks will soon become the norm, the end-game (reeling in and closing) will become the critical differentiator of success.
  4. The rise of the hiring manager self-serve model is accelerating. Just as corporate recruiters replaced TPRs, hiring managers will soon be taking over much of the work now performed by corporate recruiters. Consider this likely scenario: a hiring manager creates a quick video describing the job. Moments later it’s distributed throughout the talent network to just the right people. Available prospects will be notified moments later on their smartphones, and since everything will be known about everyone, the most qualified people will be automatically matched with the best opportunities. The best matches will be to sorted to the top with instant video exploratory meetings set up at the push of a button. I don’t know what happens next, but it will be a heck of lot different than what happens now, with hiring managers driving the process.
  5. Quality of hire has not improved under the current model. Let’s be honest on this point: there is no evidence that quality of hire improved as a result of moving the recruiting function in-house. While cost per hire and time to fill have improved, there has been no corresponding improvement in the overall talent level of a company. Improvements on this score, if any, can largely be attributed to employer branding, supply vs. demand issues, hiring manager insistence, or some executive-level strategy change. If some other corporate recruiting model can demonstrate better quality of hire at the same cost and efficiency, there’s no reason to maintain the corporate recruiting function in its current form. The one envisioned certainly meets this benchmark.
  6. The decline and fall of the FTE and the requisition. The full-time equivalent worker is becoming less relevant, replaced by contingent, contract, consultants, outsourced and project workers. This parallels demographic changes, with an aging workforce considering more part-time work, and a large portion of those just entering the market not sold on the corporate career lifestyle. Much of the mixing and matching associated with this project-based work environment can be automated, further lessening the role of the corporate recruiting function. On top of this is the idea now gaining traction of crafting the job around a great person who is a rough match on skills, rather than finding a person who closely meets the skill set on the job description. Talent networks like LinkedIn and Facebook coupled with emerging career management apps are both forcing and enabling this type of paradigm shift in approach and thinking.

While the trends themselves are quite apparent, one could effectively argue the specific outcomes and conclusions drawn. The lack of technology advances — especially on the ATS front — would be the big reason a new, more efficient corporate recruiting model does not emerge as quickly as possible. The fact that these systems are built on a work process that is requisition-based also prevents much of the changes proposed from being implemented as efficiently as possible.

While change might be slowed by the lack of an effective ATS, recruiting leaders must create the future, rather than react to it. On one level 100% visibility to everyone and every job is not necessarily a good thing. Some negatives include increased workforce turnover, waged-based inflation as companies compete for the best or to retain them, wider swings in company performance as weaker performance accelerates people leaving for greener pastures, and productivity declines caused by the need to increase training.

Whether you agree or not with the specifics here, change of some significant type is inevitable. On the tech front things are changing more rapidly than ever, and as a result, the corporate recruiter of the future will look little like his or her counterpart of today. Those who take advantage of these changes will have a field day. Those who don’t won’t be around to worry about it.

This article is part of a series called News & Trends.
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