2016 predictions for the recruitment industry are very upbeat. Record turnover figures, increased hiring projections, rising placements numbers and improving margins all point to a busy and profitable year. But are there headwinds?
Could the need for increasing investment in technology, development of niche sector specialisations, with evolving demands, behaviours and expectations from clients and candidates, and challenges in the engagement and rewarding of consultants, test even the most ambitious agency owners?
Rather than make predictions, I’m keen to get under the surface of the industry and find out what’s going on – how agencies are really feeling, what plans they have in place, and what trends they see emerging – and what the real picture is.
I’ve teamed up Broadbean Technology to work on a joint research project. We’re not out to guess or speculate but want to focus on the facts – and get some real data from the recruitment agency owners and directors who are sitting in the driving seat of the UK’s small to mid size recruitment agencies.
Tell us how things are for you right now & what your expectations are for the next 12 – 24 months by following this link…
…the questionnaire should take 10-15 minutes and is totally anonymous. The questions look at business make-up and your business development strategy. We ask how you generate business and also how you typically make placements, as well as how you are responding to new technologies and not-so-new trends.
We both think the answers you provide will give the industry insight into what the future really looks like for the SME Agency sector in the UK. The questionnaire will be open until 5 February, so please feel free to share the link. We will be publishing our report at the beginning of March.
Thanks in advance for completing the questionnaire…can’t wait to find out how you see the current market.
Recruitment is changing. The way that organisations attract, hire, onboard, engage, and retain the people they need may be a significant differentiator but increasingly also defines their ability to grow and succeed as a business. To facilitate this Talent Management is no longer purely about developing a group of early-identified potentials, but instead represents the route to developing and honing the range of skills and capabilities that will be needed to meet evolving commercial challenges.
However the role of HR develops, the need to acquire, develop and curate skills and knowledge will continue to be a key part. This acquisition and deployment will come through a mix of permanent, interim, freelance and collaborative employment models.
The issues facing hiring teams are well documented. Allegedly they keep CEOs and HRDs awake at night, and top the list of concerns on most business surveys. Moaning and worrying won’t solve the talent puzzle though. We need to look at how the wider recruitment ecosystem is shifting and maximise potential opportunities. Expecting to solve your own skills shortfall by hoping to grab someone else’s is no longer a viable option.
Here are four opportunities for smart recruiters to start doing things differently in 2016…
Turn Shortages into Opportunities
We know there’s a skills shortage. Everyone is struggling to find the specific skills they need. Or are they? No recruiter ever got fired because there was a skills shortage…but maybe this means that individual reasons for shortages don’t get scrutinised. Are recruiters and hiring managers being lazy and waiting for a fully formed candidate who ticks a dozen boxes? If your business capacity is really impaired by a lack of skills then it must be time to find another way to satisfy demand. Redefine the problem. What exactly are we short of? Maybe invest in training or apprenticeships. Look for someone with knowledge and capability close to what you need and invest in bridging that gap. Look at more collaborative ways to bring capability into the organisation whether through flexible workforce approaches or partnering with third parties. Start drilling down with hiring managers on their wish lists and filter out the absolute necessities from the nice-to-haves. Break down the unfillable roles into smaller parts and see if there is a way they can be done differently, using other employees or by hiring someone with a complementary skill set.
The opportunity is for recruiters to add real value and help solve their organisation’s problems, not to offer the same excuses and apportion blame elsewhere.
Collaboration Within the Ecosystem
Modern recruitment is an ecosystem and we are all part of the solution. Our networks grow continuously. For a business this includes employees, alumni, collaborators, suppliers, contractors, clients, customers, digital connections and influencers. Recruiters can use these networks, and their own. Everyday contacts – barista, uber driver, conference attendees, everyone in your yoga or pilates class, fellow commuters, social friends – can lead to even more contacts. There are third party staffing agencies and a plethora of labour providers. Manage these connections. Take care of how you exit employees, reject applicants, and engage and pay freelancers. Communicate and share the wider vision and the hiring needs.
The future for recruiters is also in third party collaboration. Working closely with agencies and other labour providers as partners and not purely as suppliers. Make the partnership part of the internal offering; bring their insights and wider knowledge of trends and availability in your sectors and disciplines into the business. Choose collaborators carefully though as there must be trust, on both sides. That crucial next hire could well judge you as much by how you find them as by the strength of the opportunity you offer.
