Have recruiters become too expensive? That, of course, depends on whom you ask. Through the grapevine, we heard that, for example, Paul Storimans has an opinion on the matter. The former CEO of recruitment service & RPO company Sterksen, and a real recruitment leader who previously worked in HR and IT roles at organizations like ABinbev and KPMG Consulting, is now an investor and advisor in recruitment tech companies. As such, he has seen many companies from the inside and has formed a sharp view of the market. What does he think about the claim that recruiters have become too expensive?
‘The number of placements per recruiter per period has been declining for years.’
‘To answer that, we first need to look at how the market is developing. Many staffing companies have been facing rising costs and simultaneously increasing turnover of personnel for the last 10 years, especially the past 6, 7 years. In addition, the transaction volume does not improve – read: the number of placements per recruiter per period. In fact, the productivity of the agency recruiter has actually been declining for years.’
And what does that mean, according to you?
‘Corporates have experienced a higher demand in recent years than in previous years. This applies to both permanent and flexible vacancies. So, logically, the total staffing costs have increased. On the other hand, the client is doing more and more themselves and uses the same talent pool, processes, and tools as most agencies, which reduces costs for the corporates. The biggest difference between the methods of corporations and agencies is mainly that the corporation often has a broader demand, while an agency can specialize in a target group.’
‘LinkedIn has often become one of the most expensive applications on the agency side.’
‘The client still likes to work with agencies – in addition to their own activities. Such agencies have now mostly become specialists within (a niche of) the labor market, there lies their added value, of course. But the point is: that many of those agencies still work according to the same business process as 20 or 25 years ago. Only now, they face an increasingly complex and expensive application and sourcing landscape. The costs have therefore increased significantly. Once, a good ATS with a website and, depending on your target group, a mix of campaigns and sourcing actions was sufficient. Now, the landscape consists of several separate tech solutions that need to be integrated with the ATS. On top of that, there are the costs of LinkedIn. That latter has often become one of the most expensive recruitment applications used on the agency side.’
As a result?
‘Higher costs per candidate. All agency recruiters are putting more and more available time into sourcing, or maybe all agency recruiters have become sourcers. And unfortunately, we no longer do sourcing in the ATS; we do it on (or with) LinkedIn. Sometimes recruiters spend up to 60% of their effective individual time on LinkedIn. It’s undoubtedly a fantastic recruitment platform, no doubt about that, but complete sourcing data seldom reaches the ATS or even stays entirely within the LinkedIn environment.’
‘You find less and less usable data in your ATS, a good search often yields a poor result.’
‘There are very few agencies that manage a tight data model in their ATS, so the re-usability of their candidate data is rapidly declining. You find less and less usable data in your ATS, and guess which tool we then use again to find new potential candidates? Exactly, LinkedIn.’
And so?
‘Not having good data in your ATS also means that developing digital services for candidates and recruiters at the front of the process doesn’t take shape. On the back end, the back- and mid-office processes, works much better. There, contracts finally take a concrete form, but even there, the data model often has to be completely made after the transaction.’
‘If we don’t organize the data better, we can’t improve the recruiter experience.’
‘If we don’t start organizing the data better, it will be impossible to improve the recruiter experience. That does require daily attention. We all have an ATS or a VMS application, and we put everything in it. But, say, after a month or 6 to 12, we still know very little (or nothing at all) about the candidates or the professionals we have been in contact with. As said before: this applies especially to candidates who don’t make it through the sourcing or selection phase, from whom recruiters are recording less and less or nothing at all. So even if you have a fantastic
And you do need that.
‘Most ATSs don’t lack the number of CVs/records. A lot of candidates and thus a lot of data, but very little usable information. And data in the ATS, of course, does not refresh itself, while the candidate updates their profile on LinkedIn.’ Most ATSs are called death pools instead of talent pools.
‘Eventually, the experienced recruiter drops out because the sourcing work is not challenging enough in the long term.’
‘No matter how great LinkedIn’s features may be, integrating with your ATS remains difficult. Luckily, LinkedIn does offer different subscriptions with which you can restart your sourcing. However, as a result, the highly educated recruiter gradually also starts to work more and more solitarily. Eventually, the experienced recruiter at agencies drops out because the sourcing work is not challenging enough in the long term. As a staffing organization, you thus lose recruitment capacity, knowledge, and relationships.’
Which brings us back to the beginning of the story: the recruiter becomes expensive. Too expensive?
‘The agency recruiter becomes more and more dependent on sourcing in their daily work. In the past, you did that with a phone; you went calling people, it was a bit of a telephone top sport. But nowadays, sourcing is increasingly limited to sending emails, or rather InMails. Recruiters really spend entire days on sourcing. Not always fun to do, especially when the conversion is dismal.’
‘The candidate wants more information before they will spend time with any recruiter.’
‘Candidates are increasingly shutting themselves off from direct forms of communication or contact, especially if you continue to rely on LinkedIn because literally, almost every white-collar worker is there. The candidate has become much more selective and can partly solve their employment questions online themselves. The agency will have to build a better-preferred position with its target group, preferably with better digital service provision. Because the candidate does want to cooperate if they have a question but also wants to obtain more information before they spend live interaction time with any recruiter.’
Does that surprise you?
‘As consumers, we also expect more good online and offline services ourselves. The recruitment industry is lagging behind here. The argument is always: human-to-human contact is very important. But if you keep insisting on that, it becomes relatively expensive. Your start is always one-on-one communication. That works, if the other side – the candidate – also wants to cooperate, unfortunately, that is increasingly not the case.’
‘Always human-to-human contact is expensive.’
‘The candidate expects a simple, fast, and well-organized process, preferably with one recruiter who is competent. Who understands their market, and their field. Great if it’s also a personally pleasant relationship.’
How do you ensure that you use that experienced recruiter, with all that extra knowledge, better?
‘Maybe the question should be more: why does the experienced recruiter end up dead in the staffing factory? If we assume that we work neatly according to the GDPR, then we often have more than enough candidates in the ATS. You just can’t keep calling them all personally. You can make a significant step forward there with a good working process or with digitalization then well recruitment marketing automation.’
‘If recruiters experience that the workweek becomes more monotonous, you won’t keep them.’
‘But then you need to organize your data in your ATS well. So you can share and re-use candidate data internally well. Otherwise, you basically keep doing the same thing you did 20 years ago: working from assignment to assignment. No substantial improvement in the process for the recruiter. And that is important. A better product, and better service, are also important for your own recruitment staff. Because if the recruiters experience that the workweek has become more monotonous than 3 or 13 years ago, then you’re not going to keep those people.’
What’s your solution to make work more interesting for experienced staff?
‘Improve collaboration within the team, so cooperate with each other across all clients and assignments. That requires, of course, the aforementioned specialization, a focus on and relevance to a target group, but that also means that you handle the result of all that sourcing effort we deliver day after day more carefully. Which data do we record, hopefully in a good ATS, and what are we going to do with it concretely tomorrow? How do we keep the candidate connected to what’s happening in the market, in their field, and thereby on our activities, so that we can deploy our service when the professional asks for it?’
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