Smart hiring and all things recruitment

Actually there are several. Here are some common gripes:

Tons of functionality you never use (but pay for):

Why can’t companies just pay for what they want to use and nothing else? Why not offer a modular approach so the employer can pick and choose what functionality they want rather than being forced to use a system with a ton of features they never touch.

Candidate login:

Why do ATSs insist on making candidates register before they can apply? Why oh why? Someone explain this to me. Why can’t you just let the candidate upload their cv without forcing them to create an account. Candidate’s hate it. It’s just 1 more hoop they have to jump through and all you do is scare them off because they simply can’t be bothered to keep registering with different systems each time they apply for a job. Applying for a job is something none of us want to do and would rather spend the absolute minimum amount of time on so think about what the candidate wants……..a user friendly, fast, hassle free application process.

You need loads of training before you can beginning using it:

Our rule is…..if you need to be shown how to use it…..it’s been badly designed. Let’s be honest here, we’re not working with software that’s keeping a satellite in space or landing a man on the moon, an ATS is an electronic filing cabinet with a few neat tricks so why do they need to be so utterly complicated. I don’t want 2 days of training (at $2,000 a day), I just want to be able to login and use it. Do you need training to use ebay or Google? Thought not. So why can’t your ATS be intuitive……work how your brain works, not ‘flow’ how some Developer (who doesn’t understand recruitment) works.

Customer service…….that would be a nice idea:

Some are good, but most are not. Don’t think anything else needs to be said. 

Our ATS can’t be bespoked cost effectively and quickly:

Ever tried to get your ATS provider to make even the smallest change for you? You know….tweak it a bit so it matches how you want to work? Well it’s a bit like pulling teeth. ‘No we can’t do that’ or ‘yeah we can do it but not for 18 months and it will cost you a zillion dollars’.

Ok, no one expects things done for free but we already pay a fortune for it so can’t we just agree a reasonable rate for a small tweak here and there. Stop trying to exploit the fact we’re under contract with you and do we really have to wait until 2014 before you can start work on it?

They cost a packet:

Depending on usage your ATS can cost you tens of thousands of dollars a year but in the interest of balance there are a few which cost under a $100 dollars a month which is more reasonable.

But relatively cheap or not, there’s something wrong here: 

You’re still having to pay for it.

Why?

So much of the online software market now is moving to a free model and already the ATS market has a number of companies offering a very easy to use, functionally rich and 100% free version of their products.

Don’t believe me?

Try www.ikrut.com and then kick yourself for signing that 3 year deal with your current ATS provider.

Now the major ATS providers (who are in a bit of a panic about these free suppliers) will tell you that ‘you get what you pay for’. Oh really? Well have a look at www.ikrut.com and make your own mind up.

I sent the email below out with tongue firmly in cheek to a handful of current clients to forward on to potential new users and got just 1 new response. Read the email I sent and then the 1 response below it:




the email………

iKrut is a completely free online recruitment application which helps speed up how quickly you hire people by dramatically reducing the amount of work you have to do. Quite simply it’s brilliant but in the unlikely event you don’t choose to use it there can only be 6 possible reasons why not:


1. You’ve already got a system in place and don’t dare rock the boat and say what everyone else is thinking……..

            ”Why are we paying for this expensive xxxx when we could get a better system for free?”


2. It was you who signed off the purchase of your existing and annually very expensive system and now you don’t want to introduce a better (and free) one because it would make you look like a grade A muppet for not doing this in the first place.

3. You get dozens of people trying to sell you things every day and, assuming it’s another one of those naff products or services that you don’t need, you neglect your job by not even bothering to look at how iKrut really could help you (it will but if you don’t look at it you’ll never know).

4. You’re not very bright and don’t really get what iKrut is or what it will do for you.

5. You’re a cynical old so and so and don’t believe that it could actually be free (it is).

6. You don’t think you could cope with learning how to use it as you live in the technological stone age, pine for filing cabinets and have:


        “successfully send 1 email this year”


as the only objective on your last appraisal.





www.ikrut.com

Recruitment just got free. 