Win The Ratings Battle
We’re in an experience economy. And a ratings economy. The people we are trying to find put faith in what other people think about us, and judge us on the type of experience they get. Personal trust and peer capital are crucial, and the best recruiters will know that every part of the hiring process has to be functioning just right. Delayed decisions, endless hoops, poor information, disinterested interviewers and a lack of communication and feedback should play no part in a 2016 hiring function, particularly one that is competing with other organisations for skills that are in short supply and high demand. But they still do. Despite the growth of review sites, and the transparency that social media affords for exposing lazy practice, many organisations are still offering job seekers a poor experience.
Smart recruiters should know that jobseekers increasingly judge companies by how they go about hiring their new people, and make sure that if an offer should be rejected, it won’t be because of the recruitment process.
Understand What Candidates Look For
Candidates aren’t just looking for an offer. They want to join an organisation that will invest in them and help enhance their skills, capabilities, knowledge and experiences. Across sectors, disciplines and borders. The offer is no longer just about a salary and a job title, but now also about future opportunities and HR processes. How will they be managed, the level of support, how will performance be assessed, how transparent are goals and feedback, what is the range of rewards, how good is the onboarding, and what is the potential for development? The chances are, if your business is falling down in those areas it may well be obvious from publicly available information.
Good recruiters know that candidates value honesty. They showcase what is good about the business, offer information about future potential and don’t try to cover over shortcomings.
There’s no need for excuses or to hide behind lazy assumptions. Recruitment may be changing but it is also exciting. There are new opportunities offering plenty of scope for the best to differentiate themselves, positively represent their organisations and add real value.
Every attempt to try and understand what’s on the agenda for CEOs, HRDs and businesses in general will arrive at the conclusion that finding and keeping people is our main priority. The way we attract and retain, engage and develop, reward and recognise are the key differentiators for businesses of all sizes and in all sectors.
As someone who has spent most of their career around recruitment and HR this comes as no surprise. It has always been like this. The goals may remain similar but the way we achieve them changes through a mix of technology, aspiration and economic and commercial pressures. Whilst most companies outwardly seem to be going about their recruitment and attraction as if it was business as usual, under the surface there are new factors driving the way they do it.
Our networks grow and grow. Every business is probably connected in some way to their next hire. Employees, contractors, alumni, previously unsuccessful applicants, clients, customers, collaborators, suppliers, Facebook fans and brand advocates all have networks. The answer to that hard-to-find skill may already be within the organisation. Everyone is a recruiter. From the barista brewing your coffee to the uber driver who got you home, everyone you interact with could lead to the next hire for wherever you work. The skills you need are in these extended networks somewhere, though most corporate recruiters will struggle to find them. Technology may eventually help as the strength of connections and reach of network become more visible and quantifiable, enabling more creative ways to target and reach out with the right message to the right people at the right time.
Connections are nothing without relationships. You may know people or have access to them, but will they reciprocate in a two way conversation? We need to get good at rejecting those who show interest in working for us and at exiting those who do work for us. We’re careful about the experiences we give customers and clients and the same must follow for applicants, candidates and alumni if we are to benefit from their referrals and connections. Remember that as roles evolve, and we hire for positions that didn’t exist a couple of years ago, then those we reject because they’re not right may increasingly be not right, right now. Workers will dip in and out of businesses, specialisations and projects so we may be hiring less for long term fit and more for contribution, adaptability and future potential. Recruiters, and some employees, will be judged by the strength and reach of their relationships, not by their number of connections. Recruiters will need to show influence in a competitive labour market.
Are you a good place to work? Are employees able to develop their careers and skills with you? Two questions uppermost in the mind of jobseekers as more information becomes publicly available about the type of employer you are. Your HR processes, the way you manage, lead, encourage, reward and recognise employees and contract workers is no longer a closed book. The salaries you pay and the opportunities you offer are now on sites like Glassdoor. We’re increasingly in a ratings economy with many more opportunities around the corner for businesses and their employees and flexible workers to be rated and ranked. Buying decisions are now based on reputation and the experiences of others, and employment decisions will follow.
Much advice and guidance is given to managers and leaders about making bad hiring decisions, with less going the other way – helping jobseekers to avoid making bad offer acceptances. The increasing visibility of the employment experience is an important development in redressing this balance.
