Is the Current Corporate Recruiting Department Model Doomed?

Some points to make before you read this article:

  1. It’s somewhat controversial, but by the end you’ll agree (if you get that far).

  2. If you’re a corporate recruiter or HR leader, put your confirmation bias in the parking lot before reading this article.
  3. You might want to listen to this YouTube video of a webcast (Future of Recruiting Circa 2020) we recently held. It will give you a sense what’s happening now and what will happen soon.

No surprise here, but the answer to the headline’s question is an unequivocal yes. Here’s why the current version of the corporate recruiting department is heading toward extinction:

  1. History repeats itself. The current version of the corporate recruiting department and recruiter came into existence in the 1995-2000 time frame due to technology changes. These same technological forces will fundamentally change the nature of the job in the next few years. In the mid- to late 90s with the growth of job boards, companies realized they didn’t have to pay contingency fees to third-party recruiters for candidates they could find on their own. As a result they began to hire contract recruiters at a pretty stiff hourly rate to reduce costs and increase control. This model proved successful and soon contract recruiters become full-time employees at more reasonable rates. Since cost and efficiency were the drivers behind many of these initiatives, there were never enough recruiters on the staff to handle all of the requisitions properly. In many cases this model is more transactional and administrative, focusing on filling jobs with the best person applying, rather than reaching out and finding the best available person. This strategic error, in my mind, will be the root cause of the corporate recruiting department’s ultimate demise.
  2. The active-to-passive shift is accelerating. According to a massive joint study we conducted with LinkedIn, only 18% of the fully-employed pool of prospects were looking for new jobs using traditional techniques. The 82% who describe themselves as passive need to be engaged with in a totally different manner from the 18%. They are looking for better jobs and career opportunities, they take longer to decide, they won’t apply, they don’t have resumes, they are in higher demand, and they are far more choosey. Most corporate recruiting processes are ill-equipped to handle these differences. Without a major overhaul in processes, tactics, resources, and how job descriptions are written, the biggest pool of the best prospects will go untouched.
  3. Interconnected networks will replace sourcing. Soon, if not sooner, everyone will be connected with everyone else by only one degree of separation. As a result, proprietary talent communities will become unimportant since everyone will have access to the same people. These will soon be overshadowed and ultimately be replaced by 360° talent networks. As a result, those with the deepest and broadest talent networks will win. While developing these networks will be a critical job of the recruiting department of the future, it’s unclear that managing and working the network will require the current set of recruiter skills and competencies. Since the auto-matching of jobs with prospects in these extended networks will soon become the norm, the end-game (reeling in and closing) will become the critical differentiator of success.
  4. The rise of the hiring manager self-serve model is accelerating. Just as corporate recruiters replaced TPRs, hiring managers will soon be taking over much of the work now performed by corporate recruiters. Consider this likely scenario: a hiring manager creates a quick video describing the job. Moments later it’s distributed throughout the talent network to just the right people. Available prospects will be notified moments later on their smartphones, and since everything will be known about everyone, the most qualified people will be automatically matched with the best opportunities. The best matches will be to sorted to the top with instant video exploratory meetings set up at the push of a button. I don’t know what happens next, but it will be a heck of lot different than what happens now, with hiring managers driving the process.
  5. Quality of hire has not improved under the current model. Let’s be honest on this point: there is no evidence that quality of hire improved as a result of moving the recruiting function in-house. While cost per hire and time to fill have improved, there has been no corresponding improvement in the overall talent level of a company. Improvements on this score, if any, can largely be attributed to employer branding, supply vs. demand issues, hiring manager insistence, or some executive-level strategy change. If some other corporate recruiting model can demonstrate better quality of hire at the same cost and efficiency, there’s no reason to maintain the corporate recruiting function in its current form. The one envisioned certainly meets this benchmark.
  6. The decline and fall of the FTE and the requisition. The full-time equivalent worker is becoming less relevant, replaced by contingent, contract, consultants, outsourced and project workers. This parallels demographic changes, with an aging workforce considering more part-time work, and a large portion of those just entering the market not sold on the corporate career lifestyle. Much of the mixing and matching associated with this project-based work environment can be automated, further lessening the role of the corporate recruiting function. On top of this is the idea now gaining traction of crafting the job around a great person who is a rough match on skills, rather than finding a person who closely meets the skill set on the job description. Talent networks like LinkedIn and Facebook coupled with emerging career management apps are both forcing and enabling this type of paradigm shift in approach and thinking.

While the trends themselves are quite apparent, one could effectively argue the specific outcomes and conclusions drawn. The lack of technology advances — especially on the ATS front — would be the big reason a new, more efficient corporate recruiting model does not emerge as quickly as possible. The fact that these systems are built on a work process that is requisition-based also prevents much of the changes proposed from being implemented as efficiently as possible.

While change might be slowed by the lack of an effective ATS, recruiting leaders must create the future, rather than react to it. On one level 100% visibility to everyone and every job is not necessarily a good thing. Some negatives include increased workforce turnover, waged-based inflation as companies compete for the best or to retain them, wider swings in company performance as weaker performance accelerates people leaving for greener pastures, and productivity declines caused by the need to increase training.

Article Continues Below

Whether you agree or not with the specifics here, change of some significant type is inevitable. On the tech front things are changing more rapidly than ever, and as a result, the corporate recruiter of the future will look little like his or her counterpart of today. Those who take advantage of these changes will have a field day. Those who don’t won’t be around to worry about it.

About the Author

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

  • http://www.raccareers.net Jim Wahl

    I always enjoy the annual postings of the death of recruiters, the death of job boards, and the death of the ATS.

  • http://www.sdcorprecruiter.com Simon Meth

    Well that was lots of fun to read . In my world, current technology already connects corporate recruiters, hiring managers, and potential candidates. Think LI, FB, Twitter, and G+. The real question is who will leverage those existing connections the best? TPRs do have a place if they actually recruit rather than just post and pray. Most do not.

  • Stephanie McDonald

    Me too. Amazing that I’ve been dead for so many years and still getting paid. There is a difference to me between changing and being extinct. I evolve. Those who don’t should find another profession.

