This is an industry that lagged for years and now is jumping all over Media, analytics and IoT. While it’s great too see this progression; we still need a platform that we can use for our needs and will benefit our clients in also. That is the Cloud. There are applications for anything you could want but until a few dominant players shake out, we will not see enough analyst/thought leadership that will define what is relevant for us. That is happening now but like every industry, it grows in sophistication through competition and profit. The second element, and I know someone will call me out on this, is that the technology we used in the diversified area of recruitment/staffing does not map to a client platform in most cases. You have the Bullhorns which are great and can work for staffing as well as in-house, but we have had nice products in Encore and Dillistone and others in search and our clients buy Taleo and Workday as well as numerous others.
Before we can truly apply excellence in technology we need to focus on learning systems and processes. Firms now spend, but use very little of what they buy. Full adoption of technology only comes when people understand why they have to use it. Install a new piece of software, people stare at it, install a new metric in processes of client work and they do it. The technology enables a process. Otherwise, it is just more cost. Standards of use/processes in firms need to be enforced and then the utilization of the advancements in learning/retention are at the core. They exist, but we haven’t been their big targets for obvious reasons.
- Security – The biggest area of pushback for years from long-term search practitioners. The argument was that what we do is so sensitive, you can’t risk the security in technology. How could you expose reports regarding search progress on a mobile platform? The answer is that what we do is no more sensitive than a lot of what our clients do. M2M, IoT, SaaS have kicked this argument to the curb. Think about compliance, governance, audit etc. The security argument is not valid anymore. At Boyden, I told people that I did not care if what they do is an Art or Science, what I care about is the 12% increase we need this year and how I can track it for adjustments. You do not bring a new technology idea into a board room of executives from 9 countries. You bring results, you show them the results. The data is science, maybe the approach is Art, who cares. But, I worry about provisioning. There is great technology in this area, but it’s only as good as the Project Manager setting the roadmap for the vendor.
- Platforms –– Depending on your size, specific application in the staffing food chain and interaction with clients (volume or a few executive searches), platforms will vary. At the basic level you have your network, Office 365 or whoever you use for collaboration, your “core” domain application Dillistone, Encore etc. and you can “stack” your new applications on top. There are many layers and options for security in the infrastructure. The platform needs to be first level SaaS in my opinion, it is the best way to quickly “onboard” new applications at the flick of a switch.
– Media is big, Media is big, but still a bit undefined and needs sophistication in it’s application. LinkedIn is the biggest example of media in our market. You hear firms say they do not rely on LinkedIn because they are not chasing “passive” candidates. I never knew that recruiters did not source candidates. Clients laugh at that marketing differential. The only caution I would give to clients and recruiters is the following; running an “ad” for an important hire listing your extensive hiring process and a long-list of necessary qualifications followed by a brief description of the company, is not going to yield optimal results. In addition, I had two instances of companies that were mistaken as recruitment firms by a client and a candidate because they ran non-stop ads for the same roles everyday on LinkedIn. I love the use of media in employment branding. That is a severely under-valued competitive weapon in all aspects of your business but it does not mean widespread exposure, it really is more of the opposite and very strategic.
- CRM, recruitment applications and reporting. - CRM, recruitment applications and reporting. There are numerous options depending on your specific focus. For clients, they have pretty good definition but analytics is still a challenge for some. I have seen glitches with major systems but laptops crash too. I have seen good data for large and small companies from Taleo and most other of the names commonly heard. I have seen more user issues than glitches which could be the result of training. In addition, there are so many partners selling and installing these systems, be careful who you buy from.
On the firm side, we have more problems. My biggest personal “bug” has been in finding an application that maps transparently to a client, has specific use for search (CRM, ATS, Reporting/analytics) and can produce data in a way that is appealing to a client, shows progress on an assignment or the opposite, data on why a search needs to be adjusted. If you show a client tangible data on a project that support an adjustment in comp, location, target population etc., make it intuitive, apply it to them and respect their time. It’s the same thing with working on internal research. I need the ability to access data on any project, on my cell in an airport and numbers on a spreadsheet do not help.
- Big Data – It came and it stayed and means different things to different people. The reality is that what we need to know is that we are exposed to a lot of data, research and technology but our role is to solve problems through impact candidates for our clients. I wouldn’t get too hung up on issues on “Stack Analytics”, vendors are cracking that code for you. What counts is your platform, the ability to layer new applications on the platform as technology becomes more valuable.
