Recruiting In Any Economy: The New Business Reality

(SCENE: A Boardroom, corporate or agency, not unlike one you have been in recently) “…and without any further delay, let me introduce the Man with the Plan, our own VP of HR, Numbas Manipulator.” “Well, this year certainly through us a curve ball…” (Yeah, the bubble burst overnight, from unlimited resources to budget freezes. A recruiting team and candidate pipeline that took three years to build is dismantled in less than one fiscal quarter. Now you are all sitting at this meeting pretending that you think cutting the budget for HR/Staffing is a good thing, and if I want to keep my job, that’s just what I will do.) “….with a clear vision of what we must do to prepare for both an aggressive recruiting year combined with proper fiscal caution, we will…” (I don’t even know what that sentence means! Why hasn’t this crew figured it out yet! They all have been in the business long enough to know better. College enrollments for technical and business professional degrees are down again. Despite the economic “slowdown,” national unemployment declined from 4.5% to 4.4%. Massachusetts has a 3.8% figure. The prediction for economic growth for the next two decades is only called into question as pertains to Staffing. Do you guys hear me, STAFFING!) “…but still meeting the critical needs of our users and clients to insure that business continues to flow smoothly…” (Yeah, until the first time one of you screams you need to find a “five years experienced something or other” ASAP and the cupboard is bare. Staffing is like quality; it is a continuous process that requires the maintenance of a minimum standard even when staffing needs are zero. I need everything I have left, just to do status quo. If you want accomplishments, I will need more.) “…Indicators show an economy destined to rebound with an energy equal to or greater than we have experienced…” (Yeah, that got some polite applause. But who is going to be doing this rebounding for you? Who? Me? A lot of empty cubicles in my area indicate it isn’t going to be me, not right away at any rate.) “Thank you for your time and patience and I will be in my office if you have any questions.” (Thanks Numbas. By the way, I need to see you after the meeting. I have several hot openings coming up, really got to get a jump on them…) Often I keep myself sane in the recruiting business by remembering one of my favorite lines from a comedy I saw years ago: “Don’t confuse me with the facts, my mind is made up!” The economy has slowed down, but it has not stopped, the exact date of its return to a more noticeable growth curve is still uncertain, but it is generally agreed it will be within the calendar year and continue with minor starts and stops beyond the first decade of this new millennium. I have spoken to friends in the businesses that are aggressively hiring new recruiters to prepare for the next wave of staffing. Others are deciding “who to keep and who to let go.” On the other hand, I know a lot of contractors and consultants who are dividing the money left in savings by their monthly expenditures to see how many months they have left before “something has to give” in the contractor economy or they have to look for new careers. They may even have to contemplate the dreaded world of “W2” to keep it together, if they can find an opening. The staffing industry was put “on its ear” by the last six months of increasing inactivity. It was as if somebody decided that recruiting has an on/off switch. Well, it’s not. But in business you either identify a trend and deal with it, or get run over by it. The trend in staffing will be more effected long term by the absence of educated technical and professional services labor than it will be by a temporary economic slowdown. There is a shortage of candidates and that should be good news to those of us who provide candidates as internal recruiters or external third parties. But, in time, I think those of us in the staffing industry will realize that the economy was the least of our worries. We are also in the middle of an economy looking for better solutions than it has been offered in the resolution of staffing needs. Consider the following. Many hiring manager/clients feel that:

  • They had to overstaff to compensate for the slowness in filling open requisitions. The team that needed five hires ultimately needed eight to catch up on the workload.
  • Their FTE requisitions were “filled” by contractors or through outsourcing the work, a more expensive solution, but one that had a chance to happen, unlike hiring.
  • Funding for programs needed to improve benefits, work environment, or work/life balance issues, went into increased staffing costs.
  • Overall, we failed in our mission to support the business plan through timely, cost effective, and quality staffing services.
  • We consistently resolved issues by requesting bigger budgets, higher billable hours and increased fees. Rarely was a workflow, process improvement, or innovative solution brought forward that lacked an impressive price tag.

“Better than nothing is not a service standard of which one should be proud.” One issue we all must face is that over the last five years staffing and staffing-related expenses grew exponentially, but not necessarily customer satisfaction. As the demands on our time grew, the time we allowed to spend with our hiring managers and clients diminished. As our access to reams of paper grew, the ability and time to screen it diminished and we pushed more of the process overload onto our clients. We were purchasing new technology, but not always able to learn how to use it effectively, or integrate it into existing processes and systems. We had our reasons and our excuses for the problems and circumstances that made our task accomplishment so daunting. Let’s face it, it was a mess. So how do we do business in this “new economy” and how do we plan and prepare to prevent a replay of the last five years? Well, first of all we need to accept that our hiring managers/clients are already working on solutions, with or without us, so it behooves us to join in the process.

