10 Reasons More Recruitment Start-Ups Are Needed

By Dave Nerz

business model for recruitment start-upsSome would argue that the recruitment industry has enough participants and we really do not need any new recruitment start-ups. While that would be great for those already entrenched, that is just not how the free market operates. If the existing recruitment agencies were delivering with perfection, no new agencies would be able to break into the industry. The opposite is true…many existing firms are not delivering the results needed by employers or by job seekers.

Some reasons more recruitment start-ups will happen and are needed:

  1. Low Barrier to Entry. A recruitment agency has a very low hurdle to clear in order to get into the business. The tools required to support a start-up are fairly simple and quite inexpensive.
  2. Big Agencies Train Start-ups. As recruitment consultants become frustrated with the incomes and the process demands of large agencies, they can easily leave. The big firms are literally training the start-ups as they sack, downsize, reorganize and generally frustrate a group of newer recruitment consultants that they have prepared and trained.
  3. The Market Size. As a market like recruitment continues to grow globally, the opportunity for more players to enter the market is evident and unstoppable.
  4. More Job Seekers. Those that track employee satisfaction tell us that more than 50% of all employees are open to considering a change and a slightly smaller percentage are actively looking for a change. These sheer numbers require more recruiters to handle the transactions that will be a result of these statistics.
  5. New Employers. New employers are entering the market and most of these are small- to medium-size businesses. These are not the targets of the large multi-national recruitment chains; these are a best-fit with small and nimble recruitment agencies. In some cases, a one-recruiter to one-employer relationship is what works best. Depending on the size of the new employer, every 3 or 4 new employers can deliver the volume of placements need one to support one new start-up agency on an annual basis.
  6. Vacancies Exist. There are many vacancies that go unfilled for months. In-house recruitment and the large operators are not able to fill all the openings presented. Additional more-focused effort is required by someone with a singular focus to fill these roles.
  7. Poor Candidate Experience. The existing agencies are not always delivering the candidate experience desired. While not all recruitment start-ups will necessarily deliver superior results in this area, there is a need for candidate focused start-ups.
  8. Frustration with Existing Providers. Some employers are frustrated and dissatisfied with the existing providers in the market. They will pull new competition into the industry, seeking to solve for the frustrations others have created.
  9. New Tools Make Entry Easier. New services are being provided to recruitment agencies that make entry even easier. There are services that collect job vacancies from employers and share them with any recruiter willing to do the work. In this case a recruiter can just recruit and does not need to spend time or energy marketing to attain clients. This further lowers one of the existing barriers to entry.
  10. The Pendulum Effect. After a significant downsizing to the recruitment industry that started in late 2008 and lasted through even as late as 2012, it is typical to see a rebound back to prior levels. By many accounts, the industry lost as many as one-half of all those employed in recruitment globally. It only makes sense that we will continue to see a rebound until the next big financial dip occurs.

So if you are in the industry and you are not doing all that you can to get better, to improve your skills and service to employers and candidates, then you better beware.  There will be new providers calling on your accounts and candidates. They are hungry, they are focused, they are recruitment start-ups!

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The Outsized Impact of Recruiters

By Veronica Scrimshaw

Jon-GuidiJon Guidi is the Co-Founder and Chief Revenue Officer of Hirabl, a Big Data startup known for its “Fee Catcher” reporting service. Jon founded Hirabl to ensure recruiters get paid for the hard work they do, and have the tools necessary to grow revenue at their agency. Prior to Hirabl, Jon was CEO of HealthCare Recruiters International, a leading US recruiting firm. He previously spent 10 years with Morgan Stanley and UBS in sales and trading, leaving UBS as a Senior Vice President. He lives in California with his wife and 2 daughters.

Us recruiters are a transactional bunch. That’s not meant in a negative way, we just have to be in order to enjoy sustained success. We need to be able to converse, influence, sell, counsel, advise to ultimately get two moving parts (candidate and client) to align and form a bond (a placement). Then we move on to the next one…

Regardless of whether your intrinsic motivator is helping your candidate progress their career, or working with a client to develop their most important asset (their people), or just earning more commission – in order to make a good living in recruitment, you need to make transactions happen.

