09 May 2011

'Sorry, they are already on our database' (Part 2): The solution?

My Lead Article in last week's InSight #179 ‘Sorry, they are already on our database': The lazy corporate rip-off generated a flood of emails directly to me as well as numerous comments on my blog. In less than one week it became my #6 most viewed blog post of all time (out of a total of 137 blog posts). 

Here is a small selection of the emails and blog comments I received (slightly edited for the purposes of this article). 

‘Thanks for opening up this debate - it's a very real and genuine concern.  I haven't been bitten by this so much as having a client engage a candidate three months after my submission claiming that because they engaged her for an ‘alternate role' than what I submitted her for, then ‘that didn't count', and no fee is applicable.  As a consequence, I sacked this unsavoury large, national law practice and continue to enjoy hearing from various sources about the deterioration of their firm culture.'
Legal recruiter, Brisbane 

‘We have had the same experience with a Global ICT Services company.  We know that they have their own massive database but we also know that they dish the requirements out to their panel and it is the various panel members who flag back to them who is a good fit; who is interested in the role and who is available. The client then cherry picks their preferred people and yes, they use the excuse that they already had them.  My response is always "well why haven't you spoken to them!"'
IT recruiter, Adelaide 

‘Very very topical and relevant Ross - we are getting this all the time.
Also - what about the RPOs - who owns the CV after it is sent to them - the client or the RPO company? They say it is siloed, but is it? If we have clients doing what is suggested in the article - how do we know they are being ethical in the RPOs? The recruitment market is changing and we need to make a stand!'
Construction recruiter, Sydney 

‘The "database" argument really resonates with me. Another phrase I have recently encountered is "we have a list and they are on it" in a law firm context, which is the same in effect but even more insulting!'
Legal recruiter, Melbourne 

This has been a long held concern of mine as well many others I'm sure. There's no transparency or ability to check the veracity of the clients claims. In addition to the issues you raised, what happens to these candidates that we lodge onto client databases in 12 months, 18 months etc (or even 3 or 6 months!). We're building their talent pool and/or denying ourselves or another agency a fee down the track because "they're already on our database, sorry"
Accounting recruiter, Sydney 

I have received this from fellow recruitment companies themselves, particularly the Sales recruiters. I once interviewed a fantastic sales person with specialist skills, knowledge and contacts in a certain sector, and he was interested in getting into recruitment. I determined he had all the right attributes and then presented him to a recruitment company looking to grow their Sales Recruitment team. The response: They had the candidate on their database as a Sales candidate, so wouldn't pay a fee for me referring him, even though they had failed to approach their own registered sales candidates about recruitment opportunities.
Rec-to-rec recruiter, Auckland 

When we signed up with IBM they told us this clause - i.e. any database candidate is ours. I spoke to procurement and told them they have no legal right to ownership with 'no time limit' and we would send an invoice should I be engaged on a role and fill it regardless of their database. Firstly they told me no other agency had EVER questioned them on this! Secondly they changed it to representation on that specific job order - so should I send a candidate that has not been specifically represented and/or attached to that job code then this would be our candidate. I guess just clarifying your stance with the client is a good start - set expectations at the beginning!
IT recruiter, Sydney 

In addition to these and other recruiters sharing their own experiences on this topic, I also had some people suggest a few potential solutions.  

Here's what James Purtell of Cox Purtell Staffing Services in Sydney had to say about how he is dealing with this issue  

‘After a LOT of thought on this issue, one partial solution for some of the scenarios you bring up is to generate our own unique email addresses for our candidates for clients that use an ATS. 

For example, when we add a candidate - say John Smith - to our internal database he is allocated a unique database id (say 123456). If we are submitting to a client that uses an ATS we now have a quick system to create 123456 @ coxpurtell.com.au (which we can look up in our system and find is John Smith). 

The candidate does not have access to the email and all emails are automatically redirected to our reception who can forward it on to the relevant consultant if any correspondence is received - even if it's in 2 years time.
This has multiple benefits:

·         Protects our IP (and fees)

·         Protects candidate privacy

·         Increase our control over the recruitment process

·         Stops clients ‘innocently' or otherwise emailing the candidate in X months time with any company news or job info updates

·         Stops "this candidate is already on our database, sorry" - if the client is using email addresses to uniquely identify candidates, which many are 

Obviously there's ways around it for the client if they really want to but it does make it a little harder.' 

Here's the light at the end of the tunnel provided by highly respected industry figure, Graham Jenkins (MRCSA, Life)

‘In the long term my personal vision is that we (RCSA) have a joint code of practice (with AHRI). I hope that is not a step too far. The practice on which you shine the spotlight is one that must be addressed if the industry - recruiters and HR - wants to be regarded as ethical and professional.' 

Amen to that Graham. May the force be with you on this one.

10 comments:

  1. Voice of Reason10/5/11 11:51 AM

    Whilst there is no barrier to entry into contingent recruitment, the Law of Entropy will be the dominating force that prevails over us all, ergo the mean will converge to the lowest common denominator. This is a mathematical certainty.

    Recruitment practices (read: ethics) in general obey a bi-modal distribution with the separation between modes still large enough for any village idiot to see the difference in the value proposition.

    The important lesson here is for those of us wishing to distance ourselves from such crude behaviour, to physically do so and not just huff and puff haughtily whilst moaning about having no choice of the market one works in. If you don't like this behaviour, don't work in a contingent market. Simple

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  2. Ross,

    Good to see you have followed up on this.

    With regard to one of the solutions offered, not all clients have ATS and not everyone's ATS works in that way so I am unsure if it is going to be practical.

    Further, if you are submitting a candidate on a client's database it may be best to put your own email address since if the client does decide to email them and the email address is not valid it will simply bounce back whereas if you have put your own email address at least you can find out about the progress since you are the one receiving the email.

