From Shortlist: Thursday 04 October 2018 2:47pm

Recruitment’s shift away from employing ‘outdated’ 360-degree consultants is potentially the most important transformation the industry will face, according to an advisor.

The 360 model is broken, and has been for some time, says Navigator Consulting MD Tony Hall. “It’s really time to start looking at different options.”

Good 360 recruiters are as rare as hen’s teeth, he says, and he suggests the pressure on recruiters to fit the model is one of the biggest contributors to high staff turnover. “It’s so rare for someone to have all the different skills required to be a high-performing 360 recruitment consultant.”

Agencies are increasingly deconstructing the 360 model, breaking the process into admin, resourcing, recruitment and sales roles, though with varying degrees of success to date, he notes.

Many labour hire companies have been operating in this way for years – “they have business development managers that understand the industry really well… and they might even be from the industry they are selling into, so they’ve got a lot of credibility” – while larger agencies are more likely to succeed with dedicated business development managers, following the US blueprint.

For smaller firms, Hall recommends the most senior people spend their time out in front of clients, and avoid putting junior consultants into “difficult sales situations that are way over their head”.

Small companies should be hiring people into resourcing or account management roles, to start, while senior leaders outsource their resourcing so they are freed up to do the sales part of the 360 process.

(Hall is a big advocate of offshoring, particularly for “very administrative and repetitive tasks”, such as market mapping, database building, database maintenance, and even sourcing. “I think offshoring is one of the success secrets of reducing staff turnover in the recruitment industry,” he says.)

Building the right commission structure

“If there’s no sales responsibility for a recruitment consultant, then their commission structure should be at a lower level than a recruitment consultant that’s required to bring in the business and fill the role as well,” Hall says.

He suggests recruiters on “relatively high wages” are already incentivised to fill jobs. “So you might have more of a bonus structure than a commission structure for people that are not actually selling.”

That said, Hall agrees the 50/50 commission structure adopted by some agencies including Aquent will promote team work – provided leaders monitor placement ratios. “Managing efficiency is really important, because a great salesperson might bring in multiple roles, but if they’re not filled by the recruiter, then the company is paying wages for both… and not getting any return on investment.”

Hall also advises hiring biller leaders with a track record of success (a minimum six years’ experience), rather than looking for potential high performers to train up into sales-focused roles. “Young stars are hard to find,” he says. “[Graduate programs] are so hit and miss.”

It’s certainly unlikely the one graduate will have the 20 or so attributes required of a 360 recruiter, Hall says. “It’s relatively easy to find people that start off their career resourcing, and the good ones can be promoted into… senior recruitment or senior sales streams, or leadership, depending on their attributes.”

Breaking out the recruitment process also provides career progression, which Hall says is sadly lacking in the industry. Then focusing on supporting high performers, rather than underachievers, will keep them performing and encourage them to stay.

Part of this includes regular training, both formal and informal. “Short and regular training can make a massive difference, in terms of business profitability and reduced staff turnover.”

He suggests regular weekly sessions, even for 30 minutes, will bring the team together, foster communication, and upskill even the most seasoned recruiter. “It’s an absolute critical success factor.”

Hall is facilitating discussions on the “obsolete” 360 model, and its alternatives, at upcoming Captain’s Table events in Melbourne (30 October) and Sydney (31 October) for agency owners and leaders.

By Tony Hall, Managing Director, Navigator Consulting

Great recruiters who bill well and stay for many years are now rare as hen’s teeth. They are unlikely to move from a profitable and happy desk which they probably built themselves over considerable time. Next step for them is promotion into a director role or starting their own business so they can enjoy a higher percentage of the fruits of their labour.

Industry demand for recruitment consultants is huge, with over 1958 jobs currently advertised on Seek. Every agency is after the perfect recruiter who is good at selling, admin, resourcing and recruiting. Furthermore, they must be resilient, persistent, communicate well and bring a network with them and of course fit your current team culture.

It seems absurd that any one person has all these attributes – yet that is what many recruitment firms are still looking for – hen’s teeth. Firms insist the people they hire have all of the above and bill 3-4 times their salary in the first year. Again – impossible. The only source of experienced consultant supply is from industry staff turnover which continues to push 50% due to a suspected combination of poor hiring, training and development. It is time to think differently about business growth and look at alternative strategies for bringing on new talent.