  • http://www.agile1.com Krista Ashbrook

    As it becomes more competitve to attract the very “best” candidates, I believe that this article really hits the nail on the head. Sadly I see more recruiters than not using the “post and pray” method to fill their positions. Which quite frankly doesn’t attract the BEST fill. Recruiters could stand to be a bit more forward thinking in how they attract candidates.

  • Tom Leacu

    Wow, I guess I should be looking for a new career then. I’m a contractor and the only thing that’s doomed at the companies I’ve worked is the use of agencies.

  • http://www.linkedin.com/profile/view?id=700184&trk=tab_pro Patrick Bujold

    The (active to passive)recruiting model has and will remain the key to bringing in the best candidates to meet the needs of our clients (whether they happen to be our employers or not). I was a very early adapter of LinkedIn and after 30+ years in the profession building a database, have the resources to call or write the happily employed prospects and get their attention.
    The best passive prospects are often bombarded with offers of one type or another with regularity. Most have built an immunity, that can prove formidable. Sending a video of the hiring manager, assuming he is comfortable and adept at speaking into a camera, is a clever idea, but with little hope of success unless it is personalized to the individual being contacted.
    In large part, I agree with this article. We can count on change and many corporate staffing groups will likely go the way of the dinosaur. Administrative staffers shuffling active candidates resumes to hiring managers have a function: Freeing up recruiters to make contact with the best prospects to sell the American dream.

  • Don Cihelka

    It is hard to believe that in this world you make such a critical assumption that all Corporate recruiters just sit on their butt and wait for someone to apply! I have been sourcing for years and of course using my networks to find appropriate candidates as well. Get with it!once again I am dismayed that you are out of touch with reality.

  • Ash DeVane, CPC

    Reminds me of “Future Shock” from 40 years ago (to date myself). While we might look back in 15 years and say this assessment is accurate, this transition won’t happen overnight.

  • Lou Adler

    Great! Finally getting people aggravated, although Don you didn’t follow rule #2 at the beginning.

  • Jeffrey Keene

    If this change does take place it will be much later rather than sooner. Most corporate recruiters I have worked with will not give up their domain without a fight, as evidenced by some of the comments to your article. The main problem I have witnessed in my 24 years with most corporate recruiting departments, is they are not permitted to focus on recuiting and building the relationships with the needed sources (outside firms and contractors). Often they are pulled into other tasks and endless meetings to talk about recruiting, instead of doing the job at hand.

  • http://www.linkedin.com/in/gingergraham Ginger Graham

    Lou – I kept an open mind while reading, and I understand you are simply referring to the model as you feel it is built today, not necessarily the death of the people inside the model. Interesting perspective, and for a minute there I thought I was reading a Kevin Wheeler article.

    One of the points referring to “self-service” hit me. I don’t know about anyone else, but I’ve never come across a hiring manager that has the interest, the TIME, and the capability to process an applicant from start to finish in a pleasant, efficient and effective manner. While I get what you are saying about how we are all within fingertip reach of eachother these days (and getting closer!), I just don’t think that we will ever be able to move on without the player/recruiter facilitating the hire, whether its hooking them or reeling them, or gathering additional references or simply giving them that personal experience.

    BUT – I’d love to know what this ‘model of the future’ might look like, and I’m always wide open to change if it makes sense. The evolution of the ATS these days seems to be focused on full cycle employees Talent Attraction to Management, so perhaps in theory there are true ‘talent managers’ that not only focus on external but also are responsible *and measured* on sourcing and placing internal talent, and retaining all of the above. Currently in many companies, this is at the hands of the HR generalists.

    Something everyone in TA should always be thinking about is progress, I believe we are a marketing/sales organization and (to Stephanie’s point) must evolve.

  • Ash DeVane, CPC

    To further Jeffrey’s observations, the regulatory requirements necessary to satisfy the requirements of the EEOC, and OFCCP compliance will continue to drive an application driven process for employers that will not go quietly into that good night.

  • Stephanie McDonald

    I really did put my bias to the side. I just haven’t worked in an environment where we posted a position, went to meetings, and came back and read resumes as a singular source of filling openings in SO many years. Are there recruiters (AGENCY AND CORPORATE) who still do that? Sure. But there are people in every profession who use the laziest methods, never innovating, thinking or caring about their career. Most of us (I really believe that) do care, or we wouldn’t be here on ERE reading about our profession, looking to leaders to teach us, share ideas and challenge us.

  • Linda Lindgren

    Very few Fortune 500 companies have created the “brand” to attract passtive candidates. If we can wrap the hiring managers head around “selling” the company/job when they interview, the better for everyone. What I find amazing is they still ask candidates “Why would you want to work here?” This discounts so many candidates if they don’t answer in the manner the hiring manager is expecting.

  • Tom Leacu

    I’m glad I don’t work at some of the places that you agency folks are referring to. If all I had to do all day was look at resumes of people who apply and pass them off to hiring managers, I think I’d get bored pretty quickly! Most of the hires I make are passive job seekers that involve a high level of sourcing. The notion that corporate recruiters are glorified Admin’s is completely false and something I haven’t seen in this area at all. Companies want to hire a recruiter that represents them and has pride in who they bring into their workplace. They aren’t looking to hire a candidate who was pushed on them by someone who has a monthly quota to fill.

  • http://www.matchpointcareers.com Paul Basile

    Being provocative attracts attention, readers, but it doesn’t make the ideas right. The most important thing is entirely missing in this post: we do not know the most important, most relevant things about candidates and talent networks won’t fix that. And that is why results remain lousy in recruiting. The key performance-predicting information is competencies and that is private information that is and will remain private. Corporate recruiters will remain, in some form, and will need access to what matters.

  • Jenny Stanionis

    The recruiter is not the only role that is doomed in this example – There are too many hiring managers as well who think that recruiting is posting the job everywhere. Recruiting is a sourcing function in our organization and the quality of hire has improved because we have made it so. We still have a long way to go and seeing this glimpse into the future is a wake up call.

  • http://www.teoco.com Claire Miller

    Quite honestly, these posts really get my goat. Here’s where the recruting function within the corporate realm needs to change; corporate recruiters need to position themselves as business partners. They need to know minute-by-minute the resource needs of the business. They need to UNDERSTAND the business. They need to intimately understand the culture of the organization they are a part of and they need to be the company/culture’s biggest cheerleader and advocate. And, that belief needs to be genuinely translated.