- IoT – Right now, IoT is exploding and similar to a lot of technology innovation, we need to remember that our vendors will sort out the use far before we do. Right now the strongest use is in mobile apps for us, connecting on a platform with security etc.
There is no doubt that the biggest advancements we have seen in technology are in media, cloud based applications, security, mobile, analytics for pragmatic internal use and client reporting. The technology exists. I think between 2016 and 2017, it will mean something more in the form of a business application for staffing.
The final caution I will give on technology for our industry is again, we were not early adopters. Now, we have tons of specialty vendors hitting all aspects of the market and we are discussing IoT, “real” Media applications and their application, scientific assessment techniques delivered by search consultants and advancements in automated screening techniques. All these advancements in technology and services has added cost to clients, it has resulted in clients missing critical hiring objectives and onboarding, retention, succession is not a static application so again, what is missing.
In dealing at the CHRO, CEO, CFO and board levels of these companies here and across seas I found the following;
- Staffing/search/staff augmentation is not a detailed conversation in the board room. The business issues these areas address are the topics.
- The fragmentation with large service firms between all the different divisions, partnerships and offerings is very apparent. The terminology in titles like “growth” instead of Business Development or Sales is not universally used anymore because the large services firms feel it cheapens their brand. But it confuses the clients. The reliance on vendor relations and pushing technology versus business solutions enabled by technology is another area spoken of all the time.
- Internal staffing as well as their vendors are at odds in many cases and it is counter productive. Respect and use each other to solve problems.
- We are looking down the barrel of a talent shortage, the amount of vendors and concentration on methods and processes of screening, testing, long drawn out interview processes is alarming and will continue to increase cost and the gap in your needs. Spend your time with a consultant on the impact of this issue and you will see why the term “engaged employee” is not rhetoric, it means people wants to work for you as a result of a positive experience with someone they know, turning down candidates by not calling them back is the norm today and a reason why people who are tremendously qualified will not talk to certain companies. - Staffing/search consultants need to keep in mind that we never had that great of a reputation to begin with with some people. Go out of your way to create a positive experience in your approach.
Technology/Media, IoT, Security
- Firms are finding it easier to drive technology as an advantage and a solution when in reality, we need to be concentrating on solving the puzzle of “predictive” needs in all levels of staffing, the costs associated with how we deliver the candidates and the processes used by clients to be a bit more focused on the importance of “attraction” versus “screening out” and finally the actual process itself of the “Last Mile” – get the people in the seats primed and motivated.
- These could include facilities expansion, new product introduction or a drive into new markets/geographies and they need to map a company's current infrastructure. This needs a level of security equal if not greater than staffing and cost efficiencies. I use John because he can simplify a technology solution to a business need, without bringing you into the “weeds” where you need to start analyzing all the vendors and impacts of media, SaaS, IoT, etc. I gave him a scenario of our market and process, he told me what I needed to know about the best way to deliver the solution. Our discussion started at the platform level and he walked me through how security is handled, examples of applications etc. "In today's strive for the best security it is helpful to note that there are numerous redundancies to secure information whether at the server, group or desktop level. Security software, custom applications or hardware TPM modules can be deployed or installed to safeguard information." . There is no reason at this point in technology development to be concerned about this type of security.
The Evolution of Staffing
- I started my career in staffing right after graduating college in the late 80’s and I really did not see a lot of changes in the industry for a good 10 years. There was a clear differential in staffing and executive search, you did not hear much about RPO’s and outside of a fax machine, smaller firms did not utilize technology. For larger firms, perhaps they were running terminals and email, perhaps Notes but since it was the Mainframe era, the desktop was just emerging. My perception of contingency search/staffing versus retained was that we were producing the same talent, did not get paid without situating a candidate so we worked harder and actually produced more than executive search because we had too. I found out differently when I joined the world of the larger executive search firms, especially when they started adding mid-market staffing and other solutions like interim management solutions. The processes and training were dramatically different between search and staffing. They had to be because you were dealing with multiple executives, quite often the projects were confidential and the research and process facilitation to align all these buyers at a firm is pretty difficult. In addition, a lot of the work began with intensive research before the client even wanted to launch the project. In addition, your role was to educate the client on the feasibility of finding a candidate for the role or adjusting the role or function. The knock on the length of the search process is that there is no sense of urgency. That’s not true at all, if you didn’t do excellent work at these firms, you were out. This process accrues a lot of cost and time to do correctly.
