Some Increase Recruitment Fees While Others Are Discounting

By Veronica Scrimshaw

increase-decrease-recruitment-feeRecruiters operate many different ways. The ones I am most familiar with are contingent recruiters, who charge a fee for successful hires. They only get paid when a hire is made. That structure is itself a long opportunity for discussion. I always joke with my friends that it would be nice if your accountant or health club charged this way. I guess some may? Seems that most are just working on increased fees.

With the slow but sustained recovery from the Global Financial Crisis, more recruitment firms are reporting increased revenues and profits. If you have not considered it, the demographics of our world should drive a continued shortage of a qualified supply of workers for years to come. That should mean increased fees for recruiters and higher cost to employers to recruit talent. But what is happening in the marketplace is slightly different than what basic supply and demand theory might predict. Some firms are lowering fees in a time of limited supply. Recruiters and employers alike should take note of the reason. When recruiters have a poor quality of candidate, source talent from the same pool as employers (LinkedIn etc.), or offer an unreliable process for headhunting the best talent, then a recruitment firm’s service becomes a commodity and must be discounted.

While some questionable suppliers may not be pricing their services at appropriately lower levels, it is fair to say that a recruitment firm with a solid process of finding unique talent will be in a position to increase fees. Ultimately the service may be worth every dollar. This is the “you get what you pay for” principal at work.

For recruiters working the same old process, the same way and not adding value to the recruitment process, beware. Employers are willing to hire staff to search LinkedIn and to post on job boards. That means recruiters will be forced to accept lower fees or to work only an employer’s most difficult jobs, their least important jobs, or the ones that are always open. These all offer less chance of a fee.

If you are feeling downward pressure on fees, that means it is time to differentiate, add value and up your margins.

RECRUITERS: If you don’t mind me asking, what are things you have done as a recruiter to support higher margins and fees in the last few years? What do you feel employer clients value?

EMPLOYERS: Have you paid a recruiter a 30% fee instead of a 20% or 25% fee? Why?

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Cold Calling with a Candidate? 5 Recruiter Sales Tips

By Sarah Gawrys

image of woman representing in-house recruitingIt seems to be a typical practice in the world of independent recruiting to present or pitch a candidate on that first cold/sales call with a potential client. It is a bit of a baiting method, as you outline exactly what they need, but do not offer the candidate up officially until the contract is signed. Not only does it offer the client something immediate, but shows you know how to deliver value in your space. Here are five other collective cold calling strategies for recruiters to keep in mind as they work business development:

  1. If you do not have a candidate to pitch to a client, lead instead with an alternative hook. A good idea here is to lead with a list of who else you work with in that particular sector. By dropping a few good client names, you can then go further into some challenges those clients collectively have faced that you addressed, and then follow up with an inquiry as to if their company has some of those same challenges. You have opened the door to an active discussion, and likely kept their interest as we all love to hear what competitors’ challenges are and how they compare to our own.
  2. Calling the wrong prospects: Rather than making random canvass calls, be strategic about whom you call. Decide who your target market is. What is the profile of your ideal client? Identify companies who fit that profile. Prepare a prospect list made up of companies who you know have a requirement, and/or companies who are likely to have future potential. Call your hottest prospects first! At the end of each day, invest 15 minutes to create your call list for the following day. (source: Mark Whitby)
  3. Be prepared for questions. Echogravity posted an article from a client perspective on recruiter cold calls. In the article, the hiring manager was immediately pitched a Java developer even though the company does not have an IT department or Java applications. He tells recruiters to know these answers before placing a cold call: 1. Do I really know what this company does and why am I cold calling them? 2. Does the person I’m calling have a potential need for the services my company offers? 3. If they ask me tough questions, am I prepared to respond?
  4. Follow the formula. Jenifer Lambert, VP with Terra Staffing group, shared a successful formula for cold calling clients in an article on Dice that outlines her best practice.          A. Identify the need: I see that you are currently recruiting for an XYZ position.
    B. Diffuse the objection: I assume you are getting a lot of response to that advertisement.
    C. Create differentiation: I wanted to connect with you because XYZ searches are one of my areas of specialization.
    D. Demonstrate your market insight: My clients are telling me that they’re getting more quantity than quality and that the high performers they need are hard to find and recruit.
    E. Provide a solution: That’s when they call me. I am working with several very strong XYZ candidates that I thought you may be interested in hearing about as a comparison to the response you’re getting on your own.
  5. Last but not least, do not give up too easily: The biggest cause of failure among sales people is giving up too soon: 48% quit after the first contact, 20% quit after the second contact, 7% quit after the third contact, 5% quit after the forth contact, 4% quit after the fifth contact, and yet 80% of customers say “yes” after the sixth contact! (source: Mark Whitby)