This is just the nature of the business. But it also can come with a side effect. Consistently being part of recruitment transactions can make it easy to forget the profound and outsized impact we have on many people’s lives.

Changing jobs is a big deal for most people. It’s stressful. So stressful in fact that the Holmes and Rahe stress scale rates it as more stressful than getting a major mortgage and slightly less stressful than the death of a close friend. It’s a really big deal.

Most people will do it maybe 6-10 times in their life (a number likely to grow with millennials). A good permanent recruiter will be part of the process 30+ times a year. After a few years, that will become 50, then 100, and eventually you’ve lost count. It’s really easy to put each placement in the rear-view mirror and not give a thought to the impact you’ve had on these people’s lives.

A few years ago I had this passing thought about an old candidate that I placed and I decided to give her a call. I hadn’t spoken to her in just under 5 years, but in that time she had been promoted (great!), been headhunted by another company (great!), got divorced (not great!) and was now starting her own business (where I ended up placing her assistant- great!).

Encouraged by that, I made an effort to call around to a few more. Not all were good outcomes like the above (one of my candidates had relocated internationally for a role and moved back within 15 months), but the point was I re-kindled the relationships and also got to hear first hand how their career had evolved since I worked with them. It was pretty eye-opening.

If you get a moment, find out where a few of your candidates are and reach out. You’ll be surprised the impact your role as a recruiter had on them.

And then you can get back to the next placement.

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Siri, can you find me a good candidate?

By Liz Carey

g3w62t63kdRecruiting is being transformed by technology. It wasn’t that long ago that finding a candidate for a client’s job order involved placing advertisements in newspapers and industry magazines. Technology has changed the face of the industry forever – you have to be mobile, social, and on top of these advances. Social networking, apps, and analytics has made recruiting a more efficient process, but we might be seeing technology take even more of a role in finding the perfect candidate for a role, using algorithms – or a piece of software that uses data, skills testing, and intelligence related to a particular industry or niche to match the best candidate to a role.

According to ERE Media, HiringSolved will soon unveil what it considers “Siri for recruiting,” an artificial intelligence assistant for recruiters. His name will be RAI, pronounced like the name Ray, and standing for “Recruiting Artificial Intelligence.”

HiringSolved has been working on the technology for five years — around as long as Siri has been around. For those not familiar, Siri, part of Apple Inc.’s iOS, watchOS, and tvOS operating systems, is a virtual assistant with a voice-controlled natural language interface. You can ask her questions such as “what’s the best sushi place in town?” or ask her to set reminders, schedule dates, find directions or make calls.

HiringSolved has been working on their technology for five years, and it has a similar mission — you’d ask RAI recruiting questions like: “Find me 5 sales executives with experience in the pharmaceutical industry” or “what is the most common previous title of a software engineer?” RAI might ask you to be more specific – Web Development? Mobile Development? DevOps?

This confirms that the technology isn’t meant to replace the human sourcer in the process – a recruiter’s expertise is still needed to guide and give the data to get the correct result. But if it works, the software could be a total game-changer in the recruiting world, saving a recruiter’s time, and saving their client money from lengthy searches. But the question remains whether the technology will delivery the same quality that a human recruiter would get when doing a search.

According to ERE Media, HiringSolved will have about 100 early adopters of the technology, and plans on giving a demonstration at this fall’s SourceCon event. The technology will need to be refined, and it may be a year or more until it’s ready for sale.

Until the testing and demonstration stages are finished, and the RAI tool has been tested and proved accurate and reliable, recruiters will have to do the leg work themselves, the “old fashioned” way, through social media, networking, emails, and cold-calls. Do you think artificial intelligence — or a recruiting robot — would be a benefit to the recruiting industry?

