Was anyone apart from the board of directors of HMV or Blockbuster surprised when their businesses went into liquidation? I know I wasn’t and most people I have spoken too weren’t either.
After all technology changed the way their customers could purchase their products and both HMV and Blockbuster were slow to adapt their business models. When you can buy your music and video choices on-line why would we go to a shop unless they added value.
The same is true in the World of Recruitment. With technology increasingly making the sourcing of mainstream talent and resource easier, employers will not use agencies in the future unless they can supply their ‘product’ with an added value. Only where acute skill-shortages exists may agencies still have a role but only if they can source the best talent.
The burning question is with their existing business models will they be able to?
In my recent blog Third World War begins now I discussed how the scale of the ‘War on Talent’ is about to accelerate dramatically. I questioned whether recruitment agencies would be allies of corporate businesses or mercenaries but the choice agencies face is far starker than that.
What is at stake is their very survival.
The traditional recruitment agency’s business model has been set up around attracting candidates; contractors and temporary workers who predominantly come from the ‘baby-boomer’ (born pre 1964) and ‘generation-X’ (b1965-1981) age groups. Only now are they starting to engage the ‘Millennial Generation’ (also known as Gen-Y born after 1982 and started work since the millennium).
A lot has been written about this generation and if you have not read it you need to quick.
Millennials have very different expectations and attitudes to work and so they will increasingly make different demands in the way they engage with agencies and employers. In a future world with acute skill shortages, highly educated young talent will progressively become harder to find. Sourcing these millennial candidates is therefore a must if any recruitment agency is to thrive.
In my Third World War Begins now blog many of you will remember that in the next two years ‘Millennials’ are set to become the dominant generation in the work place. This is going to come as a shock for many ‘Baby-boomers’ who as a generation, have dominated the workplace for over thirty years.
It’s a timely reminder in the week that she passed away that Margaret Thatcher’s reign coincided with the ‘baby-boomers arrival as the dominant generation in the UK workplace. It was a period of huge change in the UK and US both within work and society.
New management practices came in and the old large monolithic business hierarchy’s dismantled. The Baby-boomers readily embraced IT into mainstream corporate life which saw swathes of administrative and clerical functions computerised and abolished. They embraced the free market economy and entrepreneurial spirit, which the US & UK governments were so keen to unleash at that time. Whether one was a product of the other is debateable but the ‘Young and upwardly mobile’ Yuppies certainly exploited the opportunity that in the UK, the Thatcher government created.
Similarly todays ‘Millennials’ are poised to have a major impact on the post 2015 world.
So what are the key areas that make ‘Millennials’ different?
Meaningful Engagement – Most research indicates that the millennial generation are unwilling to perform dry boring work. Kevin Sheridan, the Senior VP of Avatar HR Solutions (an organization that specializes in employee engagement and talent management.) recently told SHRM On-line.
“In a gargantuan difference between Baby Boomers and Gen Y, the latter set their career as one element within their life, not the single element that makes their life. Gen Y wants their job to provide personal fulfillment and support a positive work/life balance.”
Clearly the work they do has to have a value and meaning. As recruiters we will find it increasingly difficult to find young people to undertake boring, repetitive and tedious roles and certainly not doing over 45 hour shifts. Recruiters might need to think differently how they sell the jobs they are seeking to fill. Millennials will increasingly demand more job information before attending interviews.
Fearless and Intolerant – One of the main qualities that sets Millennials out from the rest of us is their fearlessness and intolerance. If there is something they don’t like they will not suffer in silence. They will not bite the bullet, or get their head down and get on with it.
No, they will challenge it and if unsuccessful they will simply walk.
Increasingly the skilled and educated ones will know that they can get another a job. As greater numbers of this generation have travelled the world they already know first-hand that there are many countries where they can get work, Australia, China, Brazil, Russia the Middle East to name just a few. Employers and agencies seeking to control Millennials with the fear of unemployment will simply find it ineffective.
Flexibility – Millennials demand working environments, which are flexible. They will not work rigid 9-5 days. They will demand the flexibility to complete their tasks when and where it suits them. Employer’s business models will therefore need to reflect this desire including recruitment agencies own models.
