Time for a Recruitment Industry Shake-up?

Is it Time to Change the Way We Remunerate Recruiters?

 

As someone who is champion to the science of Marketing, many an executive throws down a gauntlet for me in terms of Marketing innovation: In a recent Pricing Workshop, someone challenged me to develop a better “model of exchange” in recruitment. Well here goes…

 

For a long time, some business leaders have harboured a certain dissatisfaction in the price-value equation for recruitment services in Australia.

 

For employers, there has been a suspicion that recruiters are paid excessively for what they do. For recruiters, there is a perception of the importance of correct recruitment that justifies their high commissions. For applicants, there is a frustration that they have been screened out with inadequate diligence, and that recruiters deliver an inefficient service to both applicants and employers.

 

Recruiters argue commissions of 30% of more for senior and key appointments are justified, citing “costs and overheads” that form an impeccable service. Sophistications such as advanced CV screening, diligent and deep reference-checking, background research, best-quality personality testing and other “overheads” are presented as depth and value in the service provided, giving the employer the best chance of securing an “A-class” candidate.

 

However, recruiters are very quick to limit their liability to a three-month trial period, before the waive all responsibility and leave the joined match to its own future.

 

For quality candidates who refuse to lie or exaggerate in their CV, there is a loss of trust in a system that doesn’t give a honest applicant a “fair go”.

 

A bad appointment can mean the end with blame being purposeless

All too often the employee doesn’t reveal weaknesses or inability to deliver until well past that point… with employers discovering all too late that they should have employed someone else.

 

Recruiters blame their clients for incomplete or inappropriate briefs, or simply the decision responsibility being beyond their mandate.

 

Employers blame recruiters for presenting tool limited a field of appropriate candidates, not consulting in a fiduciary manner, filling the brief rather than offering alternative (better?) options, of simply doing a personality match rather than a skills/competence match.

 

Regardless, a bad appointment can mean loss of profits, milestone negative implications that can extend to downturn, loss of jobs, or even the end of the organisation.

 

A Better Way to Remunerate Recruiters?

It is only right and proper that recruiters who genuinely match the best possible candidate to the right employers be handsomely rewarded.

 

At the other end of the spectrum, it is also unproductive to reward recruiters if they present inappropriate, badly selected, unsuitable or inadequately competent candidates.

 

An alternative Model to Reward Recruiters

What if recruiters could be rewarded for quality of employee service?

What if recruiters could be rewarded for duration of employee service?

What if recruiters could be rewarded for contribution to employee performance?

Wouldn’t it be fairer if recruiters shared in employees’ bonuses?

Wouldn’t it be fairer if recruiters shared in employees’ salary increases?

Wouldn’t it be fairer if recruiters shared in employees’ career progression?

I wonder if it is time to reward recruiters with a superior win/win/win approach?

How about rewarding recruiters on a longer-term basis? What if they were paid an override for every year of service? 10 years in the job would be a great appointment – worthy of a handsome commission. 18 months of hair-pulling agony, sub-optimal results, and organisational disharmony not rewarded significantly means recruiters have “skin-in-the game”.

The override could include bonuses and pay-rises… that would be fair too, while NOT receiving huge commissions for appointing short-duration candidates would also be fair.

 

FEEDBACK Please!

I genuinely would like to hear comments on this … form recruiters, employers AND candidates… it could be an opportunity to bring about constructive change… but if it is not, I’d like to hear other thoughts.

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Is Your CEO a Fraud, Fake or Failure About to Happen?

Is your CEO a Time-bomb?

They say, “Cream Rises to the Top”, and generally it does… rancid or not!

How can you determine if the CEO, leading the Company you have your life savings invested in, or who is the employer controlling your professional and financial future, or is the head of the organisation you’re counting on for your security… is adequate for the job?

 

Here’s some symptoms to look out for that are sure give-aways your CEO is NOT up to the job.

 

1. CEO gives employees, investors and stakeholders no idea of the Company’s Mission and Vision statements.

Particularly staff, but everyone who contributes to the business, should understand their “reason for getting out of bed in the morning”. Without direction, how can people apply initiative, work as a team, and contribute top “the cause”? The answer is they can’t, and frustration, boredom, and complacency prosper, becoming the “norm”. For customers, if you say a “the lowest cost air-travel possible, their expectations come in ‘line’ and less customer dissatisfaction & complaints follow, with less costs, less staff pressure, … etc. (you get the picture.)

