CEOs are out of touch with the war for talent, their biggest challenge
In the same vein this behaviour is happening again across other industries in a slightly different way.
PwCs 2012 CEO survey (referenced below) highlighted that the biggest challenge businesses face is recruiting and retaining the best talent. I can only assume the COOs and the FDs of these organisations are asleep in the board meetings when the biggest challenge topic is discussed. Or maybe it is not even a topic for the board just a sound bite for the media.
One in four CEOs said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent challenges. One in three is concerned that skills shortages will impact their companys ability to innovate effectively. PwC
This doesnt seem to happen when it comes to recruitment. HR Directors must be failing to convince their leaders that in order to recruit the best people on time, every time you need investment. Or maybe HR is not held in the same regard as Finance, Marketing or IT. To my knowledge there isnt a single top 250 company led by someone who came from HR. They are usually from a finance background and occasionally marketing. Maybe that tells us something.
So whats my point? I appreciate that large companies need to control costs and have processes in place to be as efficient as possible. When it comes to recruitment some procurement departments have persuaded HR to give up control and outsource to third parties such as Recruitment Process Outsourcing (RPO), Managed Services providers (MSP). The ultimate aim is cost savings. Yes efficiencies as well, but I am unaware of an agreement between an RPO or Managed Services Provider that included an increase in investment by the employer. RPO and MSP sell cost savings. So in short it is a cost cutting exercise.
Therefore point 1 is that business leaders are facing their biggest challenge by cutting investment.
Even industries such as banking that have retrenched workers in large numbers are still struggling to get the right people. The strain in hiring will not abate in the near term. More CEOs expect to expand their workforces than reduce. PwC
MSPs usually offer a low cost to the employer on the basis that it aims to fill a large number of roles itself. The trouble is they use the same contract for all suppliers regardless of supplier specialism. Try going into Mercedes dealer with a budget for a small Fiat. We specialise in marketing communication recruitment which includes everything from digital and content to creative, design, market research PR and media. I wouldnt know an SQL programmer if it bit me on the arse, likewise a Facilities Manager or Head receptionist. We have no interest or expertise in recruiting office staff, IT, Finance etc. Bottom line is we specialise. Therefore when an MSP takes over the recruitment process within a client of ours and say we have to reduce our fees by 30% and have little or no contact with the hiring managers they seem to by mystified when we say no.
Productivity and labour costs remain important measurements. Yet for many CEOs, those tools arent enough. Such measurements cannot isolate skills gaps or identify the pivotal jobs that drive exponential value. Hence CEOs are looking for a more comprehensive understanding of talent today and their needs for tomorrow. PwC
The trend seems to be that after declining the RPO/MSPs kind offer to take it or leave it we now know it takes approximately 6-12 months before the Hiring Managers contact us direct and you go back to normal in defiance of the new regime. However the damage done in the meantime cant be repaired. Missing headcount is a massive opportunity cost that COOs and FDs just dont seem to get. If you dont need them, dont recruit them. If you do, then the role has a daily value to the business and every day it is not there is a real opportunity cost. So CEOs and Chairmen if recruiting and retaining staff is your biggest challenge take some time to understand how it works. The value of long-standing relationships, intellectual property, understanding of culture combined with the value of acquiring the best specialist talent should not be underestimated. Invest more in your specialist partners, not less.