NPAworldwide Survey: Recruitment Business Conditions

By Veronica Scrimshaw

Twice each year, we survey our members regarding recruitment business conditions in order to document past results and also get a sense of what the future might hold. Some of the notable results:

  • NPAworldwide members are located in 32 countries, on 6 continents
  • The majority of survey respondents (76%) serve both clients and candidates
  • 77% indicated that recruitment business conditions over the past 180 days are the same or better than they were a year ago
  • Among survey respondents, the strongest vertical was manufacturing / mining / construction / supply chain.

The infographic below shows the rest of the salient data:

Recruitment business barometer july 2014 | Create Infographics

Recruiters Depend on InMail

By Dave Nerz

image of LinkedIn, a tool used by agency recruitersAccording to Forbes, nearly 97% of recruiters use LinkedIn as a part of their recruiting process. So I am guessing that many recruiters have fallen into recruiting routines. If one of those recruiting routines is to blast large numbers of LinkedIn members with InMail, get ready for a change. One that I heard recently was to InMail all those that meet the criteria set for a LinkedIn search, wait 5 days then InMail again. If still no response, then try a Google search to find phone or mail contact details and reach the candidate via those connection points. That is one recruiting process; I’m sure you know of 50 more.

LinkedIn is always on the move and making changes and improvements to the way LinkedIn works. Effective August 2014, they will notify LinkedIn Recruiter users if InMail response rates drop below 13 percent on 100 or more InMails sent over a 14-day period. So some of these old recruiting routines may need to change. As a recruiter, it is frustrating to know that those users listing themselves as “open to opportunities” are not also being measured. I often think that only a small percentage of those saying “open to opportunities” are truly open to contact via LinkedIn. I was one of those “interested” parties and I got so many invites to “sell insurance” or “work from home” that I changed my profile.

Users continuing to have a less than 13 percent response rate will be restricted to one-to-one InMails for a 14-day period. No more mass mailing or distributions. Not a bad concept…perhaps recruiting messages will become more personal and attractive to the candidates. If you get your percentages up, you will be able to send bulk InMail messages once again. If not, another 14-day period of one-to-one only awaits. LinkedIn wants recruiters to turn around their poor response rates. Whenever I write an InMail, I try to make it feel one-to-one even if it is not. That is just good business and a recruiting process best practice.

Is this change likely to change what you do? Have you been contacted by LinkedIn on this issue yet? How have you increased your response rates? Do you think LinkedIn should make users who never reply to InMails change their preferences to reflect reality? Comment below!

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Maximize Your Social Recruiting with Four Suggestions

By Sarah Gawrys

buildingblocksAs many recruiters attempt to keep up with the ongoing trends in social media recruitment, some believe that just taking the baby steps in establishing profiles on various sites or making “connections” gives them the title of being a social recruiter. While those first steps are important, there are four more suggestions I can offer to take social recruiting to a new level.

  1. Be responsive. Job seekers have a new frustration when it comes to applications that didn’t exist back in the days of handing over a resume in person; the black hole of the internet. In online recruitment, candidates often express that they get no reply to jobs they spend their efforts on. Social media gives recruiters the opportunity to differentiate themselves and be recruiters who are reachable and RESPONSIVE. Even if the candidate may not be a perfect fit for this position, giving feedback can keep them on your contact list for the future, or open you up to referrals from them.
  2. Engage, do not just sell. Social media allows the recruiter to start conversations with candidates. Many times, you will see recruiters simply posting job ad after job ad or using social media as simply an advertising medium, which is missing the golden opportunity of reaching star candidates through topics and questions and engagement.
  3. Build up an asset for your business. If back in the day a successful recruiter was able to build a database of candidate CVs/resumes, then today the equivalent is building a following of candidates on social media. This is now a candidate base you are able to reach out to regardless of how small or large your budget may be. This is now an audience that can prompt candidate interest early in the decision cycle; sometimes your post may be the first trigger in prompting them to consider a career move. Post often, and use step 3 to collect a large following.
  4. Business integration. By giving the candidate more insight on your particular business, you are sharing the culture and this integration will lead to a larger number of successful hires due to the candidates trusting and knowing you and your business.

