Recruiting in Mid-2002: What’s In and What’s Not

The past twelve months have challenged the recruiting profession as much as they have challenged the organizations we work for. The changes that characterized 2001 were amazing. In the first half of the year things looked fairly good. A headline in the Chicago Tribune on March 10, 2001, said, “The job market showed surprising strength last month, with payrolls growing by 135,000 and the unemployment rate holding steady at 4.2 percent…” while The New York Times on March 1 said: “Economic clouds may be gathering over much of the nation, but in New York City the jobs picture remains relentlessly sunny.” Even before the attack on the World Trade Center, things had changed. The Wall Street Journal reported on September 7th: “Business activity in the U.S. service sector continued to contract in August and was weaker than expected.” And The New York Times gave the year its employment epitaph with these words on December 27th: “United States companies, led by Motorola and Boeing, laid off about a million workers in 2001, as the economy lapsed into recession.” On the 19th of December the Washington Post was commiserating with recruiters, writing, “Of all the lost souls to join the ranks of the high-tech unemployed this year, recruiters may have it the worst.” In just six months, contract recruiting all but disappeared and the discussions about talent shortages became discussions about outplacement. But since then new trends have emerged that will shape our profession for some time to come. In this article I’ll take a closer look at the first four items in the following table and at what some of the specific changes have been ó other than the obvious ones of layoffs and reductions in the number of recruiters. Next week I’ll cover the remaining trends.

Referrals, Not Job Fairs Clearly the focus has moved away from the job fair. We are finding that our networks and the connections we make between people we know and don’t know ó often our own employees ó work the best. The heyday of the job fair was in Silicon Valley in the late 1990s, when job fairs became “the place” to find technical talent or to look for a new job. But the Internet quickly changed that picture, and the economy has driven in the final nails. Only a few trade-specific, diversity, or college job fairs can be found these days ó and most of those are anemic affairs. Job fairs cost a lot of money, attract many “B” and “C” players, and eat up precious time with low return. Most of us are more than happy to see them go ó although there were some good parties that went along with them! While companies like CFG and Careerfairs.com list lots of upcoming fairs, they represent only a fraction of the number of those that were being held a year ago. The online career fair is also struggling to gain acceptance on both the part of the candidate and employers, as the corporate website and email offer cheaper and more personal ways to start a relationship with a candidate. Likewise, calling people blindly using stolen corporate phone books or carefully assembled “cheat sheets” from barroom chats has become almost a hallmark of the old-time recruiter. The new breed of recruiter relies on technology and relationship building. In-House Recruiting Most firms have eliminated contract recruiters completely or have shrunk back to a handful. The focus is on a few good internal recruiters who can cover a broad array of positions. While this will certainly change as the economy improves, I think we will never move back to those crazy days of contract recruiting that were common in 2000 and even early 2001. Firms will outsource carefully and use their own resources more. This means recruiters will have to be more skilled and efficient to remain employed and will not be able to fall back on agencies and contractors as easily as in the past. The agency world will have to prove that it adds significant value to justify the high rates it charges. While there will almost certainly be a place for the very best agencies who are well connected, have superb competitive intelligence, and can locate candidates quickly, it will be a shrinking world. Technology and outsourcing will reduce the need for the traditional agency to a trickle, while increasing the need for firms that can take over the entire recruiting of a particular type of person or profession. Outsourcing the Non-Essential Organizations are being very careful about what they outsource. I see widespread outsourcing of non-essential positions and a more organized and thoughtful approach to outsourcing than ever before. Administrative, routine manufacturing, and call-center representative positions are being completely outsourced to select third-party vendors who sign service-level agreements as to cost and quality. Certain key executive positions are going to the usual agencies for sourcing, but internal recruiters are filling other key positions. There is a sense that the jobs that generate revenue or that are responsible for sales are too important to trust to an outside provider who has profit as a stronger motive than the success of the organization. You might also like to read the article I wrote in December: Outsourcing Talent Acquisition? Maybe You Should Think Twice. Talent Strategies As a natural part of this more thoughtful approach, organizations I am working with are focusing on developing strategies around their talent needs. They are looking at what kinds of talent they will need over the next year or so, and then comparing that assessment with the abilities of their current staff. Once they understand the gap, they then decide what talent to hire, to layoff, or to develop or transfer internally. They are also involved in decisions about changing the skills of the workforce and about downsizing. They may even conduct the outsourcing process and steer employees to new internal positions. They link tightly with the training and development side of the organization and also conduct active competitive intelligence gathering so that they know who is who at competitor firms. Workforce planning focused on the number of replacements and the amount of linear growth that was projected to occur. The workforce planning approach was short term and tactical, and it rarely looked at the current skill levels across the entire organization. Much workforce planning was contained within a function or division, while the talent strategy approach tries to encompass the entire organization. Next week I will wrap up with a discussion of the remaining items in the table above and talk about where we are headed in this second half of 2002.