Solution #1Break up the highly complex recruitment process into admin, resourcing, recruitment and sales as it is much easier to find people good at one (not all) of these activities. They can be sourced from within or outside the recruitment industry. A quality recruitment process will have around 50 steps which requires specialist expertise at each stage. It is unique to the recruitment industry in Europe/Australasia that we persist with the 360 model of trying to find consultants who can sell, resource and perform accurate admin despite the proven benefits of the US model which separates sales, recruitment and admin processes.

Solution #2Offshore low-level admin and sourcing tasks to save money and free up your senior staff to spend more time in front of clients and candidates where the real action (and revenue) happens. Our clients who have taken on experienced offshore resourcers have benefited from considerable improvements in client, candidate and staff satisfaction with the added bonus of significant cost reductions and revenue increases.

Solution #3Free up your senior managers to spend much more time in front of clients and candidates. They are much more credible and will find the sales process easier and faster. Forcing inexperienced, junior recruiters to cold call or visit clients can actually damage brand and industry reputation if they are not well trained, knowledgably or have specialist networks. Senior decision makers will always buy more from other senior decision makers and often find it insulting if a poorly trained junior is sent in their place. Also, your senior managers are paid way too much to be stuck in the office running unproductive meetings or administration tasks. Get them out generating revenue and building your brand instead – the return on investment will be so much higher.

Solution #4Appoint your managing director as chief sales officer. He or she will find it easier to secure meetings, easier to close complex sales and will be revered by the team for bringing in large pieces of new business. Great recruiters who are not suited to sales will be happy to fill these new roles and are more likely to stay longer and enjoy higher job satisfaction if they are not forced to do activities they are not good at. It makes no sense for a MD or CEO earning big money to be stuck in the office day in day out performing low level admin tasks and pointless meetings. The real money (and fun) happens out in the market in front of senior prospects, clients and candidates. This additional sales activity will translate to pure profit small, medium or large companies alike.

Solution #5 Hire biller leaders instead of unproven consultants – I believe you will receive a much bigger return on investment with lower risk by hiring proven leaders who can quickly attract clients and staff rather than unproven recruiters with a limited network and track record of success. Leaders with 6 years or more experience are much more likely to grow the business and cover their costs faster.

Solution #6 Develop a graduate program. Here is your chance to shape your own high performing recruiters before they develop bad habits and dangerous short-cuts. It does take time to break-even on a graduate, but time flies and before you know it your best graduates are building and running their own teams. Graduates will require a strong training program and well mapped-out career plan. With such a shortage of recruiters this is an important strategy to mentor and grow your own talent.

Solution #7 – Regularly train the skills you require of great recruiters. Even the most experienced consultants will fall into bad habits and need refresher training. Inclusive training brings your team together, sharpens their skills and allows senior people to help pass on knowledge to rising stars. One of the biggest recruitment company turnarounds I worked on was hugely successful almost solely due to the implementation of a well-run weekly interactive team training session.

Solution #8 Attend a big conference in the US. You will pick up so many new ideas and techniques from recruiters in the highly competitive US market. They are famous for owning their specialties, building very close relationships with their local communities and using a sales driven account management approach to secure new business and grow existing customer bases. For over 10 years the Americans have also perfected offshore resourcing in India and particularly the Philippines. There is a massive well educated and trained recruitment resourcing market in Manilla keen to move out of the US night shift to work for Australian companies in a similar time zone.

Solution #9 Stop micro managing and start quarterly goal setting and planning. Sit with your people, determine their strengths and weaknesses and make sure you are not forcing them to perform tasks they hate and/or are not good at. Instead of confronting old-school performance appraisals, consider individual quarterly business plans that clearly define goals, targets and activities required for success. Staff will own this plan if they feel involved in mutually setting goals and will work harder to achieve results if they feel supported and listened to. Set simple activity targets that will eventually lead to a placement every week – for example 4 unique client/candidate interviews. Nobody likes micro-management (MM), yet many firms still persist in this activity as a misguided form of risk management which counter-actively results in staff dissatisfaction, turnover and poor employee attraction when MM word gets around.

