Why Recruitment Firms Will Never Be Redundant…

The other day I heard a VP – HR of a large MNC Bank boast about the fact that they had put up an Internet ad and within a day they got 500 responses. He said that with this kind of a direct response, he seriously was wondering if Recruitment firms would be in business for long…

This got me thinking and the more I thought about it the more I realized the answer was not that simple. Recruitment firms were not mere postmen fetching and sourcing resumes they could easily be replaced by an alternate source or the employer’s team… They performed a job that had a huge value perception, not just for employers but also for candidates who could not be made redundant… here are the reasons why:

# Off course to begin with – as a direct rebut to our friend, the VP – HR of the MNC Bank, I would ask his team (since he obviously and hopefully would not have the time) to check how many of the 500 resumes were relevant to their job specs or the company… our experience shows that resumes relevant to the role itself would be a minuscule percentage of the total applications, and once you check with these candidates on interest and fitment on a whole range of issues, you might not end up with anyone.

# Also, seriously – how many of you have taken a call from a company's HR department, made directly to you, pitching for a job with them… If you do, your immediate perception may be that the company is too small, the positions too junior or the company is not very professional! Apart from these factors, if your current company gets to know that a competitor has been targeting or poaching its employees directly, you can just imagine the consequences… Need I say more? In such situations, a “Recruitment Firm” with a basket of potential firms and opportunities for a candidate is least threatening.

# One frequently comes across candidates who decline to join a particular firm for a reason and this candidate may share the reason with a “Recruitment Consultant”, who in turn can give the feedback to the firm… but in case the company was directly calling, you pretty much close the doors on such genuine feedback.

# Candidates also share information freely with a consultant as they look up to them for advice. Consultants have a macro picture of the employment market and the industry and also have multiple options for a candidate not just within the same industry but also across industries. The company's own hiring team would have limited awareness of potential opportunities for a candidate except within their own firm. Hence a candidate has a frank and free discussion with a consultant in a recruitment firm. Candidates share details that in the normal course they would not share with a company simply because the candidate tends to feel that it may go against their candidature. For example, genuine reasons for leaving a job, information on actual salary status vis a vis appraisals, etc are information that is carefully avoided by potential employers. All information is measured and disclosed keeping the sentiments and expectations of the potential employer.

# Also, when the time comes after the interview process for salary discussions, there are frequent chances of a breakdown in communication where both the company and the candidate may feel that their first move would be interpreted as a sign of giving up and they may be short-changed. In such scenarios, a consultant ensures that he hears both sides, conveys unbiased views to both sides and helps them come to a mutually beneficial win-win decision.

# I would also recommend a third-party “Recruitment firm” to be the preferred hiring source to get independent candidates for a Corporate especially vis a vis in-house employee referrals if hiring is happening for critical/senior/large number of positions. The reason being, I have personally seen such referrals create pockets of influence for people who refer them especially when the referee also has a direct or indirect say in the hiring decision. The reasons for getting such people on board tend to be political and hence not in the interest of the company. This could be extremely harmful for the company in the long run.

# Of course in today’s day and age, where companies focus on core competencies, it’s essential to outsource non-core activities like recruitment. Not only is a recruitment firm an expert due to a larger experience in the field, but they have typically exposure to multi-industry best practices in hiring apart from access to multiple sources of hiring which may not be possible for a company to replicate.

# Lastly, a line function is run more efficiently and effectively than a staff function. Recruitment is the bread and butter for “Recruitment Firms” hence this ensures efficiencies, whereas a corporate recruitment role is non-revenue generating and hence lacks the company-wide focus to make it as efficient as an external agency. Moreover, if a corporate recruitment team does not deliver, you cannot really sack the whole team, whereas another agency can easily replace a recruitment firm not performing up to the desired standards. Finally, as with all outsourced functions, you pay for a hiring agency only when you need people to hire while your in-house team will have to sit on the bench or will have to be retrenched the day the company stops hiring.

Hence all “Recruitment Firms” can be rest assured that most professional employers will continue to use their services for times to come…

(First Published in Jobnet Magazine in Sep 2010)