Pay Peanuts, Get Monkeys: High Standard Recruitment

The recruitment market is saturated but business is still built on 3 tenets: insight, effectiveness and hard work.

Recruitment

The evolution of the internet has made being an entrepreneur a little easier.   All you need these days is a laptop, the internet and a credit card; get online, register a company name and boom! You’re in business. You can work from home, find a co-working space or a virtual office… And start building your empire from there. That’s how Cogs started out, in a way. I set it up with Liam many moons ago, building our business based on 3 tenets: insight, effectiveness and hard work.  The result? Cogs is now a 52-strong team of specialists spread across the globe.

Fast forward to today, and the same still holds true –starting a new company is (relatively) easy and while that’s great, it also means that the market is now incredibly saturated, especially in service/agency businesses such as recruitment. But unfortunately, an oversupply of companies doesn’t guarantee an abundance of high standards.  In fact, the opposite might be true.

But where’s the value?

Not all companies were born equal and there’s a reason why some businesses are able to charge higher fees and position themselves as boutique or exclusive. It’s the same reason why luxury brands are able to charge thousands of dollars more for a handbag or sports car. Sure, those brands deal in goods, as opposed to services, but the principle essentially is the same – quality.

The complexity of the hard skills needed for a role combined with a lack of availability in the market create challenges in recruitment.   The reverse; low/no skill level needed and lots of people in the market, makes life easier.  So who do you need to address these problems?

The Generalist versus The Specialist

Within recruitment, better companies have higher paid and in certain cases, more staff. It’s no surprise that the best recruiters in each sector command the highest salaries.  Coupled with solid infrastructure and systems, as well as specific teams to look at compliance and legal issues, these companies are also more expensive to run.  But in turn, are capable of delivering a more consultative approach backed with a deeper knowledge base, a specialist service that’s more geared up to handle your requirements. Again, all leading to increased quality of service.

But is it measurable and what should a company look for in terms of quality? Unlike a product that you buy and are able to calculate a cost-per-wear on, how do you measure or place value on non-tangible services such as a recruitment? There are three areas for businesses or leaders to focus on to separate the generalists, from the specialists:

The perfect marriage of candidate and company is quite achievable for talented recruiters.  This is because the specialist understands every aspect of the position they are trying to fill, from required technical knowledge and skills, matching personalities with cultures and connecting an individual’s aspirations to a company’s plans. The job scope isn’t just a tick-list and they comprehend the person beyond a CV.

Successful companies are powered by talented people. The ultimate aim of a recruiter is to find you a person to hire.  But do your recruiters help you hire the best person that just happens to be free right now, or the best in the market?  And does their approach help shape the brief to get the right people or just a selection of CVs?

The Principal of Economics and the difference between value and price

A saturated market for recruiters creates a downward pressure on the rates companies pay to recruiters for their services, a classic case of supply and demand. However there is also a high demand for specialist skills with candidates in short supply which creates a need for specialist recruiters. However as every business must make a profit to survive, lower rates often leads to cost cutting, which in turn often leads to sacrificing of standards. That’s a speedy route to low quality.  Also true is that if your competitors are paying higher fees to specialist recruiters, chances are they are seeing the people you would like to have join your team.

As it is, companies are already finding it hard to find the right talent in this digital driven age. In the 2015 18th Annual Global CEO Survey, 73% of CEOs said skills availability is a concern. Lowered standards in screening and hiring talent would only set this back even further, resulting in a Talent Paradox.

Don’t get me wrong, I’m all for an energetic and competitive market, and there’s a space for everyone who’s enterprising enough. It’s up to businesses though to understand and align their needs and expectations. For example, a company might an office assistant who can be a fresh grad or with less than 2 years’ experience; there’s really no need to spend fees on a specialist to help you find one. However, if you’re looking for a Senior UX Designer with solid experience in transformation projects in the banking sector, it’s not quite so easy.

In our case, we’ve been fortunate in that we have a list of clients who see the value in our service; it puts us in a good place where we can thrive on competition and push standards higher. But that doesn’t mean we are immune from the race to the bottom on fees, which is driving a race to the bottom of standards. Companies should seek win/win relationships from their recruiters and engage specialists, not generalists. Value doesn’t necessarily mean price, especially as not all companies are born equal.

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