The final piece of advice is for recruiters to spend at least 2-3 hours per week reading and researching the various forms of social media and the best tips to maximize their visibility and engagement on their pages. The more avid followers you are able to attract and retain, the larger your candidate base will be.

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How to Collect $25,000 on Placements that You Have Already Made

By Veronica Scrimshaw

past-due-stampToday’s guest blogger is Wilson Cole. He is the founder and CEO of Adams, Evens & Ross, the nation’s largest credit and collection agency designed exclusively for the staffing and recruiting industry. In 2008 he was inducted into INC Magazine’s, “INC 500″ for being the CEO of Adams, Evens & Ross, the 307th fastest-growing privately held company in America.

Clients are starting to tell us that the economy is picking up, and for the first time in years they are starting to feel optimistic. This is a good thing. I am seeing cash flows improve from debtors as well, so we will all keep our fingers crossed and hope that this positive sign continues.

One of the issues that I have seen a very large increase in is back-door hires and conversion. I would be willing to bet that if I had 100 clients go back and check their candidates, 25% of our clients would find that at least one of their candidates was hired over the last 12 months. Yes this is a problem, but it is also a big opportunity. If you are willing to take the time and spend an afternoon checking LinkedIn, I would bet that you could find $15,000 to $45,000 in placements.

The reason I bring this point up is because the economy is improving, and debtors now have more money in their bank accounts. The chances of them paying you once you bring the hiring of your candidate to their attention has greatly increased from a few years ago. Then, debtors used to prefer to hold on to their money and prefer that you sue them because it bought them more time. Now, with sales increasing and cash flow improving, the debtor will more likely just cut a check vs. having to spend the money on an attorney.

So what should you do if you learn that one of your temps or candidates was hired by your client? The following suggestions may be helpful:

  • Pull an inventory of your paperwork. Do you have a signed agreement? Do you have an email trail? Can you show clearly that the client knew it was your candidate and if they hired that individual, then a fee would be owed?
  • Reach out to the hiring company and inform the company of its unfortunate “oversight.”
  • Send the company an invoice. If you have to guess what is owed because you do not know what they are paying your candidate, then take an educated guess. Use the higher side of your best guess without being out of line of course (if the candidate’s potential hire meant the company had to pay the fee, then contact the former candidate to find out what he or she is being paid).
  • Send an invoice with a specific date. For example, don’t have the invoice say net 10 days or due upon receipt. Have your invoice read 5 – 10 days from the day you cut the invoice. If today is March 2 then you would put Due March 12 — 20XX.
  • Send the invoice, and wait until the first day after the invoice was to be paid.
  • Then call and send a letter giving the client 5 days more. Give an exact date.

Click here for more.

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How to Make Sure You’re Hiring the Right People for Your Startup

By Veronica Scrimshaw

male-entrepreneur-laptopOur blog today comes from Nick Bowditch who has recently joined Forsythes Recruitment. Nick has come to Forsythes from Facebook where he was their Regional SME Manager (AUS/NZ). He has re-launched Forsythes’ IT/Tech/Startup recruitment division out of his home office on the Central Coast. He is currently managing recruitment assignments for Instagram, Twitter and Telstra just to name a few. Nick works with innovative startups and small businesses in Australia and internationally, presenting at conferences and inspiring others to take the leap into their own startups, as well as working with big brands helping them connect to small businesses and their communities better – both offline and online.

So your recruitment company has given you a shortlist of candidates to chat to about the vacant position with your startup. So how do you know you are hiring the right person? Think about these 4 things:

Are they doing something that you can’t?