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  1. Use the time you currently have to contact your hiring managers/clients and ask them what worked and what didn’t.
  2. Schedule more of your time out of your office or cubicle to be spent with your management teams. Find out what they really do for a living. Attend a meeting and do not ask to leave after the first five minutes.
  3. Invite your management team to a top to bottom review of your staffing process, the automated tracking and search tools you use and ask for their input. (Let them do a job board resume search and see how they like it!)
  4. Develop deeper and better relations with your sales, marketing, public relations and web development teams. These people are already out there in contact with “the market” from which you want to recruit. They are already branding the company, getting ink, and spending money on communications that staffing can only wish to have. (Do not forget that 85% of all corporate website hits are to the “Employment Page,” these people should be equally motivated to work with you, as you with them.)
  5. Work on developing a better Employee Referral Program, College Recruiting Program, and Internal Posting Program. The company model of the very near future is going to expect you to develop at least of 50% of your hires from these three sources alone. (Progressive companies will expect more in the order of 75%.)
  6. Corporate Recruiters need to develop better working relations with their agency counterparts. You will need agency support in specialized, difficult, or scarce-resource recruiting. So, does it not make sense to do business with a vendor with whom you have a strong “mutually beneficial” relationship? Too many corporate recruiters act as if using an agency is a sign of failure or weakness. Well, when I call an electrician, I do not resent the specialized skill they bring to the table, or the time I buy back to do what I do best, while they do what they do best.
  7. Training: we have a lot of tools out there that were installed during the hectic last five years that you never trained in, now is the time.
  8. Training: there is a need for all recruiters and HR professionals to accept that they are as much sales professionals as operational or business professionals. Get some sales training, communications training, decision and management training, and most importantly, leadership training.
  9. Process improvement and process integration should also be part of your recovery master plan, with all the input and training you receive, you can hopefully discover where the lost time and energy went over the last five to ten years, and “plug the hole.”
  10. Train your hiring managers and clients in process and procedures. I can honestly say that at the start of any new consulting assignment, 20-25% of my production goes into fixing errors and resolving issues caused by well-meaning managers who make commitments without knowing the possible consequences, liabilities, or issues they have created. Like the old saying goes, “Doing it right the first time takes an hour, fixing it takes a week.”

Our hiring managers and clients are going to want to develop better reports to measure the performance of individual products and individual corporate recruiters or agencies. With the staggering costs of staffing and retention, we should expect no less and rather than be offended, threatened, or resistant, we should be willing participants in the development process of these reports. If for no other reason, we can insure they are at least partially relevant and contribute some useful input. If you do not participate, they will leave it to the CFO, and you know what that means! But offer to develop reports that make sense:

  1. Is cost per hire (CPH) relevant if a low-CPH program results in high turnover and a higher CPH program results in lower turnover?
  2. Are you measuring all hiring costs, including the overall cost of not filling a position expeditiously?
  3. Are you measuring the quality of hiring?
  4. Are you measuring the timeliness of hiring? (Not just the traditional “Time to Fill”, but the more efficient and professional “just in time” staffing)
  5. Do you have a measurement tool to measure the individual hiring managers’ response and action times? (After all, getting a resume to a manager quickly only matters if they react quickly.)
  6. Do you have a measurement tool that determines how long after the manager needed a position filled that they completed all their requirements for corporate staffing or the agency to enable them to accomplish their jobs? (The requisition was approved on Tuesday, it was two weeks later the updated position description showed up — when should the clock start ticking?)

The issue is basically this: over the last five years our end users have felt a serious pinch in their ability to accomplish their missions due to a lack of adequate staffing. We are responsible for staffing; therefore the assumption is that it was our fault. I agree. We are the staffing industry. Whether you are in corporate staffing, contract/consulting, third-party agency, product or services, we are the recruiting industry. We are the recruiting profession. If we were in medicine, we would all refer to ourselves first as doctors. We would mention our specialty next, and then the hospital we currently happen to work at as an afterthought. (Unless of course it was one of those big deal “name hospitals.”) We would recognize that it is important that we work together as a profession to insure we provided, as an industry, top quality care, support, and services to our clients. We would recognize that we all would share in a “good industry reputation,” or suffer a bad one together. We would share a mutual respect for one and other based on a shared knowledge of each members contribution and we would share a belief that no one component of our profession was disposable without diminishing us all. We would support or enforce our industry standards on each other. We would all also drive “kick butt” sports cars, play golf three times a week, and get to park anywhere we wanted without getting a parking ticket. But I digress. This economy has given the recruiting industry a breather, wanted or not. Maybe it is time to develop not only better programs and practices for ourselves and our respective organizations, but maybe it is also time for us to try and develop a better and less fragmented “profession and industry” to better serve our hiring managers and clients. The industry will evolve with or without us. No industry can remain static and hope to survive. Darwin did not teach us that survival belongs to the strongest or the smartest. Darwin teaches that survival is the prize for the adaptable. When the economy revives, staffing will not look like it did for the last five years. The realities of cost, chronic labor shortages, and the changing face and demands of the workforce has caused business to adapt. Now they are waiting to see if we can change as well. Have a great day recruiting! <*SPONSORMESSAGE*>

Ken Gaffey (kengaffey@comcast.net) is currently an employee of CPS Personal Services (www.cps.ca.gov) and has been involved in the Department of Homeland Security, Transportation Security Administration project since its inception. Prior to this National Security project Ken was an independent human resources and staffing consultant with an extensive career of diversified human resources and staffing experience in the high-tech, financial services, manufacturing, and pharmaceutical industries. His past clients include Hewlett Packard, First Data Corporation, Fidelity Investments, Fleet Bank, Rational Software, Ericsson, Astra Pharmaceutical, G&D Engineering, and other national and international industry leaders. In addition to contributing articles and book reviews to publications like ERE, Monster.com, AIRS, HR Today, and the International Recruiters Newsletter, Ken is a speaker at national and international conferences, training seminars, and other staffing industry events. Ken is a Boston native and has lived in the greater Boston area most of his life. Ken attended the University of South Carolina and was an officer in the United States Marine Corps.

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