Tag: Reward

Is ‘Commission’ Becoming a Dirty Word?

‘We don’t work for commission, we work for you’

Walking through my local branch of the UKs largest electrical retailer you couldn’t escape that statement. It was printed on every price tag and every poster.

Flip this and you may think that if they worked for commission then they wouldn’t be working in your best interests.

Cross the road and enter one of the UKs largest mobile phone retailers. In their literature you’ll read…

‘This year we also made a big change to our Retail Reward Scheme; we scrapped our commission-based pay structure and introduced our new pay deal, which encourages better team-working, and more emphasis on providing great customer service’

Flip this and you may think that working on a commission-based pay structure does not encourage team working and an emphasis on greater customer service.

I’ve also noticed a growing tendency for financial services businesses to start advertising the fact that their staff do not receive commission…

…and I have sat in many client presentations where the fact that I was not remunerated by commission has been a big positive for the client.

Regular readers of this blog will know I believe that rewarding purely for sales achievements as opposed to providing a great service and experience has driven poor practices and behaviours in the recruitment industry.

Now it would appear that leading businesses in other sectors may be thinking about how commission based rewards affect behaviours…and seeing a no commission approach as giving them a competitive advantage.

So is ‘commission’ becoming a dirty word?

How can you provide an impartial, collaborative, customer centric service whilst incentivising individuals with commission?

Does a no commission policy give you a competitive advantage?

Let me know what you think…

It’s The Sales Model, Stupid!!

Whatever the industry cheerleaders will have you believe, there can be little doubt that the recruitment sector is facing critical problems that whilst not terminal, could be very damaging. Threats from direct sourcing, downward pressure on fees and timescales, upward pressure on candidate and regulatory volumes, increasing service demands and expectations from clients and candidates, and the advocacy that social media brings enabling poor practice and experience to be communicated widely and quickly, will inevitably create burdens that many underfunded, complacent, inflexible recruiters will struggle to see off.

The debate has raged again in the blogosphere this week with a quite stark view from @theHRD on this blog. Needless to say, it attracted opinion on both sides, and the debate immediately moved to figures and semantics…always a stifler to any argument of ideas, ideals and passion.

Only a few commentators picked up on the obvious fact…this piece was written by a client. The HR Director of a fairly major (so we believe) business who would almost certainly a ‘sales’ target for pretty much every 3rd party recruiter in the UK and here he was telling the industry that the party was over, the days of high volumes and big bonus cheques were probably  disappearing fast…and what was the initial reaction?

To disagree with him!

Can you think of any other industry in which a customer telling you that your offering is poor, outdated and no longer does what is wanted would be told that he was wrong??

Me neither!

I wouldn’t mind but the industry prides itself on being a sales led industry…and what is one of the first things a trainee salesman learns?  Don’t say ‘yes, but’! You don’t win business from someone by disagreeing with them and telling them they’re wrong.

But then optimism, whether unfounded or real, is a key driver for a sales business.

So what’s the main thing wrong with recruitment industry in my opinion?

It’s the transactional sales model!!

It’s been unchanged for 50 years and there seems no appetite to change it now. Not when it’s made many people wealthy in the past. I can’t think of another business sector that has a standard operating model that has been unchanged for so long.

Before I go on, let me try and establish a case for having such a strong opinion on this. It’s not just thrown together! I have been a billing recruiter, month after month, for over 20 years. I spent a number of those years placing recruiters, during which time I must have interviewed at least 3000 experienced and trainee recruiters and sat in well over 500 client meetings where I have been briefed by directors/managers of agencies on their requirements, culture, values and goals.

When you look at the recruiter behaviours that most annoy candidates and clients I believe they can all be traced back to the transactional sales model. So let’s consider a few inconvenient truths about the sales model. For starters…

It makes the recruitment process all about the fee and not about the person.

Yep, it sure does. Number one target for any recruiter is fees. Don’t bring in the fees; you don’t keep your job. In fact I can think of few business sectors in which an employee can have a clause in their employment contract which states that failure to meet targets for 2 consecutive months will lead to a written warning. I have seen these contracts and people sign them. Unbelievable short-termism. Similarly I cannot think of another industry in which an employee can be told that they are now on a commission only deal, and if they don’t like it they can leave. Yep, I’ve seen that too. In fact I’ve heard directors talk of having done it. In a tough market, with pressures on all sides, those fees have to be made…and when your job could be at stake, that’s quite a pressure.

There’s no money in candidate experience.

Damn right there’s not! (Irony alert) Well, there’s not if you’re measured on fees, jobs bought in, interviews, CVs submitted, and interviews gained with client. Why spend an hour interviewing someone you can’t place in a job this month? Why spend a few minutes ringing back candidates who have applied but aren’t relevant? Get on the phone…find a new vacancy or find a candidate you can place. This isn’t a guess on my part…it’s something I have been told many times by recruiters.

As I’ve blogged before, in my company we have a team who speak to every single candidate who applies for a role. They don’t have targets. A year on I have still to find another recruitment business that understands the value in a candidate facing team that have no fee or activity targets.**

No time for feedback.