What Recruitment Niches Are Hot?

By Veronica Scrimshaw

job-search-compositeWith the first half of the year behind us, I thought I’d take a look at NPAworldwide placement activity to see which recruitment niches are hot in our network. Compared to last year, we have three notable changes:

Cross-industry placements have increased by 20% year-over-year. “Cross-industry” refers to roles that can “cross over” into multiple industries such as sales, marketing, business development, human resources, C-level positions, etc. Historically, an increase in sales and marketing roles generally leads to an increase in manufacturing and all other roles as well, so that’s definitely a change we like to see! Some of the placements our members have made this year include:

  • National Sales & Marketing Manager, Queensland, Australia
  • Territory Sales Manager, Italy
  • Sales Executive, California, USA
  • Business Development Manager, Texas, USA

Chemical Process roles are up 14% compared to last year. This has been a strong sector for NPAworldwide for a number of years. Our members did experience some softness last year with the instability in oil prices, so it’s great to see placement activity normalizing. Anecdotally, we are hearing reports of improved activity within the chemical process area, although some members are still experiencing slow-hiring clients. Within this recruitment niche are placements such as:

  • Safety Specialist, North Carolina, USA
  • Process Control Engineer, Louisiana, USA
  • HSE Manager, New York, USA
  • Electrical Reliability Engineer, Wyoming, USA

Manufacturing-related roles have decreased 30% in the past year. I’m not hearing anything specific related to the decrease, but I would say that U.S. economic growth continues to be hit-or-miss which likely leads to skittish employers and slower hiring. With the uptick in sales and marketing activity we’ve seen, I’m optimistic that manufacturing placements will rebound in the second half of the year.

What are the hot recruitment niches in your part of the world? Comment below!

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In Recruitment and Fishing, It’s All About That Bait

By Veronica Scrimshaw

fishing-tackleToday’s guest blogger is Liz Carey, network coordinator for NBN, operators of www.searchbankingjobs.com and www.searchaccountingjobs.com. NPAworldwide and NBN merged in September 2014, and our two networks are working toward a full integration effective January 1, 2016. We’re happy to have Liz on our blogging team.

In New England, a favorite summer activity for many is fishing. I saw some folks fishing off a local bridge last weekend and it got me thinking – recruitment is a lot like fishing (minus the cargo shorts and cold beer, maybe). You must first have the knowledge, insight and patience to understand exactly what your client is looking for in a perfect fish (candidate), and then find the right fishing spot and dangle the right bait (an attractive job order) to reel in that perfect person.

Job seekers are the fish, swimming around, looking for the best possible bait – a role with a great employer to provide them with money, security, training, leadership and opportunity. There are plenty of fish in the sea, but in regards to talent, you’re bound to have some bottom-feeders, as well as a few prized fish like tuna and salmon.

Like a fisherman trying to catch the right fish, if you are a recruiter, you are looking to reel in the perfect employee to provide your client with the skills, knowledge, and cultural fit they’re looking for. So you have to know where to go. Kind of like how fishermen anticipate migration routes, you have to stay upstream of market trends to stay afloat. Maybe you have to travel away from your regular fishing pond for some variety. If you haven’t gotten any bites and don’t have the right candidate in your database, maybe talk to some trading partners to see if they have a candidate who wants to relocate to your client’s area. Fish actively.

