The Transaction v’s The Relationship or some would say chicken and egg!

I am not sure if is a symptom of the current state of affairs in the market and the difficulties many agencies are having or one of many other equally probable reasons, but I keep getting asked questions around a common theme, i.e.

“What can we (agencies) do to work with your company?”

“What can we do differently to ensure continued success in the market?”

“What can we do to improve our reputation and earn the respect of in-house recruiters?”

I don’t think that these questions are actually that new, but I know that with so many corporate in-house recruiting teams building sustainable direct recruiting models that agencies might feel under threat and need to find other ways of going about their business.

Many in-house recruiters receive an abundance of Cold Calls from agencies each week. Usually they are from agencies looking for new name business but occasionally they are received from known agencies or people with whom we have spoken but who insist on using the same tried and tested routine and script on the call. These calls are Spam Calls, usually irrelevant and intrusive. I can go on for a few 1000 words on the different ill conceived approaches employed on these call, their effectiveness and their place in my life; however these calls are not the point of the blog entry and will be saved for another time.

The point of this entry is all about how agencies can change if they want to, to meet the needs of their customers, both current and prospective. On a couple of occasions recently when asked these questions by different groups of people I have proposed a change of attitude and focus and put forward the idea of changing from Transactional selling to Relationship selling. What was very worrying was that on each occasion I was asked what the difference is! It even came up in Bill Boormans internet blogtalkradio Broadcast recently “View from the other Side”.

In general, most agencies and their staff are focused on receiving the placement fee and I’d be surprised if any agency owner or worker would honestly disagree with this. This is not necessarily the fault to the individual but is a result of the sales targets set by their managers. We’ve all heard the tales or had first-hand experience of agencies with petty targets measuring the number of calls, appointments made, vacancies obtained, CVs sent, interviews arranged and offers received set for their staff. This is makes it a numbers game with luck and opportunity being the real success factors. This approach fosters an attitude and approach by the agency staff that has them chasing the deal first. They may win the deal and thus the fee, but can it be replicated to such a consistent level that it becomes forecastable? Everything they do is Transactional.

It is written in so many sales training guides and other texts that people will only do business with people they like and trust, so why is it ignored? To be truly successful and have companies coming back for repeat business the best agencies workers have built long term cooperative relationships over time and in many cases have become friends with those they supply. So why is it that the rest don’t do this – it works!

For an in-house recruiter I need to rely on a supplier(s) that no only understands what I need, what my stakeholders need, how my company is structured but who also knows how to sell my company, the position and our value proposition to candidates. So how do you get this level of interaction? Isn’t it a bit like the chicken and the egg question? I cannot tell anyone how to go about this because as individuals we all react differently to different people but agencies should be brave enough to think longer term think about building relationships.

Whilst I appreciate that it might not suit every business model or customer profile surely it is better to focus on the Relationship for longer term sustainability. Obviously it has to have a balance! This kind of Relational selling does not have a fee or a deal as its objective. The objective is to become someone your customer trusts AND can work with. If and when this is achieved the fees and revenue will happen anyway. Rather than focusing on where a fee will come from this month, concentrate efforts on how and where fees will come from over the next 24 months.

  1. Gary,
    I hear what you are saying about poor recruitment practice however the majority of recruiters are good operators who want to do the job properly. There are 3 areas that i want to respond to in turn:

    1: Relational V Transactional. I actually think this goes well beyond the mud at the wall argument. during the last 6 – 7 years recruiters have been driven down a route of speed and volume being the key driver. This has been driven by both the clients and the candidates as a result of the job board/automated culture. many clients rewarded the first past the post with the c.v. over the recruiter that had made sure they had spoken too and interviewed the candidate before they were submitted. Equally, many clients preferred to use multiple agencies and were unwilling to go beyond issuing a generic, e-mailed job spec. This did not allow for any level of understanding and fell to post and hope. If i send you enough c.v.’s i might just get one right.
    The candidates themselves also posted their c.v. to all and sundry in the hope that one of them might be able to help, thinking nothing of applying for up to 50 jobs at a time.
    The clients appeared to be content with this poor service and the better operators found life quite difficult.
    Come the recession, this has now changed and hooray for it. Clients, with less vacancies to fill, and the posts that exist being so crucial to the organisation became interested again in what the agencies were doing and have begun to demand service over speed. With less vacancies they are also more willing to enter in to a more exclusive relationship with recruiters, demanding a much better level of service built on relationship and understanding. This is not new, more like the relationships that existed pre-internet. Equally, with decision making time taking twice as long and candidate uncertainty over long term security means a much better understanding and relationship is demanded throughout the process, where trust exists between both parties. This is relational and my true hope is that when the busy days return we do not return to old practices on all sides.

    2: The use of matrix by recruiters. I will be honest, i measure all of the areas you listed and many more. once i have the figures i can identify the efficiency (quality) of the job we are doing and i use this to continually improve the service offered by the recruiters i consult, working to achieve a minimum standard for both volume and efficiency. Lastly i measure financials to ensure we are making enough money for the work we are doing. Taking the numbers is key to this and ensures clients and candidates receive the quality of service we all desire. Measurement should not be mistaken with poor performance management which includes but is not exclusive to volume.
    3: My last area is cost. Larger corporate companies have continually driven down margin and automated the hiring process or gone over to an impersonal R.P.O. option driven by machines or third parties. In life, you get what you pay for and i believe the posturing of some corporates enforcing terms with no flexibility has equally been responsible for making the relationship transactional over relational.
    I’m delighted to see much more talk of old fashioned recruitment values on all sides. A return to this way of working will be better for everyone involved, agents, clients and candidates.

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