I blogged about this last year…inspired mainly by a comment from a recruiter in another business who told a candidate chasing feedback “To be fair if we spent all day phoning people who were ‘no’, which we’d like to do because it’s the ‘experience’ as much as anything that counts, we simply would go bust”. So there you have it from the horse’s mouth. No money in feedback…get back on that phone and cold call. If you spend time talking to unsuccessful candidates you’ll go out of business.

Inappropriate and poorly matched CVs sent to clients.

Another metric favoured by agencies is number of send outs. It also pays to send as many CVs as possible, in case a competitor sends the candidate over. More CVs may also get you more chance of interviews…it’s all a numbers game. And it’s sticking to the numbers that will keep you in your job.

I could go on, but that’s enough for now.

None of this should come as a surprise to regular readers. My first ever blog was about how I believed that tomorrow’s recruiter should be incentivised on feedback not fees. I’ve recently blogged on how business communication is changing and how business to business sales is changing.

This isn’t an anti recruitment industry rant. Anyone who was at the last Recruiters Networking evening would have heard me debate passionately in support of the industry. It’s the way we operate that needs to change. The transactional sales model rewards behaviours that have gradually dragged us in to disrepute…which is probably the biggest inconvenient truth of all.

I am also lucky enough to work within a business that rewards on client and candidate feedback and is prepared to invest in areas that do not lead to immediate fees, but provide a service and experience to the candidates and clients who use us.

At least the recruitment industry apologists all seem to agree that behaviours have to change…but my question would be how…without changing the operating model? You can’t change the way people behave without changing the way they are rewarded and motivated, and they way that their performance is measured.

I just scanned some online ads for recruiters and picked up these essential qualities:

‘Successful candidates will have a good academic background, but most importantly will be focused on entering a target driven environment where there is the opportunity for rapid career progression as well as significant earning potential within the first 12 months’

‘You must be hardworking, driven and determined with a strong aspiration to make a lot of money and a desire for success’

‘The role is a traditional recruitment position involving, winning, maintaining and developing business. You will do this in a mature environment and have the ability to work both autonomously and also as part of a team’

‘You will not be afraid to pick up the phone and enjoy business development as this is a key part of the role’

‘You will be a graduate with some sales experience’

These people will be looking after your careers and recruitment processes.

Reading that lot, I can’t see behaviours changing anytime soon…can you?

** Previous posts mentioned are:

Incentivising Tomorrow’s recruiters – it’s Feedback, not Fees

No transferability, No feedback…Candidates have feelings too

The End of the Phone?

Four reasons why recruitment sales is changing

Candidate Care – do you value your currency

5 Guiding Principles for a Modern Recruitment Business

I love working as part of the Stopgap Group, not least because it’s a values driven business that places the welfare of its people and the quality of service given to clients and candidates at the very top of its priorities. Consultants have always been rewarded on feedback – since the day the business was launched 17 years ago – and we always look for consultants with who have compassion, a real interest in people and a genuine desire to make a difference, rather than just sales skills.

We’re empowered too, and all encouraged to contribute to the future direction of the business…a group of us will be embarking on a series of Blue Ocean Strategy planning exercises with the management team, and a similar group have recently been entrusted with redefining our core values.

That’s right, no-one is hitting us with harder targets, tightening KPIs and threats over not making fee forecasts…they’re asking us to help shape everything that the business stands for and how it will operate in the future.

And we’re now looking to the future with a new set of Guiding Principles which I believe should be at the heart and soul of a successful modern recruitment business:

Daring

Passionate

Integrity

Collaborative

Agile

Here’s my view of how we can use them in recruitment:

Daring – Audacious and bold, not afraid to challenge, be it career expectations or a client brief. Actively taking a path less travelled if it helps you get where you want to be and not being afraid of change if it is needed to help you get there.

Passionate – Need to feel a passion about the whole process, candidates’ careers and clients businesses and be committed to finding the right cultural fit and the right career development. Always be prepared to go the extra mile and have the drive and determination to succeed.

Integrity – A genuine interest in people as human beings, and appreciation of the need for honesty, openness and respect. Brave enough to challenge but in a sensitive, caring way. Building lasting, sustainable relationships. Basically, it’s about genuinely caring.

Collaborative – Our Company isn’t a place that is interested in ranking boards, competitiveness or egos but is an inclusive, all-embracing culture which helps us communicate. Whether dealing with a client, candidate or colleague, there should be a commitment to an unfaltering, consultative approach.

Agile – Adapting, evolving, flexible and not tied to any tired processes.  Ready to respond to any issue. This constant evolution is needed to meet the demands of clients, candidates and colleagues in a fluctuating, demanding market.

So what do you think?

What principles have you adopted, and what principles would you like your recruiters to adopt?

I’ll be co-hosting the ‘Future of Recruitment’ track at TruLondon and it would be good to share your thoughts.

