Mike, do you think the executive recruiting game is extremely competitive with easier access to data information. What is the new model for the business? Much appreciative if you have any thoughts to share. Dave from Topeka, KS
ANSWER: I have been in recruiting since 1990, and extremely competitive is what I would describe it every year that I have been in the business. You probably have figured out that most recruiters in our industry do not invest in themselves. The people here do, because you are on reading this blog. Most do not invest in technique. They do not invest the time to integrate new material and they do not integrate great questions and things like that into their process.
I find there are 10% to 15% of the recruiters in this business, and that is an estimation on my part, that are THE real pros. And then, I find, there are between 70-85%, in that next tranche –the next 20% down–that are mediocre in their skill. Lastly, I just find a group of recruiters that has a sophistication level that it is like, “Hey, Joe, I have not talked to you in a long time, I am just checking in. I wanted to see if you’re open to hearing about something or if you need any help on any open job requirements”, or they cold-call HR to get openings and/or they work through internal recruiters.
Having said that, that type of business is extremely competitive and is really probably what the quality of the search business you do not want. My office’s objective was to go into those accounts that were working with those types of recruiters that were frustrated with the quality and the quantity of the talent they were seeing because the recruiters were not doing search the right way. We would show them a better way, through a much more defined process of finding talent, and then owning those clients to the tune of $200,000-300,000 a year to $2-3 million in lifetime revenue from those clients.
There are a lot of client companies that want to partner with recruiting firms that are able to deliver. Key: ABLE to deliver, meaning you cannot just go in and sell that you are wonderful and different. If you are going to “talk the talk” you need to “walk the walk” Great recruiters fill job orders with great candidates and the reason they can get retainers and excel at getting retainers is because when these recruiters sell their process, they actually deliver on the back end. Really, really good recruiters, fill consistently with great talent on the back end.
There are some recruiters I know that can sell retainers but then they do not provide the fulfillment they promised. You do not need 100 clients. If you think of the market as competitive, you need less than a handful of good clients each year. The year I did $2.1 million on my desk, 90%+ of that recruiting revenue was done with only 8 companies. The remaining 10% were more traditional matching assignments.
The recruiting industry has always been competitive. I have not seen any drop off in business. When I read about the major, publicly-traded recruiting firms, they are growing at 10, 15, 20% a year right now, which is what they have done in the best of times, so the recruiting industry is growing. There is a ton of opportunity right now for service oriented recruiters who serve clients at a high level. There is opportunity for very high margins with very deep partner relationships for those that choose to work, to invest their time a little bit differently, to learning better techniques and then become much more consultative in their approach versus recruiters that just submit resumes.
This is a fantastic question, Dave, because you said “thoughts to share”. It is not getting competitive with easier access to data information. In the early 2000’s, everyone thought, Hot Jobs, CareerBuilder, and Monster were all going to put recruiters out of business. And, you know, it never happened. The industry through 2007, early 2008 grew rapidly in the age of the beginning of the internet. In the mid-2000’s through now is the advent of LinkedIn. Most great talent is passive. Big billing recruiters know how to recruit passive candidates. The business is incredibly difficult for recruiters that don’t know how to do that and THAT is where the opportunity lies!