    Hiring managers will never have the time to spend an hour on the phone with a strong prospective candidate (which, btw, is the average amount of time I spend on the phone with a strong contender).

    The shift needs to be around quality, not quantity and the deemphasizing around recruiting as a transactional function. The fact is it should NEVER be treated as such. Candidates should be looked at as commodities and treated as such. A person (in this case, the recruiter) should be leveraged as the go-between; the person acting as advocated for BOTH the organization and the candidate at hand. More often than not, recruiter look at candidates simply as boxes to checkoff.

    I have long since learned that the most important part to being a successful recruiter is not finding 10 candidates, but finding THE candidate and that takes being a PART of the organization (and not an agency), it takes time and it takes addressing all of the needs/wants of BOTH the candidate and the organization.

    As an example, if I’m screening a candidate who has fabulous credentials and looks tremendous on paper and know could kick butt in doing the job, but they tell me something which indicates to me that they wouldn’t be a meaningful fit from a cultural perspective (and in the long run wouldn’t stick around), I’ll always decline that candidate because at the end of the day it’s about going deeper. About truly understanding the needs of the organization. And, dually understanding the needs of the candidate. That’s what makes a successful partnership. And, that work requires a Recruiter. Perhaps, the recruiter of the future.

  • Chuck Carlson

    The assumption that hiring managers can actually make correct hiring decisions is suspect at best. I’ve seen far too many hiring managers who don’t know what they’re looking for and they don’t know how to hire. Ergo, I don’t foresee point #4 becoming a reality.

    Are real estate agents becoming extinct? After all, home owners can do all the things necessary today to sell their homes. But the typical homeowner either doesn’t want to OR is not able to do what it takes to make the sale happen. I think the same analogy applies to corporate recruiters. They will continue to be necessary b/c corporate hiring managers can’t or won’t do the heavy lifting required to hire people.

  • Derek Zumwalt

    Yawn! This seems like the “padded” approach to posts – (circa 3 years ago) to stir up conversation and debate. Lou/ERE you can do better than this! We want articles including experiences of those living it and not just living on the periphery of consulting and writing. Sure some nice opinions and views on the death of corporate recruiting but nothing that hasn’t been said before. Lets talk/see real examples, give us the meat behind the words, live examples and not gut checks and opinions from the periphery.
    So to answer your question of: Is the Current Corporate Recruiting Department Model Doomed? No, I think it is evolving – and I would like to hear how others do as well.

  • http://www.cleanjourney.com/ K.C. Donovan

    Lou – your article gets right to the heart of the business disruption that the “Engagement Economy” has caused in the last 3-4 years and will continue to drive…

    People are so fed up with the current employment system with resumes that poorly reflect the complexity of experience, to job ads that most of the workforce avoid, to the drill down and screen out formula that has made up our process for the last 50 years or so with little change…this antiquated system has turned off the workforce big time (less than 5% of workers do any career investment activity).

    The cornerstone of the “new” employment system (and yes – it is already here) is all about interaction, eengagement and transparency. Recent reputable studies have indicated that 75% of the workforce will listen if approached for a new career path…this is unprecedented, and the opportunity to grow a talent network filled by passive or casual career consumers has never been better.

    The interactive and interconnected online world that has become the norm has created a new system. Sharing a company’s inside story with a person’s “inner chemistry” in a Community of interested professionals is the networking that Lou speaks of and its happening today (Linked In has 870,000 groups!). If you are still kicking it old school with active only career consumers then you’re missing out on the other 70-75% of the workforce who if approached properly are willing to listen…

  • http://www.inboundrecruiter.com Brian Kevin Johnston

    You are all right about this topic… Got to run, just earned another lead from Google+ 🙂

  • Marina Rudolph

    It’s funny – I just read an article on SHRM regarding how online sourcing through social media is getting companies who are OFCCP regulated in trouble. In my last two companies giving this responsibility to the hiring manager will not only get the company in trouble they don’t have the time to create that cool video they don’t even have time to interview. It’s a very thought provoking vision though.

  • Lou Adler

    The score so far – Ostriches 8 vs. Foxes 14. I define Ostriches as those who fight change vs. Foxes who lead it.

  • Stephanie McDonald

    Lou, am I a fox or ostrich? I re-read my comments and I don’t honestly know how you’d classify me.

  • Michael Rosmer

    Lots of great points, thanks for the article and the video.

    There are certain trends that are easy to see, auto-matching for example, virtually unlimited awareness of the talent market at costs that are virtually free, etc. these will theoretically make the ability to hire at extremely low costs extremely quickly the norm (even today we see examples of filling positions in 24 hours at very low costs and that trend will only continue).

    The ones that are more difficult to predict are:

    1. War for talent – I suspect that reputation management will usurp employment branding (take a look at platforms like eLance, ODesk, and Guru for examples, where star ratings and feedback drive employment choices a lot more than public marketing messages), in the future there will be free and open access to the opinions of employees about employers, with real time data about how those trends are shifting and how to improve them, this will do a lot to change how companies create employment brands and will focus more on managing their online reputations, but even beyond this the question becomes how do companies gain a competitive advantage in securing top talent in a scalable way?

    2. Increased quality of hire – without a doubt improving quality of hire or perhaps I should say hiring ROI is the game changing aspect of the employment future, being able to improve the output of hiring decisions is the untapped competitive advantage for organizations to leverage, but up till now it’s been highly hit and miss, as described above it has been associated primarily with better access to top talent and improved employment brands, but especially in the mid and low tiers of hiring where candidates haven’t developed much of their own reputation or don’t have significant stand out track records there’s been precious little to improve what we’ll loosely term quality of hire. Part of this challenge I believe is associated with poor performance management systems and a lack of data about who thrives within a particular corporate environment and who does not, as more tasks move to information based systems creating these measurements will become easier and that will help. Real world simulations will also be helpful as nothing replaces the test of actually doing the work. However, beyond these fairly basic models, which don’t necessarily work in a fast changing or highly creative work environments, or where you’re dealing primarily with passive candidates for diverse roles, we run into the scalability problem. Almost all good hiring comes from good hiring managers as opposed to good hiring practices. There are all kinds of methodologies to increase hiring effectiveness, but really without discipline to the goal (as opposed to discipline to the process) the results tend to remain the same.

    What do you see as being the direction of those two challenges?