When you fish, you must make sure you have the right tools and bait to catch the kind of fish you want. Similarly, recruiters have to make sure they have the right “bait” to attract the kind of candidates they want, because others will likely be fishing in the same spot, too. When you post your jobs online, you can’t throw out a broad net, because you’ll only be scooping up the bottom-feeders; you need the right bait (a clear, concise and specific job posting) to attract those select healthy fish in the candidate pool. Choose the type of fish you want to catch before you choose your bait and tools, and tailor your job posting to that exact candidate.

Once you’ve found a suitable candidate and dangle the bait (their CV) in front of your client, keep a finger on the line so you know when there’s a bite. Just how most fish escape because the fishing line is taken slack, recruitment is no different – make sure to follow up and give feedback often. No one wants to harp on ‘the one that got away.’

While fishing is a leisure activity for many, it takes years of experience to become a great fisherman. If you know the best places to “fish,” have other “fishermen” to bounce new ideas off of, and the right tools, you’re well on your way to landing that big catch.

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What’s on the Minds of Job Seekers?

By Veronica Scrimshaw

job-seeker-wordleThink you’ve got a handle on job seekers and the current recruiting landscape? You might be wrong. Jobvite’s 2015 Job Seeker Nation Study offers insights into the current job market and how job seekers are approaching their career searches. Some of the most interesting details:

  • Not surprisingly, the overall job market is more robust than it has been in recent years; only 35% of job seekers think it’s gotten harder to find a job — that compares to 60% just two years ago.
  • Even satisfied workers are open to a new career opportunity — and that is true no matter what the age, industry, or education of job seekers. Overall, 45% of job seekers are satisfied in the current jobs, but are still open to something new.
  • Job seekers are increasingly likely to have short stints at a particular job – with more than 1/3 of Millennials reporting a job change every 1-3 years and more than half of those employed in software or technology moving every 1-5 years.
  • Money matters — a lot! I think there has been a long-held “truism” that money is not necessarily a motivating factor in career decisions, but the Jobvite study shows a different reality. The primary reason for seeking a new job is for higher compensation (32% of respondents), and it is also the primary factor in deciding to accept a new job (61% of respondents). Work/life balance, growth opportunities, and flexible working arrangements were rated significantly less important than compensation.
  • A mobile-friendly application process is growing in importance, especially among younger employees. More than half of Millennials want the ability to see job listings without being required to register, and a third want to apply for jobs directly from their mobile device.
  • There is a disconnect between the social platforms being used by employers and recruiters to find talent and where candidates are looking for jobs. A full two-thirds of job seekers who use social media use Facebook for their job search. In fact, Facebook is the preferred social network for job searches across all income levels, yet LinkedIn remains the primary social channel for recruiters.

What does this data suggest? To me, it seems clear that employers need to step up their social game, evaluate their offers based on the current landscape, and either develop great retention programs for their top employees or be prepared to deal with much more frequent turnover. What’s your opinion?

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Exit Strategies for Micro Recruitment Agency Owners

By Veronica Scrimshaw

2013 Rod smallOur guest blogger is Rod Hore from HHMC. Rod is a 35-year veteran of Australian and international IT and corporate advisory organisations. His executive-level credentials traverse many segments of the staffing and recruitment industry and include corporate advisory assignments, mergers and acquisitions mandates, and C-level advisory to multinational and other public and private organizations. Located in Sydney, Rod founded HHMC to provide local industry acumen and global knowledge to Asia Pacific recruitment agencies. HHMC’s innovative business strategies and well-grounded guidance result in clients realising their personal and corporate goals.

A micro-business is usually defined as a business with less than 5 employees. The recruitment industry has a vast percentage of agencies at this micro level. Though the irony is, when important aspects of the industry such as strategy, valuations and M&A are discussed, the smaller businesses are ignored and the focus is on larger businesses.

It has been well documented that the western economies will see a mass exit of micro and small business owners in the next few years as baby boomers retire. What will happen to these businesses? Are the owners ready with the appropriate exit strategy?

