February 15, 2008

Playing in the Sandbox... Part I

Can Third-Party Recruiters and Corporate HR play together in the sandbox?

So often, I see rants and diminishing comments on recruiting community boards. Corporate HR are accused of being bumbling, bureaucratic idiots; Third-Party Recruiters (TPRs) are likened to stereotypical, sleazy used car dealers.

Throughout my career, I've had the opportunity to sits on both sides of the fence. I've been fortunate to meet my share of world-class practitioners on both sides. It seems that lots of TPR's HR players view each other as enemies. Here’s my take on some perspective on both sides of the fence.

The "HR Game" isn't so difficult to understand, if you can realize that the HR Perspective isn't about being ANTI-agency, it is about:

1) Vendor management - as an in-house corporate recruiter, I could have spent all day on the phone with agencies looking to do work with my F500 employer. To what value? Every call was about being a specialist in X, with the best candidate ever. What was always interesting was that when I started offering to review the candidate blindly, submissions rarely followed. Were the candidates real? Was the firm concerned about me 'stealing' a candidate? I'll never know, since I rarely heard a follow-up.

2) Vendor compliance - corporate purchasing and legal often sets criteria for the bonding, and financial stability of a firm with whom to do business, as well as reporting/invoicing compliance

Yes, purchasing does often create a requirement of total vendors, criteria (financial stability, bonding, etc) of vendors allowed. Typically, however, it is part of an overall corporate philosophy to deal with highly-engaged vendors versus a revolving door of contracts to execute and review.

3) Cost containment - yes, some Corps have a strategy to eliminate (very few actually accomplish this, however) third-party fees. More likely, is an initiative to REDUCE third-party fees - using third party firms in high-need, niche, hard-to-fill positions (let's face it - not every position needs external recruitment support if you have an in-house team).

And, a company is typically in business to make money (this shouldn’t be shocking). If you follow a Lean principle of business, that includes eliminating waste. It would be wasteful to spend money unnecessarily. Therefore, dollars are spent where needed. I wonder how many TPR agency/firm owners spend money without cause?

4) Implied-agency avoidance: I have worked for a number of corporations that out of good will, would pay placement fees if a manager accepted a resume submission from a Third party EVEN if unsolicited. The downside (as a corp recruiter) was that often the resume was accepted without having a search in place - then, when a search was executed we found that same candidate in our top database searches (internal and public)! We paid the search fee, but used it as a 'coaching opportunity' to show that hiring manager the value (ie., avoiding a 25 - 30% placement fee hitting their bottom line). Every time thereafter, all submissions the hiring manager received from a third-party was routed directly through Corp Recruiting/HR for consideration to be accepted.

5) Team-work and respect: I know of more than a few Third-Party firms that specialize in HR avoidance. Come on, we all know some of the major vendors actually train their franchisees and recruiters to do so, down to verbatim technique.

6) Reporting and process: much of the role of the recruiter is not only coaching their client towards business objectives, but also maintaining compliance with federal reporting requirements.

Think about this... if you start the process specifically AVOIDING a part of the interview team, do you really think that part of the team is going to embrace you in the future? I heard the quotes from Third-Parties via my hiring managers as a corporate recruiter of being ". Guess what? As a competitive person who had a background in TPR, I was steamed and made it my personal agenda to prove those firms wrong. Guess what, I did! I sourced that same candidates they did - first! After two backdoor submissions from the TPR to hiring manager, without fail, the Hiring Manager was then redirecting the TPR to deal with....me. The TPR had to have a compelling candidate for me to even bother with them at that point - the relatioship was TRANSACTIONAL and a low-value COMMODITY.

Now, flip the coin. As a Corporate Recruiter, when I found an agency that worked with me, wasn't slandering my reputation to the hiring manager, and making gross generalizations like owning an "exlusive database" - I identified searches to work with them on day one of recieving the req. They earned a premiere position in the search life-cycle, they knew about the position before I posted it externally. The didn't have to prospect for business with my team

Fast forward to my current role, as an external consultant to companies looking to develop their Internal Recruiting function. Who do you think I recommend to the high-growth, high need clients? The team players who approach the search as a broader relationship, or the transactional suppliers?

The bottom line is: there ARE operational efficiencies that a company can gain by limiting the number of agencies they contract; which works BOTH ways. I mean, after all, do you really want to work on a search that is out to 20+ firms?? Do you want to have access to the best work, or do you want to take the dart-board approach to business; sending a candidate out to see if it sticks.

When companies create a key provider list of recruiters, they can create partners in the search process who become intimate with the organization and highly vested, external advocates for their customer. Corporations gain improved efficiency in managing fewer resources that typically produce highly qualified, screened, prepared candidates and stay in the search till the end.

I know lots of third-party recruiters who have built a lifelong, highly profitable and successful business by being the (or one of a few) search consultant for an organization. They rarely prospect for business because they have built lasting, reciprocating relationships with a few key clients.

Top sales performers (and most world-class sales organizations) who generate sustainable, recurring revenue call this account penetration; and would also be able to tell you it is the most cost efficient sales technique they can implement. And, the world-class Third Party Recruiters know this to be true, too.