When I talk to HR leaders across the private and public sectors, and even in the not for profit space, it’s quite clear that attitudes towards recruitment have changed significantly in the wake of the Global Financial Crisis. In my opinion, the change is entirely positive for the recruitment industry, which has been greedy and complacent (in equal measures) for far too long.
In today’s pressured ‘new normal’, organisations are focused on value from every part of their supply chain, and for once recruitment hasn’t escaped notice. Across all industries, clients are demanding higher standards of candidate pre-qualification, more accountability, and, ultimately, increased return on investment (ROI) from the suppliers they engage. But what is return on investment in recruitment? One blue chip HR director we’re currently working with has a pretty clear idea: ‘If the new group FD’s still with me in two years, you’ll know you did a good job!’ That’s certainly part of the ROI puzzle, but, in driving toward that outcome, I think there are a number of areas where recruitment firms can boost their accountability and add value.
But achieving ROI isn’t just about the fee structure: it starts right at the beginning – with the job description and role brief. I make no apology for mentioning something so simple – there are some organisations that are great at creating job descriptions and role briefs, but unfortunately they are very much in the minority. My experience is that role descriptions (and the subsequent briefs), very rarely get the attention they deserve on the client side. That means the process is flawed right from the get-go: how will you find the person you need if you’re not entirely sure of what it is that you need them to do, or if you’ve just recycled the role brief from a year or two ago? Has the job really stayed static in that time? In the current environment of constant change at strategic and operational levels, that always seems unlikely.
That’s where your recruitment partner (NB: ‘partner’, not ‘agency’) should begin delivering value. They should be proactively taking charge of the brief, asking the right questions to find out exactly what the successful candidate needs to achieve in the short, medium and long terms, and how those goals align with the overall business strategy. They should also make a thorough exploration of your organisational culture, and the culture of the particular team the individual will fit within (or lead).
It will take a real investment of your time to go through this process properly, but I guarantee it’s worth it – especially if your most senior stakeholders are engaged to give their input and are therefore committed to the talent acquisition journey. Giving and taking a brief seems like a simple thing, but it is often overlooked in the mad rush to get searching for candidates following the sign off of a senior role. It’s like starting to cook before you’ve even confirmed the recipe – and it’s about the most common way to make a bad start in a recruitment initiative.
I’ve already mentioned that due diligence standards are higher now than they were in the recent past, but let’s explore that a little further. When most people think of due diligence, they immediately think of things like reference and credit checks. Those might be part of the process, but in fact due diligence should encompass a far wider set of pre-qualifying factors. In today’s environment, due diligence means a thorough exploration of the candidate’s background, experience and achievements, motivations, potential issues and personal situation, and their personality, preferences and styles – as well as mandatory referencing, CRB checks and financial probity assessments as appropriate.
Most HR people would read that and say ‘sure, we do all of that’, but are your recruitment partners really exploring the candidates to that depth of detail? Do they know each shortlisted candidate well enough to understand their drivers and pivot points if the process does get to offer stage? Have they weeded out the applicants who have all the skills and experience on face value, but are inappropriate in terms of style and approach – how many times do you end up interviewing people and thinking – ‘they’d never fit in here’?
Getting ROI from this part of the process hinges on a robust and consistent process, which is perhaps the most common failing of executive level search firms (and operators in the mid-market, although I am willing to concede that they have more margin for error with junior roles).
In this area, the public sector has some great elements of best practice. The process works around the specific nature of the role, engaging the key stakeholders right across the lifecycle of the recruitment initiative and assessing candidates in a matrix format, measuring skills and experience, style and approach and even cultural fit against the requirements of the role. It’s a great way to ensure the recruitment is completed ‘right first time.’ If you’re working with a recruitment partner that’s doing their job right first time, your shortlist should be short (i.e. approximately three or four candidates), and they all should be appropriate for appointment: you should be selecting the best one or two, not removing the worst three or four.
The final piece of the puzzle links back to the HR director I mentioned saying ‘If the new group FD’s still with me in two years, you’ll know you did a good job!’ At the time it was a bit of a throwaway comment, but it has a ring of truth.
Ultimately, a search exercise is aiming to find someone to take on the role ‘permanently’. Of course, permanence in today’s environment doesn’t mean a gold watch after 50 years at the same desk, but at the same time a permanent hire is made on the expectation that the individual will be around for a while – after all, they probably won’t even be genuinely ‘profitable’ for six to nine months (depending on the situation). It’s less about recruitment, and more about helping organisations find talented people who can grow and develop with a business.
When we’re talking about two years, we’re starting to move away from recruitment and into retention. But let’s say the person leaves before the six month stage – I’d say that’s a recruitment issue, rather than a retention issue – which highlights the need for the recruitment firm to be proactively involved in the onboarding process. On that note, shouldn’t recruitment firms be willing to ‘put their money where their mouth is’ and collect a proportion of their fee after that six months?
That’s exactly what I suggested to the HR director, and it’s no surprise we won the work when the competition were still plodding out the outdated ‘half on starting the process, half on offer’ structure, or even ‘a third, a third, a third’. In the old world, those arrangements were the norm, but in the new normal they aren’t good enough – you have the opportunity to effectively ‘guarantee’ one element of ROI before the process even begins.
There isn’t a magic formula for achieving increasing ROI through recruitment, but there are some fairly quick wins. For a start, you can ask your suppliers how they plan to achieve increased ROI – you’ll pretty quickly find out which of them have any chance of delivering it.
Shani Newbold is a Partner – Head of Search Practice, Green Park Interim & Executive Search
