I hear this all the time from hiring companies: “Since we’ve been looking for candidates, we’ve failed to see anyone we like. We’re just not getting a good number of the right candidates through.”
When asked how many recruiter they're using, they usually reply that: “We’ve only appointed a few, in addition to our HR team doing some direct sourcing.”
STOP – there’s the problem right there!
You see, there is already a major flaw in this strategy; the company is not really showing any true commitment to the service of the recruiters, so it’s only natural they are not accountable for delivering results (candidates).
“But the successful recruiter will get paid if they feel the role”. They reply.
Yes true, but that’s exactly why they won’t all be fully committed to filling the role; they’re all being asked to work for free.
The simple fact is that the traditional contingency recruitment model is broken since it is based on volume and speed, which sacrifices quality over quantity. For this reason and many others as well, it is not in either the hiring company or recruiters’ best interests. Yet, many hiring managers don’t recognise this or even know that there are better ways of interfacing with recruiters to get better results since they are well used to the traditional contingency approach. It is all they are used to and put up with, what about you?
Recruiters on a contingency basis will happily take on multiple roles already knowing there is a good chance they won’t fill them, after all, statistics tell us that contingency recruiters only fill 1 in every 5 roles they take on. What most recruiters do is take a scatter gun approach. They target only 30% of the candidate market in order to find quick candidate fixes, quickly screen them, then rush to submit to the client before the next recruiter finds the same candidate. Sound familiar?
With many recruiters happy to fill 1 in 5 roles, any more being a bonus, there is no culture of committing to quality service delivery to clients given that they are being made to work without any guarantee of remuneration. It is only natural that they reciprocate and give the client no more effort than is necessary to fill 1 in 5 roles.
Recruitment is a professional service, and the best results come through the right amount of consulting time applied to service delivery. It takes time, sometimes weeks of consultancy, the conduct of due diligence and application of skill to source A-Player candidates, who don’t exactly sit across a recruiter’s desk all the time waiting to be hired. For any professional service, time is money but basing whether a recruiter gets paid on how soon he fills his quota will certainly not get you the best results.
Let me put this in the context of your fintech business. Say a hedge fund asks your team to spend the next few weeks developing a front office tool, and if they like it, they will pay you for it. But by the way, they let you know that they are asking two other fintech companies to do the same, and in addition, their internal team of developers will in the meantime also see if they can build something they like. They also say they will even consider buying the first tool they like rather than wait to see the best, whether you’re finished or not. Absurd right?
What would you say to this hedge fund? Do you really think these terms would encourage your company to do their best work? Would you even accept such a project? How would you prioritise that project, tying up business analysts, developers and testers for a few weeks, when you have another client that following a vendor selection process, has selected you as the exclusive provider to build them a front office tool?
Clearly you would fully commit all your resources to that exclusive project for these reasons benefiting both you and your client;
No-one else is working on it or in competition with you, so when you deliver the fee is assured;
You will have the time to thoroughly specify the clients’ requirements, for whom you will build the best tailored-made solution;
The client will save time working with only one vendor, rather than having to brief, manage and follow up many;
Having agreed on the time frame, you will project manage the schedule, taking appropriate time so as to ensure quality review;
You will have the time to be creative, escalate your efforts, try out different designs, proofs of concept and builds in order to come up with the best possible solution;
Since the client and your company are entering business on an equal partnership, you will be willing to share other ideas and expertise with the client free of charge as a value-adding service.
Ultimately, by committing exclusively with you and agreeing on deliverables, you will be accountable for delivering the project to time and budget, in stark contrast to the first multi-development scenario.
So, if you’re used to briefing multiple recruiters on roles and have always wondered why they don’t tend to come across as being fully committed to getting you A-Players, and that a huge majority of candidates you get don’t fit your needs, put yourself in their shoes as a business model. Clearly, the contingency recruitment business model is not in the interests of either the recruiter or the hiring company.
Now is the time to go further than the traditional approach and take my advice. Run a contractual selection process as you would for any other business service and commit to one recruiter exclusively. You will be amazed by the accountability and results you will get!
Contact us to learn how we commit to finding you the best available FinTech talent.
About the author. Shawn Rutter is the Founder of Excelsior Search, a market-leading, niche search company, specializing in international executive search and recruitment solutions for financial technology (fintech), data, and research providers to the global capital markets and investment industry. With experience delivering search assignments across the Americas, EMEA and APAC, he founded Excelsior in 1999, having previously worked as an Army Officer and for the international search firm MRI. Shawn invites you to connect on LinkedIn.