Staff Turnover: A Recruitment Industry Crisis
by Ross Clennett
This article originally appeared in the
(October 2007 issue)
“...anyone who diminishes or downplays the costs of uncontrolled employee turnover is a fool, and fools should not be in positions of responsible leadership in any organisation.”
from Impending Crisis (Too Many Jobs, Too Few People) by Roger Herman, Tom Olivio and Joyce Gioia (Oakhill Press, 2003), page 126
What do we make of the turnover figures of the recruitment
industry? In this very
journal’s last issue the
RSCA CEO, Julie Mills, announced that the latest staff turnover
figure was 43%! Forty three per cent! In numbers or words it’s still a
Most other industries have staff turnover figures less than half of ours.
What’s the matter with us?
Are we recruiting poorly? Training erratically? Paying inadequately? Managing too much and leading too little? Not offering enough career development? Providing too little work/life balance?
I would suggest that either ‘yes’ or ‘probably’ would be accurate answers to each of the above questions, with ‘definitely’ the answer to the first question.
We are not an industry run by fools as Herman, et al might suggest however I estimate that about half the staff turnover in the recruitment industry is due to our consistent failure to recruit the right person in the first place. In other words, the very specialised skill that we proclaim to have, the skill that allows us to flourish and prosper with our clients and candidates, is the skill (or the lack of it) that appears to slow our growth and profitability. As Professor Julius Sumner Miller used to say in the Cadbury commercials; “why is this so?”
I suspect that it is because we don’t really understand competencies and therefore we don’t recruit against them. A competency is a specific, measurable action or behaviour that is required for successful performance within a defined context. Specified or nominated ‘industry’ experience, ‘Australian’ experience, ‘number of years’ of experience, age, gender, ethnicity etc are not the drivers of effective job performance, competencies are.
“Basing hiring decisions on myths rather than realities is, according to our research, the reason that about 55% of people holding sales positions have little or no ability to sell, while another 25% have sales ability are attempting to sell the ‘wrong’ product or service. The remaining 20% are doing precisely the job that is appropriate for them and their companies.”
Is this quote from recent recruitment industry research? No, this quote comes from a Harvard Business Review article (Job Matching for Better Sales Performance by H. Sreenberg and J. Sreenberg) from 27 years ago! How true is this for our industry? How many myths do we continue to perpetuate in the hiring for our own staff?
If it is any comfort this problem has been around for many years? No! We are just perpetuating past mistakes and very few recruitment leaders seem to recruit their own staff based on anything other than ‘gut feel’. All of us started out without recruitment experience when we entered this industry so clearly something else, besides experience, has enabled us to become successful.
So what competencies are the most important ones for recruitment success as a third party (agency) recruiter? From my own experience in recruitment since 1989 there are five competencies that I would highly recommend you interview against to satisfy yourself that the person you are considering hiring has the best possible chance of succeeding as a recruiter.
So what competencies are the most important? For better, or worse, here are my Top 5:
Influencing & negotiating
(the relationship competency)
“through their communication with other people do they consistently cause results to go their way in a win/win spirit?”
(the optimism competency)
“do they keep knocking on hard-to-open-but-ultimately-profitable (client and candidate) doors?”
(the sales motivation
“are they prepared to be accountable for and own both activity and result targets, as well as stated company values/behaviours?”
(the feedback and learning competency)
“are they open to feedback and will they take that feedback on board and immediately change their behaviour/actions to improve their results?”
Judgement & decision making
(the prioritisation competency)
“do they make effective choices within appropriate timeframes that lead to desired outcomes?”
It’s not within the cope of this article to explain in detail why I have chosen each of these competencies ahead of other competencies but I have had very few arguments or alternative competencies suggested to me by others when I have proposed these competencies in my recruitment leadership workshops.
Given it is highly likely that you will be unable to recruit a person who has all five of these competencies at a high level it would be useful to know whether certain competencies are less responsive to development and others more so. The research unequivocally tells us the answer is ‘yes’. Research on competencies would indicate that those competencies most accurately described as ‘motive’ and ‘trait’ competencies as distinct from ‘knowledge’ or ‘skill’ competencies are those most resistant to quick development.
Looking at the competencies I have espoused as the Top 5,the two that are more motive or trait competencies than the other three are, ‘persistence’ and ‘achievement drive’.
These are the two competencies that I would highly recommend that you completely satisfy yourself are competencies possessed by any potential recruiter that you are considering investing your valuable time and money in hiring and developing.
Why take my word for it? Two of the most respected and
successful Australian recruiters say it all for me:
“At Morgan A Bonks we were not looking for people who were tiptoeing through life towards death. Rather, we wanted those with a very long blue flame coming out of their posteriors. In other words, we wanted people who thrived in a demanding and performance-based culture because they had significantly higher levels of energy and motivation than most. The incremental effect of this energy was enormous, because when you get a critical mass of high performers, they attract others like them, and spit out mediocrity.”
from Flourish & Prosper by Geoff Morgan & Andrew Banks (Penguin, 2005), page 103
The current boom times for most recruitment companies have temporarily smoothed over the cracks of poor recruitment practices that have contributed to our industry’s embarrassingly high staff turnover figure.
As we head into more uncertain economic times courtesy of a stock market correction, successive interest rates rises and a likely change of federal government we need to lift our game and prove we are not the fools that the current statistics would suggest that some of us are. If we don’t, the costs to our organisational morale and the financial bottom line are likely to be enormous, let alone the damage to our professional credibility in the eyes of our key customers and stakeholders.