The Recruitment Industry’s Own ‘War for Talent’: How Rec2Recs Can Help
This is a guest blog, written by Wan Pang, Managing Director at Reccelerate
Recruiters are a funny lot. We have websites, blogs and big social media campaigns telling our clients and candidates how we are professional, meticulous, and hiring experts in their fields. We believe that we know the market, that we can evaluate talent and that we can hire – after all, this is what we do for a living. When it comes to hiring, onboarding and retaining talent for our own businesses, many recruiting companies fall flat – turnover is common and most start-ups fail to attract and retain the magic number of at least 10 revenue generators - what we like to call critical mass.
Recruiting companies most commonly hire via referrals from current staff who are often incentivized financially to do so. Whilst this strategy is definitely one to utilize, we also need to listen to the same advice we offer our clients – that is, are you sure you are hiring the best possible candidate for the position you have open? If not, wouldn’t it make sense to bench such referrals with someone who really knows your market, and whose business it is, day in and day out, to meet and assess talent in your industry?
When we set up Reccelerate in Hong Kong in 2014, we decided to make our model a retained one from day one. We adopted standards laid down by the Association of Executive Search Consultants (AESC), and we are their only global Rec2rec partner. We decided to work across Asia, and to focus on new market entrants and other businesses that really wanted to effect change. We recognize that high levels of confidential information exchange are vital if we are to really help our clients hire the best fit for them and only them, rather than churn resumes of recruiters looking to move on, or are out of work, to everyone hiring in their area.
Interestingly, our model has been accepted by recruiting companies with contingency recruiting models, temp staffing companies, recruiting CRM businesses, as well as classic, retained businesses. We are agnostic, but we do try to ensure we leave enough of the market open to make sure we can address the hiring challenges of the clients we serve. Rec2recs have a mixed reputation, but then again so do some recruiting companies.
A common objection to using Rec2recs is the search cost, and this coupled with a belief that recruitment companies can do it better themselves, has meant that most Rec2recs fail to grow beyond one-man bands. We have worked hard to build up a portfolio of clients, sharing market insights and helping clients really understand the opportunity cost of a poor hire. Together with Shuen Loh, our business partner in Reccelerate Singapore, and our research back office in Manila, we have closed numerous Senior Consultant, Director and Managing Director roles in Hong Kong, Tokyo, Singapore, Manila, and China. Every single one of our clients has so far engaged us on follow up work.
Through our core business, we have helped educate clients on industry partnerships, M&A options and new market entry opportunities. We have expanded our business to help corporates looking to hire in-house talent, as we recognize that not all recruiters want to stay on the billing treadmill forever.
In the recruitment industry, consultants educate their clients on the opportunity cost of a bad hire and how this not only impacts the bottom line, but also affects morale and productivity. A good Rec2Rec partner will similarly reduce the risk of making costly hiring mistakes for recruitment companies. At Reccelerate we do that by looking carefully at what makes the potential hire successful where he or she is, and seeing how transferable these factors would be in the new organization, as the change in set-up is often drastic. It is important that both sides go in with eyes wide open as to expectations and that DNA aligns, and we make sure we are very much part of the onboarding process to ensure prejoining expectations are met.
The outlook for recruitment businesses in 2016 in Asia as a whole seems to be quite bullish, despite some uncertainties in certain markets. One particular Insurance client of Reccelerate plans to increase their Hong Kong headcount from 30 to 60 before 2017, and hired 9 consultants in February alone. The most active sectors for hiring, as a rule, seem to be in healthcare, digital and media, insurance, and risk and compliance.
It is refreshing to see that many recruiting companies of a certain scale are investing more in the sales support functions such as learning and development, operations and marketing communications. Falling oil prices and continued turmoil in global financial markets have meant that some recruitment businesses have had to scale back recruitment teams focused on servicing markets most affected by downturns, such as construction, engineering, infrastructure, industrial, and banking.
We are seeing an increased movement towards specialization over generalization, and this seems to mirror what clients want, especially those who have in-house talent acquisition teams. Some firms, particularly those close to technology and banking, are looking at bolt-on temp contracting businesses to meet client demands as well as give themselves recurring revenues. This used to be the preserve of the larger firms given the cash flows required, but smaller firms are also looking to muscle in here, building solid business models and winning discounted invoicing facilities with banks.
We are also seeing a growth in franchise businesses, and other structures offering finance, mentoring and infrastructure support to individuals and small teams who want to break out and take some ownership of something of their own. Rather than a move to consolidation of firms, we are seeing even more players on the market, encouraged by the ease to set up, greater candidate access via LinkedIn and other mediums, cloud-based recruiting technology, social media, as well as aspirational examples of people who have built and sold businesses in the region.
Read the full article here.