- Staffing had different challenges which were every bit as difficult. The competition between firms and candidates on the same projects, companies sourcing their own candidates and when you first are learning that business, it is often difficult to figure out if you were even dealing with a qualified buyer. Low salaries, turnover and the roller coaster emotions you experience in contingency staffing are why I will never agree that one is harder than the other. Staff Augmentation is the same. Outsourcing decisions are not purely based on lowering cost. Companies have infrastructures that evolve over time that work, they also adopt training methodologies and their own “brand”. Projects differ but decisions are related to a lot more than cost; they include quality decisions. Even if they need access to outsourced experts, you are no longer in the comfort zone of your culture and systems of management and training. I give credit to those that climbed the ladder to the top and actually stayed at that level. Similar to all types of staffing, firms do explode and die quick if not managed properly.
- Pricing – Regional pricing models have differed for a long time. Truly global firms know this because they have people who have lived and/or operated around the globe. There are also differences in the compensation level of project to some degree depending on the market you serve. Where you may do a CEO search in the US, you are hiring Country Managers quite often to report to the US. Again, same level of difficulty, but more pricing pressure from clients and the firms the consultants worked for. The pricing pressures blended methods and perception of recruitment across seas to some degree. I think it was very smart of certain firms to establish networks (some worked, many were purely marketing without value), and rotate consultants to other regions for cross-training. As I started refocusing my work during the past few years, I have advised clients that regardless of your geography, the more pressure you put on pricing with your vendor, the more the consultant needs to mitigate support, research and time so be careful how hard you push.
The first Big Change in My Opinion
- About 10 - 15 years back, a number of recruitment databases hit the market. You were also beginning to see more focus on internal staffing organizations. No one wanted to say that internal staffing had an effect on the outside vendors but it did. It still does today which is so counterproductive. The effect on your firm business by internal mechanisms really has to do with your practice and the amount of expertise needed for a particular assignment.
- LinkedIn was not the actual technology change, but it drove the value, brought media to the forefront and cleared up a lot of the confusion with all the research tools that were costly and cumbersome because it had most of what you need to launch a project and source candidates you either will not find on LinkedIn or do not respond.
- LinkedIn needs serious competition and the sooner, the better. They have become very expensive, especially in a market where you are seeing more and more sole practitioners. The confusion on their “packages” and the costs are going to be a larger factor going forward because firms will be putting more money into budgets for other applications hitting the market. Some firms state as a key marketing differential that they do not rely on candidates found on LinkedIn, they will recruit those candidates that are passive. I shake my head at that statement because I wouldn’t employ a recruiter who did not source candidates.
- RPO’s/staff augmentation firms became more visual in the late 90’s, early 2000 although they existed before that. The larger executive firms bought up some of the better boutiques to enter new markets. You also had huge multi-national Holding Companies buy up staffing firms, interim management, consulting etc. The best of them grew very large and like many consulting firms, they decentralize. It is still a tough market to track.
Where we are today
progress: Gender issues are very visible right now across most industries, especially professional services. Firms are paying a price for it in their brands and also their infrastructures. To me, they are sending confusing messages by going out of their way to point out accomplishments related to gender in return. That comes across as condescending in some cases. But, I do not blame the approach, they are living with these issues now. In addition, they are driving the point home that gender issues didn’t just hurt feelings, it hurt the businesses. There are a lot of reason for representation issues in the market, and there is also quite a bit of bad data. I read an article that women are paid 20% higher in certain functions than men. Yet, I hear the opposite every other day. Now, you have a “volume” problem in certain functions and industries. Conduct a CRO search for an East Coast enterprise software company. Does gender factor into the quality of the candidate? Not at all. But if your goal is to find equal numbers with the same qualifications, you are in for a long project.
-Consolidation of firms is not a prediction, it is happening and it helps define markets.
- Better technology to serve clients – – ATS, CRM, analytics for recruitment firms have improved. Advancements in Media may be the biggest impact we have seen in the industry. But, again, it needs more definition. The “definition” I speak of comes from larger firms to some degree, but the analysts will become more visible. We need that.
- Specialty vendors in assessment, comp/rewards, interviewing processes etc. There are way too many of them right now but again, consolidation will solve that issue.
- Identity problems. Right now, we need to focus on equal quality in in-house recruitment, staffing, search and staff augmentation. We also need clarity in consulting services that are relevant to clients in hiring, training, the use of technology for cost controls in these areas, measurement of team productivity etc. Does it exist? Yes, but again, until the market shakes out, there are just too many to actually research for clients. Who is our Oracle in the application of talent? Who will push those leaders to stay ahead of innovation like Workday?