  • http://www.ScoutRock.com Caroline McClure

    Hi Lou,
    You didn’t make a distinction between corporate staff recruiting and corporate executive recruiting, so I am not sure if you are referring to one or the other or both. Any way, I take exception to your comment that the quality of hire hasn’t improved under the current model.

    First, I suspect that there is no one “current model.” Just as all firms and agencies follow different practices and procedures, so do corporate teams, whether they are staff or executive recruiters. Additionally, there are great recruiters and poor recruiters in agencies, firms and corporations alike. The comments from the other posters here demonstrate that.

    Second, I contest the blanket statement about the quality of hire. I started and ran (eight years) the executive recruiting department for a F50 company. I set the team up similar to the standard retained-firm structure and we recruited from director-level to reports-to-CEO level, as well as for board positions.

    I suspected that the quality of hire for our in-house (direct) executive recruiting team was superior to that of other processes by which executives entered our company, so I asked our labor-stats team to take a look. They designed the study, and collected and analyzed the data (i.e. the study was conducted by people other than those on the executive recruiting team).

    My hunch was correct; the data showed that our corporate team’s work had a 215% increase in high-potential nominations, a 175% increase in diversity and a 570% decrease in executive attrition over those executive hires that came in to the company through other means–including through firms or agencies.

    I do agree with you that the recruiting profession is constantly changing, and I do believe that the competition among firms and agencies drives them to innovation and early adoption of change. Corporate recruiters, whether staff or executive recruiters often (not always) do lag in both these areas, but not enough for the blanket statements in your article be spot-on accurate.

  • Michael Rosmer

    @Krista

    I agree far too many recruiters rely on post and pray as their strategy…I don’t necessarily agree that this correlates in any way to quality of hire. It’s hit and miss. Here’s a quick question I’d be interested in data on “what’s the difference in ROI between ‘the best’ hire and great hires”.

    I think of the people I employ and how much better would they have to be to result in better ROI? Let’s take sales people as an example, how much more can they increase the volume and size of the sales and how capable are we of dealing with those sales anyway given our current capacity? Further, how much more does it cost me to employ them and is it worth the extra gain (in some cases I might be able to employ 2 people who cost less and get the same or greater results than hiring someone who is “great”). In terms of customer service how much higher are they going to drive our net promoter scores and how much will they improve customer retention?

    There are obviously some cases where there is a significant difference, such as senior project managers or program managers for multi-hundred million dollar projects, but those are relatively rare and relatively few, you’ll only have a handful of qualified candidates to look at anyway and their ability to be effective will be heavily influenced by the effectiveness of more junior staff, so what’s the ROI and does our structure of doing business inherently limit that ROI?

  • http://www.cleanjourney.com/ K.C. Donovan

    Michael: Great comments…particularly about Quality of Hire, where both you and Lou make provocative points…

    Our experience is that with the increased engagement between hiring company and prospect, that with just a few online events, and a Professional Profile that confidentially includes details about the prospect’s “inner chemistry,” that company mgmt actually gets to “know” the prospect vastly increasing the hiring quality potential.

    This isn’t resume and phone screen activity……if you hang out for an hour with 8-10 people that have the same career interests and give them something to tackle during that hour – you’ll see what actually makes a person tick combined with a view of their communication, presentation, like-ablity, collaboration, reasoning and mental acuity skills in real time…

    Think about it, small companies grow fast because everyone on staff is known before coming on board…as they grow past hiring from their personal networks – company growth diminishes – in our veiw based on hiring strangers by using a ridiculously inefficient hiring system…the new engagement tools and norms are making this possible…times they are a changing!!

  • Steve Crumley

    They key word here is “current” corporate recruiting department. Clearly, technology changes, people change, and so does any other trend. As it changes, those involved need to evolve as well.

    While the “post and pray” recruiters and the “make 100 calls a day” recruiters may fall by the wayside, those who move with the changes will still be here in five and ten years.

    Many of Lou’s points are valid. But, the real conclusion should be that those who will survive in this (or any) industry are those who develop a strategy that works well in the current environment.

    Similarly, if you held onto what worked in the early 90’s, you’d still be advertising in the newspaper. Those who saw the changes coming and developed a strategy to match the online world are still here. Today, we have to move from a world that relies on the Monster board to one that leverages the power of today’s communication tools.

  • Lou Adler

    The foxes are pulling ahead, but quite frankly I’m a cynic on all of this stuff. While I think it could all happen, the logical arguments to why it won’t are valid (excluding the ones made by ostriches). I made many of the same arguments 15 years ago (see the video) and while a lot has changed at the process level, very little has changed in terms of better results. I also suspect that while cost per hire has come down, the velocity of turnover has increased offsetting much of these savings (i.e., more hires). As a point, has anyone seen their company’s overall recruiting budget shrink as a percent of sales after adjusting for fixed and variable costs and shifts overseas?

    There is no need to change the current EEO/OFCCP stuff to pull this off, this is just an excuse for inaction. However, the reporting would need to be modified to ensure no adverse impact.

    There is no question there needs to be two paths here – one for the rank and file positions and the other for high impact and strategic positions. On the quality of hire front, executive search firms have a reasonable quality of hire record, that can certainly be matched by an internal group like Caroline describes. However, her pre- and post- comparisons are suspect. There must have been a lot of problems with the previous administration on this account for her improvements to make sense.

    The inbreeding of the ATS is the biggest stumbling block as I see it, followed by corporate bureaucracy and corporate inertia which breeds a culture of no change or micro change. Regardless, there is a lot changing today, and the foxes are leading it. All they really need to implement many of the changes described in the article is to get a better map.

  • http://www.inboundrecruiter.com Brian Kevin Johnston

    Lou..

    Who earns more $$$ on average (Provides the universe more value/service in other words)

    An Ostrich or a Fox?

  • http://www.ScoutRock.com Caroline McClure

    I agree, the metrics we had are divergent enough to warrant suspicion. The comparative cohort was during a concurrent time frame rather than a previous administration–my group was small, so we didn’t do all the executive hiring.

    Our study didn’t identify what the processes were that brought in the comparative-cohort execs, but I know some were through search firms and agency hires; I suspect some were through the staff recruiting organization and others through employee referrals. I wonder if some of the divergence in the metrics supports your argument (Lou) based on the “current model;” The comparative-cohorts were hired through methods that weren’t tightly managed by recruiters experienced in senior-level sourcing, recruiting, or assessment.