Often in the startup phase you are bootstrapping the business or under some financial pressure. I am a big believer in hiring what you need rather than what you would ideally like. So the first hire – after you and the other co-founder(s) – is often the most important one. Will this next hire mean you can get some money in to then recruit further? Is the role that they will fill something that you and people already in the business could do if you were really pushed? I think hiring for skill gaps in your business is the way to think about it.

Do they share your vision?

Let’s face it, nobody is really going to share your vision, not the way you do. But you can reasonably expect them to be on board at least with what you are trying to do and what you think their role is in that. Unfortunately a lot of startups find out their new employee doesn’t share their vision for the business until they have sapped a lot of your resources and finances and it’s too late.

Do they need structure and a hiding place?

Startups are scrappy. Sometimes you are doing your job and sometimes you are doing stuff you never would have dreamed doing. The scrappiness of startups both attracts and frustrates people who work in that space but it can be a very rude shock if you are not prepared for it. If you work out that someone is used to working in a big corporate space where they can hide all day without it being obvious then you are probably not hiring the right person for your startup.

Understand what motivates them.

What do they want to achieve? What’s going to get the best out of them? What will totally frustrate them? Most importantly, are both you and they aligned on these things? You don’t have to know everything about them but understanding what motivates them is the number one way to ensure you are getting optimal performance from your new startup employee.

What’s been your experience with hiring the right – or wrong – people? What would you change next time?

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International Recruitment: Expats or Local Talent?

By Dave Nerz
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globesI was recently asked some interesting questions by a global recruiter. They were interested to know about the numbers of executive and professionals leaving Brazil each year to take assignments outside the country and overseas. As you might guess, this is not easy info to find. If you have insights on where it is available please let me know.

Here is how I tried to answer the question that was posed…

I found some numbers showing that Americans are the largest expat country in the world according to government records. The number of Americans moving to foreign countries every year is about 45,000 on the high side. Of those people moving out of the country only a small number, say 20%, are executive professionals moving for international assignments. Others are returning to live with family or retiring to other locations, etc. So maybe 10,000 are taking international assignments in foreign countries each year. For Brazil the assumption is the number would be smaller yet. Perhaps 3,000 to 5,000 annually. Those positions are likely in larger numbers in and around Latin America and then overseas in still smaller percentages.

Enough with the math and the figuring…

The real point I am driving to is that while cross-border movement of people and international recruitment is not staggering in numbers, the process is specialized. It also became obvious that employers will more frequently seek local talent to fill local jobs in foreign locations as an alternate to moving a headquarters-based person into an international assignment. Of course all of these generalizations will vary by industry, location and the level of international assignment being filled.

As employers search for local talent in foreign countries as an alternative to relocating exiting talent, unique relationships and connections are required to successful fill position openings. Companies with international assignments to fill need good global recruiters on the ground in the country where the job is. Even more desirable is a relationship with a global recruitment partner that is local, yet able to source talent in the targeted area of need.

I’m interested to know if you see the movement of talent across borders or the recruitment of talent in other countries to be the more common occurrence in the years ahead. I see employers opting for the recruitment of local talent as the faster growing need in the next five years. Expatriation of existing staff is complex, time-consuming, short-term and expensive. Sometimes it needs to be done, but given an option I think most would opt for local talent that can be groomed for success.

7-trends


What’s Wrong with Active Candidates?

By Veronica Scrimshaw

hire-meThere is so much hype about passive candidates vs. active candidates. It seems like most recruiters, when pressed, will tell you that passive candidates, i.e. candidates who are not looking for a job but might be interested if the right opportunity came along, are the ‘gold standard’ of recruiting. Active candidates are sometimes overlooked or written off as undesirable, and I’m not sure that’s the smartest approach.

You know what I think? I think too many recruiters think “active candidates” = “unemployed candidates.”