During the life of a business all owners have choices to make about the growth, size and sustainability of the business. Many business owners, for good reasons, choose to build and operate a micro business. But it is at the business exit that the implications of those decisions are felt.

Often, as advisors to the recruitment industry, we are asked about exit strategies and valuations for micro businesses. It is very important to have a clear understanding of value and options when considering an exit.

We recommend a business owner take the time to view and evaluate itself from the perspective of a potential buyer. What a buyer would see, when they look at your business and evaluate its potential and its risks, is something that should be kept in mind while forming any business strategy.

The value of a services business such as a recruitment agency is best thought of as the risk associated with earning revenue and profit into the future. If the characteristics of the business change after acquisition, then the risk of earning future profit is likely to fall; and this is something that a buyer would always consider and reflect in a price and structure offered to acquire a business.

If the owner of a micro business is looking to exit immediately, then the value of the business is likely to drop significantly as the drivers of revenue and profit are likely to be tied to the owner.

Once the owners have departed, what value is left? Possibly some client contracts; possibly some consultants; a candidate and client database. But the business position in the market; the key client relationships; the drivers of performance and productivity, and the key revenue generator are usually tied to the owner.

Our advice to the micro business owner is two-fold.

Firstly it is essential to concentrate on wealth creation on a continuous basis, as the lure of an equity transaction pot-of-gold may never be realised. That is particularly true for micro business owners as they have made the conscious decision to build a business that has a small equity value.

Secondly, when approaching an exit phase, the owner of a small business needs to position themselves to create a smooth handover. Their business is less likely to be sold as a formal sale process, but is more likely to have its assets passed on in a friendly and less structured process. That takes time and energy to achieve. The value is likely to be dependent on the enthusiasm of the owner to stay and assist with a transition and the earning of future revenue.

Unfortunately what you read in the paper about M&A transactions, about business valuations, and about business sale structures will be of little relevance to you.

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Is Contract Staffing for You?

By Veronica Scrimshaw

employee-compositeToday’s guest blogger is Patti Steen with The Pelsten Group located in Seattle, WA. The Pelsten Group is a recruitment firm that focuses on all levels of positions within IT. The majority of their clients are in the Seattle area but they actively support NPAworldwide across the US. Patti is currently serving on the NPAworldwide Board of Directors.

Is contract staffing for you? I have worked for years in both contract and direct hire placement and have wondered why more firms do not supply both to their customers. Current trends in staffing show a 6% increase in contract staffing during 2015, bringing the total spend to US $115 billion. If your firm is not currently supplying contract staffing to your customers, it may be time to take a look at this growing service.

I talk to a lot of small firms that are only focused on direct hire. They have a lot of pressure to fill requisitions! This pressure can cause them to take on orders that are not ideal or customers that are difficult to work with. A lot of that anxiety goes away when you are not “unemployed” every morning. Contract staffing gives you a weekly paycheck…so you can relax and love what you do.

  • Steady Cash Flow – When you have contract staff working, you generate consistent revenue that can provide stability for the rest of your business. Let’s look at what can happen with just a few people working on contract. If you have 5 contractors working at all times and you earn US $10 margin per hour, you would generate an additional $104,000 annually. Wouldn’t that give you some peace of mind and flexibility to build your business?
  • Secures Your Customer – It is very likely the customers you support with direct hire services are also using firms to help them with their contract needs. You don’t have to find new customers to dip into the contracting side…you already have them in place. You become their “one-stop shop.” Why let competitors in the doors when you can do it all?
  • Expand Your Referral Network – We all love referrals. You will expand your network not only within your customer, but also have a larger candidate pool to tap into for referrals.
  • New Offering for Direct Hire – As we all know, companies are working on very tight budgets. In some situations they have to pull the plug on a direct hire placement due to changes in their budget. Well, maybe you can save that placement by offering a temp-to-hire. By spreading the cost out over a few months, your customer might be able to make it work. Don’t let their budget affect your budget…get creative.

What has been holding you back from jumping in to the contract services pool?