So I sent it out and got this hilarious response:

You forgot number 7:

You don’t care as you’re being made redundant


Oops. Possibly bad timing.

n.

I used to work for a recruitment agency. A good one at that. One that tried hard to recruit good consultants, who, on the whole, tried hard to do a good job finding the right people for their clients. But I always had the feeling that I was nothing more than a middle man. I didn’t really add much value other than to do the donkey work the client could have done themselves if they had access to our database. My job was really a glorified cv sifter, searching through tons and tons of candidate profiles to find a good one to match to the job. Forget all the tosh of adding value by matching candidates to the right culture of the company or the speel about forensic screening of the candidate to ensure they’ve got the exact skill set requested by the client. The real value of all recruitment agencies is the database of cvs they have. A company will use an agency because it knows they’re likely to have relevant candidates tucked away somewhere on that precious database and more often than not these days, the agency is the option of last resort. Let’s face it, recruitment agencies have been a bit like funeral directors: you just know that at some stage you’re going to need one but you’d rather not. Well that’s been universally true in years gone by: almost all companies at some stage were likely to have to turn to an agency for some type of hire but is it true any more? I mean, do you really need them and do they have a future?

The reason agencies have survived for so long is not because they added huge amounts of value to the hiring process but there was a total lack of cost effective alternatives available to the client. Take for example a company that 15 years ago wanted to hire a Sales Manager on £30k. They basically had 2 options:

1. Advertise - risky, lots of responses = lots of work, all the money paid upfront and typically quite a lot.

2. Agency - usually a bit more expensive than advertising but they do the filtering, no hire = no fee. Probably a £5k fee.


So which did companies tend to choose? The agency route most of the time. The risk free proposition was usually the deciding factor. Who could refuse a no hire / no fee proposition.


So what’s changed? Well it’s one magic word: the internet. Actually that’s 2 words but you get the gist.

When job boards first started to appear in the late 1990s recruitment agencies got nervous. Very nervous. They didn’t know whether they were going to be a friend or a foe. As it turned out they have really been a friend (at least initially). Yes they tempted away some clients who preferred to try their luck (and no doubt some succeeded) by advertising for £50 rather than the £5k fee at an agency but……and it’s a big but, agencies suddenly had access to an incredibly cheap source of candidates. No need for vastly expensive trade magazine advertising just make up a load of iffy jobs and place them on multiple job boards, collate the cvs into the cv database so that when a real job gets sent to them….voila: ‘We have the perfect candidate’…. and the cost of sourcing was only a few quid per candidate. Alternatively it might actually be a real job the agency is working on but (without the client’s permission) it’s then advertised as….’Our client is….’  on a job board with suitable cvs simply mailed to the client. The expression money for old rope springs to mind. Agency profits can at least be maintained under that model with such a low cost base.

So if all the big agency guns are still around and still making money (albeit without much growth over the last 10 years) why hasn’t the emergence of job boards hit agencies much harder? Many predicted this was the game changer all the clients had long hoped for. No more having to spend a fortune on agencies as at last there was a cheaper way to source your talent. Well the reason is that using a single job board in isolation just isn’t very effective for the vast majority of users. It wasn’t very effective 10 years ago and it still isn’t very effective. Why? Well firstly there are now too many job boards. The available pool of active job seekers is spread too thinly and employer jobs are simply not being spotted by such a diverse audience as they look on other job boards where the perfect job may not be listed. Secondly job boards are often saturated with too many jobs making the ones posted by direct employers difficult to find. Thirdly, at best job boards really only attract the very active job seeker not the vast majority who are gainfully employed and not proactively looking. From our own calculations, using 1 job board in isolation now has about a 10% success rate across the spectrum of roles a company might have. The figure is likely to be larger, the more well known the company is and vice versa.

So given that agencies were clearly making money before the recession and are still making money now it’s surely an open and shut case that agencies will always be with us. Well perhaps but now (as opposed to just 5 years ago) there are many different business models emerging that are more efficient than the traditional recruitment agency approach
and they might just make life very difficult for the average agency.

