Global Recruiting

Today’s post is from Nerissa Reyes from AVANTI People Partnership International in Manila, Philippines. Nerissa is currently serving as chairman-elect on the NPAworldwide board of directors and was previously both secretary/treasurer and a regional director for the recruitment network. She lives and works across several countries including Jakarta, Sydney, London, and Manila. 

AVANTI People Partnership provides executive search and staffing for various multinational companies across functions. In the fast-growing “business process outsourcing” arena, AVANTI provides cross-border recruitment solutions on a global scale.

Did we ever go to university thinking we would like to be a recruitment consultant? It does not follow a prestigious degree like law, doctor, accountant.

So why do we do this? Why did I become a recruitment consultant after obtaining a professional qualification in accountancy? Did I see this as an interim job? Why did it last for 20 years? Accountancy is a good discipline, but dealing with people provides deeper gratification & meaning to everyday life.

But can we make a recruitment firm sustainable and built to last? I believe if the leader of the company follows through with a vision/ mission that goes beyond themselves, the business can continue to prosper. A recruitment firm that follows a culture according to authentic personal values is reflected through the recruitment staff & appreciated by candidates. The  clients see your difference and offer repeat business. A network of associates sharing similar values expand the business.

Maintain a culture of authenticity. A values-grounded management is truly concerned about the welfare of staff. The  head of a small recruitment firm sets the vision and determines the working environment. Walk the talk in the workplace and the recruitment staff will care for the company like their own.

After 20 years in the industry, our legacy lives on. I recently opened a Facebook posting from the company’s first group of recruitment consultants, a team photo in our first office with the caption, “the good old days.” Our consultants have moved on, but the learning and experience is something they will carry with them…and they are always proud to have been part of the team and eager to refer repeat business.

Nowadays, we are tempted to make shortcuts. Clients push us to do mass production and treat candidates like a commodity. Nevertheless, our core values as recruitment consultants should not be compromised in the process. The recruitment process is not just about the KPI’s…it’s about  the person. Unlike  any other business  it affects people’s long-term careers and livelihoods.

Do not be afraid to tell the truth about employment market conditions. If we have reservations about a client’s cultural fit with a candidate & vice versa, we should be in a position to provide relevant, sincere advice. Remember, relationships are long-term…we may miss this placement opportunity, but it comes back a hundredfold. Ultimately, they appreciate the honesty. This is our main differentiation over searches done just using technology tools.

No task is ever so daunting if we maintain that authenticity in the recruitment workplace. Our recruitment company will take on the challenges brought about by the industry ups and downs. But we will be “built to last” because our core values are grounded.

“The only truly reliable source of stability is a strong inner core and the willingness to change and adapt everything except that core.”
― James C. Collins, Built to Last: Successful Habits of Visionary Companies

Our 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.

As the year has progressed we have all seen a rise in announcements about acquisitions in the recruitment industry. A rush of consolidation activity is underway between the large and international companies. In a number of cases the deals are enormous and the valuations seem “generous.”

Does this activity have any impact on life for the small-to-medium business owner and manager? Well, yes it does. Here are 4 impacts.

Valuations
The question we are most often asked is about valuations – does all of this activity create a spike in value for small-to-medium enterprises (SME’s)? Possibly, but not for most.

For most SME’s, HHMC has seen little change in valuations over the past decade. Profit levels have risen and fallen, and the appetite for acquisitions has risen and fallen, but the multiple of profit paid for SME’s has mostly stayed within a set range.

In most circumstances, larger companies cannot justify acquisitions that are too small as the transaction cost and risk is too high for the expected return. The exception may be those companies that have developed a particular niche that is in demand and can prove there is strategic benefit is that niche.

However the rise in larger-scale M&A activity does embolden SME owners and managers to consider acquisitions as part of a growth strategy. These are not reported widely, but the activity level is high.

Global Expansion
The rise in global companies has an impact on SME’s. Not only does it bring well-funded and high-performance organisations into a local market, the global companies tend to have disruptive models compared to local SME agencies. Clients are presented with new solution models and new pricing models that are often beyond what can be provided by the SME’s.

