How you would actually want to reckon recruitment....
..on the success of the candidate
What if you stopped focusing on the job posting and instead focused on the success of the candidate? A triptych from practice. Today the conclusion: the account. It is not yet as far as we would actually like. But we are definitely moving in the right direction.
Rewarding recruiters by value added
Traditionally, recruitment agencies have been about one thing: filling the job vacancy. Job done? Then the invoice is sent. Usually a percentage of the new candidate’s annual salary. Whether that candidate then succeeds in the job or not. And then many agencies work on a no cure, no pay basis. In other words: no candidate = no income. But also an undermining of clients’ trust in the recruitment industry.
Couldn’t that be done differently? Couldn’t you reward recruiters according to how successful they ultimately are? In other words, according to how much value they add with their clients? In other words, really based on the value their candidates deliver, and how those candidates move their new employers forward? Rather than on the hours the recruiters put in?
Business model turned upside down
The business model of agencies needs to be turned upside down. That hourly bill, or that “percentage of an annual salary,” is actually an outdated idea. Just like the margin on paid hours, at an employment agency. Wouldn’t it be much nicer to look at what value you add for that client?
We at Velde have been moving in that direction for some time. Our dream is to eventually be judged on our client’s development, thanks to our candidate. That is still a bridge too far. It is also difficult to make concrete, of course. It would be nice, but we are not there yet.
Account after the first year
But until then, we at Velde did come up with a second best. That has resulted in a revenue model where the client doesn’t just owe a fee the moment a candidate signs a contract. After all, the service does not stop there. The final bill therefore only follows after a year, when both client and candidate are satisfied with the new commitment. It takes some getting used to for clients. It is different from what they are used to. But we are very successful with it, even during times of corona.
Velde’s new business model was created after a thorough evaluation of “normal” recruitment and selection processes, and the many frustrations that often accompany them. Why do at least half of these processes still result in a bad hire? Why is it impossible to improve this and make recruitment and selection a success? We think it has to do with a number of things. For example, that vacancies are rarely forward-looking. Or that someone’s assignment is not sufficiently clear beforehand, and expectations are not well managed.
Guarantee on the candidate
But so they see another cause in the revenue model. As long as you keep focusing on filling vacancies, that’s what it’s all about. Especially if you work on a no cure no pay basis, which is common in our industry, there is only one interest: that of the placement. We try to offer a way out of that. That’s not always easy, mind you. Sometimes we have to force ourselves to stay in that long-term mindset. And every now and then our internal colleagues also say: nice thought, but that client is making a mess of it himself. Should that bother us?
But just then he wants to persevere, to keep the idea high. We don’t guarantee the candidate. But we do guarantee the process and the fact that we are ultimately working on the future with that client. That is also why we have spread our fee over 1 year, and now only send the last invoice when the first year is successfully completed. This way, of course, we indirectly give some kind of guarantee to the candidate.
Early enough at the table
By committing yourself in this way to the success of a candidate in a particular organization, you automatically get a different business model. For example, it becomes more important to be at the table with the client earlier. Often a recruitment and selection agency only comes to the table when the vacancy has already been outlined. The vacancy has then already gone through several internal stages and the client says: ‘We have thought about it. Now you go and search. Good luck!
But in practice, this often does not work optimally. For example, one company said they were looking for an operations manager. However, after several interviews, my colleague found out that they were actually looking for a completely different role. He then said, “If you go into the market like that, chances are you won’t come up with the right candidate. And you’ll soon have to start looking again.” So if you sit down at the table early enough, you can avoid something like that.
No reports in a drawer
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It may be less traditional recruitment and selection, and more consulting. But not consultancy with bulky reports that disappear into a drawer. We don’t need that at all. What we want is the 50% of failed working relationships. That is a kind of never ending story, and we want to get rid of it.
And so at Velde, we always first ask the client about their raison d’être, “why they do what they do. From there, objectives and a special assignment emerge. This is then translated into the vacancy. Then the message is also clear. If you want to be there a year from now, you can think: what needs to be done? And who do you need for that? What will that person look like?
It has to keep running
And once the procedure is complete, and the ideal candidate has been found after two interviews, an assessment and a mini business case? Then we have only completed half of our services. Then we establish: how can we determine in six months whether you are on track? And how about a year from now? To ensure that things continue to run smoothly, we also supervise both the client and the candidate during the first year. We have only succeeded when both are satisfied after a year, not when the contract has been signed.
Our ambition is obviously for our clients to benefit from us, and for our professionals to add long-term value for them. But what if it doesn’t work out with a particular candidate? We hope not, of course. But it could turn out differently than planned. The advantage is now: we are there. And then we can talk to each other and see if we can make adjustments. And otherwise we can say: okay, this didn’t work. But what did we learn from it? And then you can take that further.
Not shuffling candidates
In such a case, it is not about “saving” a candidate. We are interested in the client’s objective, which we want to achieve. And we look at what is needed to achieve it. Especially for new clients, this sometimes takes some getting used to. But their reactions so far have been quite positive. We often hear, “You’re not pushing a candidate in, but you’re really going to help me take our leadership to another level.” That always makes me proud.
It’s not that I think I’ve found the key to preventing bad hires altogether. But I am sincerely convinced: it really can be done much better than it often is so far. I also do think that we can interpret things a little better, and can help to show why things go the way they do. And from there it can only improve.
Free 2nd cup of coffee
I like to refer to the “free second cup of coffee” introduced by IKEA about 20 years ago. Many experts at the time said: you shouldn’t do that, people will start drinking locks of coffee. But IKEA implemented it anyway. And look at the success. They turned the existing model around by giving trust to their customers.
Trust towards clients, but also towards candidates. I really dare say that candidates also have a very positive experience with us. And if you know what you are doing it for, and you can do what drives you and what really motivates you, it goes without saying that in the end everyone benefits.
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