    In the end as much as people believe there is a solution, I strongly believe this is a mix between communicating and covering yourself upfront, commonsense and treating each case individually depending on the past and future state of relationship with that particular client.

    There is no simple solution.

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  3. Engineering Recruiter from Melbourne14/5/11 10:08 AM

    When we get down to it, Taleo and other ATS packages like it are purchased and implemented by large employers for one purpose only - to dramatically reduce expenditure on recruitment agency fees - that's their only raison d'etre, pure and simple. Coupled with the large scale implementation of dedicated 'recruitment' teams staffed by mostly third-rate ex agency recruiters (rather than this process being handled by normal HR officers) it should be apparent to all that the recruitment agency industry is cutting its own throat by agreeing to deal with employers who run these systems and insist on candidates' telephone numbers or email addresses being uploaded as part of the process.

    Haven't most of us noted how relatively easy it is to start dealing with new clients who run an ATS now-a-days? Even the ones that only a few years ago wouldn't even have taken our calls? All of a sudden they are sending us lists of jobs after only an initial phone call! Why? Well, if a company has invested an eye-watering amount of money in buying an ATS then you can bet your life that the business model also includes stocking it with candidates' details as soon as possible - and that's where suckers like the contingency rectuiters come in - using their own advertising budgets / search efforts to stock employers' own databases free of charge. It's utter madness and one way or another it has to stop.

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  4. Great Posts and follow-up as always Ross!

    A similar discussion is just starting in the forums on Recruiting Blogs.com to do with Linkedin connections.

    http://www.recruitingblogs.com/forum/topics/linkedin-profilessame-as

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  5. Barry - executive recruiter19/5/11 1:28 PM

    Thanks Ross for taking an active role in this issue, and calling it exactly how it is. it is clearly one that hurts and if not addressed is going to hurt even more.

    The spectrum of overwhelming responses is representative – from agencies who want to walk away from clients to Graham Jenkins who wants a joint code of practice. Graham is right of course – It’s a “now” issue and I hope the RCSA get onto a resolve for all of us. Some of our best and biggest clients have already been romanced by the new rampant fashion of “screw the agency”. We are losing deals. If we argue our view to clients, we tend to destroy relationships. Then if we walk away, what good is that? Some other agency will fill the gap we leave on a lower fee structure and carry on populating the client’s databases for the future.

    Whilst it maybe brave for recruiters to walk away from clients, it just is not an option in the long term. Why should we hide the candidate details till the last moment? The only way is to make it clear that the practice of 'screwing the agency' is short-sighted and unethical. It is certainly not in the best interests of Companies who need diversity of candidates for role considerations. A collective stance from the Recruitment Industry is clearly being called for. It is clearly an international issue - judging from the link Gareth so kindly provided.

    Ross could you not arrange a webinar panel to deal with this issue to promote solutions.

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  6. James - Recruiter in Brisbane24/5/11 2:27 PM

    Ross, great advice, what the RCSA needs investigate is the right of clients to hold onto candidate resumes submitted by recruiters in the past that were not employed.

    It has been recently suggested that the 'intended use' concept in law coupled with the law of privacy may have protections

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  7. Do management in these companies ever review their recruitment practices, and I don't mean a procurement review. If I was a company I would be more concerned with the issue of really good candidates being missed. I see this a lot when dealing with clients who use direct response as well as agencies. So many candidates have submitted their CVs and never heard from the company. As I am an experienced Recruiter, often I will speak to and/or interview them, and find they would be an excellent fit (but not necessarily on paper). But I can't submit them because the candidate is already in the CRM.

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  8. Trevor – CA and an accountant recruiter - Melbourne3/6/11 5:40 PM

    Hi Ross, I found this article in the Hr Daily


    “How Deloitte saves $6m on recruiting, each year

    Drumming up support for social media initiatives and a referral program was "challenging", but Deloitte Australia now saves about $6 million annually on its recruitment costs, according to recruitment and mobility leader James Elliott.”


    Do Partners and Senior Executives at Deloitte ever assess the loss that Deloitte sustains fishing in smaller talent pools. Surely restricting access to talent from recruitment companies, ultimately demonstrates that Deloitte is not getting the best person for the job. What does it cost Deloitte a year against their competitor Big 4 not having the best person for the job. What does it cost Deloitte a year hiring 20 average accountants - millions of dollars, certainly that would not be a concern of HR or ever subtracted from this so called ‘$6m saving’.


    Partners or the Risk Management team of Deloitte need to assess these restricted and subjective processes of HR and the potential opportunity costs involved. Can you imagine how much business they are losing to their competitor Big 4 practices not having the best people for the jobs.

    What’s more - how much did they lose on billable hours because they didn’t have the people in the seats, while HR took longer recruiting on their own when talent was already available?

    As they say ‘penny wise – pound foolish’

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  9. @trevor - I have heard James Elliott speak a number of times and in one of those presentations he said that in tracking 'quality of hire by source' recruitment agencies ranked lowest (internal referrals highest). If this is true then I guess Deloitte would want to use their own resources even more, and agencies even less. James has said he always sees a role for agencies at Deloitte and does not have a goal to remove them as a source of hire. Let's hope that's true.

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  10. Cox Purtell Staffing Services method doesn't really work does it... Most recruiters with half a brain cell would remove personal info from the candidate CV, otherwise you are just handing over everything with no guarantee! At the end of the day there is no way around it apart from educating candidates about how the recruitment industry perceivably works and how it actually works. When I explain how it all works to my candidates they are horrified by how unprofessional the entire industry is!
    Biggest example of what you are talking about though - Christchurch in New Zealand!

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