If you think about how an agency/client relationship works you realise just how inefficient it is as a business model. The client sends the consultant a job and the consultant must then go away and search their database for candidates, typically stopping to ask for referrals from candidates on the way. They phone dozens of candidates with only a few going to be interested and then proceed to arrange all the interviews and offers themselves……and to cap it all off probably 80% of the jobs they work on they don’t fill and thus earn no fee for. Now that’s a very time consuming process, invariably done by hand that often results in no payment. Is it any wonder they have to charge so much?

Prior to the internet, agencies held a virtual monopoly in recruitment because there was no meaningful way for an employer and potential employee to be made aware of each other’s situation (1 looking for a job, the other looking to hire them) without spending significant sums of money up front. But now there are ways, and worryingly for agencies, there are lots of them. So let’s look at 5 new things that are likely to cause the agencies a few problems.


Applicant tracking systems:

One of the reasons that a direct employer used an agency was because advertising could be a headache with the sheer volume of cvs that were submitted (often in the post) causing an administrative nightmare. Each one had to be logged somewhere, acknowledged, sent to the line manager etc etc. Now an Applicant Tracking System can do that all for you.

10 years ago they barely existed. 5 years ago they were the preserve of only the biggest companies but now any employer can use an applicant tracking system and not have to pay a penny for it.  Yup……completely free (but not many people know about that).

So why is an ATS bad news for an agency? Well 4 reasons, firstly it’s now possible for an employer to list their current vacancies on a careers portal powered by the ATS and update it instantly. The result: direct hires. The candidate can simply visit the employers website, open up the careers section and apply direct. Secondly, potential candidates can register for job alerts and get vacancies emailed out the instant the employer starts to recruit. The result: direct hires. Thirdly, it’s a doddle for the employer to save cvs submitted to previous jobs who might be suitable for future vacancies building the talent banks that were the agencies usp. A quick search of their own talent bank/cv database and they can find matching candidates or ask for referrals. The result again…….direct hires. Finally, if they did want to advertise roles why do you now need an agency to do all the donkey work sifting and handling cvs? You don’t. The ATS will do it for you……….and for free.

Previously there was no way for a direct employer to do any of this much to the relief of the agencies. But not any more. Nestle managed to reduce their dependence on agencies between 2001 - 2006 from 80% of hires to jut 29% and this during a period of candidate shortages. I wouldn’t mind betting it’s even lower now.

‘Ah yes’

I hear you say,

‘but Nestle and other major corporates have a huge brand awareness with candidates actively coming to their site. An advantage that SMEs don’t have so agencies will still be needed by SMEs.’

Well, maybe but I’m not so sure. So let’s look at what else is out there to help SMEs get their hires direct.


Social media

Everyone keeps talking about it, but the internet now makes it easy to connect with people and crucially get your vacancies published. You can get vacancies onto blogs, Twitter, Linkedin, Facebook, Google + and not have to spend a penny. Have a look at this e-book on recruiting for more ideas on how to do it. Once again, whereas previously an employer could only really use an agency to fill that £30k Sales Manager role, now they can get it published on multiple websites for nothing as well as proactively finding the right people who’ve put their profile out there on the internet via searches on Linkedin, Twitter and Facebook. All of this keeps chipping away at what used to be safe agency territory.

In addition the job seeker, once so reliant on an agency finding them the job, can search their own contacts on Linkedin or use tools like Branchout to connect to employers via their own friends on Facebook.


Job boards, free job boards and cv databases

When you think about it, a recruitment agency is really just a cv database searched on your behalf by a recruitment consultant. Before the internet there was no real way for the average company to be able to access a pool of job applicants - both active and passive. Now there is. Just about every job board now offers companies direct access to literally millions of cvs via their own database. The search mechanisms are pretty good and whilst it’s true to say that there is often a lot of dross on them, there are definitely some real nuggets to be found particularly if you’re prepared to look at candidates who logged a cv quite a while ago. This is worrying for recruitment agencies because whereas previously agencies could genuinely lay claim to being able to provide access to both passive and active candidates and job boards could only really attract active candidates (hence low success rates), now the employer can attract active candidates via an advert on a job board and search for less active job seekers via the job board’s cv database again lessening the need for turning to an agency.  So why would you pay £5k for that Sales Manager when more than likely the very same cv is sitting on a job board’s cv database somewhere which you can pick up for a lot less than £5k.