When CEO’s arrogantly boast profits inherited or experienced due to incidental or fragile circumstances (usually circumstantial) you want to watch out for short term profits that don’t dissipate faster than they came.

 

2. The CEO doesn’t understand the Hierarchies of Marketing.

My favourite quote for this year is borrowed from David Packard, of Hewlett-Packard fame, who said, “marketing is too important to be left to the marketing people”.  He was expressing an understanding of STRATEGIC MARKETING, in a world where OPERATIONAL marketing people are the functional folk who manage our daily marketing activities.

If your CEO doesn’t intimately understand the Hierarchies of Marketing, he’ll be loading his team with operational people delivering clever tactics, but in the absence of a single holistic strategy. Business will be reactive not active, budgets will be way out, production shortfalls and overruns, desperate discounting and high pressure sales drives… pressure, pressure, pressure, cost, cost, cost… while R&D will be minimised, market research will be nominal or “postponed till next financial period, and so on.

In the words so Sun Tzu, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

 

3. The CEO doesn’t Thoroughly Understand that Ethical Options are a Huge Business Opportunity and Not the Problem

Social media, the internet and globalisation, and all the communication ramifications have changed the game… It is often said, “Those that don’t observe the mistakes of history are bound to repeat them” and history has proven – so often – that when the “masses” discover contempt from the “elite”, heads role!

There is no reason a corporation can prosper and be immortal… companies don’t fail, its leaders who fail to run them properly who fail.

People want ethics and need satisfaction… it is up to C-level executives to deliver and they will secure customer loyalty. What’s incredible is that innovation using creates blue-ocean opportunities, and companies that deliver always prosper even more so. Imagine if tobacco companies had self-controlled their greed and capitalised on customer goodwill and brand equity? Marlboro was the 7^th most popular brand in the world – it COULD have spawned industries! Imagine if building industry had introduced an innovation to replace its asbestos voluntarily at any of the times points since 1918 when it was discovered to be dangerous. Ethical leadership could have created HUGE opportunity in every time this was ratified, in 1933, 1942, 1943, 1947, 1949, 1953, 1955, 1960 and 1964. Ethical leadership would have led to R&D with something better/safer/ newer. They could have “upsold” and avoided the legacy of corporate criminality. Imagine if petrol companies hadn’t bought up and buried alternative energy patents decades ago when they wanted to protect their businesses… So many companies might still exist if their CEO’s had vision through an ethical high-road expressed in Corporate Values.

 

4. The CEO Takes Bonuses and High Salary Regardless of Company Performance

Any CEO who puts personal gain before their Company can’t be trusted to lead. If they don’t have “skin in the game”, a sense of balance, dedication to employees, customers and shareholders before themselves, a higher purpose than personal wealth, beware.

 

4. The CEO Doesn’t Intimately Understand the Importance of Balancing all the Elements of the Marketing Mix.

If your CEO perceives the word, ”Marketing”, to mean sales, selling, promotion, advertising, getting people to buy stuff, marketing communications , and doesn’t recognise the 8 “P’s” of Marketing… you’re doomed.

 

My firm surveyed every Australian IPO over 3 years during the 2000’s and found almost everyone, WITHOUT a Marketing qualification of the Board, experienced a less than issue price per share. EVERY company with Boards inclusive of a marketing qualified board member, had a higher than issue-price market value per share. Not one failure/collapse, was experienced by tertiary qualified marketing representation on the Board.

 

Remember, businesses don’t fail. Brands don’t fail. Products don’t fail… It is Managers, leaders, decision-makers who make wrong decisions who cause failure.

 

Is your Brand Strategy Misguided?

Recently, I was part of a discussion on Linked In about Brand Strategy. My colleague, a branding expert, declaring, “Brand Strategy Work Is No Job for Ad Agencies”.

His article should be mandatory reading for everyone is business, from CEO to business-studies student, and definitely every person working in advertising.

The problem is simply that advertising folk just “don’t know how much they don’t know” about the greater issues in Marketing that go beyond those relevant to just the discipline of Marketing Communications (there ARE 7 other “P’s” in the Marketing Mix).

Too Many Ad Agencies are Untrained in “Marketing”

Its could be deemed hypocritical, particularly if you consider how violently ad agencies protect, and roll their eyes when a client tries to develop their own creative! But when the shoe is on the other foot, they glaze over, insisting they know best.

