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.
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.