Pricing remains an issue with too many job boards making it very hard for the SME market to afford it but that will surely change as ‘pay for a day’s access’ becomes more standard. In the future more and more companies will be able to afford to get access to these huge repositories of cvs and inevitably more and more jobs will be filled directly.

Job boards were meant to kill off agencies but that hasn’t happened…..doesn’t mean it can’t happen though. An improved user experience, more realistic pricing via an increasing deployment of a cost per hire model, better understanding of how to attract candidates, all of this will mean they will only get cheaper and better at helping employers fill their jobs. Don’t forget the ever growing list of free job boards out there as well. We’ve given a few examples in this e-book but a quick Google search will bring up plenty. Why pay an agency when you can find someone for free? Sure, free job boards will never fill every vacancy and you’d be very lucky if you make more than a handful of hires from them but that could still be quite a bit of money saved in agency fees.

Before the recession, not everyone had easy access to the internet. Even now not everyone has a computer at home but year on year the availability of cheap and easy access the internet is increasing. Be it phone, tablet or computer the web is everywhere. Within 10 years all TVs will offer 1 click access to the web so when a TV advert appears promoting say Jobsite or Totaljobs, as they are doing now, a couple of clicks and you’ll be through to the job board without having to leave the comfort of your armchair where jobs can be applied for during the TV advert break crucially tapping into the curious but not necessarily active job seeking market. This internet ubiquity means more people viewing direct employer jobs on job boards, more people posting profiles to Linkedin and cvs onto cv databases, searching employers’ careers sites directly, picking up links to jobs via social media references…………all of this is getting easier and easier to do each year and will surely increase the number of direct hires made.


Job search engines

The likes of Indeed and Simply Hired and other job search engines have developed an interesting niche. Essentially you can post your jobs onto them free of charge and candidates can search and apply. If you want to make your jobs more visible, just sponsor certain key words such as ‘Sales Manager’ and more job seekers will see it. They work on the same principle as Google. So if you don’t hire someone for free you could hire someone for just a few $$$$ and then stop the advert as soon as you’ve found someone.

At present very few SMEs synchronise their career pages to these sites which is a shame as they’re potentially missing out on free candidates. Over time, this process will become the norm where almost all companies send their jobs to these search engines free of charge the moment they are added to their own corporate careers page. Once again slowly chipping away at the need to use an agency.


New recruitment agency models:

We work with companies in a manner not radically different to the traditional agency except we took the innovative step of flipping the price structure so we get paid upfront but typically charge much, much less….. about a tenth of what a standard agency fee would be. Because the client pays upfront they work with us exclusively and trust us to put all our efforts into filling that job for them and 70% of the time we do fill it. Yes there’s a bit of an upfront cost but isn’t a few hundred £££s very good value if you’re likely to fill 70% of your vacancies when the alternative is a £5,000 agency fee?


Other models have developed such as the so called fixed fee recruiters who guarantee to post your vacancy for you onto multiple job boards. True, the adverts don’t exactly look great because they rarely mention the client name but for a fee of £500 - £600, getting it posted onto all the big generalist boards does increases your chances of filling the job as opposed to just using 1. So suddenly using multiple job boards is an attractive proposition as well as financially viable.

None of these 5 new approaches will in themselves, be the killer app that puts agencies out of business. But each one just chips away that little bit more at the pie the agencies used to feed on. The combination of all 5 factors means that fewer and fewer jobs will need to be sent to agencies and with a shrinking pool to drink from………..a lot of agencies could die of thirst. (1 too many dodgy mixed metaphors there).



I’ve painted a pretty depressing picture for the future of recruitment agencies. Unquestionably the number of employer jobs that need agency assistance will continue to go down but will agencies one day disappear?