    Aside from processes that followed retained search firm best practices, we also had an excellent team. Almost all team members had years of executive recruiting experience within search firms as well as other corporations. Some of the divergent metrics were just that they rocked!

  • Lou Adler

    Re: BKJ’s question re: who earns more ostriches or foxes. Answer: it depends.

    Ostriches could earn more, but it would be short-lived. Foxes tend to adapt or lead change to maximize their earnings, but making change for the sake of making change would not be a good business model.

  • Martin Snyder

    Derek, Lou can defend himself handily, but as far as I know, he is out doing search work every day and cashing large bank; far from the periphery as you put it.

    It’s also not easy to crank these articles, and this one was pretty good. To the extent that his vistion depends on a state where “everything will be known about everyone”, we will have some time to wait for that to transpire…

  • http://www.mnheadhunter.com Paul DeBettignies

    Lou,

    “Here’s why the current version of the corporate recruiting department is heading toward extinction”

    What is your definition of the “current version”? What does it look like?

  • Michael Rosmer

    @Ginger
    “I just don’t think that we will ever be able to move on without the player/recruiter facilitating the hire, whether its hooking them or reeling them, or gathering additional references or simply giving them that personal experience.”

    It’s worth it to differentiate between types of positions here, however, I’d argue many of the normal functions will disappear. For example reference checking. In a world where there is open access to information, identity is confirmed and feedback can be shared (as in any of the current virtual worker platforms) reference checks will vanish. You won’t need to confirm employment or dates of employment because there will be an electronic record of it, eventually this will also include who they worked with and what they did along with feedback from people they interacted with on how well they did. When these sorts of things happen it will be a lot less troublesome to screen candidates (sourcing is already getting a lot easier) so the only question will be the courtship and negotiation process, which I’d contend is more a faculty of the offer than the process, and even that will be easier because there will be solid data about comparables, current compensation, etc.

    Put yourself in the job seeker’s shoes, if you know the real time feedback rating of people working for particular company about what it’s like to work there combined with what it’s like to work for a given hiring manager in a manner that’s authentic and transparent as opposed to marketing jargon, then your decision of whether to move becomes a lot simpler. In the future people will make decisions faster “I see your personality traits fit the position, your cultural aptitudes fit our company, we’re willing to pay you more and our employees prefer working here, are you interested?” Doesn’t mean it will be an instant decision or there won’t be process involved, but the dynamics will change a lot and relieve a lot of the administrative burden on the process.

    The questions and challenges develop as you begin to build roles around people rather than trying to fit people into roles.

  • Michael Rosmer

    @Paul B

    “we do not know the most important, most relevant things about candidates and talent networks won’t fix that. And that is why results remain lousy in recruiting. The key performance-predicting information is competencies and that is private information that is and will remain private. Corporate recruiters will remain, in some form, and will need access to what matters.”

    1. if that became the function of corporate recruiters that would be a dramatic shift from their primary roles today.

    2. I’m not persuaded that information will remain private

    3. Talent networks might arguable offer deep insights into those competencies simply based on social networks research and factors like who refers a candidate, who they associate with, etc.

  • Michael Rosmer

    @Claire – Amen!

    @Chuck – “Are real estate agents becoming extinct? After all, home owners can do all the things necessary today to sell their homes. But the typical homeowner either doesn’t want to OR is not able to do what it takes to make the sale happen. I think the same analogy applies to corporate recruiters. They will continue to be necessary b/c corporate hiring managers can’t or won’t do the heavy lifting required to hire people.”

    Actually yes real estate agents are becoming extinct along with travel agents and paper books, it is taking time and will take time but it’s happening (not sure about your part of the world but things like 2% Realty & ComFree here are rapidly growing trends, true the creme of the crop still offer important value but we’re talking about general trends not instant change, probably 50 years from now there will still be a demand for super great recruiters for very particular positions but the point is the market will more or less have evaporated).

  • Michael Rosmer

    @Marina – Perhaps those companies will become less competitive. Don’t think in terms of what’s true today with hiring managers etc. Think in terms of what could be true 20 years from now, and videos aren’t the key. Consider the following world:

    1. When defining a new job you get real time analytics about the availability of candidates who are a fit, change a single criteria and find out how that opens up your talent pool

    2. Applicants who aren’t qualified don’t even see that the position is open it is automatically filtered from them and candidates who apply but aren’t qualified aren’t even shown to the company, they are automatically filtered

    3. There is open information about the company & manager in the form of real time feedback data from people within the company, and likewise there is the same kind of deep analytics and feedback data on all the applicants allowing for an in depth review prior to any sort of conversation

    4. Composite data about all the works and their performance metrics within the company are combined, refined, and analyzed automatically to build assessment profiles of the types of people who would best succeed in the position and prioritize the list of candidates, this data is cross referenced with business ROI information taking into account what differences in performance would mean to the company, predictive models of candidate’s likelihood to leave both their existing job and the job you’re offering, etc. all to give a solid analysis of who is most likely to produce the best ROI for the company based on a variety of factors and by how much

    In a world where those 4 factors above are true the role of hiring managers, recruiters, etc. changes dramatically. First because they don’t need to identify the talent, the talent is already known. Second because they don’t have to deal with the chaos of unqualified applicants those are already filtered. Third because there is good selection data right from the beginning helping to prioritize down the pool of candidates to a very small number of interactions. This means a hiring manager suddenly is able to take the time for those few interactions that are necessary and rated in terms of their ability to sway key target candidates.

    Will that world come about by 2020? Probably not, but by 2040 we’ll probably have that kind of data and we’ll be well on our way with each passing year.

  • Michael Rosmer

    @Caroline

    “My hunch was correct; the data showed that our corporate team’s work had a 215% increase in high-potential nominations, a 175% increase in diversity and a 570% decrease in executive attrition over those executive hires that came in to the company through other means–including through firms or agencies.”

    All good numbers, but none of those are “quality of hire” numbers where I come from. To be specific, quality of hire is about increased employee performance, achieving $2 million in sales instead of $1 million; about producing 200 widgets instead of 150 widgets, about having a 26% conversion rate instead of a 17% conversion rate, etc. You might have even improved those numbers, the problem is most companies don’t measure it so they don’t know…and then there’s the question of what those numbers mean in terms of ROI, where it sounds like you had a clear impact.

