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Blue Ocean Strategy for Recruitment

by Veronica Blatt

Today’s guest blogger is Taufik Arief with People Search Indonesia, based in Jakarta. People Search Indonesia serves clients in FMCG, pharmaceuticals, IT, telecommunication, general manufacturing, and fashion & retail. Taufik currently serves on the NPAworldwide Board of Directors representing Asia.

A moment of truth. I was at Los Angeles International Airport when my eyes caught a newly released book: Blue Ocean Shift written by W.Chan Kim and Renee Mauborgne. I bought and read it during my 20-hour flight to my home city, Jakarta. The book reminded me how companies can sustain business and increase their shareholder value by creating new markets, changing the landscape of the competition and of course, through continuous innovation. Companies who do not pay attention to these, and just focus on competing and outperforming competitors will gradually suffer in the ‘red ocean’ ecosystem, forcing them to price wars and struggling with the market share. This really disturbed me, as our current recruitment industry might not have specific strategy to address it.

The recruitment space has changed. Technology is a major driver. More players are coming to the market taking advantage of the relatively low entry barriers to the industry. Customers are getting smarter too, and consequently they demand more. All of these gradually alter customer expectations and their views about our industry. Where in the past clients just wanted good quality candidates and quick placements, today they want more. Now they want good employer branding. Users want more analytic information about the talents on offer, requiring more sophisticated assessment tools with better algorithms. More clients now understand the importance of ‘talent mapping,’ charting potential candidates outside of their organisation even without vacancies and integrating outside talent to their talent management system. They want more flexibility in hiring, they want more contingent talents, avoiding long term commitment. Companies also want to develop their databases. Instead of just receiving a shortlist of the three best candidates from search firms, clients also want to develop their talent data banks which might be used for future needs. Also, clients wants to save on operating expenses. Hiring ex-head hunters, investing in a good ATS, and paying for LinkedIn, giving them sourcing ninja training and other tools, in the long run, will probably be much cheaper than using external recruiters/search firms. We lost some Fortune 500 accounts, not because of underperformed service, but simply they hired regional recruiters serving ASEAN market. Hiring further headhunter services on top of what they spend already, does not make sense.

The Risk for Not Changing

Remaining in traditional search models means living in the ‘red ocean.’ If we are currently still living comfortably there that’s good, but we have to realise it is not going to be forever. The transformation of this industry has been going on swiftly around us. Our old recipe for success – sending the best candidates as soon as possible to customers – might actually be far from enough in the present and future environment.

I’d like to address the new mindset that we need to adopt. Most of the time we apply the doctrine of winning the competition: we have better candidates, we ship talent faster, we have more accurate assessments, we charge lower fees and so on. These all are about beating our competitors. But can we go beyond this? Can we create new solutions which at the same time create a new market? Can we really capture our clients’ updated expectations and future demands? A new market without existing competition – at least in the early days!

When Recruitment Process Outsourcing (RPO) landed in our industry, it became a new market, and affected regular executive search practice. RPO answered clients’ new needs (including employer branding, talent databank management and so on) at a much lower fee, compared to using regular executive search services. Talent sourcing agencies (sourcers) have become a new sub-industry in the recruitment world, providing a detailed focus on talent sourcing and mapping, enabling in-house recruiters to focus on talent assessment, analytics and closing the employment agreement.

One of the steps that I recommend to search firm owners and leaders is industrial/market mapping. If your main solution/product is in ‘red ocean’ territory and you have no potential ‘blue ocean’ products or services, then you might face difficulty in the long run. As some of our clients are transforming their recruitment practice, and taking traditional search off the table, we shall be dealing with more limited customers. Please do remember, therefore, that the client’s demands are also moving forward, and with some speed. Anticipating their future needs might require us to become more visionary, but with many tools available in the market we can keep innovating. Furthermore, the most important thing is to instill a spirit of innovation within your business. Indeed, larger firms with more resources would no doubt benefit from an innovation committee/team responsible for this effort.

Moving forward

Having read Blue Ocean Shift, my firm changed our paradigm. We now refer to ourselves as Innovative Recruiters. In the long term, we will probably be less interested in traditional contingent search. We will never be 100 percent away from the ‘red ocean,’ but we will create and promote ‘blue ocean’ solutions from time to time.

We have already launched ‘Flexy Hire’ – a result of decoding the diverse parts of recruitment and thereby enabling our clients to buy our recruitment services partially through a ‘pay per use’ model. We can help them by just doing phone screening, reference checks, writing salary proposals or negotiating – whatever parts of the recruitment process they want us to do. We have also created a ‘Golden Talent’ product where we assist retired C-levels to work for SMEs as advisors, shared directors or freelancers. Social media checking is demanded in today’s recruitment world in addressing extremism and intolerant behaviour; here we work together with an “investigation company” which is an expert in this area. We believe our extensive collaboration with recruitment technology (RecTec) companies will bring future revenue. We are always open to collaboration opportunities with RecTec firms from traditional ATS & HR solutions to assessment service and more advanced RecTec solutions. We love to create new solutions for today’s client needs and also for the future, and will love to collaborate with other search firms or institutions as we dive deeper into the ‘blue ocean.’

This article was originally published by Global Recruiter Magazine; please see the original article here.

Posted in: Global Recruiting

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