The definition of an “active candidate” is one who is actively, currently, looking for a new role. It’s a big jump to automatically assume that candidate is unemployed. Consider the following examples of active candidates:

  • Those who have reached the top of the payscale at their current company
  • Those who have no more room for promotion at their current company
  • Those who are caught up in a merger / acquisition that is likely to impact their job downstream (change in focus, consolidation, etc.)
  • Those who work for bad managers (remember, employees don’t leave companies, they leave managers)
  • Those who are interested in relocation for a variety of reasons

In some ways, I believe recruiting active candidates might be the smarter move — for one thing, you don’t have to convince them to leave what is familiar for something unknown. They have already emotionally separated themselves from their current employer and are ready to move on to something new. There is a high(er) likelihood they’ve already talked with their spouses, so the career move is not an out-of-the-blue shock. They’d probably like to remain employed until they find a new role, which means they probably aren’t shouting out their job search from every available rooftop, job board, or social media channel. Nothing undesirable about any of that, is there?

The goal (I think?) is to get the best person in front of your client. If the best person is someone who has already decided a career move is in order, would you NOT present them to your client? Would your client ‘pass’ on an interview? Probably not. Don’t be so quick to label active candidates or passive candidates; instead, focus on the *best* candidates.

What do you think? Has the “active” versus “passive” debate run its course? Why or why not?

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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8 Great Phone Screening Tips

By Veronica Scrimshaw

man-telephone-headsetToday’s guest blogger is Jason Elias with Elias Recruitment, specializing in placing lawyers throughout Australia. Jason is a longtime member of NPAworldwide, a previous director, and recipient of the 2014 NPAworldwide Chairman’s Award.

  1. Where possible find a quiet place to make the calls with all the CVs printed out/on screen in front of you.
  2. Prepare a series of questions based on the selection criteria, experience and attitude, e.g. why did they apply for this role, what makes them a good candidate?
  3. The aim is not a detailed assessment but rather a “Yes” or “No” as to whether they progress to the next stage, usually a formal interview. Try and be as efficient as possible and remember everyone you say yes to will require interview time, so be selective.
  4. Always ask the essential criteria questions first. If there is a threshold issue such as a degree/qualification, there is no point continuing the conversation with unqualified applicants. Politely notify the applicant that you cannot progress
    and ask if you can keep them in mind about other roles where that requirement is not an issue.
  5. Assess their communication skills. There are many roles that require significant phone time. Does the applicant have the requisite phone presence your organisation needs?
  6. Check logistical issues such as when they can start. If you need someone to start shortly and they need to provide a 3 month notice period, move on to the next applicant. Also check visas/working rights, salary expectations and any other housekeeping issues.
  7. Check what other opportunities they have: there is something comforting about knowing that other organisations are also pursuing the candidate. This also means competition, so you need to know how quickly to move things along. There is nothing more frustrating than selecting the perfect candidate only to find out she has taken a job elsewhere because the other company moved faster.
  8. Remember to keep the good candidates in the loop, perhaps call or email them after the screening and let them know that you are keen to interview and ascertain their availability.

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4 Reasons Recruitment Firms Should Offer Contracting

By Veronica Scrimshaw

professional-employeesMany independent recruiters focus exclusively on direct-hire recruitment, and that can certainly be a successful business model. However, it’s not a bad idea to diversify your recruitment firm’s business mix, and contracting is one way to do that. Here are four reasons recruitment firms should consider contracting:

1. “Annuity” income. Contractors get paid for every hour they work, which translates to a “paycheck” to your firm for each hour as well. Just 5 full-time contractors out at a small profit of $5 per hour would generate a $50,000 annuity each year for your recruitment firm.

2. Even out cash flow. For small businesses of all types, cash flow is king. Recruitment firms, especially those with a contingency model, can suffer from wild swings in cash flow when payment for work sometimes doesn’t happen for 90 or more days. It’s tough to manage ongoing overhead with that kind of ebb and flow. Adding contractors is a way to bring in steady, regular income to help balance the cash flow that keeps your business running smoothly.

