What’s so special about adding talent to your business?
Recruiting is simply a transaction, isn’t it? How complicated can it be?
– Businesses negotiate to buy products and services all the time.
– The internet has automated the transaction process to a couple of key strokes and in some situations, orders are delivered the same day.
– Recruiting is a easy as a job posting with a few keywords and presto, you have great candidates. Right?
– Shouldn’t this level of hiring automation be celebrated?
What makes recruiting a non-transactional event?
Of course, hiring is not simply a transaction. Adding the right talent to your business can deliver significant on-going value. It is all about the right “fit” which is where everything gets complex. This is the point.
Regardless of how complex or how complicated your product or service are, there is nothing more complicated or complex than the people who work in your business and the people who you want to work in your business.
Recruiting is the very first step in what could become an employment relationship? Why would any employer want to approach it as simply a transaction?
If we can agree that human beings are very complex, can we also agree that humans are the only part of a business who possess emotions? What other part of your business has emotions? Human emotions make this a game changer, where the traditional transaction does not work.
Can we also agree that hiring the right talent involves multiple “fit” factors, including meeting the technical requirements as well as meeting the cultural fit of the employer.
Where does today’s recruiting fee model get it wrong?
The total fee for almost all of the recruiting models today is based on a percentage of the compensation earned by the newly hired candidate. You could also refer to the fee as a commission. Therefore, the higher the first year compensation earned by the newly hired candidate, the more money the recruiter earns.
As for a typical business transaction, this makes perfect sense. For example, when a product or a service are sold for a higher amount, the sales person stands to make more in commissions which motivates the sales person to make the sale for the highest possible amount. As it relates to recruiting, ask yourself if the most expensive talent is always the best hire? Of course not. It is about the right fit being the best hire.
While there are multiple fee structures within recruiting, the most common fee structure is called “contingent”. This means that the recruiter is only paid a commission fee when the candidate they submitted is hired. The contingent recruiter is frequently called a Head Hunter. Could there be a more classic example of a transaction then the head hunter recruiting model?
With respect to the talent being recruited, the contingency fee model turns the candidate into a commodity. How many talented professionals want to be regarded as a piece of meat or a commodity? What many business leaders fail to see is how poorly the qualified candidates are treated and how poorly this treatment reflects on the business. Why would a candidate be treated in any other way than a commodity if the recruiting model is a transaction model.
The contingency model fails on two major levels:
– It fails to serve the employer who wants to hire the best fit, when the contingency model rewards the recruiter for hiring the most expensive.
– It also fails to serve the candidate who is pursuing a human interaction/employment discussion but is positioned to be nothing more than a commodity in a classic transaction.
Is there another way?
The first step is recognizing that recruiting and hiring humans can’t be approached as a transaction. A change to today’s broken hiring efforts is needed. Recruiting should be a process and a deliberate departure from a transaction.
An example of a process approach might include:
– Develop a recruiting fee structure that does not have a commission aspect.
– Clearly define the business challenge that newly hired talent would need to solve.
– Implement an interactive process with qualified candidates that measures for technical and cultural fit.
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