  • Michael Rosmer

    @KC – Thanks for the comments.

    “Think about it, small companies grow fast because everyone on staff is known before coming on board…as they grow past hiring from their personal networks – company growth diminishes – in our veiw based on hiring strangers by using a ridiculously inefficient hiring system…the new engagement tools and norms are making this possible…times they are a changing!!”

    Being continually involved in growing small companies I’d challenge your assertion. First, small companies don’t grow fast in most cases…in fact there’s frequently little to no difference in how fast companies grow unless you’re talking about companies who’ve more or less reached a ceiling in their market or begun to face real competition for the first time in their history.

    For most companies regardless of size a 25%+ year over year growth is pretty good (Virgin, which grows notoriously fast averages 30%). However, in spite of this Apple has been growing over 100% year over year for the last little while…how does one explain that? It’s much faster growth than almost any small business but here they are one of the largest companies in the world.

    Companies grow rapidly mostly because of being able to exploit holes in the market (the whole blue ocean strategy thing), obviously they need to deliver and manage their growth and it’s easier to do that in some sectors than other (read software as the big one), you can see it in Apple, Virgin, Facebook, Google, McDonald’s, Wendy’s, etc. etc. for small businesses it tends to be slightly different because there’s a greater focus on personal relationships in terms of the sales and marketing process and it’s certainly true that as a company grows they need to shift from this more personal approach to a more brand oriented approach, but access to a personal network of talent is in my experience of relatively small consequence when compared with other factors.

  • Lou Adler

    Michael – great stuff – keep it up!

    Martin – thanks for clarifying things for Derek. He just needed a smack on the head with the ruler to wake him up.

    One point about “all knowing” – imagine if all of your employee referrals have some type of quality level associated with them. Don’t we all keep track of our referrals this way? This is one way to determine quality before you even call a candidate. Here’s another: as recruiters we all look at resumes and make a quality judgment based on company names, track record, academics, title vs. years, promotions, honors, awards, etc. Automating is not a big stretch. So if managers can automatically be matched with best candidates and best candidates automatically matched with best opportunities, it doesn’t seem too long from now when the recruiters role will be limited largely to the end game.

  • Ross Clennett

    I cannot speak for the USA but here in Australia one of my clients, who runs a government agency shared services division, did a comprehensive cost/benefit analysis of their recruitment, pre and post building their internal recruitment team.

    After collecting a substantial amount of qualitative and quantitative data her conclusion was that the internal recruitment team had cost them a lot more money and the quality of hire had not changed.

  • http://www.bbt.com Marc Witorsch

    Is the model dead? No. Dying? Perhaps. It is certainly in need of change. However, I don’t believe it is at my company. Where I work, we are not just recruiters. We are employment consultants. Our team is called executive search. We do more than just process resumes. The article makes some presumptions that are not true in my company.
    1. Hiring managers like recruiting. This is not the case at my company. Most of them don’t like it, don’t have time for it and see it as a burden. Additionally, they don’t have a network, and they don’t like to network. What separates most recruiters is we like to network.
    2. Companies don’t have to deal with compliance issues. Compliance is one of the biggest obstacles to recruiting, but it is a fact of life in my company. Good recruiters are able to adapt and work with it. Despite the changing nature of recruiting, particularly corporate recruiting, we still have to remain compliant with respect to EEOC and OFCCP regulations. Again, this is not an area that hiring managers want to touch.
    Recruiting is not as simple as posting to your social network sites. There is a lot legwork involved before my managers see resumes, which saves them time. I work in a very proactive recruiting system, which I believe has already adapted to the future. Recruiting will always change, and we will always need to adapt to new technologies and new ways of doing things, but we can’t get past the regulations and we can’t make people in our companies, i.e. our hiring managers, if that is not their disposition.

  • http://www.cleanjourney.com/ K.C. Donovan

    The point has been made that we will eventually (in 20+ years or so) have a “career repository” of pertinent information removing the barriers of who does what and where they do it… Further, the work for a recruiter to do in this future will be to woo those that fit into the culture of the company, team and hiring manager and close them on coming aboard for their next career ride.

    In a future such as this, resumes will be eliminated, job ads will be more prominent like the company’s product and service ads, job screens will be unnecessry. Recruiter cultivation techniques will be prominent and successful companies will create talent pools for each job family or type they hire for on a recurring basis – so they have people interested in their business that can be strategically tapped into when needed.

    Look around…this is not something that will happen in 20 years – it is happening today in just about every industry. There might not be a “career bureau” yet, but the information about workers today is easily found with a few clicks of a mouse. If you look at the 2-3 companies leading each industry – the ones that are just killing the competition – it’s probably due to a very forward thinking recruitment program where they are stock piling talent in groups or communities with awesome employment messaging to keep them motivated (Starbucks, Pepsi, Deluxe, Microsoft, CH2M Hill, etc.).

    Want to join in on the fun, its already there for the taking…just have to do it!

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  • Lou Adler

    Does LinkedIn’s “Apply Now” button accelerate the demise of the current corp recruiting model? Here’s the code to cut and paste or look at John Zappe’s post for more – http://www.ere.net/wp-content/uploads/2011/07/LinkedIn-Apply-Button.jpg.

    Basically candidates don’t need resumes anymore. If you try out the apply button it shows a demo job with your first degree connections at LinkedIn. It then suggests to connect with these people rather than submitting your application to HR/Recruiting. Since the quality factor can be determined roughly just looking at the profile and if the employee referral validates this, you’ve taken a lot of friction out of the hiring system. Equally important your internal hiring workflow is changed profoundly. Wouldn’t this so-called minor change, change the role of the ATS, the recruiter, and the recruiting department. Why couldn’t the referrals done this way go directly to the hiring manager BEFORE HR even sees the connection?

    This one little change might be a huge tipping point.

