24th
Why are there so many recruiters out there?
It’s a simple and yet complicated answer. Most clients of recruiters and or recruitment companies don’t realize how necessary they are to their careers their business and or their personal or corporate advancement. Having spent a good portion of my career in recruitment and talent representation ultimately leading to my founding my own company 3 Degrees Creative Resourcing, I thought this would be a good forum for dispelling some of the rumors, myths and legends of the recruitment industry.
The first question I will tackle here is: Why are there so many recruitment companies?
On last inspection there were approximately 1000 independently incorporated companies operating within the Golden Horseshoe of southern Ontario who described at least one of their basic service offerings as recruitment or staffing and those are just companies who target the Information Technology sector (yes Y2K was very kind to the recruitment industry). Now, if you are one of my clients reading this for the first time this is not surprising and you will undoubtedly laugh because the likelihood is you get contacted by a new recruitment firm at least once every week most of whom, you’ll never respond to (lucky for me if we’re already working together… not so lucky if we haven’t done business yet… ) If you are a candidate of mine, you will undoubtedly have registered with at least 5 different agencies by the time you read this and if you market yourself on the open market, you’ll likely get called by new recruiters or agencies each week most of whom you’ll never have head of or have time for. We’ll get into why later…
New Term: “Open Market” refers to the universally accessible interface points where potential candidates can announce their existence, market themselves to potential employers and or recruiters, and define their willingness to consider alternative employment and or project work. Typically agencies and or recruiters find open market candidates on job boards such as Monster or Workopolis or social networking tools such as LinkedIn or Facebook.
The first reason why there are so many recruiters out there is due to the fact that the recruitment industry has what is refered to as a very low barrier to entry. What this means is that theoretically anyone who knows someone capable of doing a job could in theory market themselves as a recruiter. This is now especially the case with the widespread use of the internet. As such, the information that was historically tightly controlled and coveted by some of the worlds most well known agencies (Robert Half, Michael Paige, Korn Ferry, Sapphire (formerly CNC Global) etc etc is now widely available to anyone with a Linkedin Account, a Scott’s Directory or a Monster subscription. As such, an agencies “Drawer” can easily be equated to and marketed to potential customers as the number of people posted on Monster or any other resume database that a company may subscribe to. This however says nothing of the companies knowledge of the candidates who are searchable or the relative validity of their work experience.
New Term: “Drawer” A recruiter or a agency will often use the term Drawer to describe the number of candidates they have at their fingertips. That’s because historically (pre internet, pre-database) most agencies kept their carefully guarded candidate résumé’s and contact information in a drawer under their desk hence the term “Top Drawer” a phrase coined in the 50’s and 60’s as a term used to describe an agencies “best candidates”
Further, because of other networking tools such as LinkedIn, it is much easier to identify who Key Decision Makers are within companies making it easier for almost any agency with a bit of savvy to develop a list of target clients that does not differentiate from that of their competitors.
New Term: “Key Decision Makers” In the recruitment industry Key Decision Makers are usually hiring managers or people who require the services of an agency. Anyone in a position to hire someone is in theory a Key Decision Maker. Although the approvals process for hiring someone and or bringing them in on a temporary project may involve more than one individual, a good rule of thumb is to assume anyone with an expendable budget and a need to hire is in theory a Key Decision Maker.
The second reason there are so many recruitment companies is very simple.
Money….
Few industries offer the potential for earning in the six and occasionally seven figures without significant investments in education and or industry certifications (MD, MBA, LLP etc). As a result the earning potential in recruitment can be second to none. The average income of a recruiter working for an agency who has survived for at least 1.5 years is between 80 – 90 thousand per year. Not bad for someone who can be hired and trained to do their job effectively without a university degree. That being said the recruitment industry also has some of the highest turnover of any sales industry out there and the people who stick with it long enough to achieve incomes in the six figure range are not as common as you would think. The reasons for this are numerous. Most companies make it very difficult for an individual to achieve their maximum earning potential and the market is as I’ve already described, saturated. Further, most recruiters working in the industry lack the ability or knowledge base to effectively differentiate themselves from the competition. Finally, recruitment by nature is can be extremely challenging from an operational standpoint. Because the industry inherently deals with human capital… the candidate, consultant or client at any point may lie, change their mind and or simply stop responding to your calls or emails. If you are reading this and are in sales try to imagine your product, be it a photocopier, can of paint, load of gravel or desktop computer always being out of stock, always thinking you’re taking money out of its pocket, or simply walking off the job site or across the street for 50 cents more an hour and you will begin to understand the dynamics of what it’s like to deal in human capital. The closest field I have seen to date that has some similar facets to that of the recruitment industry is the real estate market. Still this too has some exceptions. Houses don’t walk off the jobsite and it could be argued that as everyone needs a place to live real estate as a market segment isn’t likely to suffer the ebs and flows of the economy in the same was as the recruitment industry.
But what makes or breaks the success of a recruitment company? Why are some people seemingly so good at this while the vast majority of people who enter the recruitment sector fail? There are many reasons and factors that determine the answers to these questions which I will explore in days to come but to close this post today I’ll simply leave you with the notion that…
RECRUITMENT IS BLOODY HARD WORK!!!!!