Reputation is important and culture plays a big part in how it grows . Most poor employment experiences come from expectations not met and promises not materialising. The whole concept of organisational culture and employer brand has gained much traction but its not a marketing campaign nor a glossy brochure. Whatever the purpose, values or guiding principles of the organisation, the people who are thinking of working in or with the business want to know them. Not only the ‘way we do things round here’ but the why and how we do them that way. For recruiters this is becoming a key driver – whether job seekers ask about it or not its the culture they want to know about. Salary and rewards are important and in a tight market can be a differentiator, but without a culture that will help them and support them in doing their best work and being happy, enable them to grow and develop, then rewards will no longer be enough.
Talent attraction, attention and acquisition is changing. Are you ready?
A lot of the HR and Recruitment commentary I see focuses on skills shortages and hiring difficulties, with concerns over attraction, retention and development. This often overlooks some of the many nuanced changes and developments in a number of HR processes that impact the day-to-day employment experience, all encouraging a shift in mindset and behaviours. Technology is often at the heart of these, either enabling and facilitating, or encouraging much of the evolution.
During the last twelve months or so I’ve written about many new recruitment and HR trends in reports and on other sites. These are 10 in particular that I think important:
- Performance Management becoming a richer, more agile process focusing on continual development and coaching rather than annual reviews and school report style grades and assessments; moving from measurement to improvement
- Leadership Development not restricted to early identified high potentials or specific job titles but becoming open to all employees with aspiration who can display influence and performance; individuals take responsibility for their own development
- Talent Management less about linear progression and job titles and more about lateral moves and the gaining of a diverse range of skills, experiences and knowledge; progression isn’t only an upwards trajectory
- Rewards becoming less about legacy entitlements and more about offering a varied and holistic package of initiatives and offerings that suit a range of employee preferences
- Engagement at last being seen not as an initiative that a company does but an outcome of treating people right; commitment and loyalty earned
- Retention becoming an ongoing process of continuous attraction with organisations using many channels to try and differentiate the way they are perceived externally and the way their purpose and values are defined internally
- Most organisations now recognising that they are digital businesses that need employees and collaborators with digital skills and a digital mindset
- Reactive recruitment now identified as a problem; skills are short and people have more options – the hiring process can’t wait until someone resigns, or worse leaves, before starting; there is a need for an ‘always be recruiting’ mindset
- Leaders beginning to talk more about hiring for attitude and culture and not purely on past performance or against a checklist of perceived duties and achievements
- Your workforce is no longer only the people on your permanent payroll; there is a rich mix of temps, freelancers, consultants, interims and collaborators that contribute to business processes and outputs, and their needs and expectations also have to be satisfied; they are potential advocates or detractors, same as everyone else connected with the business
There is much going on around the organisation that is both shaping these trends and creating new expectations. Employees don’t want to be overwhelmed and overburdened. They want technology that works, and makes their life easier not harder, and communication that is clear and concise, not filled with buzzwords and jargon.
Our businesses are now more transparent than they’ve ever been. Information is available freely and publicly on what we do and say, what our employees, alumni, collaborators and customers say. Internal processes are often laid bare without us realising. Our people are looking for an organisational soul, something that can encourage a sense of belonging and identification. And pride.
Speed is the new normal and leaders need to be change agents. Top down, autocratic, individualistic managers are losing their key staff. Employees want inclusion and collaboration, transparency and authenticity. The emerging trends that I’ve already mentioned, plus many more that are still evolving, require leaders who are agile and collaborative, able to offer constructive and insightful feedback…and take it too. Their goals are becoming visible to everyone in their team and they need to develop and mentor their people. Talent management is fluid so managers can no longer expect to always hold on to best performers looking for development elsewhere in the organisation. They need to be talent producers not talent hoarders.
Recruitment is becoming more driven by connectivity, reputation and culture. Information on individual experiences of your recruitment process – from the length of time to acknowledge an application through the interview questions you ask to the packages you offer – is publicly available on sites like Glassdoor. Companies need to embrace it and own it.
Your next hire could be a customer or someone in their personal networks, or from the networks of employees, alumni, collaborators and partners. People who leave are a great source of referrals, and may have gained new skills elsewhere so could return. We need to get better at exiting people from the business. Too often they are poorly managed out. Performance discussions become about the person and not the performance.