Solution #10 Support the great people you already have. Most managers end up spending all their time trying to turn around under-performers then are shocked when one of their best people resigns. Contrary to instinct, managers must spend most of their time supporting their best performers who are a big loss if they leave and are much more likely to increase performance year on year than the marginal low performers who typically shout out for more attention and cause everyone the most grief.

Solution #11 Establish a commission/bonus plan that is simple, regularly celebrate and reward people who make an additional effort to do more than the job they are paid a salary for. Pay incentives for new business, innovation, efficiencies, cost savings or activities that are over and above what is required by an average performer – even for junior support staff. Avoid over or double paying incentives for work brought in by senior managers or sales people and then filled by non-client facing staff. Incentives should be paid for extra effort and contributions to the over-all business.

Solution #12 Consider part-time and work from home options for proven performers. Experienced high billing recruiters are so hard to find that it is worth providing flexible work alternatives so long as they are productive, have agreed goals and don’t disproportionately draw on company resources. Several recruitment firms have built highly profitable businesses around experienced part-time working mothers job sharing.

For more ideas on business growth advisory, recruitment industry staffing solutions, remuneration structures, offshore resourcing or business and performance planning please make contact anytime.

Tony Hall, Managing Director, Navigator Consulting, E: th@navigatorconsult.com

Staff Turnover Now 50%!

Recruitment firms are turning HALF half their team every year! Australian staffing companies with 21 to 40 employees are replacing almost half of their team every year, according to data released by RIBreport and APositive.

This is a staggering waste of money, time, resources and mental health for all involved. In 17 years of helping recruitment companies grow, I have never heard of staff turnover reaching these lofty levels. The reasons are many – huge demand for recruitment consultants (1,700 open jobs on Seek) means tight supply and increasingly risky hiring decisions. There is still a low investment in training and leadership development while many new starters are not given nearly enough support.

One of the best ways to grow a profitable recruitment business is to take on a smaller group of high quality people and support them with resourcers so they can spend more time in the market away from their screens and thereby make more placements. They will be more productive, feel better supported, earn more money and are less likely to leave.

If you are a owner or manager keen to explore offshore resourcing as a way of reducing staff turnover, making more placements and dramatically reducing cost – please send me a note and I can forward you a copy of our proven Business Case For Offshore Resourcing. 

Right now I am also working on a partnership model whereby quality private recruitment companies can work together to share costs, client opportunities, ideas and support to create better succession and potential exit value. This takes the pressure off growing too fast and wasting hundreds of thousands of dollars on staff turnover. It means firms can concentrate on servicing their target market professionally and profitably while building more tangible business value. Please let me know if you would like more information.

Email Tony Hall, Navigator Consulting, th@navigatorconsult.com

Save the date – innovative and practical 2 day Recruitment Summit @ Sea aboard 4.5 -star Carnival Spirit 3-6 November 2017.

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By Tony Hall, Managing Director, Navigator Consulting

I just had such a great experience designing a new logo for our unique Recruitment Summit@Sea and Navigator’s Best Practice Certification.

Previously I used a local designer and paid hundreds of dollars and the process took weeks of frustrating edits. I think I even paid for the agency account management team to fly in from another state.

Then I recently discovered freelancer.com.  Ok so this Australian listed (ASX:FLN) success story has been around for quite some time  but you know how it is when you have heard of a good tech solution but have never had time to try it.

It was so easy. Simple registration, post the project and within minutes bids for the project flooded in from all over the world.

You can even post a cash prize for the best design and award it to the winner.

For less than $200 I chose Divya from India based on his good communication and excellent reviews other customers gave him. There were designers from every country imaginable.

Divya was a joy to work with – took a clear brief, communicated well patiently made changes and delivered outstanding work on the two logos above. He is the perfect staff member – never complained or took sick days and was always happy to help.

Also added to our virtual team is Ilian from Bulgaria – a very talented web developer who is extremely skilled, communicates in perfect English and provides first class customer service at a very reasonable price.

Our business has now outsourced:

Accounting to Xero

Graphic Design to Divya in India

Web Development to Ilian in Bulgaria

Marketing to Jane in the Philippines

Marketing comms to local interns

… all of which enables are senior people to spend more time building relationships and helping recruitment business leaders.

I cant help but think this is the future of many types of work – outsourced and offshored – high quality, great service and low cost.

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www.navigatorconsult.com