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Manpower Reports Upbeat Quarterly Hiring Outlook

By Veronica Scrimshaw

quarterly hiring outlookManpowerGroup has released the results of its newest quarterly hiring outlook. For the upcoming quarter, some 59,000 employers located throughout the Americas, AsiaPac, and EMEA were surveyed about their hiring plans. In 42 of 43 countries, employers are planning to add to their payrolls in the next quarter. Twenty-one countries indicate an improved hiring outlook compared to a year ago. Globally, the most robust hiring outlooks are in India, Japan, Taiwan, and the United States. A few highlights from the survey are included in this post; the full report is available here.

The Americas

  • The quarterly hiring outlook is strongest in the US, thanks to the continued confidence in the leisure & hospitality sectors. Other opportunities are expected to be strong in both wholesale and retail trade, and transportation and utilities.
  • Job seekers in Colombia will see favorable hiring in agriculture, manufacturing, and services, as well as in finance, insurance and real estate.
  • While the outlook remains negative in Brazil, it is improving both quarter-over-quarter and year-over-year. Perhaps this is a signal that the job market is beginning to rebound after declining steadily since 2012.
  • Considerable quarter-over-quarter and year-over-year growth is expected in Canada in the finance, insurance, and real estate sectors.

Asia Pacific

  • Hiring is expected to remain brisk in India, particularly in the services and wholesale and retail trade sectors. This marks five consecutive quarters of optimism in India.
  • Japan continues to struggle with an aging demographic and a shrinking labor pool. This means demand for talent is strong as there are fewer available candidates. Mining and construction is especially strong. This may be related to preparations for the 2020 Olympics.
  • The quarterly hiring outlook in Australia is improving. All industry sectors and regions reported positive activity. There has been a concerted effort to diversify beyond mining and related areas, which is paying off. The most robust areas are transportation and utilities, finance and business services, and services.
  • Singapore has now reported declines for seven consecutive quarters. The current hiring outlook is at its lowest point since Q3 2009; however, the finance, insurance, and real estate sector remains strong.

EMEA

  • After a prolonged decline, the quarterly hiring outlook in Ireland has improved for two consecutive quarters and is at its highest level since Q2 2007. The strongest hiring activity is anticipated in the electricity, gas and water and the restaurants and hotels sectors.
  • Brexit has (so far) had little impact on hiring plans for the upcoming quarter. Nearly 90 percent of UK employers intend to keep their current payrolls intact through the end of the year.
  • In Spain, another optimistic forecast has 80% of industry sectors expecting growth through the end of the year. This is a marked improvement from the depressed hiring outlooks from 2008-2014.
  • Manufacturing-related hiring is especially robust in Germany, and is now at its strongest level in two years.

Where are you seeing the strongest (or weakest) levels of hiring? Add your comments related to geography or sector below!

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Collaborative Meetings

By Veronica Scrimshaw

video-conferenceOur guest blogger is Gregg Whitt with Professional Personnel Associates in Clemson, South Carolina. Gregg is a longtime member of NPAworldwide, currently serving on the board of directors. Professional Personnel Associates provides recruitment services in the technical, engineering, manufacturing, professional, and management fields across the United States. Read his post about collaborative meetings below:

We’ve come a long way!

Remember back in the day when meetings were scheduled, flights booked, rooms reserved and required time away from the office? Today, electronic meetings enable us to fully engage in a meeting, with other locations, clients, network members, family and others all while remaining at our office or place of preference. The benefits of collaborative meetings are numerous…

Consider:

  • A video conference among two or more people can be quickly set up
  • Knowledge share for solutions no matter where participants are located
  • Time of decision cycles can be reduced
  • Change decisions can be effected simultaneously across the organization
  • Travel time and EXPENSE reduced
  • Feedback for information shared is exchanged in real time (This is highly important due to the time-value of information and the dependence of our efforts of having the right information, at the right time)
  • Meetings can be recorded and retained for future reference
  • CEOs and high-level personnel who need to be everywhere at once can participate from their physical space for quicker decisions necessitated by time-sensitive exchange
  • New opportunities can be seized, not lost, by getting to the right decision makers wherever they are, whenever they are needed
  • Meetings can be held prior to face-to-face meetings to share expectations among participants, affording a cost-effective, convenient, time-efficient way to properly prepare participants for the more formal face-to-face event

Not having the benefit of seeing the facial reactions from co-participants on a phone conference can have a few drawbacks. But well-moderated collaborative meetings provide a neutral ground to review agendas, sort out concerns and expectations, prior to out of office site travel and expense.

