I’m a studious reader of sites like ERE.net, SourceCon, TLNT, and RecruitingBlogs. I’ve read the debate over the demise of agency recruiting. A debate which is filled with emotion, and where sentiments are strong.

Reading the commentary and online debate provides perspective, but to me it’s not enough. That’s why a recent conversation with a Director of Talent Acquisition [let’s call her Jane] stood out. Her story typified the angst employers feel with recruiting agencies. Jane feels like the value recruiting agencies provide is something her organization should be able to do on its own. In her mind it’s not typically about the expertise of the agency. More often, it’s about sheer volume of effort and a sales transaction.

The conversation was high-level, so I asked Jane to provide more context as to why she feels this way. She detailed how she has been with the company for six months, and that she is evaluating all areas of recruitment. During her evaluation, she has found that one-third of the company’s hires have come from agencies over the last year. This amounts to 40 agency hires, and a gold mine for agency recruiters. To the tune of over $800,000 in fees.

During the conversation, Jane’s emotion was highest when telling me a story from a chat she had with a new hire that came from a recruiting agency. It was the absolute definition of why employers are frustrated with agency recruiters.

Jane’s frustration is driven by “The $20,000 Email”.

The $20,000 Email

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Like it or not, corporate recruiters view agency recruiters as transactional.

Jane told me she’s been asking new hires about their experience being recruited. She asks each of the new hires about their experience so that they can improve the hiring process. She does this across all departments of the company. Her conversation with a recent hire in sales [let’s call him Steve] immediately caught her attention.

Steve told Jane that he received a LinkedIn InMail from a recruiter he had not talked to before. The agency recruiter gave high-level details about the opportunity, but Steve had never talked to this recruiter before. This concerned Jane. She decided to dig further.

Jane quickly learned that Steve had little vetting by the agency. The agency recruiter had one conversation with Steve, and did not meet him in-person as part of the process. He also told Jane that, to his knowledge, the agency did not check any references. In fact, they never even asked for his references.

Steve was told that he was going to be “submitted” to the company, and that they expected feedback within a couple of days.

In most cases, agency recruiters base their value on the networks and the influence they have with top candidates. In this case, the perceived value of the agency recruiter was identification of the candidate, the time to write an email, and effort of submitting the candidate.

Search LinkedIn. Send InMail. Conduct quick phone screen. Submit candidate. Stay in touch. Charge $20,000.

That’s the narrative running through Jane’s mind. Right or wrong, she’s one of many Talent Acquisition Directors I talk with who are trying to bring agency spend down.

Obstacles for corporate recruiters

We learned a lot in our recent research for the Top 5 frustrations of corporate recruiters blog piece. Two of the main frustrations we learned about are directly linked to this article: corporate recruiters are managing too many reqs, and their online systems suck. Let’s examine.

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Corporate recruiters should be spending their time selling the company in-person.

Recruiters who are managing an average of 25 open requirements need help. As an experienced recruiter, I estimate that I can effectively “recruit” on 2-3 positions at a time. This includes sourcing, parsing, qualifying, submitting, etc. It’s not possible for me to do a quality job from start to finish on more positions than this at a time.

Corporate recruiters have to offset the load, and recruiting agencies are one of the options they have. While there are a handful of corporate recruiters who have a dedicated sourcing team, most do not. Sourcing for 25 open requirements at a time, conducting phone screens, coordinating schedules, etc. is way too much to handle with any level of quality.

The second issue is that most corporate recruiters we talk to don’t like their online recruiting systems. This includes the ATS, careers page, email, and various other online tools. The fact that these systems are not efficient adds to the problem. Now the recruiter responsible for all of those reqs wastes time trying to navigate poor systems.

This also impedes the ability to generate inbound leads from the web. Inbound leads which can make the hiring process way more efficient.

The two strikes on corporate recruiters can make utilizing agency recruiters essential to hitting hiring goals.

Finding balance

Great recruiters need to be great salespeople, just in a different context. Just as top sales closers have the best leads funneled to them, top recruiters should do the same.

In-house recruiters need to spend their time selling the company to top candidates. Your best recruiters need to be closers. They should be fully invested in the company, and closely connected with company leadership. This can increase their influence with the top candidates they are working to close.

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There’s always a lineup at In-n-Out. That’s good inbound lead flow.

The lesson to be learned in “The $20,000 Email” is that inbound lead generation is critical. Jane’s perception is that she essentially paid $20,000 for a good candidate lead. Her team had to do the rest of the work.

Jane agrees that paying for good candidate leads is the right thing to do. However, she doesn’t believe that $20,000 should be spent on sourcing a single candidate for a role they hire for consistently.

