Building Talent in the Age of Recruiters

Acquisition of talent is the most important key to a successful business. Whether it is hiring an executive or a group of testers, the abilities of a company rest with the abilities of its people.

Companies establish a reputation through their talent, however the companies themselves become the perceived vehicles of this talent and often people are unaware of the real “movers and shakers” behind the scenes. This creates an environment of disassociation where people see the accomplishments of the company, not the people.

With the traditional model, companies would conduct interviews through the managers of the associated need for talent. For example, a Director of Development would interview a lead programmer, and a lead programmer would interview a mid-level level programmer, and so on and so forth.

However the dynamic of talent acquisition has changed with the unprecedented and excessive use of recruiting firms, which bears a critical question: why do so many businesses put the acquisition of talent in the hands of unassociated and often inexperienced and unqualified third parties?

This trend is generating a middle-man nightmare many are reluctant to talk about and even fewer are willing to challenge. It is also creating weaker companies of disconnected team members.

Recruiters…
Recruiters have been with us for a long time. There is nothing new or unique regarding the services of a recruiter. What has changed are the habits developed by companies regarding their use of recruiters. It used to be a company would work to acquire talent through their own resources and when those resources failed they would call in a “specialist” to help fill the position they were unable to fill.

In the past, recruiters were hardly ever used as a “complete solution for all talent acquisition” because the idea would have been so absurd. For those of you who have been around in the IT industry for two or three decades, think back to the 80’s and 90’s. Did the majority of companies you worked with solely rely on outside parties to acquire all talent for the company? Most certainly not. So why is this happening now?

The perception of “using a recruiting firm to manage the acquisition of talent lowers overhead and liability” is a primary driving force, but how real is this perception, especially given most recruiters have no hands on experience regarding the talent they are looking to acquire? Does this not generate liability instead of prevent it?

Many companies believe the recruiter acts as a buffer to find viable candidates and once a viable candidate is found, the company conducts their own internal interviews to determine if they wish to hire the individual. However, is this really worth the “fee” associated with the individual, which is often 10% or more of that individuals “payment? How is that cost effective?

The average experienced C++ developer makes around $90,000 a year. With this model, $9,000 of that (per year) is absorbed by a recruiter as a fee for placing the individual. A company may say “but that’s OK because it would cost us $12,000 a year to insure them, and it saves us money by having the recruiter absorb that cost and offer health insurance as an employee of the recruiting firm.”

But guess what – that person works for the recruiter, and is paid by the recruiter. Their paychecks come from the recruiting company. How does this generate loyalty for the company the person is “working for” through the recruiter? Simply put, it does not. As a matter of fact it creates a subliminal psychological side effect on the worker purposely detaching them from the very company they are doing the job for. This dynamic is inherently counterproductive to building a strong team that is dedicated, loyal, and most importantly, connected directly with the very company they work at.

In general, recruiters are salesmen and while salesmen are good for selling things, they are traditionally not good at developing things. Ask your developer recruiter how many lines of code they have written or how many products they have shipped. It’s important to remember the Recruiter doesn’t know the job, they know recruiting.

Dealing with Market Saturation
Market saturation of school trained and inexperienced individuals is something taking the IT industry by storm. Pair that with a faltering economy and every individual claiming to be some sort of technology or programming specialist, the result is a monumental amount of applications for general positions which must be reviewed to determine of an applicant is qualified or not. This mound of submission-based paperwork serves as another reason why companies justify using an outside source to act as the entry point for resource acquisition, especially when we are in a job market which is flooded by the unemployed who continually apply for jobs they are unqualified for solely to keep their government check coming in.

Taking all of this into account, are companies making the right decision by putting the acquisition of key talent required for quality and growth in the hands of recruiters?

The Importance of Leadership
This leads to another critically important aspect of running a company and acquiring talent; Leadership. Proper leadership is critical for talent to thrive in a productive work environment since the productivity of talent is directly related to empowerment. Many companies attempt to enact policies of control and restriction which often infringe upon talent and productivity. A good leader recognizes these restrictions and adjusts them to serve as guidelines for productivity rather than limitations on what one can and cannot do because true talent is empowered to do whatever their talent allows them to do within the area of committed focus. Good leaders also inspire and support.

While there is no substitute for experience, leadership focusing on guidance instead of restriction is also critically important. Creating an environment where an individual has the ability to focus and execute their talent results in a thriving company. An environment where an individual must worry about rules, policies and procedures which hinder productivity and talent can kill a company.

Retention of talent is directly related to the leadership. It’s important to remember talented people thrive in environments where they can operate at their fullest potential and a truly successful company allows them to do exactly that. But talent has a habit of working with other talented people. Just having one or two weak managers or the worst case – a weak leader – will result at best in mediocrity with no inspiration and at worst in high turnover or talentless team members who simply go to work to have a job.

Key Decisions
An unfortunate truth is many people possess no talent whatsoever and companies who waste resources, time, money and energy attempting to grow talent from somebody where none exists are rampant. This is why key decision makers must provide respectful leadership showing they have the knowledge necessary to determine if talent exists in a potential new hire.

While many jobs and responsibilities can be carried out by dedicated and capable people, some require a specific talent. To put it bluntly, if a position requires a specialized talent and the person in that position lacks the talent, let them work somewhere else that does not have the level of standards your company requires, or let them work at a different company altogether.

Empower your strong, experienced and capable leaders. Remove those who are not. All managers and executives will find the core rule set of culling bad individuals applies to anyone no matter the position, and it is highly effective.

If your company uses outside parties to find your talent, take a step back and review why your company is doing it, what benefits come from it, and how successful such a decision has been on positively or negatively impacting your company. Ask yourself the key questions many people prefer to avoid. Is the use of outside firms related in any way to laziness, a lack of knowledge, or as a means to cut corners? If your company lacks the knowledge, experience and ability to use today’s tools to find the people you need in order to be successful on your own, is your company really making the right choices?

While I believe some recruiters can offer a great benefit to companies, most offer very little and cause more of an overall detriment than benefit. Weak companies lacking truly talented individuals use recruiters as a total staffing solution. Strong companies hire their own people with their own resources. Even stronger companies utilize recruiters solely for specific purposes in clearly controlled and defined scenarios based on their own hiring structure, principles and practices – and most importantly, led and directed by their own internal talent.

About David Allen
David built the first virtual company in the industry to ship a commercial MMOG. With nearly 50 team members at its height, his company had a near 100% retention rate for anyone who was with the company more than 90 days for a period of more than three years. Not once did he use a recruiter to secure his team members. Instead, he used referrals from existing members and contacts, and recruited the members himself.