The recruitment-to-recruitment industry (r2r) in Australia was born in 1992 when Rosemary Scott, bored with her brief taste of retirement after selling Scottstaff a few years earlier, decided to launch Scott Recruitment Services (SRS).
The concept of recruiters using a recruitment agency to source their own staff, wasn't one that was warmly or rapidly embraced.
Graeham Pratt (Ashworth Consulting) both Mary Dowrick (Dowrick) all opened r2r businesses in the mid 1990s and were the forerunners of a swarm of aggressive, new entrants in the r2r space.
This coincided with the rapid growth of the recruitment industry, which piggy-backed Australia's mid to late 1990s economic recovery and subsequent jobs growth.
Fast forward a dozen or so years and the r2r market is slowly recovering after what can only be described as a nightmare past 18 months.
One of the higher profile agencies, Marker Consulting, went into administration in May 2009 on the back of a collapsing r2r market and unpaid superannuation to current and former staff.
The sale of the Dowrick business in early 2009 had complications, turned messy and the final result was that offices closed and for the past 12 months, Dowrick has been a sole owner/operator virtual business.
Hughes Recruitment was sold by Tink Hughes in February 2009. Twelve months later, she purchased the business back.
The ProShortlist website claims to list all the current r2rs in the Australian market, and there's 32 company names on the list. Most of those appear to be businesses with one or two employees and no permanent office.
It seems Rosemary Scott's experience of working through previous recessions has stood her in good stead as she is the only player left with any sort of claims to having a national business (Sydney, Melbourne, Brisbane and Perth).
So after all this chaos and change, does the r2r industry have a future? Is it still relevant? Does it provide a worthwhile service? Is it value for money? Does it need to change?
My answer to these five questions is yes, yes, yes, yes and yes.
So what needs to change?
Well, I believe clients of r2rs need to demand more rigourously screened and assessed candidates. It's been too easy for r2rs to simply conduct a cursory interview and then refer the candidate to a client or clients with nothing more than the candidate's resume and a few comments or bullet points in a covering email.
The major area of improvement in providing this higher standard of screening and assessment, is in the type and amount of hard data that should be easily obtainable from effectively interviewing an experienced recruiter. Here are some suggestions for what an effective r2r agency should detail with their candidate referrals:
1. Their billing history
Both year-to-date net margin/gross profit (temp) and/or perm billings as well as previous full-year results. Any consultant who cannot (or will not) provide this data to a r2r consultant, shouldn't be referred.
2. Their target and actual KPI's
Calls, visits, interviews, floats, jobs generated and job filled ratio are just some of the activities and results that recruiters are (or certainly should be) performance managed on and therefore provided to any prospective employee.
3. Their business development record
If the consultant is being considered for a role that includes business development (both new clients and within existing clients), then information about the number of new clients won, value of work won, growth of billings within clients and growth in the share of client recruitment spend, with clear timeframes, should be included.
What about the clients of r2rs? What do they have to do to raise the bar for themselves and by association, their r2r partner(s)?
I would suggest that documenting a clear job description and performance expectations (both results and behaviours) is a very good start. Just as important is providing a competency map, model or framework to the r2r and asking them to provide a candidate rating for each competency in that model.
As we all know having a certain amount of experience at doing something provides no guarantee of competency (so why do recruiters keep asking for X years experience in their ads?) therefore making assumptions about an experienced recruiter's level of competence is just asking for trouble.
If you are interested in hiring potential high performers, whether in recruitment or elsewhere, then Daniel Goleman suggests in Working with Emotional Intelligence (Bloomsbury, 1998, page 113) that high performers within organisations possess the following three motivation competencies:
• Achievement Drive: striving to improve or meet a standard of excellence
• Commitment: embracing the organisation's or group's vision and goals
• Initiative and Optimism: twin competencies that mobilise people toseize opportunities and allow them to take setbacks and obstacles in their stride
I doubt I would get too much argument from recruitment company owners and managers, that these three motivation competencies are an important part of the make-up of a high performing recruiter.
So, if nothing else, demand that your r2r provide a thorough competency assessment against these three competencies for any candidate they refer!
Clients of r2rs need to ensure they provide the r2r with the specific behaviour that they regard as, at least, satisfactory for each competency. The r2r consultant then knows exactly what answers to look for when assessing the competency in an interview and then validating it in a reference check.
Even though the three high performance motivation competencies, identified by Goleman, would be the same competencies desired by owners and managers, the length and breadth of the country, the actual specific behavior sought will differ. These differences will depend upon the company or team culture and the performance expectations of the actual role.
The high performance competency of commitment might, for example, in a high-growth, middle-market, Sydney recruitment agency, translate to a behaviour of regularly working past 6pm and socialising with clients and candidates in the evening once or twice a week. This same competency commitment, in a suburban Brisbane industrial agency, for example, might involve working until 6pm once or twice a month and being rostered on to take after-hours calls once per fortnight.
One of these behaviours, demonstrating commitment, is not better than the other - they are just different and unless the r2r knows what specific behaviours are sought by each client, then they are just guessing whether there is a genuine competency match each time they make a candidate referral.
Competency mapping is not especially hard to do ... it just takes a bit of time and a lot of commitment, to see through.
So, as somebody committed to a thriving recruitment industry (and by association a thriving recruitment-to-recruitment industry), here's my challenge:
To recruitment company owners and managers: Provide much more specific information, especially a competency model, to your r2r and request (demand?) that this information be used to thoroughly assess each prospective candidate before they are referred.
To rec-to-recs: Ask your clients for a competency map that details specific behaviours, attached to clearly defined competencies. Then ensure that you provide the documented evidence that your referred candidates possess both the requested minimum previous performance level (ie hard data) and the minimum competency match.
If both these challenges are taken up successfully, then I predict much happier clients and much happier rec-to-recs because the rate of r2r-placed candidates that stay at, and perform for, their new employer, will soar.