Most technology-related jobs are in that category, requiring constant upkeep to be in business in a few years.

posted September 15, 2007

There are many changes about to happen (hey but change is the only constant I hear you say) in the global and local arena. Integrity in all areas is going to become essential as the 'old order is rapidly fading' (all credit to Bob Dylan for saying it so clearly all those years ago). Mean while recruitment is being increasingly handled electronically with pre-screening and competency based process being automated. Very much of the high tech world is already involved in this and as the focus becomes more Global and skills transferable between cultures this automation will supplement our more 'relationship' based activities of the past. Social and professional networking systems will play a bigger part in the process. I think that fees will continue to go up because as ever the 'Too hard' placements will continue to require very creative individuals to grow networks and develop novel ways to locate and attract the perfect candidates for organizations.

Links:

• http://www.zubka.com

posted September 15, 2007

There seems to be two factors which would affect recruiting fees. The first is of course basic supply and demand. From this, the prediction should be about how the market will fluctuate and to what degree this will have an affect on fees. A recession with a freeze on hiring would have an obvious affect. The other factor is the trending is hiring practices. Which is mentioned to some degree here in this quote. What is not mentioned is more of a meta-trend. That is, if the belief in what makes a good hire changes, then so will the practices. As a general example, consider that for some reason we return to the company man idea of the 1950s, in this case the recruiting structure of today would make no sense. I'm not saying this is what will happen, but hopefully this shows how larger trends can completely change the landscape. Most likely a new meta-trend will swing in within the next 10 to 20 years. In the short term, I expect a freeze based on the inability of many companies to take on new hires due to a long overdue recession. Following the freeze, we may be about to enter into a new meta-trend, which also seems overdue since the current trend of head hunting is almost 20 years old. As such, fees in the current market may not recover after the recession due to a shift in the hiring paradigm. To see where hiring practices will go, keep on eye on which companies implode over the next few years. People will expect that their business practices are inferior and to be avoided. I might suggest looking at some of the corporations which are already in the process of imploding such as Countrywide since most likely, it will be a considered model to avoid.

posted September 15, 2007

Interestingly I shared a beer with an MD from a hedge fund last week who talked about his fund's average 13% return each month over the last 15 months - even when firms were returning 15-18% he was at 13%. And this summer when firms fought for 1-2% or even just to stay in business, his firm continued on at 13%.

Value is rewarded in bull and bear markets. And if we stay loyal to what we know to be sound business practice and we offer actual value that equals the perceived value then we should see our fees remain the same.

For those "Bud Fox-style" recruiters who may want to cut corners, or oversell or loot customers just because they can, I think they will see many of their fees disappear with great speed... and it is likely to occur before too long.

posted September 16, 2007

The thing I notice about the recruitment business is that it lends itself very well to a 'niche' strategy. The most successful recruiters I've met seem to have followed an approach of becoming THE person to go to in a very narrow sector consisting of a couple of dozen companies, dominating it completely and dictating their fees as a result. It doesn't matter what happens in the broader market, good service always commands a premium.

In terms of bigger trends, I think the larger recruitment co's are going to have a rude awakening when technological screening comes of age. We are now very close to the point where automated screening of masses of candidates becomes a practical reality. This technology will first affect mass recruitment, with the advent of on-line services that combine the function of an automated job board with that of a competent recruiter at a cut price.

Even when this happens it'll have a relatively small impact on executive search however, where industry knowledge and 'who you know' is going to continue to be decisive.

Janos

posted September 16, 2007

Great question Maureen. I dont believe there will be any fee generators going the way of the dinosaur but if I had to hazard an opinion I believe there will be more of an affect in the contingent arena in the future. Percentages over the last decade have shown a steady decline and the market has become so oversaturated with firms that the natural competition is driving actual fees earned down siginificantly. I think the market is shifting towards a more data hungry focus. What a hiring manager can do with data and off shore or in house sourcing is much more powerful at this point than one filled open rec. Also, there is a danger in not having the data that your competitor does. I dont believe contigency fees will every completely vanish but if trends continue they will have less of an affect and take up less of a companies annual recruitment budget.

posted September 19, 2007

Maureen,

There will always be those firms that add value to their clients by being able to use a consultative approach in terms of market trends, compensation, onboarding, and other areas of staffing. Additionally, those firms that can supply all of the information about a particular candidate in order for a hiring manager to make the right decision will always be of value.