As we know, face-to-face meetings, allow us direct eye contact and voice inflection interpretation and video conferencing does not always provide that same dynamic. But in cases where many participates are required to attend, and locations are varied many times into other countries video conference is getting our high mark…for keeping us, our clients, candidates and business relevant and competitive. I am looking forward to the next step holograms where we can electronically sit in a conference room together…or maybe we already have this technology? If not, I feel certain that it is coming soon.

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Europe? No, let’s go worldwide!

By Veronica Scrimshaw

Jackie-Bennett-2016Today’s guest blogger is Jackie Bennett, director at TEAM. TEAM is the largest network of independent recruiters and employment service providers in the UK. Some of the best talents in the industry are members of a national network providing solutions to all your staffing needs. NPAworldwide and TEAM have a long-standing partnership in place to support the needs of our members.

The Brexit referendum results are in. Whilst there were some initial concerns amongst the membership for the immediate future, the discussions and expert legal advice obtained at the regional networking meetings that followed helped to reassure that it’s business as usual. Great Britain finds itself in a position to forge new relationships around the world.

For several years now, TEAM (the UK’s largest network of independent recruiters with nearly 700 locations) has enjoyed a reciprocal arrangement with NPAworldwide (a similar network with more than 500 locations worldwide), splitting fees on a regular basis. We felt this was a good time to make our relationship more formal. In recent times, we have seen an increase in our respective recruiters sharing business opportunities, and we felt it appropriate to both recognise and seek to improve such relationships.

An excellent example of how our networks work together was a recruiter in Surrey, England helping a fellow NPAworldwide member in Australia to fill a senior mining engineer’s role. It took several months, but the end result was a happy client and candidate and success. There is never a need to turn business away.

Exciting times are ahead with the introduction of a new role of International Development Director to TEAM.

Both networks have seen growth recently and we couldn’t see a better way of celebrating this than with the opportunity to further cement our association with NPAworldwide taking a more strategic role within TEAM. To further this, the intention is to rotate NPAworldwide attendees at TEAM’s regular executive meetings and include other NPAworldwide directors from around the globe who can bring a variety of experiences to the table.

TEAM are looking forward to first of many of these now international meetings which will take place in the UK in September. The first NPAworldwide attendee will be Alfy Zidan from PureAudit Executive Search in the Netherlands.

Exciting times ahead, watch this space!

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What’s the Learning Curve with Splits?

By Sarah Gawrys

papaya-halfNew recruiters come into a recruitment network to expand their reach, build their revenues, and to better serve clients and candidates. If you’ve never been in a split network, what’s the learning curve? How does it work? How long will it take to get that first split placement fee in your pocket? Where do you start? Here is a story about how a couple of experienced NPAworldwide members reached out to a brand new member and helped close a deal:

Don Previti, managing partner of DVP Partners, LLC, and Jim Lyons of LH International, who both work the financial services domain in New York City, were advised of a new member, Elisa Sheftic of Right Executive Search, who had just joined and had a very similar focus on the financial service and hedge fund space, and both took the time to call Elisa and introduce themselves. “It was immediately apparent we had many mutual shared connections and direct business compatibilities,” Don said. Don and Jim invited Elisa to lunch in Manhattan, where they both work, so they could meet face-to-face and discuss their success on NPA and how they can help her optimize the power of the NPA network, Don said. “I believe this was a pivotal point in defining our relationship and success going forward,” Don said. “Following our in person lunch with Elisa, we summarized some immediate action points and agreed to send each other some open requirements.”

One such role was a Senior Compliance Officer in the hedge fund sector based in San Francisco that Don had been working on for four months and was unable to fill.