Whilst a number of businesses, particularly in the SME market, will not have embraced many of these changes as yet, the chances are they will. The transparency I mentioned earlier, coupled with the availability of information and insight on all of these topics, means that workers in all companies have access to what other businesses are doing. And if they like what they see elsewhere, then the chances are they’ll expect it where they are…or else may go out and find it for themselves.
Nestled amongst a list of potential future C-Level roles in a recent Fast Company article was ‘Chief Freelance Relationship Officer’. Some groaned but this made perfect sense to me. According to the author:
“As companies continue to increase their dependence on freelance and contingent workers, many believe that the time will soon arise when an executive employee is tasked with maintaining and growing their partnerships and reputation within the freelance community”
This echoes something I wrote in a recent blog for JM Executive about HR and the employer brand:
“With growing numbers of interims and consultants working as contractors or freelancers for businesses it would be a mistake to assume that employer brand only relates to those who are permanently employed. Growing numbers of reviews on sites like Glassdoor come from people who have been contractors so the way that they are engaged and paid, with clear briefs and support where necessary, can also impact on how you are perceived as a place to work”
The recent Randstad Sourceright 2015 Talent Trends Report also identified the rise of the gig worker as an emerging trend. They reported 47% of HR leaders factoring in independent contractors as part of their talent acquisition strategy. Amongst their advice on how to manage these workers was the importance of engaging them:
“As an organisation utilising all types of labour, consider how your employer brand is perceived across your entire employee population. Remember to communicate your employee value proposition to all potential talent”
Whatever the reasons driving this shift, we’ve got more self-employed and freelancers working for organisations. Then there are also the gigsters, the casual help, the new wave of entrepreneurs and start-ups who fuel the sharing economy/collaborative economy/concierge economy or whatever we call it this week. All different types of workers with one thing in common – nobody employs them permanently yet their experiences of working within, or collaborating with, a business are becoming just as much of employer brand as that of regular employees.
This will grow. Increasing numbers of Uber style apps/platforms for employment are being launched and raising funds. Some are looking at general skills but a growing number are for very niche sectors. This ‘human cloud’ has recently been the subject of an in-depth FT piece. There are estimates of global spend through these platforms already over $3bn, though this could be understated as US leader Upwork estimates $1bn of payments through its site alone last year.
So once they are engaged to perform a duty, who has responsibility internally for the gigsters?
These kind of deals will often fall under the remit of procurement, though their drivers will often be cost and delivery deadlines.
For many companies it will be the hiring or project manager, who has a budget and specific delivery requirements.
The recruiter and HR person in me concludes that if the Chief Freelance Relationship Officer is a role whose time has come, then it should be part of HR. In fact it’s probably part and parcel of what HR does, not separate. Its a role about curating skills, satisfying requirements and needs through the best available hiring channel. Freelancers are part of the wider employer brand ecosystem, their experiences reflecting the type of business you are to work for. The work they produce is ultimately part of the overall business output. The data they have access to, and add to, is subject to the same company privacies and regulations as permanent employees. And their employment status, often unclear and uncertain, is one that HR needs to understand – particularly if pay rates come under scrutiny.
Whilst the whole flexible/outsourced workforce seems a growing phenomenon it’s not necessarily a new one. As far back as 2001 this research paper on the challenges for HR in managing the outsourced workforce was published with this remit:
- For most of the twentieth century, the number of tasks and levels in large organizations grew incrementally, adding new job and career opportunities to full-time employees. In recent years this pattern has fundamentally changed.
- Global developments, both technological and economic, have led to many organizations cutting back their operations, closing facilities or outsourcing non-core activities to specialist providers.
- As we move further into the twenty-first century, we can realistically expect that the need for cost reduction, speed and flexibility will become even greater, leading organizations to reduce the number of full-time employees.
- As labour markets are becoming tighter and supply-driven, finding qualified staff will become more difficult and companies will increasingly have to depend on temporary staff and other types of non-permanent employees to meet their staffing requirements
In the US, the Freelancers Union offers a strong voice, with their #FreelanceIsntFree campaign getting some traction. Meanwhile there is a vibrant online network of project workers ready to share their experiences. Just as the new platforms enable companies to rate their freelance workers, so those workers have the same opportunity to rate those who engage them. Whether by user reviews on a site such as Glassdoor or user ratings through an app there is a growing two way transparency – with pay rates and timeframes likely to be in firing line.
Is business, and HR, ready to operate in a ratings economy?
