Updated: Jul 17, 2022
Recruiting companies have incorrectly addressed the problem of decreasing profits. They invested in higher employee counts to chase diminishing profits. The higher headcount disastrously affected sales, shifting the focus from quality of service to quantity of deals. But new technology and recruiting techniques, like intelligent Customer Relationship Marketing systems (CRMs), Artificial Intelligence (AI) assistants and psychographic recruiting models can solve the recruiting industry’s woes. Companies can focus on quality of staff over quantity of staff. Increased productivity and customer satisfaction solves the problem.
The invention of the internet changed the recruiting industry. Before the internet, recruiters were a niche profession. They tailored their services to specific job markets. Recruiting companies were rewarded for quality of service and market expertise. The internet gave recruiters access to jobs and clients not accessible before.
A race to capture more of the market turned into a race to the bottom. Recruiting firms began increasing headcount with unqualified recruiters. Service quality broke down and a vicious cycle emerged. Recruiting firms saw increased costs and increased competition. In this low margin business environment, companies shifted to a commodity business model.
As recruiting companies sought profit by economies of scale, the service experience further eroded for clients. Clients are no longer happy when they receive a call from another recruiter. Human Resources (HR) managers now view recruiters as a necessary evil at best and a nuisance at worst. Recruiters once carried prestige as experts in sourcing top talent. That’s been lost in the new era of commodity recruiting.
Fixing the damaged reputation of the recruiting trade requires changing the paradigm. New recruiting techniques coupled with supporting technology can increase worker productivity. Recruiters have a very complex deal cycle with separate sales funnels for prospective clients, candidates, and existing clients all requiring careful attention.