  • Funding the Payroll – This a big one! My firm is small and I did not want to have the burden of funding payroll, processing time cards and issuing checks. That would divert my attention from recruiting. I decided to outsource all of that work to a payroll agent. The payroll agent handles all of the back office and they are the employer of record. As the employer of record, they are accountable for unemployment, workers compensation, insurance, etc. This leaves me to do the work I enjoy.
  • Managing Contract Employees – This can be simple or a bit more involved depending on the customer’s needs. The employee will receive direction from the customer on their day-to-day work, but I am their contact for any human resource-related questions/concerns. I check in with the customer and the contract employee on a regular basis to see how the assignment is going…but honestly, it is similar to what we do to keep a direct hire candidate engaged.

There is a little drama sometimes but isn’t that why we like this work…we never know what will happen next!

Contract staffing helped me get my company off the ground and continues to be a large part of what I do today. I hope this helps you decide to give contract staffing a try!

Image courtesy of nirots at FreeDigitalPhotos.net

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Easy Appointment Booking Recruiter Tool

By Sarah Gawrys

A problem I was having for quite some time was ease of scheduling call times with recruiters of independent firms to qualify them for membership in NPAworldwide. On average, it took about 2 to 3 emails to nail down a call, and then there was about a 50% chance that they would cancel, forget, or just get carried off by a herd of non-purple squirrels never to be seen again. After a few trial and errors with online calendar tools that did not seem to sync appropriately, I stumbled on https://youcanbook.me/ a site from the UK that has made my life much simpler. First and foremost, this tool is FREE. Well, the version I use is, and it does the trick, so I will stick with explaining the features and benefits I have found with that version. YouCanBook.me is booking software that integrates with your Google or iCloud Calendar. When you sign up, you get a personalized scheduling page so your customers can book you online. The look is very clean and professional:

bookme

Users are able to change their time zone prior to booking as well, so for our global audience this helps me have to deal with less converting. After you decide which calendar/email you would like this tool to sync to, you are able to set your custom booking link, add a logo and customize what message and colors you would like. Once your hours and duration are set, you are pretty much ready to go in less than 5 minutes. At this point, you can really close out of the web page and in all honesty, never have to reopen it. The tool is now synced directly to your email calendar, and updates within seconds whether you are receiving new bookings, scheduling meetings, or leaving the office early. If you are more techy, the booking information form can be fully customized with whatever fields you want and can be 100% controlled by CSS to style it up to match your website.

This tool works for you rather than against you. I personally have text message reminders sent to me 2 hours prior to appointments in the event that I am out of the office in a meeting or appointment that is running late or my mind blanks on checking my email calendar. After you customize your site, you have many options as to how to share it with your customers, whether as a link in your email, embedded in your website, or shared on a social media site. Sometimes a client or job seeker may see you on the web but write down your number or email to contact you later. This tool gives them an easy opening to making sure you are available.

Another differentiating feature is that users do not have to create a login to book appointments, and you may create any fields you like for them to fill out to schedule the appointment. If you want to keep it simple, just require a name and phone number, or if you like to have more background ask for a website or a LinkedIn profile to be able to prepare.

If this tool doesn’t quite fit what you are looking for, I still urge you to consider a similar option as just good client/candidate service! I can definitely say it has saved me time and money, while automating a tedious process, and helping to stay organized.


5 Terrific Sources of Recruitment News

By Veronica Scrimshaw

news-headlineWhile there are plenty of resources for human resources and hiring news, sometimes it can feel difficult to find credible sources of recruitment news. Here are 5 of my favorite sources, in no particular order:

ERE Media – Originally founded as an online “community” of sorts for recruiters, ERE has a brand-new (and awesome!) website that brings all of their brands into one single online space. Their brands included ERE.net, TLNT, SourceCon, and The Fordyce Letter. In addition to weekly newsletters, ERE Media also hosts numerous webinars and conferences throughout the year, focused on agency recruiters, in-house / corporate recruiters, sourcers, and human resources professionals.

