HR's strategic 1%

Recruitment industry expert, Ross Clennett, tells Phil Preston that while there are benefits to using recruitment agencies, the industry needs to adapt to a landscape being shaped by social media.

I conducted an interview with Ross Clennett, who is a recruitment industry expert. As a coach and mentor of owners and professionals in the agency recruitment industry, he is uniquely placed to observe human resource trends and how they affect the employer, recruiter and employee ends of the market.

Given that several studies, such as SKE’s analysis of high-performing workplaces, have shown that employee engagement is a key driver of business value, I was interested to find out from Ross what is really going on out there, especially in the SME market. How strategic are employers?

Social media, such as LinkedIn, is a disruptive technology that is impacting traditional business models. I was keen to hear Ross’s views on this and much more:

Can you explain the difference between agency recruitment and other forms of recruitment?

Recruitment agencies provide outsourced recruitment services, both permanent and temporary/contract. These outsourced services are mostly provided on a success-only fee basis.

The most common other form of recruitment is a company having an internal recruitment function where they undertake all, or most, of the recruitment activities themselves.

The advantage of agency recruitment is that it is a completely variable cost, incurred only when used. Internal recruitment has many fixed costs including staff, office space, software, telephone, Internet etc that continue to be incurred regardless of the volume of recruitment being undertaken.

Why should we take this market seriously?

Because it is a very large market. IBIS World research indicates that the recruitment industry in Australia comprises around 2,500 business and employs around 15,000 people. It provides a service, especially to the SME market, where internal recruitment would be uneconomic.

What trends are driving change in this industry?

Technology and social media, especially the aggressive growth of LinkedIn. Companies now have easier and cheaper access to DIY recruitment than they have ever had. This puts far more pressure on recruitment agencies to deliver excellent value for their fees.

The skills shortage means more and more pressure is on making the right recruitment decision, as a poor choice could have significant negative consequences.

Can you tell much about the merits of an employer by the way they behave in a recruitment process? What examples spring to mind?

Candidates, rightly or wrongly, make decisions about an organisation by the way the recruitment process is handled. The three major negatives are applications not being responded to, interviews occurring without any feedback and a long, drawn out recruitment process.

My very first permanent job was a good example of this (for the positive). I had two interviews within three days and then received an offer the next day. I had another offer elsewhere but the speed of the process gave me an ego boost. I thought that any company who acts that quickly must think I am good so I’ll take their job.

If people are increasingly recognised as the key assets in organisations, do we see the recruitment function treated with the respect it deserves?

Hmm, I’d like to say yes but I still see, in a majority of cases, a very reactive recruitment function. Recruitment works best when a company has a clearly defined competency model, accurately compiled job profiles, unambiguous behavioural competencies or values and a rigorous process used to assess ALL candidates for ALL jobs. When all these components are in place I would say that recruitment is seen as a strategic not transactional function.

The companies that do this best have a CEO who understands the strategic value of recruitment and provides a budget to build and maintain such a function.

How many employers are strategic in their HR activities versus those that are just trying to get through each day without falling apart!

My guess is that less than one per cent of people employed in HR in this country are doing anything that could be close to strategic. Overwhelmingly HR (and recruitment) is still very reactive and transactional.

You have created a strong niche as the "recruiter’s recruitment expert”, was it easy?

No. It’s been ten years of training and coaching as well as five years of very active blogging, tweeting and building my Linked In network. Ultimately it doesn’t matter what I call myself the only thing that matters is what other people think of me.

What are the common problems you see in recruitment agencies?

Lack of their own effective recruitment processes! The recruitment industry has an annual staff turnover rate of 30-45 per cent, indicating that we are not great at recruiting the right people for our own businesses.

Compounding this is the lack of structured and ongoing training for new employees. There is still too much ‘learn on the job as you go’ as the major training technique.

Thirdly, there is lack of understanding of how the game has changed by LinkedIn and others, and a reliance on the recruitment agency business model of last century being adequate for this century. Hence most recruitment agencies are only thinking about this month’s and next month’s fees rather than how the overall market is changing and what that means for their business model.

How do you help them improve their business performance?

Skill development predominantly. Secondly, I provide ideas for structured performance management and how to build a career in recruitment.

What is your most satisfying achievement with your clients?

There have been plenty but the one that stands out is a client I first started working with as an employee . Then she gained the confidence necessary to start her own business, which is now thriving, and subsequently she was named as a 2011 Finalist in the Queensland Telstra Young Businesswoman of the Year.

What’s the best business advice you’ve ever received?

Specialise. Trying to be all things to all people is for mugs. I made a decision to niche myself in agency recruitment training, coaching and commentating and it has paid off for me.

What has been your biggest learning along the way?

Never stop marketing yourself. You can never have too many clients.

What legacy do you want to create?

A professional, thriving and highly respected recruitment industry. I would hope that people within our industry would see my consistent writing and training on this topic has helped raise the bar across the country for recruiters.

I reckon I’ve got about thirty years left in me doing this so I am not sure whether that will be enough time!

Thanks Ross for your insight into the trends and issues facing the HR and recruitment industries.

Phil Preston is an independent practitioner who helps organisations find innovative solutions to performance issues. He can be contacted on phil@philpreston.co phil@philpreston.co.

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