I recently experienced an ad agency completely wash away the significant and proven findings of consecutive, in-depth market research, because an arrogant account director of my client’s agency simply wanted to push through the creative they passionately believed in.

They got sacked months later, but not before they created a small misdirection in thinking, pressed upon my client, leading to a complete dismissal of statistically valid research findings, in favour of the emotional delight with the agency’s ‘tricky’ creative.

Of course, this happens often under the umbrella of “Marketing”. Synonymous with the rift between “sales” and “marketing”, but more complex due to the external nature of the appointment, it takes focus, wisdom and humility of decision-makers to resist.

 Ad Agencies Should Listen  & Understand

For 40 years I’ve observed strong willed, strongly opinionated and overtly arrogant ad people insist they know better than their humbler, better educated and brow-beaten clients.

Every makes this mistake sometime in their career: I have done it myself, in my earlier days, I naively perceived my worth, so I am guilty too – but at least I have the benefit of strong academic grounding and extraordinary mentoring and experience across the 8P’s rather than just advertising.

Creative Genius is Important, but Marketing Strategy is Key

Nobody denies the brilliance of a great creative, the street cunning of a whip-smart suit, or the genius of great copy, but when advertising agencies present a ‘strategy’ person, I’ve yet to find one (in 40 years) who actually understands the complexities or issues of ‘marketing strategy’. (Some years ago, I presented the Law of Diminishing Brand Loyalty to the Strategy Director of Australia’s biggest ad agency, and was shocked to observe she was lost, overwhelmed by concepts she had never heard of before!)

My colleague’s insistence, that ad agencies should stick to advertising strategy and heed the input of those empowered with marketing knowledge, is pure gold to those who don’t yet understand the limitations of ad agency services… but also a home truth to those who do.

Building Brand Equity

Let me Gift You with my 40 years’ Learning on Branding

Decades of academic & business exposure and practical, commercial successes have taught me valuable secrets & disciplines in Branding. Having empowered C-level executives, mentored MBA students with breakthrough branding successes, and been revered by peers as “a brilliant brand strategist”, I know a thing or two.

So, I’ve boiled down my most valuable knowledge into a 2-day workshop called, “Building Brand Equity”. Join me in Shanghai this coming March. Get more details by visiting, http://tr.globalscm-group.com/training_info.php?id=98

The Easiest Way to Grow Brand Equity is through Customer Engagement & THAT Comes from EMPLOYEE Engagement!

There is a crisis of engagement. With 87% of employees disengaged worldwide, Gallup states in a 2016 report that “employee engagement has barely budged in years”. In the United States and Australia these figures are 68% and 76% respectively. These levels of disengagement represent billions of dollars in costs to organisations and governments.

Why are so many employees disengaged? How can organisations increase engagement? What effect do disengaged customers, students, welfare recipients and other stakeholders have on the bottom line and on organisational success? How can you find a superior means to overcome these engagement problems?

With a market in need of a viable solution, management has to address the symptoms, the foundations and find the solution, including a next generation of engagement tools.

Leaders MUST address the issues, the direct & indirect costs, the effect on customer experience, and the philosophies around minimising, and explore new & engaging methodology to deal with this problem.

MARKET STATUS QUO

Increasing employee engagement investments of 10% can increase profits by $2,400 per employee, per year. (Source: Workplace Research Foundation). Employers are rapidly catching on to the positive ROI of investing in their employee engagement efforts.

Highly engaged employees are 38% more likely to have above-average productivity. (Source: Workplace Research Foundation). This is a huge part of where we see increased profits coming from. Kevin Kruse (@Kruse) coined a great term to define this ripple effect that employee engagement tends to have on an organization, he calls it, “The Engagement Profit Chain”.

Companies that foster engaged brand ambassadors in their workforce report an average of 2.69 sick days taken annually per employee, compared to companies with weak engagement efforts, reporting an average of 6.19 sick days. (Source: Workplace Research Foundation). Sick days can be very costly in the way of lost productivity and reduced workplace morale. Reducing these costs is just another benefit associated with employee engagement efforts.

Companies with engaged employees, outperform those without by 202%. (Source: Dale Carnegie). “Employee engagement is the emotional commitment the employee has to the organization and its goals. This emotional commitment means engaged employees actually care about their work and their company. They don’t work just for a pay-cheque, or just for the next promotion, but work on behalf of the organization’s goals.” – Kevin Kruse

Companies that implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback. (Source: Gallup). This is a big one folks! There are a lot of estimates on the cost of employee turnover, and honestly, that number is going to be different for each employee, location and company. The exact number doesn’t matter as much as the prevention of that cost. What is employee turnover costing you?