Onrec – Onrec, or Online Recruitment magazine,  publishes daily news on their website (you can subscribe to a free daily newsletter) in addition to a bimonthly magazine and various online recruitment events around the world. Their audience is recruiters, personnel managers, HR directors, and job boards.

The Global Recruiter – Based in the UK, the Global Recruiter publishes monthly magazines for the UK/Europe, Asia, and Australia markets. They also host annual awards as well as global recruiting summits, and feature an online suppliers directory. For those who may not be interested in subscribing to the magazine, check out their blog.

Recruitment International – Another UK-based publication, Recruitment International is a digital magazine with specialist sites for the UK, Australia, and Asia. New in 2015, Recruitment International is publishing a Top 500 report of the largest UK recruitment firms, ranked by UK-only turnover. RI also hosts conferences and an annual awards program.

Recruiting Trends – With a website as well as a weekly email newsletter, Recruiting Trends delivers news and other recruiting information to senior-level recruiters, HR professionals, and other talent managers within small, medium, and large organizations. They also host a variety of webinars and the annual Recruiting Trends Conference.

What are some of your favorite sources for recruitment news? Please share in the comments below!

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3 Reasons Job Seekers Should NOT Expect a Return Call

By Dave Nerz

image of man waiting for phone callWhat if you were a BMW car collector and reseller? You made your living by finding out about all the great BMWs available, buying and reselling these to others that collect BMWs. What if every day you got calls from people asking you to spend your day talking about Mercedes? Got so that every day you could spend 6 to 8 hours talking to collectors, owners and resellers of Mercedes. Do you think that spending 6 or 8 hours a day on Mercedes discussions would improve or damage your income, skills and reputation as the best darn BMW reseller in the world? You could learn about how to make Mercedes run more like BMWs, you could become expert in being the nicest BMW collector in the world, but your sales and income would forever be impacted by investing so much of your time on something that is not going to support your core business.

Think of a recruiter as that BMW expert. As a candidate you may be the Mercedes enthusiast. While you are working on similar searches, they are not exactly the same. Every minute invested in non-core activity (other than learning, searching, discussing BMWs) is time lost that will impact income.

I use this example to show what candidates expect of contingent recruiters. Recruiters tend to get a reputation for not being helpful to candidates in the ways candidates expect. There is good reason for recruiters to remain focused on what makes them income. Most recruiters understand the expectations and reasons for candidate calls, but candidates do not understand the lack of action they get from recruiters. Candidates are sometimes all about the Mercedes and the recruiter is collecting and reselling BMWs. This is why recruiters don’t return your call.

  1. Recruiters have limited time. Are you asking the recruiter to spend time outside of a core area of focus? Not returning your call is a calculated business decision.
  2. You want to CHANGE careers. Are you telling a recruiter that you want to change careers? If so, consider this: recruiters help people move into roles they are very qualified to do and where there is a proven track record of results. They are not typically career coaches helping you move from one profession to another. If they see a call as a coaching session, they will not return it.
  3. Your resume is on too many job boards. If your “car” is already being sold online and listed in every enthusiast’s magazine, then the recruiter needs to move on to candidates that are not as well known. Recruiters do not get paid a fee when employers can grab your resume off many different job boards. If you have not established a win-win relationship with a recruiter, they will not take the time to even present you to a client. They need to know you are talented, looking for a job in an area where you excel and not posted on every job board out there. If your resume is all over the web, you may not get a return call.

Don’t get angry about these comments, just look for the nugget of truth in each of them. These are real. I am not saying they are right or wrong, I just want candidates to be realistic. These comments do not hold true for all recruiters, but most focused contingent recruiters cannot and will not be accommodating to every candidate. Their goal is income and survival in their competitive industry.

Job Seeker Tip: Find a recruiter expert in your industry. Engage them in a discussion about your proven track record. Limit the exposure of your resume to the just one trusted recruiter. Tell them about target companies you want to work for. Have a weekly talk about opportunities and action being taken. Be patient, be truthful, be open to change and something good could happen!

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