A Bright and Busy Future for Executive Recruiters
March 28, 2019 – A tight labor market with low unemployment means companies are struggling to find qualified talent, costs associated with talent acquisition are rising and a lengthy hiring process is now the rule, not the exception.
Recent surveys of hiring managers and individuals just completed from CareerBuilder, Inavero and the American Staffing Association (ASA) identified these major obstacles and extrapolated what the future holds for recruiters given the rapid rate of technological innovation across the sector. By and large, it is a very rosy picture.
The majority of Millennial hiring managers (59 percent) strongly agreed that technology will reduce recruiters’ roles in their companies’ talent acquisition processes over the next five years. But hiring managers across all generations said they are keen to leverage the data recruiting firms can provide, including salary data and industry hiring trends. In the current market, the primary reasons that hiring managers gave for working with recruiting firms include the desire to shorten the hiring process (42 percent) and access to candidates with specialized skills (41 percent). Yet, 40 percent of hiring managers said that their companies maintain recruitment processes in-house to save money.
Hiring managers and recruiting industry leaders alike agreed that technology will impact the industry: Sixty-seven percent of hiring managers said they believe it is very or extremely important that recruiting firms use up-to-date technology, and 32 percent of recruiting industry leaders plan to invest in new technology this year. Most hiring managers also said they think that search firms can be helpful in addressing top problems faced during the recruitment process: eighty-one percent said they believe that recruiting firms can help eliminate issues caused by technology limitations.
“The results of these surveys confirm the industry is changing, and hiring managers are expecting more from their recruiting firms,” said Andrew Streiter, senior vice president of the staffing and recruiting group at CareerBuilder. “Hiring manager loyalty to recruiting firms is at less than 40 percent as they are widening their nets in terms of how they source candidates, with most companies working with more than one recruiting firm, and 43 percent leveraging two or more recruitment technologies to search for, match and interview candidates,” he said. “This uptick in technology utilization among hiring managers requires recruiting agencies to think differently in how they can leverage technology to best serve their clients.”
Eric Gregg, CEO of Inavero, said that more than 70 percent of leaders agree that the recruiting industry will be transformed by technology and automation over the next five years, yet only one in five feel that innovation is a major threat to their firms. “In today’s historically tight labor market, lack of access to quality candidates is a major threat, and recruiters are spending more than half of their time searching for, screening and reaching out to new candidates, rather than building relationships with current candidates,” said Mr. Gregg. “In fact, almost half (43 percent) believe they only know current candidates somewhat or not well.”
Recruiters Now Balancing Technology and Human Touch
Automation is already transforming the recruitment process. People skills, and the human touch, however, still determine who succeeds and fails in the hiring game, says a new study by Randstad Sourceright. Let’s go inside the latest data and explore five ways to accelerate recruitment with technology.
Most hiring managers believe technology will reduce recruiters’ roles in the next five years, but more than half of hiring managers also plan to increase their work with recruiting firms, said Cynthia Davidson, senior director of research at ASA. “Even with new technologies pushing industry evolution, recruiting firms will continue to play a key role in the recruitment process,” she said.
Additional Key Findings
The survey also found that companies generally partner with recruiting firms to improve and streamline hiring processes, and most are not exclusively partnered with one firm. Fifty-four percent of hiring managers said they plan to increase their use of recruiting firms over the next five years. In turn, most recruiting firm leaders (66 percent) said they have seen revenue increases over the past year.
Related: 10 Things to Consider When Selecting a Search Firm
Hiring managers said that the top pain points in the recruitment process are access to candidates with the right skills (52 percent), time to hire (40 percent), and budget (34 percent). Sixty-six percent of hiring managers said they feel that using a recruiting firm would be very helpful in gaining access to the right candidates.