Only about 25% of business leaders have an employee engagement strategy. (Source: Dale Carnegie). There’s another powerful statistic. The benefits of building an engaged workforce are undeniable, yet so many companies haven’t made the investment yet. This disconnect seems like the opportunity for a strong competitive advantage over the other 75% of companies who don’t have a strategy.

The numbers don’t lie, organizations are going to need to invest in employee engagement in order to stay competitive, drive productivity and improve the bottom line.

THE FIRST STEP

Leaders need to develop sincere, motivating, inspiring alignment of teams for many reasons… Remove silos, undo secret agenda, create unity of effort, inspire initiative, minimise mistakes, etc.

At Launch Engineering, we deal with this under the “8th “P” of Marketing, “Politics”… were we recognise that Internal Marketing is key to Marketing Strategy & Planning. Readers should contact Launch engineering or visit…

http://www.launchengineering.com/MissionVision.htm

 

 

Engagement Levels Around the World

Category Management – Just old fashioned Marketing, re-boxed?

Category Management. Every time I think about CatMan key points, one is the core definition of the Marketing Concept: Satisfaction of Customer Needs & Wants.

Of course, there is much more to Category management than one-sentence, throw-away lines, simple theory, or intangible concepts.

Category Management is a potent and serious business approach that, properly implemented, can grow an industry, streamline a channel’s operations and genuinely improve profits throughout the channel while increasing customer value: It is a win/win for everyone!

However, badly done, misunderstood, or inadequate organisational commitment means win/lose… which (ultimately) means lose/lose.

You can organise your won, in-house workshop, or attend & learn at my #Category Management training workshops on 17 & 18 July (Singapore) or 20 & 21 July (Manila, Philippines) and you’ll discover tools you need to do it right, avoid the landmines, and make it happen. You’ll find more details at  http://www.sv-grp.com/newslist.aspx?ID=110 …

You’ll acquire the material you need to attract internal support and trade partner alignment, as well as adopt and carry out your own Category Management strategies through both supply chain and demand chain.

It’ll be great to see you there!

Black Hat Promotion, Dishonesty & Ethics – Please, “No!”

A curious email passed under my nose recently, which read…

Australian Enterprise Awards 2017 is due to be published soon.

You will remember me informing you that Launch Engineering was awarded Product Launch Specialists of the Year 2017 – New South Wales

Unexpected, (we never submit for prizes) I read on….

We now have limited availability of the final packages available:

Digital Package WAS $528 NOW $350AUD:
Bespoke digital winners’ certificate & Personalised winners’ logo

Premier Package WAS $950 NOW $595AUD:
1 dedicated page of content, 1 crystal trophy, Personalised winners’ logo

Superior Package WAS $1,895 NOW $1,195AUD:
Front cover image, 1 dedicated page of content, 1 crystal trophy, Personalised winners’ logo, 6-month clickable web-banner placed in prime position on our homepage

Individual Items:
Crystal Trophy – WAS $400 NOW $285AUD (discounts apply on multiple orders)
1 Page Editorial – WAS $310 NOW $225AUD
Personalised Winners’ Logo – WAS $300 NOW $215AUD

So, a “shade of grey” revenue-raising service that provides fro unethical marketing consultancies to “buy” accolades; I suppose to impress people and attract business from potential new clients unable to discriminate between ability and bull-artistry.

What concerns me is this is an example of the significant prevalence and adoption of deception, half-truth and unethical marketing communications of the 21st Century- and how acceptable it has become!

Black Hat Promotion, Dishonesty & Ethics – All PROFESSIONALS should say, “No!”

Ethics, honesty, moral fibre, and (most importantly) performance, these days, seems relatively secondary to sales success. Short term gains have become wholly absorbing, while long-term market effect appears to be completely ignored.

In the context of so many people perceiving the word “marketing” to mean persuasion, as opposed to the real meaning, being “management of exchange”, if even one “marketing consultancy” adopts deceptions like the one above, what hope have we?

I’m genuinely afraid for the long-term impact on the “marketing profession” if THIS is what we produce, endorse, promote, or even accept as a standard worth supporting.