  • Derek Zumwalt

    “Lou Adler Jul 23, 2011 at 2:48 pm Martin – thanks for clarifying things for Derek. He just needed a smack on the head with the ruler to wake him up.” Lou, wake from what, you are being challenged and questioned regularly here and all you have is Aesop fables of ostriches and foxes? I expect more from the “experts” in the industry and hope you have more than this. Maybe I was unfair to cite the example of the article as being boorish, and circa 2009, in its inciting approach. Instead of name calling and school marm jargon, show us where all this work in the periphery and consulting is yielding details you can share and examples you can give vs. speculation. I didn’t dispel working on the periphery, I questioned what was behind it and what could come from it – asked for something more substantial than theory.
    You missed my point, the article as I mentioned had bearing and merit, but we expect and want to see more. I come to the ERE to learn and observe the efforts of experts and asked as such. For example you state: “I also suspect that while cost per hire has come down, the velocity of turnover has increased offsetting much of these savings (i.e., more hires)”. You suspect? You are out there every day, we expect to hear more than suspect, we the readers want more than speculation and theory’s. We want more substantial info to back it up so we can select an animal of choice instead of the lemming (had to add another animal to the mix).
    “Martin Snyder Jul 22, 2011 at 5:13 pm Derek, Lou can defend himself handily, but as far as I know, he is out doing search work every day and cashing large bank; far from the periphery as you put it.” I don’t levy expertise on someone’s business prowess at making money, but instead place more reliability on those that give hard factual information, share lessons learned and can give specific examples. I don’t reach out here often, but when I ask for more, I expect an author to come on and do more than name calling and incites and instead to take the challenge to share.

  • Lou Adler

    Derek – note: yawning in class doesn’t create much credibility –

    And unless you’re on a different subscription plan, you’re getting a lot of credible advice at a pretty good fee. See John Z’s and John S’s stuff, for examples. As for me, I write this stuff to create a buzz, and as most of the good PhDs who frequent these pages know, I start out with the suspicions before letting them gather the facts.

  • Derek Zumwalt

    Lou-
    Thank you for confirming that your post was to create buzz and incite conversation. I was under an impression that as an author here you were invested in more and had the ability to dispel more on experiences behind the words. The yawn was right on track then – it was for driving traffic and inciting and not why many visit the site. As a reader, I expected more.

  • http://www.fugro.com Kevin Spain

    When I first read this article it seemed positioned to call-out for a response from the corporate recruiting group. I personally work fro a large glabal organization where most of our hiring managers don’t have time to recruit in no fom…ie, live, job fairs, college recruiting, military recruiting, social networks, etc.

    Therefore, the organization will not leave the recruiting in the hands of outsourcing agencies. Example: 1 in 4 hires in our company in the US locations come from military hires. Who better to recruit from this group than a corporate recruiter with a military background.

    What I’m getting at is, who will build the relationships in the colleges, technical schools, put together the hiring events, work the job fairs, etc. I don’t believe the job will ever be able to be done 100% behind the desk – Where does the human factor come in?

  • http://www.cleanjourney.com/ K.C. Donovan

    Lou – Know that you work closely with LI, but really, when are the LI people going to start innovating with all their new found riches?

    The use of the LI profile is little different than what Monster provided over a decade ago with the ability to apply for a job directly from their site, a profile eerily similar to the LI one (or you could use your resume), and milions of US based users? Being that you can dump the LI Profile directly into an ATS is just not very innovative. Sure, it can act as an application – but aside from user generated recomendations – the LI Profile has all the same elements as a resume.

    Adding a list of 1st Degrees to contact at that company is about the only innovativel approach, but BeKnown, Branch Out, Cachinko all do this already and with no metrics yet as to the jobs obtained using this action – schools out that it even works…

    Game Changer, tipping point – don’t see it…if LI would add assessment possibilities and interactive engagement possibilities well beyond In Mail – that would be a start…looks like they’ve bought into the same path of business development we’ve seen a time or two already in the employment space. When you strip away the book reviews and the 100’s of thousands of groups to join, what really is Linked In? How different is it than the new Job Seeker Yellow Pages? Don’t get me wrong, it has changed the way people are sourced since I don’t have to pay Monster $10-20K to search the database, and that in of itself is a good advancement…but they could and should be so much more!!

  • Lou Adler

    KC – the real value of the LI “Apply” is not the Apply with your Profile feature. When you push the Apply button you’re shown a list of connections you have at the company and given the choice to short-circuit the apply process to one of these people. As simple as this sounds – this is huge! This suggests that employees building a vast network is the key to hiring of the future and the 360 networking point mentioned in the article.

    Monster couldn’t connect you with employees at the target company, only LinkedIn comparable networking sites can do this. While other vendors can do something similar through the LI API, don’t be surprised is this is turned off to non-LI friends. (This just happened to Monster)

  • Lou Adler

    Kevin – I have no doubt that recruiters and the recruiting department will exist in some form in the future. The point of the article was to suggest that it will be far different than today’s version and the change is happening faster than most people imagine.

  • http://www.cleanjourney.com/ K.C. Donovan

    Lou – I’m well aware of how the new functionality in LI works, as well as the doors that have been closed recently on the competing networks…

    The point I am stressing is that there are quite a few assumptions being made as to the potential of this being “huge.” Will any random employee at a company with an opening “short circuit” anything? As an example, if I have 500+ First Degrees – not all of these contacts are my friends or even really “know” me, why would they even respond? Will the LI user with 150 connections or so (I think that this is the average number – yes?) have enough (or any) contacts in their First Degree with company contacts to make this funtion valuable? Won’t this be used mostly by active job seekers who are hoping to make any connection at all with a company that has a relevent job opening – and if so, how different will this e from any other job ad respondee? There are other “issues” as well, but that’s enough to make my point.

    Sure, this is a new feature with value, but “huge” is not the word I would use. Linked In has such promise to change the landscape of the inefficient employment system we have been using for the last 60 years and although it might be a little early, they do seem a bit timid about using their market strength to make the changes that could get us out this economic malaise (Yes – they could be that catalyst if they seized the day).

    Lou – the U.S workforce is screaming out for an employment system that is about engagement, interaction, transparency and knowledge sharing. They don’t want to be screened out or not responded to or any of the most common
    “black hole” events. Only 5% of workers spend any time career investing because it stinks…and this is one of the reasons that the average LI user only spends 3 minutes a week.. LI can change this with a program that appeals to a worker that sees something different from the norm. LI has the platform to make this a reality – but they spend their time on referrals and ATS issues…they can do so much better!