According to hiring managers, the key reasons for working with recruiting firms include the need to hire someone more quickly than they could do on their own (42 percent), access to candidates with specialized skills (41 percent) and their difficulty in filling the position on their own (37 percent). The main reasons hiring managers gave for why they do not work with recruiting firms are that they were trying to save money (40 percent), recruiting agencies are not hiring the type of positions needed (28 percent), and they believe the best candidates do not work with recruiting agencies (26 percent).
12 Reasons Why Companies Hire Executive Search Firms
Is retaining an executive search firm always the best route to take when hiring top performing talent? Hunt Scanlon Media and CNA International have brainstormed with senior executives, CHROs and top recruiters. Here’s why you might need a top flight recruiter to find your next leader.
The survey, in which CareerBuilder, Inavero and the ASA polled 859 hiring managers and 681 internal recruiting firm employees, also found that recruiting firms must be up-to-date on the technology they use. Sixty-seven percent of hiring managers said they believe it is very or extremely important for their recruiting firms to use up-to-date technology. Seventy-four percent of hiring managers said that using up-to-date technology can help differentiate a recruiting firm.
Related: 6 Reasons Why Executive Search is Ready for Disruption
At recruiting firms, leaders cited inconsistent use of systems as their biggest frustration with technologies (31 percent), while at the field level the main frustrations were attributed to outdated candidate data (29 percent). Applicant Tracking Systems (ATS) were ranked as the most valuable technology used by recruiting firms (31 percent), followed by social media sites (19 percent) and job boards (15 percent). Both leadership and field workers at recruiting firms, however, said they believe that ATS technologies are in the most need of improvement.
The most common resources used, according to the survey, include technologies to match open jobs to potential candidates (45 percent), use of a single search bar to look at multiple third-party resume databases (40 percent), and video or online interviewing capabilities (38 percent).
The survey also found that hiring managers are made aware of new recruiting firms through a variety of different sources including the firm’s reputation within their industry (12 percent), proactive recommendations (12 percent), and through experience hiring with the firm at a previous job (12 percent). The primary resources companies said they use when vetting new recruiting firms are similar to how they initially learn about these agencies, and include: asking people in their professional networks for referrals (34 percent), the firm’s reputation within the industry (34 percent), and reading the recruiting firm’s website (27 percent).
Related: 7 Ways to Evaluate Your Executive Search Firm
Lastly, the survey found that the main reasons cited for selecting a primary recruiting firm include the firm’s ability to find specific or niche skill-sets (16 percent), strong reputations (15 percent) and the ability to find high-quality talent (15 percent).
Leveraging Personal Career Information in the Big Data Era
There are two questions every search firm should ask about their core technology: 1) Is it simple enough for everybody to use? 2) Is the information held within it accurate?
Most companies, including search firms, still rely on outdated candidate tracking systems that are now seen as unreliable, over-complicated, and under-used. The result: data quality has suffered – and that has led to a proliferation of outside technology platforms, like LinkedIn. In this era of expanding data privacy rules and regulations, search firm databases, once historically viewed as major assets, have instead become 21st century business liabilities. And corporate in-house candidate platforms don’t rank much better.
Fortunately, solutions are emerging to control the reams of people data pouring onto social media and into tracking systems. One that seems to be particularly catching fire is Not Actively Looking – a candidate platform that allows busy business professionals to manage their career histories with the ease of a few clicks. It is smart 21st century thinking.
Visit NAL today and join a quiet revolution that’s underway. Control your data . . . control your destiny at www.notactivelylooking.com
Recruiting Professionals Weigh In
“Technology has its place and its purpose, but only to a certain extent,” said Scott Whipkey, CEO of Ascend Executive Search. “Entry-level jobs, and even some mid-level positions, are prime-time for technological advances in the recruiting space. Computer programs can more effectively match active candidates’ resumes with company job descriptions.”
“So those looking for speed and volume in their hiring process will embrace the new technologies and see great results,” he said. “But for those looking to fill mission-critical and executive-level roles, no program will ever match the skill, experience, art-form, and results delivered by a top-notch executive search consultant.”
Related: Eight Trends for Recruitment Firms to Heed In Changing Times
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media