I believe that the days of contingency search are nearing the end because of social networks like LinkedIn, which allows a hiring manager/corporate recruiter the opportunity to reach out to candidates directly.

Configured correctly, a corporate staffing area can deliver all of the talent to their respective hiring managers. There is no need for a firm to pay a contingency fee. With tools like Applicant Tracking Systems (ATS), job boards, social networks, employee referrals, and their own database, the strategy should be for corporate staffing to focus on the entry level to intermediate level positions. Let the executive search firms work with corporate staffing to fill upper and executive level positions. This leaves the hiring managers free to focus on the needs of the business. This does not come cheap, however.

Executive management needs to re-think the way they see staffing. It is not a cost, or an after thought, but rather a strategic piece to getting to the goals of the firm faster (and first). More firms are begining to take notice of this and are putting the horsepower into staffing. More need to.

I am interested in seeing other opinions here, and will check back from time to time. I would like to hear from hiring managers as well as recruiters (third party and corporate).

Best,

Steve Guine

posted September 22, 2007

An open answer to an open question:
Fee generators that do not add value will fade out in the near future regardless of region, culture, industry and technology.
The question is, who manages the adding-value process in the US and what goals they have?

posted September 22, 2007

Beautiful answers to a very important question of the industry. Inception of out company was based on the premise that IT & ITES being a niche' sector doesn't enjoy the attention it deserves with big recruiters. Focusing on the sector and growing our understanding, values and technical edge, I think we will be able to survive any ice age coming our way.

Even the most advanced AI pre-screening tool will not take away the intelligence a recruiter can indulge in a recruiting exercise, making the right match possible for candidates & employers. Networking and specially social networks will play a very important role in our survival.

Catch tricks like SEO, SEM and playing with ad market industry will fade away. And all the people doing a piggy ride on Open Source app's will need to consolidate on their skills and services in the time to come.

Freelance hire-to-blog and hire-to-avatar (e.g., second life) will become hip!

posted September 22, 2007

I keep reading in a lot of the answers to this question about how automated screening is going to provide the perfect candidates for positions and will eliminate the need for recruiters. I would totally disagree, the only recruiters that the automated screening will replace are those who are currently doing their own semi-automated screening. These screeners (hard to call them proper recruiters) and automated systems will continue to place pegs in holes without any real concern about whether the candidate is actually the right one for the position.

All that automated screening can tell is whether a candidate has met a pidgeon holed history of previous people in the position and can put the right keywords in a resume. What the automated screening can't tell is whether the person can learn and grow, whether the person has a different background which makes them even better prepared for the position, and what a person's attitude and aptitude for taking a new position is. These are things that a real recruiter through building relationships can tell.

The screener also won't see which is better for a position, a person who has worked in the same area for 20 years and will always work in the same area at the same level because they can never grow, or a person who is new to the area, but a rapid learner and will soon make significant contributions rather than just plodding along.

As an example, at MCI I was in a position where I needed to hire someone with X.25 expertise to cover some short term needs, and then this person would move to cover mostly Frame Relay in the future while still doing some maintenance level X.25 work. Fortunately, IBM was in the process of laying off dozens of engineers with X.25 experience. The trick I needed to perform was to sort through this stack of 20+ year experienced people to find the ones who not only knew X.25, but also where interested, capable and adept at learning and absorbing new technologies. Try doing that with an automated system.

Automated systems also don't deal well with people like me who have had non-traditional careers. Most of us can do just about anything, and enjoy the variety. Not only that, but we can apply experiences from many industries and positions to great advantage in a new position, but we'll never get that position if the screening is done by an automaton rather than a thinking person.

Over dependence on screeners leads only to careerism, stagnation and dullness.

posted September 22, 2007

Maureen, I just posted this to the SF Recruiters forum, and I think it relates to your quetsion.

Jack makes an interesting observation about the affect of RPOs on the market, so I thought I would chime in on his note.

RPOs will capture a lot of business from those companies that really don't understand that their people are their most important asset.  All attempts to give-away this function to any 3rd party that is not fully dependent upon the success of the company will ultimately fail.  Taking a long-term macro view, the RPO really is best served by a high turnover situation, not a company that is firing on all cylinders, has low turnover and high levels of both internal referrals and unsolicited inbound interest.