In a word: no…….but (and it’s an elephant in the room sized but), the days of easy placements, fat fees and big bonuses are long gone.

It’s clear that in 2007, the last year of economic growth prior to the downturn, despite nearly 10 years of job boards, recruitment agencies were very busy indeed. A cursory glance at the accounts of any floated agency in that year (and preceding ones) will demonstrate that. It is obvious that in times of economic boom, the so called war for talent and competition for the best people means that almost all companies are going to need to use agencies to varying degrees to fill some jobs. Only agencies are likely to be able to do the unpaid (i.e. non retained) headhunting that is required to identify, tempt and then place a candidate who wasn’t actively looking  though it seems highly unlikely the industry will ever return to the buoyant times of just 4 years ago where agencies had more jobs than candidates. In the future agency usage will closely correlate to the size of the company. The bigger and more well known the employer the more likely it will be that they can source candidates directly for the 5 reasons stated above and the fact that they will have the resources needed to do what recruitment agencies do i.e. search cv databases, Linkedin, Facebook etc as they develop their own in house agency function. Agencies will typically have to make do with working the SME market as they mainly do now. But in times of economic hardship (now) agency usage will drop to the point where many will go out of business with the pool of available candidates large enough to allow almost all employers, of whatever size, to hire without recourse to the traditional agency.

So here’s what’s likely to happen in the next 10 years:


1. The large, well known direct employer brands (see Nesle example above and also Panasonic) will recruit almost exclusively without using traditional no hire = no fee agencies.

2. Even in prosperous times, there will be far fewer direct employer jobs available than say 4 years ago meaning that the agencies will have to fight it out almost exclusively in the SME market.

3. Margins via lower fees will be cut. Expect agencies to have to work at 5 - 10%, not 15 - 20% as they used to do.

4. As average placement fees drop, bonuses will be harder to come by making it far less attractive to talented consultants to stay in the industry.

5. Agencies will diversify away from purely cv senders to adjust their service offering.

If you look at what some agencies are beginning to do you realise that they’re starting to see the trend as well. It’s adapt or (possibly) die and not just for those servicing the public sector. They must surely adapt to move away from merely senders of cvs which direct employers are often now able to access themselves (for much less or nothing at all) and move towards providing services that the client might struggle to do themselves. The agency of the future will likely earn little if anything from placing people and may use it as a loss leader to get into companies to sell in higher margin work with some morphing into a wider HR consulting firm providing payroll for temps (and not even necessarily supplying the candidates, just the payroll administration). Like Hays they might also move towards supplying redundancy and retraining services for companies laying people off as well. But the most obvious area for them to move towards will be a kind of dedicated RPO service. With companies increasingly streamlining headcount as much as possible and outsourcing non core activities like payroll, IT and facilities management, increasingly recruitment will be outsourced even for the smallest of companies. More and more RPO vendors will appear, typically developed from within the larger agencies. Instead of offering the traditional pay per hire model the agency will work exclusively for the employer trying to source candidates from anywhere, effectively operating on a retainer basis and like a typical RPO agreement, the more ‘direct hires’ they can make the more they’ll earn.

In 10 years time the traditional recruitment agency as we know it now will still exist but will be smaller in size than the average agency now and typically the consultants will be much more niche focusing on the employment black spots that direct employers find hard to fill but with fees coming in at less than 10% it’s questionable if many of the agencies of today will still be operating in 2021.

We’re delighted to announce the launch of a new feature in iKrut which allows a potential job applicant and employer to communicate with each other prior to applying.

There are always really great candidates who may not be actively looking for a role but are put off applying because they want more information on the role and there’s no one to ask. Not anymore.

Now with iKrut’s confidential communication tool, the potential candidate and employer can contact each other with either side revealing either their name or email address. Click on the link below for full details.

https://docs.google.com/document/d/1Z9eRVhatAPV2B_1DP8CdCMZWsgDA4lvpaG2zkSbjxpg/edit?hl=en_GB

I was thinking recently about how many barriers there are to jobseekers  and employers talking directly. Recruitment agencies who charge big fees, job boards who also charge big fees for advertising or searching a cv database as well as the myriad of places a jobseeker can go to find a job……..which often means they will miss at least a certain proportion of jobs advertised because they are not looking where these jobs are being advertised.