- The biggest issue – – I call it “The Last Mile”. It’s a non-original term stolen from the darker days of Fiber Optics. What it means to me is the following: Talent solutions, leadership solutions, “Thought Leadership”, comp/rewards, assessment, technology, workforce planning and confusion in staffing really has zero value without the employees. Over $40B in spend on HCM/analytics, the largest services and advisory firms focused on technology and their partnerships in software which is just increasing in focus, yet the biggest issue is not being addressed. The last 6 years has been a blur of in-house staffing replacing recruitment, services, technology etc. yet; if you read data from SHRM, Fortune, Businessweek etc.; the amount of companies that missed in their necessary hiring goals has close to doubled and exceeded 50%. The numbers we see in overall operating costs at companies tied to the employee is staggering. The “Last Mile” means the following, companies need to plan 2-3 years out on hiring, the firms that know the candidate population by speaking to them daily have a responsibility to help clients plan the sources, costs and processes to drive actual numbers to drive an exact staffing plan, hiring processes, metrics on training on how to hire, how to make the perfect interview experience etc.
A lot of research on the changing workforce, more people spinning out on their own and the “skills” gap does not mean a thing to most companies. Fix your inbound employee processes, shorten up the interview cycle, balance selling with all the new vendors selling solutions to teach you how not to hire people and create a culture that begins with candidate follow-up, enthusiasm with people coming in for interviews, less focus on how creative you can be on screening people out and focus on having people want in, this will give you the fully engaged employee and solve you’re on-boarding issues. In addition, treat those that do not get an offer with a high degree of respect, maybe a hand written letter or advice; they become your best marketing for new employees down the line. Employment branding techniques, done well, will drive people to your door for the next 2-3 years, help you retain and cut your costs tremendously. The CEO of a major software vendor and a leader in HCM was commenting how he was surprised that his East Coast hub in the Boston area did not take off as hard as anticipated. I thought about how people asked me for introductions to the firm since my first year in the industry.
- Screening versus selling. The innovation on methodologies and tests and checks has surpassed the innovation on securing the candidates you need. Put in an exhaustive interview process, make it as impersonal as possible by zero follow-up after online applications and try to imagine their reaction when their networks ask about if they should look at a company. I picked a market, looked at the process before you actually speak to someone and the time involved with registering for an account, the application documents etc. I gave up when looking at what might be the leader in technology services during their process. Put the sales hat back on. Put metrics in place for speed in internal communication for hiring. What is an acceptable amount of time for follow-up? What is the penalty for not following up at all? How about checking unsolicited references with other clients on a candidate? That happens all the time. Tie management bonuses to these metrics. This additional spend and focus has had the opposite effect on costs and achieving hiring objectives.
What is coming:
2016 and 2017 will be the time for consolidation and weeding out of some cost in specialty services that are not fixing problems. 2017 and beyond = A few leaders emerge in the market to add to what is already there, pragmatic innovation results, more attention from analysts and industry experts also and the market confusion clears.
I See the Following:
- Solutions to address the complexity and cost of accurately measuring a 2-3 year or beyond plan with better accuracy in hiring numbers, sources, costs and effectiveness (agility) to “engage” potential employees during the hiring process, which will have the biggest impact on the inefficiencies and costs involved in training/onboarding and create an environment where the people that interview at your company will drive the future hiring.
- A fusion, of integrating all levels of hiring without the confusion of partnerships and independent divisions. Look at your client as being in need of a “fix” to a problem, or sees opportunistic expansion in the form of growth and globalization. Technology is not the answer in the corner office. The answers include the fusion of financial resources, compliancy, legal, necessary talent and advisory services. Technology enables, tracks, improves this high level business solution but it is not the question first asked.
- The ability to implement our solutions at equal quality in search, staffing, RPO, technology and advisory solutions. Major financial and technology service providers have been doing part of this for years but lack the actual staffing component and concentrate on the strategy and implementation of software and other solutions. This will mean two big shifts in thinking for companies; one is that all staffing related solutions are needed, and if your core is in one or two of these areas, you can not create the third. Acquire the expertise. Markets devalue other markets that they perceive as not as impotant to their solution when they are.
- The second and possibly more important core component is in the cross-training of Business Development executives. These individuals need training and credibility to be able to sit at the “C” and board level of a company, hear where the pain points or where opportunities are, help with competitive information or knowledge on trends and then be able to draw up a complete solution to address these areas. Examine the need and present the solution. All clients as well as the vendors will benefit greatly from this approach. Right now, large firms have BD execs in technology and talent as well as financial and legal etc.