Already a great many global companies who are aware of this are migrating to operating models where employees are evaluated on performance rather than presence. The ROWE (Results only Work Environments) is one of these such environments. Cali Ressler and Jody Thompson are the Founders of CultureRx and creators of the Results-Only Work Environment (ROWE) and their site is worth a read. This model will not work for every industry and there will be a need for some people to work core hours but entire workforces working rigidly will be a thing of the past.
Dynamic Environments – Stayed and monotone working environments will not appeal to Millennials they demand change. They also have low attention spans and will rapidly move on if the work isn’t stimulating and challenging. They are not afraid of tough challenges and will strive for ambitious goals. So recruiters when taking briefs you need to check how stimulating the work is otherwise your refund clauses could be used a lot more frequently that you might like. Money is not their primary motivator in making career choices.
Recognition and Management – Millennials crave feedback, instant reaction and gratification. They will not wait for annual appraisals they have been brought up on social technology and are accustomed to getting frequent responses. They will not suffer pretentious and insincere fools as managers. ‘Authentic and honest’ superiors whose knowledge they can respect is what they seek. 1970s and 80s autocratic leadership founded on hierarchy and status will not work. If your clients operate this way prepare to find them very difficult to recruit for.
Diverse, Fun loving Team Players – Millennials like most of us are fun loving at heart and for them work is not supposed to be an austere place. They will expect to work in multi-cultural and multi-disciplined teams with other workers who have knowledge they can respect and learn from. When attracting candidates your techniques and approaches need to reflect this.
Technology Sensitive – If your clients are luddites and do not embrace new technology then Millennials will shun them. Filling jobs where employers shy away from investing in the latest and most efficient technology will see the Millennials leave. BYOD ‘Bring your own Device’ employers are expected to become the norm. Agencies that employ old methods of applicant attraction, which do not embrace the latest technology, will also see themselves lose out too.
To this end Social Media is therefore the most effective way to engage them.
This is the battleground recruitment agencies are already losing. The Millennials, who seeking ‘meaningful engagement’ are connecting with employers who are already ahead of the curve. Astute and forward thinking corporate HR departments are aware of these demographic and social changes and are reshaping their businesses to accommodate them. They are also learning to leverage their corporate brands to recruit and attract the best talent using In-house/Direct Sourcing team.
Like Network Rail, who at the CIPD conference in Manchester this year, outlined how they had used Facebook very successfully to hire virtually their entire 2013 apprentices, businesses are creating and cultivating their own talent pools not by tweeting incessantly that they have vacancies but by placing meaningful and highly relevant and interesting content into a Facebook Group.
A move to in-house recruitment at Network Rail has saved the company 85 per cent in hiring expenditure, the CIPD’s annual conference in Manchester has heard.
The reduction in recruitment agency fees has seen costs per hire drop from an average of £3,500 to £500 in five years, said Adrian Thomas, head of resourcing at the rail maintenance firm. The company – which employs 35,000 people – externally hires or internally promotes around 10,000 people a year.
Now, 73 per cent of external recruitment is done through direct resourcing, with only 7 per cent fielded out to agencies, delegates were told.
The majority of candidates were now generated through a revamped careers website, explained Thomas. Other initiatives included a specially designed Facebook forum for the Network Rail apprenticeships scheme, which generated 6,000 applications for the 200 places on offer, he added.
Other companies are similarly using YouTube, Twitter and LinkedIn to post relevant and domain specific videos, articles, case studies and industry news for their target audiences to feast on. Only once their core following is established do they start to post jobs news into it. Like good farmers they spend hours preparing the soil before planting the seeds.
This is nothing that niche agencies in IT, Oil and Gas, Engineering, Biotech or Nursing couldn’t do but they choose not to. It requires patience and investment without immediate returns. Sadly for the agencies however by the time the industry accept the returns are there it may be too late. Agencies will have lost the high ground and the commercial advantages that go with it.
So MD’s will your businesses also go the way of HMV and Blockbuster or do you have the courage to start to change now. As Network Rail demonstrates there are models out there that work.
Globally the number of people under the age of 30 now exceeds 50% of the world’s population. Somewhere between 2014 and 2015 the Millennials will become the dominant generation in the workplace. The time to change is upon you.
The War for Millennial Talent has begun. The only question is do you have the courage and wisdom to triumph?