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The Threat Of Recruitment Process Outsourcing

I’ve been fortunate in getting the opportunity to speak at a lot of conferences about the successes I’ve generated in the staffing world. Those speeches tend to focus on ways to make third party staffing firms more competitive, because I come from that world, and I’ve seen what works.

One of the key takeaways from any speech I give is the need to understand what your clients are looking for, and what your competition will look like in the future. Us old-school phone jockeys pride ourselves on our connections and the speed of our dialing finger, but in the complex world of corporate human resources, the comprehensive staffing firm is going to have a lot easier time then the smilers-and-dialers.

Corporate Human Resources departments are looking for partners who understand that making a few placements with a company is a net loss. The time, focus, and money of making a few key placements spread out over numerous firms often turns HR executives into cold-calling punching bags. They get so many calls that it often interferes with their ability to do their own work. At the same time, smart companies recognize they can’t fill all of their positions, and respect the work of genuine headhunters.

The threat to the industry isn’t more technology, better job boards, and robust internal staffing departments. The threat to staffing firms is Recruitment Process Outsourcing firms that offer full-service employment consulting in addition to recruiting. We see some of this in the run to VMS systems in the last decade. There’s not a recruiter out there that wasn’t furious at being forced to make placements through a third party software vendor. We adjusted (mainly by large staffing firms co-opting the model), and the model has shown some real weaknesses, but it’s a warning sign to the third party recruiting industry.

Think about it. Pundits have been forecasting (and sometimes wishing for) the demise of the staffing firm for decades. Every new technology is supposed to end the era of the third party recruiter, and yet through early adoption, recruiters have actually grown in size relative to the industry. We serve a useful function as the lubricant of corporate hiring.

There is no real alternative to our services that can dominate industry wide. But what happens when a firm comes along that offers placement services, but backs them up with better hiring practices, benchmarking, and actually improves the overall hiring posture of our clients? What happens when Recruiting Plus becomes the model?

It’s happening. Clients want more then a placement. They want someone who comes in, analyzes what works for them, and finds candidates that fit in the overall structure of the company. You can’t do that from a job description, and you can’t do it interviewing hiring managers who select candidates on their intuition.

Nothing should be scarier to a third party firm then someone who speaks the language of corporate human resources to your client and delivers the same candidates. The only question, is what you’re doing to prepare for that day.


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