How to save money on recruitmentMartin Tripp
Research from the Recruitment and Employment Confederation suggests 42% of employers have raised their levels of pay in order to secure difficult-to-attract staff.
What makes staff difficult-to-attract varies from company to company; but usually it is because the skill set needed is in high demand but low supply (HDLS); because of location issues; or because the company or its sector is simply ‘not sexy’.
These are all valid reasons why your company may struggle to attract the best people. But poor recruitment practices are a much bigger issue.
How do you recruit? Most companies use contingency recruitment agencies, their own in-house recruitment teams, or they place adverts.
Each of these approaches has its place – especially when recruiting ‘commoditised’ roles. (The in-house recruitment leader of one major bank, for instance, told me that his team were “brilliant at recruiting bank clerks, but not much good at anything above that.”)
For HDLS roles, however, none of these approaches is particularly effective. Contingency recruitment is about harvesting candidates, working for any number of clients at the same time. In-house recruiters have an obvious vested interest and are not seen as independent by candidates. Advertising – and agencies – do not reach people who are happy in their work and not actively seeking a move.
A lot of companies, in recent times, have become obsessed with their Net Promoter Scores. And with good reason: in an age when news and ‘experts’ aren’t trusted, people have learned to listen to the advice of people they respect. Yet, when those same companies recruit, they don’t give any consideration to the influence their recruitment processes have on their overall image.
A properly run executive search – whether by us or another consultancy – overcomes much of this. An exclusive, retained relationship ensures the consultant is talking to potential candidates solely on your behalf. They will have the time to have one-on-one conversations and to tell potential candidates exactly why your company is a great one to work for.
Even if some of those candidates don’t want to move, they will be left with a positive impression of your business. A tick in the NPS box, which makes it much easier to recruit in the future. Moreover, this approach can overcome many of the previously mentioned issues that make attracting candidates difficult.
Since we founded MTA nine years ago, we have consistently worked with businesses in transformation – those who need HDLS candidates at the leading edge of their profession. We have worked with clients all over the UK and the rest of the world (typically, around 50% of our clients are outside London). We have also recruited for many companies who are either ‘unsexy’ or work in an image-challenged sector.
Despite all this, we had a 96% success rate in the last financial year. Because a properly run recruitment process will yield results.
So why does this save you money? After all, we – and other executive search consultancies – charge high fees.
The reason so many companies are looking to raise their base pay is to compensate for poor recruitment practices, we believe. We never reveal our clients’ compensation packages in our early conversations with potential candidates: we present the opportunity and try to find the right fit. The salary – or at least a salary raise – becomes a secondary consideration if the opportunity is sold properly. (My personal record is in persuading someone to take a £170k pay cut for the right job.)
If people want to move purely for the salary, they will move again the next time a higher figure is offered. A proper process will hire people at a non-inflated salary and find candidates who will fit your business. Despite the HDLS areas we work in, 75% of the people we recruited in 2013, for example, are still with the client company.
Of course, salary is important. But an executive search process, well handled, can manage candidates’ salary expectations and give clients valuable market data about what is a reasonable level of pay.