The problem most companies experience is that they do not take a systematic approach to sourcing candidates. In-house recruiters struggle to find time for identifying good candidates, connecting with them on a personalized basis, and tracking them for future hiring needs. This creates the $20,000 opportunity for the agency recruiter.

The angst I hear from employers about recruiting agencies is frequent. The question is…is the angst more about the recruiting agency or a product of their frustration with their own recruiting department?

The answer lies in having a balanced approach. Even the best in-house recruiting departments will need the support of agency recruiters for certain searches. They may also need agency support when utilizing contract labor.

The key is to set up an inbound talent lead engine. This can reduce sourcing costs, and allows in-house recruiters to spend more time selling top candidates on the company.

Of course, that’s not an easy thing for recruiting leaders like Jane to achieve. But the fact is that in-house recruiting leaders are looking for ways to reduce their agency spend. There’s no debate about that.

 

Jason Webster

Jason Webster is a social recruiting enthusiast and co-founder of Ongig, a platform that creates shareable, visually-appealing job descriptions. He has spoken at multiple social recruiting events, where his passion for candidate experience is the primary topic. Connect with Jason and Ongig on Twitter, Facebook, and LinkedIn.

by in Recruiters

  • Headhunter

    “The 20,000 email” is not as easy as it looks. Just a few points:

    1. I doubt that the headhunter/ recruiter just sent one email and that was it. They probably sourced for several hours, days, weeks, even months and on several sources not just LinkedIn.

    2. The headhunter/ recruiter probably has a much larger network on linked in that the corporate recruiter would not be able to reach. It takes a lot of time and energy to build a large network of qualified candidates.

    • Jason Webster

      Hi Headhunter,

      I worked in agency recruiting for 14 years, so I have full respect for how hard the job is. I’ve lived the ups and downs that come with the profession.

      Per your comments:

      1. The reference of “one InMail” was specific to the particular candidate who was hired. He recalled being messaged once, having a phone call, then being submitted. I have no doubt the agency recruiter messaged many other candidates during the sourcing process.

      2. This particular client has multiple seats of LinkedIn Recruiter. This allows for searching and messaging of all candidates, regardless of if they are in a recruiter’s network. However, the ability to leverage one’s network and build relationships is another story as we all know. It’s just that the “secret network” of the agency recruiter is growing less and less “secret”.

      Thanks for your comments. I appreciate you reading!

      JW

      • Shoshannah Brenner

        I agree that a lot of new agency’s are playing the numbers game and not spending time with their recruits, however as you know, we all don’t work that way. I tell all of my clients to really pay attention to the type of recommendations the recruiter has on LinkedIn, because you can tell right away who builds honest to goodness relationships and who plays the numbers game. One thing that is left out of this article and it’s important, is the culture match. If your a corporate recruiter you’re stuck with selling whatever the company’s culture is. However in an agency I can have a PHP engineer that’s perfect for one company and terrible for another based on the type of company culture they fit best with.

        • Jason Webster

          Hi Shoshannah,

          I couldn’t agree more. Quality people are the most important ingredient in a successful company. Connecting the skills AND culture is vital. Thanks for your perspective!

          JW

  • RMC Jim

    Great article Jason. The bottom line is that the Corporate Recruiter / Agency Recruiter dynamic boils down to the one age-old, common denominator of ‘World-Class Service’ . . . . RELATIONSHIPS. Human nature dictates that you will be more transparent and strive to engage in authentic win-win solutions with people of which you have common interests . . . and that includes the ‘vendor’ people.

    • Jason Webster

      Hi RMC Jim,

      Thanks for reading. You hit the nail on the head…relationships are the most critical piece to the recruiting puzzle.

      The intent of this article was to communicate the thought process of the Corporate Talent Leader. In this case, the Leader embraces relationships and how they will communicate with candidates going forward. She just didn’t see the relationships in practice between the agency recruiter and candidate in this instance.

      I agree that transparency is powerful. That’s the opportunity for the agency recruiter in this story as well. They likely did not supply the right-level of information regarding the candidate. This is a missed opportunity for them to stand out with the client, and connect the fees they charge to the future success of the client they serve.

      Good comment. Thanks again!

      JW

  • Amos

    Sorry recruiters but the margins are crashing. Before the agent was the oil between candidate and client…. you made the transaction smooth. I am afraid that oil is now social media. Any agency not deep within a niche will have little added value. Margins will be squeezed and your input less valuable.
    (BTW I own an international agency)

    • Jason Webster

      Hi Amos,

      Thanks for the comment. It’s good to get some international perspective on the matter!

      JW