Within a week, Elisa sent Don a great candidate, which his client wanted to interview right away. The phone interview went well, and the candidate was invited for an in-person interview the next week with the hiring manager and two partners. They made an offer, and the candidate started last month at a $150,000 salary. Don’s placement fee was 20%, so he earned a $30,000 commission, half of which goes to his new partner, Elisa. “So within 3 weeks of Elisa joining NPA, we had our first deal closed,” Don said. “I will be sending Elisa a check for $15,000 and we now have two additional requirements that are in varying stages of success.”

Elisa said that one of the things that make her partnerships successful is that Don and Jim are very quick to get her feedback. Openness and transparency shows a level of trust that can reassure a new member that recruiting is not always a dog eat dog world.  

“That’s a tribute to their professionalism and the strength of their relationships and it makes my team and I want to work on their assignments,” Elisa said. “Anyone in this business for any length of time knows that is not always the case with partners or clients and it is appreciated and it’s the stuff long lasting relationships are made of.”

This deal not only shows the power of the network, but the power of folks like Don and Jim, who took the time to reach out to a new person and introduce themselves.

“I believe this short story demonstrates the power of a split placement network when people reach out and leverage the national and international resources provided,” Don said. “I also hope this provides all new members a sense of encouragement that their first placement will happen and it’s in their hands to reach out to like minded partners to facilitate the process.”

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3 Reasons to Consider Split Placements

By Veronica Scrimshaw

growth-seedlings-300I saw a post on a social media site yesterday about split placements. One recruiter emphatically stated he does not believe in split placements. Fair enough, splits aren’t for everyone. But I always feel it’s shortsighted to summarily dismiss splits. Here are 3 reasons I think every recruiter should consider split placements:

Split placements can even out business cycles

All business have ups and downs, including recruitment. There are times when you have more jobs than you can reasonably expect to fill, and there are times when you think you might never get another one. If you’re working the candidate side, you know there are times when candidates are a dime a dozen and other times, like now, where it’s darn-near impossible to find the right talent. Adding splits to your business model can help you even out the highs and lows. When you don’t have enough candidates or jobs, lean on your trading partners to fill the gaps. When you have too many, your trading partners can help you fill those orders more efficiently.

Split placements offer economical business expansion

At some point, most recruitment firm owners have been faced with the decision of expanding their business to meet demand. Many owners will opt to hire staff, and there is nothing wrong with that. However, splits can help you grow your firm WITHOUT adding extra overhead: no recruiters to pay, no desk costs, no training, no tools. You’ll bring additional revenue into your recruitment firm by working with other successful recruiters and sharing the fees. Split placements can help you quickly expand into new niches or geographies without the onboarding time (and money!) it takes to research and develop a new desk.

Split placements can help you serve your clients more effectively

No one likes to say no to a good client. Whether your best client comes to you with an opening that needs to be filled urgently, or an opening for a role you don’t normally work, or an opening outside of your typical geography, splits can help you say yes with confidence. You may also find that you can fill open roles faster, or work on more placements simultaneously. One of the best ways to keep your clients is to provide top talent faster than your competitors. Splits can help you meet that goal.

While split placements can include an element of risk, they are also an effective tool for many successful recruiters. Keep an open mind and give it a chance!

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4 Ways to Get Your Feet Wet in a Split Placement Network

By Liz Carey

4PMSQNEV8DJoining a recruitment network can open up a world of opportunities for a recruiter – new trading partners to do splits with, access to recruiters and candidates outside of your niche and geographic area, and a group of peers to brainstorm with and bounce ideas off of. But for a “newbie” joining an established network, it can sometimes seem like everybody already knows each other, so how do you make a name for yourself? Here are 4 tips on how to get your feet wet in a split placement network:

1-Where to start

You have to get your name out there. Make it a point to call one network member each week/month. Recruiters are busy and they don’t often have time to keep tabs on and reach out to every new recruiter who joins the network. By being proactive and introducing yourself, you’ll stand out from the crowd and be able to develop relationships with other trading partners faster. You never know who is looking for help from a recruiter who specializes in exactly what you do or where you work. It’s important to reach out by phone, and not just hide behind a computer screen. You might find a position that another recruiter posted online that interests you, but it’s in both of your best interests for you to reach out and connect with that recruiter to find out more about the role and the client before you waste anyone’s time.