But what if there was a website which became the world’s online employment market place. Free to post jobs and free to view candidate profiles, a place where employers and jobseekers can meet without the barrier of fees getting in the way. No catches or gimmicks…..it’s just free. It’s not about making money, it’s about creating a site to help everyone who wants a job to find a job . A sort of facebook for jobs where people and employers can connect. Does any one know of any kind of not for profit online employment meeting place that does this?  It would cost very little to run as it’s just server space and would essentially be text adverts from jobseekers and employers.

We’re delighted to announce the launch of our new e-book written on recruitment. It’s called:

The 21 tips and tricks they don’t teach you at Harvard Business School about recruiting

It’s completely free and anyone can download it with 1 click from our website. Just visit www.zodo.co.uk and click on the link.

It’s packed full of all the best tips we know of about writing job specs, using job boards and of course the elephant in the room………..using social media in recruitment. Whether you’re an expert of just an occasional recruiter, we think there’s something in here to help everyone.

We’d love to hear any feedback from you. Enjoy.

There’s a lot of hype about the 3 giants of social media: Twitter, Facebook and LinkedIn. Many have hyped it as the future…..job boards are dead etc etc. Unsurprisingly many of those voices have a major vested interest as they typically run companies that just so happen to advise on how social media has to be the central platform of every company’s hiring programme and can generally cure all the world’s ills.

Now don’t get me wrong, using the ‘big 3’ is definitely a good idea but it needs to be done right. Simply synching your ATS or corporate site to post jobs onto a Facebook, Twitter or Linkedin company page won’t do very much for you. Think about it, just because your Linkedin page has all your jobs on it means nothing. You might as well post them to any old random page on the internet and the chances of the candidate actually finding them is just as high. Unless you’re a major corporate with a big brand name, it’s frankly unlikely that job seekers will find your jobs on them. Don’t believe me? Type a job title into Twitter and see what comes up………. loads and loads and loads of jobs and given the limited ability to refine the list, the likelihood is not great that a perfect match will see your job. Now try the same thing on Facebook. Almost the exact opposite happens. There are far fewer jobs and the reason is because to get any real chance of being noticed, an employer would need to actually produce a Facebook page entitled…..’Web Developer - London wanted’ or whatever the relevant details are. Because of the perceived time involved you can see how few employers actually do this. They may well list them on their company pages which is great if the jobseeker is already linked to that page but practically useless if they aren’t as they just can’t find the page. For the moment, it would appear that Facebook doesn’t keyword search within company pages and that means any jobs you list……..won’t and almost cannot be found. So should we write them off as a source of candidates? No, not at all but don’t expect to be able to post jobs onto them and suddenly generate vast quantities of suitable candidates. That simply won’t happen. You’ve got to be a bit more proactive, do some work and possibly even spend a little money. Download our free new e-book:

The 21 tips and tricks they don’t teach you at Harvard Business school about recruiting.

It will give you some great ideas about how to properly exploit social media as a tool for finding new staff. Yes it’s free, so we’re not trying to get money out of you ! Our e-book will be available to download with 1 click from the front page of our website from Thursday 26th May.

Oh, ok so you can’t wait that long and you want 1 little gem…..try www.followerwonk.com. Type in the job title of a role you’re trying to fill and rough location and see who you can find. It searches Twitter for people who match up.

#recruitment #recruiting #social media

http://www.killerstartups.com/Web-App-Tools/ikrut-com-a-system-for-online-recruitment#ixzz1MW6ZJqqg

http://www.ilovefreesoftware.com/27/webware/free-online-applicant-tracking-system-ikrut.html

http://www.killerstartups.com/Web-App-Tools/ikrut-com-a-system-for-online-recruitment

http://www.techclump.com/hiring-and-applicant-tracking-tools/