  • Lou Adler

    KC – I don’t disagree with any of your points, other than not classifying this as “huge” – this is just the tip of the iceberg, as I see it.

    With little prognosticating one could see how the connections created could be made smarter, e.g., who is the best person the candidate should connect with or the most influential connection. From here one could see some type of quality match, ranking the candidate somehow on track record and referral score then comparing the job to this person’s quality ranking from a career move standpoint. Companies then could prioritize these prospects on their quality of match score.

    In reverse, candidates could also be informed as to what open positions people in their network have available which ones represent better jobs than the one the person has now. People could then be informed only of those that represent significant move opportunities.

    I guess I see all of this as representing huge upside potential starting with just a simple blue button.

  • http://www.ScoutRock.com Caroline McClure

    @Michael thanks for the comments.

    Quality of hire is an elusive topic as you suggest. The measures you identified:

    “?increased employee performance, achieving $2 million in sales instead of $1 million; about producing 200 widgets instead of 150 widgets, about having a 26% conversion rate instead of a 17% conversion rate…”

    would be ideal, but you’re right that not many companies maintain those data. To my knowledge, we couldn’t identify those types of performance metrics down to the individual employee level–at least not easily or consistently enough to conduct the study. We used what was readily available and least subjective; and while not a complete picture, it was still compelling.

  • Michael Rosmer

    I find two interesting trends in the defensive comments here:

    1. No one is willing to admit that they or what they do is relatively ineffective, increasingly worthless, lacks a direct correlation to significant corporate value, etc. as though somehow magically the people on ERE are immune to the trends and tendencies of the recruiting market and world…or perhaps it’s just that they/we are possessed by an inability to honestly self evaluate. I’d love to see someone step up and say “this is true, I know we don’t contribute the value necessary to persist in the next 10 years”.

    2. Those who say “that might apply to them, but not to me/us” reference “just processing resumes” as though that’s the only task that’s fundamentally useless or at least extremely low value in the future. Here’s the reality sourcing candidates off any job board, basic internet searches, competitor websites, LinkedIn, or by posting ads are effectively useless and dying roles, by which I mean the tasks aren’t worth the dollars spent on them because they can easily be close to automated and will be automated in the near future. Nor is calling or emailing candidates and running through standard interview questions as valuable as it costs, these too can be done for a substantially lower cost. Nor is administering standardized assessments (again, you can automate them) particularly valuable, nor is staying in touch and cultivating a relationship particularly valuable. Why? Because we can do all of these things quicker, faster, and cheaper. This brings up the question, what specifically is highly valuable? Do you realize that inherently a recruiter who does what he or she does because hiring managers “don’t have the time” are less valuable than the hiring manager and consequently deserve less allocation of resources (based purely on the fact that they are doing higher value tasks and can’t justify doing the lower value tasks that you’re taking on)?

    To answer #1 I’ll be the first to admit a diminishing value on recruiting efforts including my own and those I work with, which is why I’m actively working on changing the model. Right now the only significant values provided that I can see are:

    1. Sourcing passive/unknown candidates – not massively valuable but certainly specialized in many cases

    2. Recruiting hard to steal candidates away from their current employers – I’m not actually persuaded that there are many who are really good at this but it can certainly be valuable

    3. Providing greater candidate/geographic employment brand reach than the company would normally have (this is valuable for small and mid-sized firms where talent acquisition would otherwise be geographically limited)

    4. Devising, developing, studying, advising, and implementing recruiting best practices – this is a real value since it involves improving systems and consequently short term work has a long term pay off to justify the expense

    Otherwise, the tasks performed by recruiters are mostly administrative in nature, not requiring a high degree of skill and consequently not justifying any significant expense, most being worth $2/hr for basic internet tasks and $10/hr for telephone tasks.

    I think the wake up call to corporate recruiting and recruiting in general isn’t a question of whether it’s dead or dying, but rather a call to find ways to increase their value to the company. What I’d be interested in hearing are suggestions of what those might be?

  • Keith Halperin

    Hi Folks,

    Late to the party:

    @Michael R: Well said. I would slightly modify what recruiters should do (instead of what they now do):
    Similar to you, I would no-source (eliminate), through-source (automate), or out-source (sending away) recruiting activities which you wouldn’t pay someone $50+/hr to do.

    1. Sourcing passive/unknown candidates – not massively valuable but certainly specialized in many cases.
    Much of this can be outsourced for $11/hr retail, and if you they can’t do it, outsource it to our $40/name pro friends.

    2. Recruiting hard to steal candidates away from their current employers – I’m not actually persuaded that there are many who are really good at this but it can certainly be valuable
    Exactly. Definitely a $50+/hr activity, and if they’re too tough for your folks to steal, you should pay 30% to someone to do it. I think that’s what contingency search is for, and it should be very well compensated.

    3. Providing greater candidate/geographic employment brand reach than the company would normally have (this is valuable for small
    and mid-sized firms where talent acquisition would otherwise be geographically limited)
    Seems more like marketing than recruiting, but that’s just me…

    4. Devising, developing, studying, advising, and implementing recruiting best practices – this is a real value since it involves improving systems and consequently short term work has a long term pay off to justify the expense
    Exactly. Definitely a $50+/hr activity if I ever heard of one.

    In addition….:
    5. Acting as an on-demand Project Manager/Liaison for outsourced resources.

    6. Being an up-front Business Analyst in a Solutions Recruiting Model, where the goal isn’t to hire walking, talking, living widgets, but to get the work done, through FT, PT, Contract hiring, out-sourcing, through-sourcing, or (conceivably) no-sourcing: “Sometimes the best result is not to do the work at all.”

    Cheers,

    Keith

  • http://softwaresalescareers.com bob deskin

    This assessment is leterally rediculous. For those of you who were around in the 90’s when “Monster” first started people said the same thing, “traditional recruiting is dead!” Well proof is in the pudding, I challenge the writer of this article to find the most talented sales manager he knows, have him create a video of job he is looking to hire for (boy wouldn’t it be nice if it was that easy) and give me that same job and see which one of us comes up with the most qualified candidate first! Just like Monster what Linkedin is doing is just ptroviding you with more data to sort though in an already data crowded World.

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  • Leslie Morgan

    I agree with Jim Wahl. We’ve seen this before. The truth is that one size does not fit all and there is plenty for all with the gumption to go for it.