Having been part of the onsite-offshore RPO model, I can say that it is incredibly difficult to run effectively.  If, like most companies the RPO runs an offshore facility in a non-english speaking country, the communications difficulty is an added complexity on top of time zone differences, business process differences and infrastructure stability.

Going further, RPOs do not in any way provide a zero footprint for Staffing in light of current and future OFFCP, EEO, ADA, ETC., ETC., regulations.  In fact, if an RPO has offsite assets utilizing the corporate infrastructure in order to provide a transparent experience to the candidate (IE all emails come from company.com, then the RPO increases the impact on the IT infrastructure.)

Provided the counter argument/case studies are published as to how well/not well the RPO function has worked, I think that the current RPO models are not yet there.  To some degree, the current RPO model is no different than Kelly Services 10+ years ago, and yes, it can work for the 80% of what is out there, but doesn't yet unilaterally provide "THE SOLUTION" to all ills.

So, where does that leave the Sr. Contract Recruiter.  The answer is No Changes in my books.  Smart RPOs will NEED the Sr. Recruiters to be the client-facing role as there are far too many opportunities for a more junior person to completely screw-up a Manager/Recruiter interaction.  A Jr. Recruiter still can't design a recruiting strategy for the 20% non-standard positions, a Jr. Recruiter can't negotiate with confidence with the most senior candidates, can't recruit the spouse/significant other, etc.

The target market for Senior Recruiters will no longer be the larger companies.  They will be the smaller companies, the start-ups, and the re-starts.  To some degree, these are the Fun, Non-Boring types of companies that we like any ways.  To most Sr. Recruiters that I know, a large and stable company is by definition pretty boring.  Within these companies the RPO will become "the gatekeepers to the contract recruiting jobs (Temp staffing positions)" but I say fine, that job sucks in my view.

I FULLY agree that the RPO model will have an effect on the contract recruiter market, but any large-scale changes will be caused by the next economic down-turn, not the RPO model itself.  Recruiting never recovered from the .bomb, and hiring managers, CFOs, HR, etc. have still not fully appreciated the value of what Staffing and good recruiters can do for a company.  To some degree, Staffing still seems like an ugly step-child (even less liked than HR) in some companies.

So, as Jack pointed out, Contingency and high-end Retained Search will still be the best role for those Senior Recruiters who both enjoy the "lone wolf" work style AND that can provide the results.  In fact, as the 'traditional executive search' companies adopt more RPO business, this market will become an even better opportunity for those of us that chose this business as those companies will dilute their focus.

So, answering your question. Your services will STILL be needed, just your client base may change.

posted September 22, 2007

Roles within organizations are rapidly changing. Positions are evolving in every marketplace.

posted September 23, 2007

Interesting question,

IMHO fees will be smaller for those with sourcing or candidate network as a primary value proposition, and higher for those with an eye toward assisting with performance management, long-term sustainability of a high-performer population and driving the ability to change into the workforce.

CIO's and CFO's have long been waiting on HR to provide reliable mechanisms for this critical work and to prove it's value in financial terms, but HR stubbornly resists the challenge to become business experts at the value side of people management, sticking to the shallow water of compliance, risk mitigation and paper pushing.

The recruiter that plugs himself into this gap will be worth much more than the resume generating machines we see today.

The resume machines will take on a lesser role serving the consulting firm, not the end client. Clients are already sick to death of the pressure, calls, and extra work they take on when they hire one of these companies.

The true consulting search firm will serve fewer clients, drive much higher value, demand very high fees because they can prove the value over the long haul, and control the inflow of people into the companies or teams they serve.

As Dennis Miller used to say on his HBO show after his rant, "That's just my opinion, I could be wrong." Thanks for letting me rant...

posted September 24, 2007

Mmmmmm....perhaps I'm getting old but this question keeps popping up since I entered the industrie in the early 80's. Its not about the fee but about the (real or perceived) value you add with your service.

In booming years fee's will tend to rise, and in slow years tend to decline but still then go for quality and you will earn very decent fees.. And no I'm not afraid of being kicked out of business by the jobboards (which was a concearn a few years ago)

Just keep going and you'll be allright.

Hans

posted September 26, 2007