Getting the best out of your people – It’s a Question Of Trust

When I wrote last week about looking at a different way of rewarding recruiters so that they focused energies not just on the deal but on developing deeper, collaborative relationships with clients, and on building and engaging with their candidate community – almost certainly 2 key objectives of the future recruiter (hey, did I miss a rhyming alternative blog name there??!) – I didn’t expect everyone to agree.

I got some encouraging comments on the blog, and by tweet and e-mail, and I did get the ‘so does that mean if candidates like you but you don’t bill any fees then you still get a bonus’ objection.

My reply to this was that if a consultant was delivering to their clients and candidates what they really wanted, then they would be billing…it was all a question of trusting your consultants.

Move forward to the weekend and I was involved in 2 particular conversations on twitter that bought home to me the question of trust.

Firstly a quite detailed debate (due to run and run) about Social Media strategy…who, if anyone, owns it, who controls it, and what policies/guidelines should companies create for its employees.

Now this topic has already been written about on many blogs, and debated at many conferences and unconferences, and will continue to be debated, and there is a great summary of the conversation on the unblog for the London Recruitment Unconference…there you will see me say “management need clear vision on SM for their business & then have to trust employees to be professional”

Some of you may follow Gareth Jones (@garelaos) on Twitter…he’s the director I report to and he has given me complete freedom over how I build my professional social media profile. He’s encouraged me to blog, and is happy that my blog and twitter feed are visible to all candidates and clients through my LinkedIn profile. I’ve offered him the chance to read my posts in advance…to approve or censor them if he wants…but he said no…just post it and get in the conversation. Clearly he trusts me…

The second conversation was about Power Naps, and how Power Naps Rule! Karla Porter sums it all up here in a great post, and it got me thinking…how many companies have a quiet room, or put aside space where employees could take a short Power Nap to keep them fresh for the rest of the day? How many businesses would TRUST their employees enough? It’s helped Presidents and Prime Ministers rule our countries, but would management allow it for their workforce?

It’s all a question of TRUST…if you want to get the best out of your people, trust them. Whether you’re looking for sales, trying to build a social media profile, or looking to get maximum performance…loosen the rules, guidelines, structures and KPIs…and trust your best people.

 

Incentivising Tomorrow’s Recruiters – its Feedback, not Fees

Historically we have always seen 3rd party recruitment as a sales business. We employ recruiters who are rewarded for their ability to open doors and sell to clients and to place as many people as they can…irrespective of how they do it, and of what experience they deliver to their clients and candidates.  

Social media is beginning to change that…whether on LinkedIn, Facebook or Twitter, recruiters now have a relationship with their candidates and clients which is both visible and transparent.

New articles and blogs appear on a daily basis foreseeing the end of traditional recruitment as we know it. Certain themes about the future landscape are showing through, with the clear messages that, post recession, there will be a need to develop deeper, more collaborative relationships with clients, and to pay more attention to building and engaging your candidate community, specifically the ‘Talent Puddle’, the top 10%, if you like, of that community.

Certainly the HR and Recruiting directors that I speak to (and as an HR recruiter I speak to a lot of them, as clients and candidates) are looking for something different from 3rd party recruiters in future.

 

How do you nurture your ’talent puddle’ if you’re only remunerated on placements?

Well, I don’t know about you guys, but I hate being sold to. If my career, and possibly the future income and stability of myself and my family, were at stake I know that I wouldn’t want to be sold to. Nor would I want think that the person who was advising and helping me was thinking of their bonus cheque and how I could add to it.

I would be much more comfortable, much more trusting, if I knew that their main motivation was in developing a long term relationship with me, and not how much they could make out of me.

 

Can you develop deep relationships with a bonus model based purely on rewarding sales?

And if I was a hiring manager, looking to build my team and fill some key positions, with a tight recruitment budget, and knowing that my neck was on the block if I screwed up in the hiring, well I wouldn’t want to be sold to either. Certainly I wouldn’t want to be relying on a recruiter who was only looking at how many fees they could get out of me.

I would certainly be much happier, much more trusting, if I knew that their main motivation, again, was in developing a long term relationship with me, and not how much they could make out of me.

 

How do you incentivise relationship building and service?

Difficult, isn’t it.

After spending many years as a 3rd party recruiter, including nearly 10 placing recruiters, I’m not sure that we’ve ever found a successful way of rewarding RELATIONSHIPS and SERVICE. We still look at volumes and values of placements, and usually still measure activity by volume. Great recruiters are defined by how much they bill, not by how valued their service is.

 

So how about using feedback as a measure?

Instead of paying your top recruiter by how many placements they make next quarter, try taking feedback from their candidates and clients on how they performed, and on what kind of service they provided? Did it meet or exceed expectation? And did they add real value to the process?

I think you may find surprising results.

Firstly from candidates and clients, who will now have some real input in what will become a true two way relationship, it will bring them closer and give them the opportunity to reflect and comment on your service in a transparent way.

And secondly from your recruiters, who will now be able to invest time and energy in really developing the service to their candidates and clients, taking time to nurture relationships, build their communities, find out what they really want, and create ways to deliver a real value added service. One that they can be proud of.

Who’s up for that challenge??