SME’s need to choose their strategy carefully so they are providing services to clients that want those services.

Large works with large
As the recruitment industry’s clients adopt greater HR and procurement-led purchasing models, SME’s tend to be sidelined. Larger companies work with larger companies in most circumstances. This is especially true for international organisations that are seeking single-supplier solutions across counties and across regions – indeed this is driving some of the global M&A activity.

SME’s need to consider where they can best add value and what client type they should target.

Success breeds success
A very positive outcome of the M&A activity is that it puts a spotlight on the industry. This can lead to greater investment activity such as the attention of private equity companies seeking investments in a buoyant industry. It also attracts greater entrepreneurial activity, attracts new management talent, and provides a focus for business advisers.

One would hope the focus and activity will embolden business owners and managers to strive to build the best businesses they can; businesses that will come to the attention of global acquirers or the private equity investors.

That’s good for the industry.

Manpower has released its quarterly Employment Outlook Survey, with mixed results. Nearly 59,000 employers throughout 40+ countries and territories were interviewed to gain insight about anticipated hiring activity during the fourth quarterly. While many employers are reporting positive hiring news, the numbers are lower than might be expected as signs of a robust economic recovery have not yet materialized. Geographically, some of the key take-aways include:

Americas

• Employers in the US anticipate the strongest hiring plans in this region. More than 20% of employers are planning to hire additional workers during the fourth quarter. Hospitality and leisure leads the way, followed by wholesale & retail trade, transport & communications, and professional & business services.
• Mexico expects an improved outlook compared to the previous quarter. Manufacturing and transport & communications are especially strong.
• The hiring outlook in Brazil continues to decline, with it now at its lowest levels since the Brazilian survey was launched in 2009.
• While some hiring is expected in Canada, the outlook is lower compared both quarter-over-quarter and year-over-year.

Asia Pacific

• India remains in a robust hiring climate, leading Asia Pacific. Forty percent of employers surveyed plan to add personnel during the next three months.
• Taiwan follows India with the second-most optimistic outlook with very strong hiring in both the services and the finance, insurance, & real estate markets.
• Japanese employers report the best hiring conditions since Q1 2008, but its aging workers are rapidly leaving the workforce. This is causing additional pressure on a candidate-short market.
• Australia has had lingering difficulties in hiring but the finance, insurance, & real estate sector is the strongest it has been in more than three years.

EMEA

• Continuing concerns about the debt crisis in Greece are impacting hiring plans across the region to some degree.
• Both Romania and Turkey indicate very positive hiring news. Romania leads the region, particularly in manufacturing and wholesale & retail trade. Roughly 30% of Turkish employers plan to hire through the end of the year.
• Ireland and  Spain appear to be climbing out of a persistent depression in the labor market. Both countries have now reported four consecutive quarters of hiring gains.
• Italy continues to have the weakest labor market in EMEA, with a negative hiring outlook for 19 consecutive quarters. Young workers have been especially impacted by very high unemployment rates.

What are the hiring conditions in your part of the world? Comment below!

Today’s guest blogger is Geoff Crews with Forsythes Recruitment in Newcastle, New South Wales, Australia. Forsythes Recruitment specializes in engineering and technical recruitment; corporate recruitment, including executive, sales, HR, and finance; office support recruitment including admin, accounts, and clerical; trade and industrial recruitment; and organizational consulting including psychometric assessment, outplacement, and OD. Geoff serves on the NPAworldwide Board of Directors.

An article in the Harvard Business Review entitled Why Incentive Plans Cannot Work goes into some depth about rewards and the human psyche. It was published in the September-October issue of 1993.

Nearly 25 years later, many of those years I’ve spent recruiting sales people, and I wonder if we, as agencies and employers, are yet convinced that commission delivers the best outcome for clients.

It’s not a one-size-fits-all scenario.

Selling your house for $5000 more to a prospective buyer is worth around $200 to your real estate agent. Who might then split that with the licensee. Is it the commission or the character of the agent that drives him/her to push the buyer that bit further?

Commissions for car salesmen are more complex. Other factors come into play including the number and age of cars in stock, the manager or dealer’s projections and even the time of year.