Yes, I can understand the carrot is that Launch Engineering could choose to ‘ride’ on being awarded the “Product Launch Specialists of the Year 2017 – New South Wales in the Australian Enterprise Awards 2017″ publication, probably “selling” trusting new prospective clients, but this is LAZY marketing.

What Hat Marketing Communications, Honesty & Ethics is Simply GOOD Marketing!

Surely, we can conjure up more ethical, constructive, positive, meaningful and mutually profitable ways to do business, can’t we?

Isn’t it more important that our team is exceptionally highly qualified, with decades of specialised experience, and world-renowned, winning outcomes? I believe so.

Whether those”consultants”, lacking anything to support their aspirations, should they be allowed to use such services as the one above is not my major worry… it is the apparent willingness of so many to do so.

White-Hat Marketing is the creator of brand Equity. White-Hat Marketing is the means by which we extend and maximise the lifetime value of a client! White-Hat Marketing is how we push customers into   (Net Promoter Score) emissaries of our products and services. White-Hat Marketing is how we satisfy and dominate the attractive segments in our individual market segments.

YOUR THOUGHTS?

I’d be grateful for any thoughts, observations, or debate on this or any issue regarding subversive, covert and deceptive promotion of marketing services.

The Easiest Way for Businesses to Make Billions

Why Do Businesses Stray from the Proven Path to Making Billions?

I recall the adage, “Not advertising is like kissing someone in the dark… YOU know what you’re doing, but nobody else does.”

Market research tells you:

1. If there are any kissable people in the dark,
2. How to find them,
3. What sort of kiss they would like, and
4. How likely you are to enjoy it.

It is so, so easy for big businesses to make billions… why don’t they?

If research can tell you EXACTLY how to achieve your business goals, why doesn’t EVERY business do it?

THE FIRST, OF TWO REASONS, is that bad research has a GIGO effect (garbage in, garbage out). With most executives undertrained in how to brief research, appraise and assess its implementation, and interpret the findings (properly) in concert with strategic marketing know-how, research can simply go to waste.

The second reason is (in Warren Buffet’s words) because of “Corporate Cancer”… where arrogance, bureaucracy and complacency, combined with operational micro-thinking, dilutes or discounts the demand for, and reverence towards, market research.

In the high-profit, high-growth days of B2C (FMCG and Consumer durables), research was conducted with finesse, expediency, discipline, regularity and concise interpretation.

Nowadays, few executives demonstrate any respect for, tight management of, or scientific approach to the art of research … and the results speak for themselves.

We can all probably name brands that are weaker versions of what they were, and trace it back to a departure from the disciplines of marketing strategy built upon good research.

Where is the once-dominant Sharp brand? How long can Nestle last, relying on its long-term cash-cows? How out of touch and behind is Kellogg’s? What happened to Spillers? Where’s Ampol? Grace Brothers? Criterion Furniture?

The Hurdles to the Billions

Remembering that products don’t fail, businesses don’t fail, brands don’t fail… it managers making bad decisions who fail… It is possible to remove the hurdles for failure by opening business leaders’ minds to more productive and proven methods: Commissioning and utilising market research!

In 1983/4 when My Dog had failed to launch successfully for Mars, their Product Manager asked me for help. All I did was read the research overnight, and it was clear the positioning for the re-launch had to be “for fussy eaters”: 33 years later My Dog has not made less than $250M annual sales… simply founded on good interpretation of good research.

In 1994, simply reviewing the research data for Mersyndol revealed that 95% of sales came from the 5% of heaviest analgesic users, but Mersyndol loyal users were forced to buy another brand to avoid drowsiness. In a 20-minute meeting, my identification of this and suggestion of a “Mersyndol Light”, led to the launch of Mersyndol Day-Strength, that has generated around $200M p.a for the past 23 years.

All those billions came from objective interpretation of quality market research.

IF companies REALLY want the Billions, bad research won’t ‘cut it’.

Interpretation without the synergy of understanding strategic marketing science also won’t ‘cut it’. (e.g. Brand adoption theory, innovation theory, brand equity, brand loyalty, involvement, BCG Matrix, and about 100 other key models.)

But, with good market research… well planned, well conducted, well interpreted, and well respected and followed… the path to billions is simply “finding out what people want and giving it to them”.

How easy it that? So why don’t or won’t business leaders do it?

I think it would be healthy and beneficial for anyone to share thoughts, perceptions experiences, and concerns… or just comment…