Secret Commissions and Cane Toads

Bloated, ugly, destructive and shouldn't blo.dy well exist!

My argument against Cane Toad Ads?

They don't work; they only benefit the big recruitment firms; they damage our economy; ruin careers and damage lives; and they promote unprofessional behaviour due to the secret commissions paid.

Why don't they work? We'll cover that in the next Rant, just assume they don't for the moment - but if you really need to know, the reasons are here.

Why do they cause so much damage? Well, newspaper ads fragment the market in an area where the internet is perfect for the INITIAL matching of people to jobs. Fragmenting makes it more inefficient so companies find it harder to find people. And people find it harder to find better jobs.

IT'S ALL ABOUT THE THEORY OF MARKET PLACES. An efficient one always has lots of buyers and sellers in one place.

Now this is complicated to explain in a Rant (for a fuller but still simple explanation), but here's the Very Simple Guide: Think about a boat show - like the one in Sydney at the moment. Not surprisingly, they put all the boats in one place, Darling Harbour.

Imagine the chaos if we scattered them over 10 different locations, with a random mixture of different boats at each?

Well, that's recruitment. Twenty or more different 'market places' for each type of job including: newspapers, large recruitment firms and the internet. The only place ads should be is the internet - and Cane Toads are the main blockage to this efficient market.

Do you think big recruiting firms would spend so much time and money pushing Cane Toads if their rewards weren't huge?

Come on HR! There are better uses for your company's money. Stopping the Cane Toad Gravy Train is a giant stride towards making the recruitment industry more effective.

So far there is no magic bullet for real Cane Toads - but their is for the recruiting equivalent. A bullet a mere 200 people have and can fire at will.

Who? The 200 HR managers in the organisations who buy Cane Toad Ads.

Just say no. Today.

It's worth billions to our economy. And a huge growth in happiness.

Cane Toad Ads are a naked, very ugly emperor with no reason to keep living.

I learnt this pitch 19 years ago when I worked at a giant recruiter with hundreds of 'consultants': it was drummed into us at the weekly sales meetings. We were made to practice it on each other and in front of the mirror. You had better believe that this pitch is the foundation stone of Australia's major recruitment firms.

The pitch is simple, plausible and seemingly valid: people read the front of the newspaper, and their eye is caught by an advertisement so they become interested in it and apply. They are argued to be better applicants because they are more likely to be happy in their current job and therefore likely to be good at what they do. And of course, would not see jobs where active job seekers go to look - online or in classifieds.

Who could argue with something so self-evident??

No surprises that I'll have a go. There are 3 counter arguments that rubbish the whole sales pitch:

Firstly one that came to me at 4.30 a.m. on a recent Cold August Night, the hour when all good ideas roam in a fevered brain. In the 3 years since I wrote a version of this Rant in my book, Get Great People, I had thought there were only 2 main counter arguments. This final one is the Big Momma - the last and very large nail in what is now virtually a metal coffin:

That we have moved to a world of Free Agents and the Internet. Where people manage and assess their careers constantly (even if usually not particularly well!). A world where people under 40 (Gen x and Gen Y) consider themselves independent of their employers, even if they enjoy their jobs. That they have a life outside work, or in more extreme cases, that they have a life, and work is just a small component of that. Something that many of us Boomers have also come to believe and live our lives by.

In this world, the Free Agents browse 10 or 20 or a 100 websites a week (even I, a geriatric, am on at least 20 different sites every week). And one of the sites they go to is MyCareer, Seek or Monster. Just for a look. To keep in touch. Because you never know. And what about all those niche job boards attached to professional forum sites: LOTS of browsers on those. And what about the snowballing LinkedIn and Facebook and all the other social networking sites. Full of browsers. Full of recruiters.

And because it is so easy to apply for jobs with just a few clicks they are more likely to make an enquiry than that browser reading the paper in a cafe or their garden.

Now, if the price was about the same, the ad salesman just might have a point. But we are talking chalk and cheese on cost. Not in the same ball park. A hundred dollars versus many thousands.

So, you tell me:

Who are the browsers? Where are the browsers? And, in particular, where do the browsers go, who in this ageist world, are the most sought after by employers? Reckon there are way more of these valuable young applicants on the job boards and social network sites than there are reading the Early General News in the Saturday papers.

Maybe the ad salesman is looking a bit like a seller of dodgy cars - even before we get to the other two reasons %u2026.

Secondly, we read the Saturday pages 'eyes up'.

If there were only 2 or 3 job ads on a page, and they were designed to attract the eye, no problem attracting eyeballs. That's the argument of all advertising agencies and media sales people and it's completely valid.

With recruitment, all the ads are in a block at the bottom of the page. Or, even worse, they are on a whole page by themselves when you get towards the back! Great for browsers!