Research tells us that the more complex the commission, the less effective it is in driving sales success. My experience recruiting sales people across industries supports this research. Many candidates I have interviewed, when asked how their incentives are calculated, tell me they are unsure. Any wonder they are sitting in front of me considering alternative employment.

For most recruitment consultants, remuneration is base salary plus commission on placements. Rod Hore (www.hhmc.com.au) in his 19 March 2014 article would suggest this is an outdated remuneration structure for large parts of our industry. “Commissions were initially brought in for people who achieved sales, and sales to me is about winning new clients, not necessarily about doing the job of recruitment,” he said.

I agree with Rod. And it would seem there is a wave of recruitment firms redefining their remuneration, fee structures and service offerings to deliver and reward not just a single placement but a breadth of outcomes considered strategically more valuable – market research, candidate attraction, long game pipeline creation, talent engagement, consulting. Such firms think and behave like marketing companies (see www.gregsavage.com.au 5 May 2015).

Global software firm ThoughtWorks removed commissions for its salespeople and says it has worked wonders for the company. ThoughtWorks believed salespeople were spending too much time on “non-productive, administrative efforts,” and that the right salespeople weren’t being assigned to clients. “Not having a commission structure ensures every salesperson can concentrate on chasing the deals and coming up with constructive solutions for clients.”

Profit-sharing schemes are becoming popular in boutique recruitment firms like mine.

A group profit share fuels internal cooperation and delivers genuine group strength to clients. NPAworldwide works on this principle – a global cooperative of boutique agencies working together for the benefit of clients and sharing in the success.

Profit share creates more rounded consultants as it necessitates a commercial understanding that goes beyond the revenue line of a P&L. And profit share means success is shared amongst the team. Which, provided you have the right team, is way more fun.

Maybe I’m crazy. But in a world of disruption I wonder if we as an industry really believe that traditional commission will be the structure upon which our piece of the ‘talent acquisition’ pie will grow over the next decade.

Attracting global talent requires a new perspective. Employers must think about their marketplace for talent internationally rather than just locally. Based on the studies and reports from those that survey employers, many are experiencing difficulties finding qualified candidates for job openings. In fact 80% of employers reported difficulties filling openings in CareerBuilder’s Skills Gap Report. So perhaps now is the time for employers to expand their reach and seek candidates in other markets.

Getting started requires innovative efforts and new methods to connect with the talent that exists internationally. Here are a few things to consider:

• Connect where the candidates are. Do research to find out what organizations and communities exist and are attractive to the types of candidates you desire. Connect to schools that are graduating degreed individuals that you desire. For example, international engineering schools or medical programs. Are there local communities like “Engineers Australia” or “Philippine Nurses” that are hot beds of discussion and offer an opportunity to attract and connect with future candidates?
• Get social. Start a LinkedIn Group or Facebook page to attract the types of international candidates you want to engage.
• Join social discussions. Place your organization into the social dialog. Get active, offer insight, contribute to the conversation.
• Schedule interviews. It is virtually free to interview. Set aside some time early or late in a day each week to entertain international candidate interviews via Skype or some other distance connecting tool.
• Speak or do webinars that will draw the global talent audience you seek to engage.
• Find partners. Look to establish a connection to an international recruiter or a collection of global recruiters.

Distance is no longer the reason blocking access to global talent. Technology has enabled connections to anyone virtually anywhere. Leverage the tools out there to connect.

Anyone have a favorite tool for connecting with global candidates they want share with us? LinkedIn and Skype are my “go to” tools!

Image courtesy of siraphat / FreeDigitalPhotos.net

It’s no secret that we are in a candidate-short employment market. Globally, employers are reporting significant difficulty finding the talent for their most crucial openings. With the employment market stronger than it has been in quite some time, more employees are open to new career opportunities. In fact, 45% of SATISFIED workers say they would consider a career change. Anecdotally, our member recruiters are reporting more counteroffer and multiple-offer situations than they have for a number of years. Great candidates have an increasingly short shelf-life and are typically off the market in a matter of a few days or less. Read the rest of this entry »

Recruiters 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. Read the rest of this entry »

With 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: Read the rest of this entry »