Don’t pay the middleman

agencyvsclientPICDon’t even fix a price” said the lesser known Talent scholar and Irish landed gentry dwarf Dr Chris De Burgh, who summed up the sentiment of HR people at the time who thought that the rise of the internal recruitment function was the key to destroying the dastardly agency recruitment industry. The typical persona of Essex wide boy ‘Luke’ from Pucker Mucker recruitment agency in Basildon,  was perceived, unscientifically but not without some due cause, to be a boil on our recruitment arse cheek that needed lanced.

So as the HR tribe splintered into the inevitable breakaway factions in a manner that would make the People’s Front of Judea blush, the internal resourcing function was born and tasked immediately with replacing the agency middleman with their own in-house version and ‘cost per hire’ was the battleground.

As time went by the HR function found that the promised land of agency eradication was not reached with this big idea. New fronts were opened, with the help of internal finance and procurement troops, introducing a series of three letter weapons such as the PSL, RPO and MSP to ensure that the interface between talent supply and demand was carefully governed by ‘market forces’. In other words, screwing the margin down as much as possible to demonstrate that the power relationship with any potential agency middleman was being governed by the organization. Short-term economics seemed to trump any commonsense as HR searched for collateral to be ‘at the table’ and internal Heads of Recruitment spent too much wasted effort managing the internal dynamics of this race to the bottom.

Rise of the Resourcing function, impact of HR outsourcing and the over reliance on cost containment as a business strategy. I haven’t even touched upon the non-stop rise of technology as part of the armoury for sorting out the agency middleman in the last generation. I’ve written before about the dangers of over-reliance of Technology in the current recruitment strategy mix but TAT has developed from automating clunky manual recruitment processes to positive developments in the art of sourcing (as recruitment splintered again), exploiting social platforms for employer marketing purposes and driving speedier matching but let’s be mindful about what it can’t do currently.

The belief system are that these technological developments provide further assaults on the agency middleman with full cycle recruitment ownership going in-house. But let’s step back. This narrative has failed to see the world of recruitment agency become obsolete and in fact the problems faced with the great white hope of internal recruitment LinkedIn and the sheer resilience of the agency industry has proved what a waste of our collective efforts this phony war has been, distracting us instead from key talent problems surfacing today.

Indeed, the new technology front in the past few years has seen some HR Tech disrupters, with little legacy in life and sometimes nothing in the world of recruitment, seem to think that they can now further simplify the recruitment process by copying a matching process they think correlates with the purchase of a pizza or the hailing of a cab. At a time when we need the best minds of our generation to truly help us humanize the recruitment process this requires:

  1. Greater collaboration between technologists and enlightened talent folk who both understand the sentiment for dialling up the right kind of technology investment that answers real talent questions.
  1. A recognition that nobody holds the moral high ground in the crap experiences front between the agency and in-house and maybe it’s time to put off this phony war that has distracted for too long. Across the piece will be winners and losers ahead but the best of the agency piece will adapt and prosper if they read the memo that dialing up human interaction wins the war for business.
  1. Finally, more bravery in the HR function and the board table that strikes a balance between short term cost containment measures on bad spend (that we do so well) to justify the seat and the longer-term pursuit of quality talent solutions (that we don’t do so well and that will truly help differentiate our workplaces).

Until next time. Interestingly Chris de Burgh is approximately 1.6847262820m high and is the most common fake profile name used on Linkedin.


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