I can remember the incredible hubris one Friday when I was at a Mega Firm and we had sold a whole broadsheet page of ads - it was all us! We were so proud! We were the champions! But hey, didn't we forget something: what sort of insane browser browses a whole page of ads!? Maybe a desperate job seeker?

The ads are all the same size and all look pretty much the same - even better they are now in color so stand out like the proverbial dog ba.ls. They are also conveniently located in the bottom half of the paper - so handy for folding the broadsheet in half as I lie in my deckchair on Saturday morning!

So after 30 years of such ads, those browsers know where the ads are - they know to keep their eyes focused on the top of the page. That is where they find what they are looking for: something interesting to read.

I don't have any major research to quote, but I have talked to a lot of people - it is quite common to read the Saturday papers 'eyes up'. Don't you?

Thirdly, the Saturday papers are now conveniently divided into sections.

The sections help readers find the bits they want to read. And in what order they want to read. And of course it helps in selling ads to particular demographics (now there's a thought: recruiters could place ads in sections that attract who they are trying to employ?!)

With the sections, many of us have developed very idiosyncratic ways of reading. Take how I read the Saturday SMH (apologies for those who don't live in Sydney):

I start with the front page; quick glance at the back page for some scurrilous gossip; Mike Carlton and Peter Fitzsimons for a laugh; rugby news; the rest of News Review; Spectrum; and sometimes the Good Weekend. And finally, if I get through all that, I turn to the news bits where the recruitment ads are - pages 2 to about 20 - and religiously keep my eyes up. But most weekends I don't get to it.

Again, no research on readership that I can quote, just an informal survey of professionals; but it is common practice to read selectively. Of course the newspapers do lots of market research, which lead them to create sections in the first place.

So, three strong reasons that rubbish the browser sales pitch - just tell the advertising salesman masquerading as a consultant to go and spin his B.S. to someone else.

Love to hear your stories of 'consultants' trying to sell you ads. Or, even better, a recruiter defending them!

It's the focus of nearly every recruitment conference I've been to - 'how to get your billings up'. This Rant will help outsiders understand how the industry got to its appalling state.

With refreshing honesty, trainer Sophie Robertson's opening sentence states:

"Understand that you are in a sales position, no ifs or buts."

Which is what all the others say, just not as neatly - though some like Barb Bruno in the USA are pretty blunt!

So what does this mean? That recruiters are trained to cold call meaning they have no time to consult. And remember most work contingently - racing other recruiters to a sale, so consulting is ruled out anyway.

Ross Clennett, one of Australia's best recruitment coaches has a great e-book (go to www.rossclennett.com.au to get it) that recommends:

1. Weekly Prospect Calls: 50 (= Cold Calls)
2. Monthly prospect & client visits: 28
3. Monthly Float Outs: 20 (= sending unsolicited resumes)

Not much time left for deepening relationships with existing clients after doing these calls and following up. Now, in other articles and talks, Ross and other trainers rightly say that our focus should be on deepening relationships: But where's the time? You can't have it both ways.

This cold calling model is different to how my firm and some other boutiques work: where you have 10 to 20 clients who you work for repeatedly. So relationship building visits might be 3 a month, with 2 or 3 visits to prospective clients on top of that.

Re 20 float outs: No thank you! That's not consulting, it's acting like an 3rd rate web server! When you have fewer clients who you know well, sending unsolicited resumes is welcomed, and you might do 2 a month - not 20. It's still sales but the focus is on relationships, not 'foot in the door' tactics (see Sophie's wonderful cold calling scripts in my last posting on Lies).

Which gets to the fundamental problem:

We are virtually talking about 2 different industries.

One where 50 or a 100 'clients' is the norm, based on constant cold calling.

Versus one where recruiters work closely with a few employers helping them reduce the risk of a wrong hire, while still needing to work quickly.

Ross made the following comment on my blog:

"Toby re your assertion that the role of the recruiter 'is to reduce the risk of making a wrong hiring decision'. I would suggest you are in minority company there %u2026. clients use a recruiter because they want 'excellent candidates, delivered quickly'"

The chasm here is wide.

Ross is right - I am in the minority but the Rants & technology will change that. His model was right BEFORE Seek.com.au and Monster.com. Recruiters in his transaction model are just selling information: finding candidates and racing to the line in a winner take all race. They are middlemen who the internet will soon wipe out (why it is taking longer than in other 'Agency' businesses is a future Rant).

After recommending 50 prospecting calls a week, all trainers go on to say "you must of course focus on long term relationship building".

Alice in Wonderland. Rubbish. There is no time left AND it requires different skills.

Relationships require consultants, not cold callers,