(image from https://www.freelancersunion.org)
At the recent RecFest conference, Roopesh from Workday opened a session exploring the relationship between agency and in-house recruiters by leading the attendees in a raucous sing-a-long of the Only Fools and Horses theme. It went down so well that they sang it a second time. Clearly for this group the image of recruitment consultants as fast talking market traders hit the spot. This was underlined by a slide showing some of the things that agency recruiters say during sales calls…
“I’m an expert in your market”
“I have a superb candidate from a previous search”
“Our standard Terms are 25% but I can agree to 12% just this once”
“Give me your most hard to fill vacancy”
So far so Delboy, but it wasn’t all pantomime villainy. There was agreement that in-house recruiters can learn things from their agency suppliers – sales and closing skills, focus and pushing back on hiring managers amongst them.
Earlier in the year I took part in a round table event where around 20 owners of small recruitment agencies were talking about their frustrations with in-house recruiters. They saw them mostly as failed recruitment consultants who weren’t commercial enough to realise the value of partnering with specialist agencies, and were scared of sales and targets and wanted an easy life. My role in this gathering was as one of two specialists with knowledge of both areas so I attempted to counter this view.
The real eye opener for me was that their major bugbear with in-house recruiters was over how they handled unsolicited emailed CV submissions. Yes, in 2015, all in the name of business development, agencies are still emailing companies with which they have no relationship, nor knowledge of their current recruitment requirements, attaching candidate CVs displaying full name and contact details. It seems that in-house recruiters ignore them, or worse still contact the candidate to let them know that their CVs have been sent in unsolicited.
I wasn’t happy with the stereotyping from either side. Whatever the rights and wrongs of each approach, there appears a clear undercurrent of disconnect between in-house and agency. Even amongst the successful supplier relationships there is still an element of mistrust.
These are interesting times for staffing agencies. There are skill shortages and talent is hard to find. Yet most are working harder for shrinking returns. Some sectors are thriving but the overall picture is one of tighter margins and harder to fill briefs. The number of permanent placements has fallen from almost 800,000 in 2006/07 to around 630,000 in 2013/14, despite the increase of people working in wider economy.
Trainees often join the recruitment industry in 2015 on basic salaries lower than those offered in 2005. Bonuses then were saved towards an investment in property or purchase of a car yet, anecdotally, now they help to pay the rent. Clients are changing the way they approach performance management, rewards and leadership development. Can the agency sales model similarly develop? Are we hiring the consultants that our clients would choose?
The days of being an intermediary between the client and the channels are gone. Agencies are now a channel again…and an expensive one.
Increasing automation and job polarisation could threaten the bread and butter business of clerical temp work. Clients are becoming competitors, whether through setting up their own internal function or offering their employees as a short term solution to others. There could soon be an app for outsourced managed workforces. Meanwhile the gig economy is connecting those who need a skill with those who are available and have that skill. Recruitment agencies are rarely facilitators of freelance gigs.
Everyone is connected. Clients are probably already connected to their next hire but may not yet understand where the connection is or how to leverage it. Permanent agencies need to look again at their own offerings and ask where they really add value. What if the introduction was free? What would they charge for then?
Much of the advice given to agency recruiters about the skills they need to develop – sourcing, analysis, content creation, storytelling, relationship building – usually pre-supposes that the business model remains unchanged, that vacancies need to be found and filled. But what if the business opportunities are not so obvious? Strategies need to evolve and respond to changing dynamics and preferences in employment models and talent acquisition.
Over the next few weeks I will be looking further into the current recruitment landscape and trying to understand the challenges that the industry faces, the impact they may have and how agencies might need to adapt.
Let me know what you think their challenges are?
Really interesting post and mirrors some of my recent experiences.
For many, work is still a place you go, not just a thing you do…
Five years ago I asked whether people were starting work earlier. Based on my own observations and anecdotes from others, it seemed to me that roads and railways were packed with commuters at times of the morning when they used to be almost deserted.
Thanks to an article in the Economist, retweeted in the context of yesterday’s Tube strike, I now have some data to back up my hunch. Since 2001, the number of people using the Underground has increased and so has the length of the rush hour. It’s more like a rush three hours now. As passenger numbers have increased at peak times, the number of people leaving early or delaying their journeys has also risen. In just over ten years, the volumes have shifted at each end by about half to three-quarters of an hour, so 6.15am now looks like 6.45am used to.
This example from the article reflects many…
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