3. Provide your clients a way to hire when their “hiring budget” is unavailable. Sometimes your clients will have an urgent hiring need, and their normal budget is unavailable. Maybe there has been a spending freeze. Maybe the budget dollars for the fiscal year have already been spent, and no new monies will be available until the next fiscal year. Offering an employee via contract *may* offer your client a solution. Money for contract/temporary labor is very often in a different line item than money for direct hiring. Structure your deal correctly, and the client can convert the contractor to a direct-hire employee and you can still earn a full fee for the placement.

4. Create a saleable asset. If you’re the owner of a recruitment firm, have you thought about retiring? Are you planning on one of your kids taking over the business? What if they’re not interested? If you don’t have an “heir-apparent” whether in the form of a family member or a longtime employee, your options may be limited to either closing the doors or selling your business. Selling recruitment firms isn’t necessarily a quick or simple process. It can be tough to determine the value of the business. Your database probably isn’t worth as much as you think it is. Contingency clients are not a guaranteed source of future income. But contractors are a different story. Contractors ARE a guarantee of future income and thus, are a tangible asset with a defined value.

Are you currently offering contracting as part of your business mix? Why or why not?

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Independent Recruiters, Split Placements, and Tennis

By Sarah Gawrys

sports-fieldAs many independent recruiters start to explore adding split placements to their business model, different questions arise as to whether they want to split profit, why they would pay to join a network, and most importantly what belongs to whom? Recently picking up the game of tennis, I think many aspects of tennis can be related directly to recruitment and split placements, and perhaps this will give a new perspective on this business model to those on the fence.

Why join a network when you can network for free on Linked-In? Ah. The most common question that seems to be swirling in recruiters’ minds is why they should pay. With Linked-In groups and recruiters advertising they need split partners, it would be easy to say you could attain splits simply this way. That is fine, but what happens when a tennis player relies solely on playing on free outdoor courts? Life. Without the protection of a facility and the unity that comes from belonging to an organization, there is no security that you will not get hit with the unpredicted. Finding a tennis player online to show up at a court to play, you do not know if they have officially been rated, if they will show up, or if the weather will even permit you to play. Trying to find a split placement partner on Linked-In does not give you any assurance of their ethical background, there are no rules or guarantees that they will honor your candidates or fee agreement, and you may never hear from them again after providing valuable information. A network also provides leading industry information, important events, and discounts on products and services you use in your recruiting company.

Why split profit? As an independent recruiter, many are hesitant to start split placements due to the fact that they think they can handle all of the positions and do not want to lose half a fee to a trading partner. In a tennis tournament, notice a single player and a doubles player. The single player will run all over a court frantically hitting the ball over the net, tiring out after a match or two and slowing down significantly. A doubles team uses the strengths of each player, masking their weaknesses and using their partner to balance them, resulting in lasting endurance, and a well-fueled operation that can last many more matches. In split placement recruitment, you are being offered a doubles partner that can take on those positions you are overloaded with, providing you with candidates to fill them, or take on those star candidates you have found and find them positions. The result is two independent recruitment firms making more placements while not running themselves into the ground or increasing overhead.

What belongs to whom? The final question often asked of independent recruiters is in regards to ownership of shared candidates and clients in split placements. This is extremely logical if you are thinking in an ethical manner. When you join a tennis organization and play with a doubles partner, you come to the court with your own shoes, racquets, and gear. Working with one another to achieve a victory, you could not succeed without your partner bringing their belongings; just as in split placements each partner must openly share their candidates and positions to achieve a successful split. When the tennis match is complete, you do not take your partner’s racquet or gear; it belongs to them, and they will be able to use it again the next time you play. In split placements, each trading partner keeps their client relationship, they keep the relationship with the candidates, and you honor that.

Recruiters like to complicate things when in reality, this business transaction is as simple as any other activity you work through in life. At the end of the day, what you must possess is an ethical and professional attitude, and you must look for the same in a trading partner. If you choose not to join a network to do this safely, I urge you to really spend some time learning about your trading partner, their firm background, and construct or use a split fee contract that leaves little room for errors.

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