Recruitment is broken, but it doesn’t have to be
27th January 2020
- Phillip Blaydes, Founder & Co-CEO, Talentful
Modern recruitment can be traced to the 1930s and the start of World War II, where agencies emerged to fill the gaps in the industry by soldiers going to war. After the war, these same agencies were used to place returning soldiers in new jobs – with the added challenge of finding opportunities for soldiers who had acquired new sets of skills during the war.
At that time, the most common methods of recruiting for companies and agencies were analogue bulletin boards and newspapers. The companies paid for the basics: type of job; apply here. The idea of courting talent didn’t exist yet. People needed to work, and that was motivation.
That basic model formed the foundation of modern recruitment. And along the way to 2020, the model shifted – from placing people who needed jobs to a commission-driven model that changed the focus from people to profit. Once the charging model made its way into recruitment in the 1980s and the dot.com boom and job boards of the 1990s became a reality, recruitment changed forever.
Talent became a commodity
The first dot.com bubble from 1994 – 2000 slowly eroded the humanized approach to hiring. The tech sector was growing faster than there were people to fill tech positions. With record-breaking high valuations, first-generation tech companies like Priceline, Amazon, and eBay went from obscure to overnight success, and the recruitment agencies expanded beyond white-collar management and banking jobs into specialized tech talent.
Money became the driver, the life-blood of the recruitment industry — not people. Rather than looking at talent as people, talent became a commodity. The Glengarry Glen Ross mindset of ‘Always Be Closing’ took over, and the emphasis on money dehumanized recruitment. You can see this in the language that still exists today, with talent referred to as candidates by agencies. This labelling falls short because everyone in the process is a human and people are valuable even if they are not a suitable candidate for a particular job.
The commission/success fee model isn’t new. Incentive-based pay has been the backbone of sales jobs for decades. The problem with incentive-based pay in recruitment is that it requires less commitment from the client, and that isn’t a good thing because it creates a false economy. The contingency search agency has traditionally focused on placement anywhere, as long as they get paid. Agencies place candidates; they aren’t looking at roles or culture.
But, technology changed the balance of power in recruitment in the post-dot.com decade that followed; online job boards democratized the recruitment process giving talent a better idea of where jobs were and what you should be getting paid. It was a giant step for talent, and it gave companies and startups with a smaller footprint the opportunity to hire and keep up larger global brands, but it de-valued the tech recruiters’ role to companies.
The industry began to lose that 1:1 connection recruiters had with talent. The little black book, networking, and the importance of staying connected to the talent took a back seat to the anonymous, detached LinkedIn approach where anyone with a computer and the ability to type can access the candidate through online messaging. Lou Adler, the voice of recruitment since the 1980s, said high-tech was dehumanizing the hiring process.
When company culture became king
What made the most significant impact on recruitment was the emerging mindset of company culture. Beyond blitzscaling, valuations, and unicorns, company culture changed how both companies and tech talent recruited and searched for jobs.
The tech world has changed dramatically in the past decade. It’s an entirely different environment than it was more than ten years ago, with thousands of companies who know they have to refine their messages on who they are as a brand to the people they want to hire. They have to prove they have the company culture that can play the long game.
This emphasis on the company brand has re-established the value of recruitment to companies and talent. The broader trend of in-house recruiters who know and understand the company and what types of people match that company culture has become an integral part of how a company communicates its culture to candidates.
A seat at the table
Today, recruitment is shifting into a new era. Recruiters are increasingly an essential part of leadership teams and have a seat at the executive table.
Highly credentialed leaders are coming into the industry to lead not only talent companies but work in-house as Chief People Officers to build teams, create culture, and foster the employee experience. They are creative strategists who can analyze the corporate landscape and recruit the team that’s going to outperform the competition. They are number crunchers who are making data-driven decisions not only to hire and retain top talent but structure, restructure and grow a company.
Ultimately recruitment is about humans joining other humans. Talent knows they have the right to control their destiny, and if they want to move to a new position to find a culture that fits them, they will move. At the same time, companies are waking up to the fact that if they don’t create the right culture for their talent, people will leave.
The future of recruitment is truth and transparency and remaining focused on building and nurturing the company’s most critical asset, people.