2-Communication matters

The most successful trading partner relationships work because both recruiters are open and honest. The recruiter with the job order will likely share every single piece of information about a role, including his client’s information, if he/she trusts the exporter he/she is working with. It’s important for the exporter to get clarity on the role and the company culture in order to completely understand what the client is looking for and find the right fit. The recruiter with the job order will also keep his trading partner informed and “in the loop” of any new developments in the hiring process. By being completely transparent, the two partners will develop a sense of trust in one another, leading to a smooth hiring process and a solid relationship where they know they can turn to each other for help in the future.

3-Meetings and the importance of getting your name out there

Attend meetings and trading group calls so people can put a face and/or voice to your name. The more people hear from you, the more likely they are going to think you are active and reliable, and might be able to help them. When you go to meetings, you learn an incredible amount, but you also learn more about one another. Recruiters have limited time during the day to have in-depth conversations, so by going to the meetings, you get to know someone’s style a bit more and learn a bit more about their clients or things they’re hoping to do. Personal connections really do help.

4-Find a peer coach or mentor

If your network offers peer coaches or mentors, sign up for one immediately. They know who the “players” in the network are, and will be happy to help connect you. This business isn’t the easiest in the world, and it helps to have someone you can ask questions to or bounce ideas off of — maybe you can learn from them about a certain type of technology, or about their experience working with a particular affiliate. Everybody works differently, so it’s nice to hear firsthand how someone has worked with different people in the network.

How did you get your start in a split network?

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Preventing the Process of Counteroffers

By Liz Carey

E4PSRGAB8YOn a recent trading group call, Scott Love of GreatRecruiterTraining.com gave a presentation on counteroffers. For a recruiter, it is crushing to have a candidate who’s already accepted your client’s offer renege and accept a counteroffer from their current employer. You saw the light at the end of the tunnel, the placement fee was almost in your pocket, and now it’s back to the drawing board. What Scott Love told recruiters was: an easy way to keep candidates from taking counteroffers is to prevent the process. But how can you prevent it?

Have a conversation with the candidate — not the night before they’re putting their notice in, but earlier in the process, before or after the first interview. It behooves a recruiter to assess the risk of any candidate they are considering presenting to their client considering a counteroffer.

The likelihood of the candidate taking a counteroffer depends on their motive. Fear of change is the biggest killer in the recruiting field, so ask them flat out, “Before I present you to my client, can you actually see yourself moving forward in the next 30 to 90 days?” and “Is there anything that would keep you from it?” If they tell you “I’m prepared, I’m ready to move,” that would be someone to assess for the role early on.

Tell them the process – “I present you to my client, you interview, and if they like you, they will give you an offer. Can you see yourself resigning from your current company?” Once they realize and understand the process and timetable, it puts everything into perspective and they’re more likely to envision themselves making the move (or not being able to).

He often tells candidates that his role is to facilitate the process of the candidate and client getting to know each other, and if at any time the candidate is not interested, that’s fine, but he requests that they just be honest with him. If they have concerns, he wants them to tell him, not just disappear. He says the recruiter’s role is kind of like a pressure valve — not to put pressure on, but to remove it. To get into a candidate’s head and figure out if it’s a deal-killer.

Then, put them in a hypothetical scenario: “How do you think your employer will respond?” If they indicate they believe their employer will try to keep them, ask the candidate “How will you respond if they give you a counteroffer?” If the candidate seems to be at the point where they’re not sure, and their employer might be able to convince them to stay, you’re at risk. Scott Love advised not putting a candidate in the process if they have a high likelihood of taking a counteroffer.

If a candidate says they’d consider a counteroffer, it’s time to be honest and cut your losses. The way Scott goes about is telling candidates that he doesn’t want to put them in a position of permanent career damage, as accepting a counteroffer often instills a sense of distrust in the candidate’s current employer. Because the candidate was ready to leave, they will always be thinking that he or she is unhappy and/or looking for a new job, and are unlikely to promote that person.

How do you handle counteroffers when it comes to your candidates?

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