Recently though, I was turned on to the Boolean Black Belt. I don’t personally know the author, but I’m intrigued by the content.  If you happen to visit the site, be sure to read through the archives an!d/or subscribe to the RSS feed.    It really is fantastic reading for any recruiter that’s willing to think out of the box and try something new.   Its not quite as succint as a one hour webinar, but the content goes well beyond just a list of Boolean strings; it also discusses some pretty interesting recruiting concepts.

Happy hunting everyone!

Last week, Dayak sponsored the Seattle SHRM (Society for Human Resource Management) meeting for November and I was on-hand as the Dayak representative. The meeting itself featured three panelists who spoke about Corporate Social Responsibility (CSR) and its importance.

Here are a few interesting points that I took away from this morning’s meeting:

What is CSR?

Let’s start with what CSR isn’t. It isn’t just an open checkbook that your company writes to its favorite charity and it isn’t just a brochure you design which languishes in a densely packed box in the office supply closet.

CSR is a program of social responsibility. It can include company outings to clean up a beach, paid leave for employees to perform volunteer work in their community, food drives or other charitable acts in which the company takes part.

Role in Recruiting

One of the panelists, Christina Hemmen from Deloitte, mentioned a survey that they completed of new hires from the “Generation Y” age group at various companies. I didn’t catch the size of the survey or some of the details. But what here are two little gems that I believe I’m remembering correctly:

• 75% of those surveyed stated that their employer’s CSR policy was important in their decision to accept a job offer

• 25% stated that they were told of their company’s CSR policy during the interviewing and hiring process

If I’m remembering this correctly, then these numbers are pretty astounding.  And it begs the question: How are you using your company’s corporate sense of social responsibility as a tool in your hiring process to attract candidates?

BizSpark is an innovative new program that unites Startups with entrepreneurial and technology resources in a global community with a common goal of supporting and accelerating the success of a new generation of high-potential Startups.

This certainly mixes things up for startups but I don’t believe this changes much for a SMB.  For a startup you know have access to Microsoft Exchange, Microsoft Sharepoint and Microsoft Development and Server software for 3 years for a mere $100 up front fee.  If you have someone that can administer the various products, it would be hard pressed for a startup to not try to qualify for this offering -

http://download.microsoft.com/download/4/d/4/4d41081a-d8d9-407a-9bae-5127e6e931ca/BizSpark%20Startup%20Program%20Guide.pdf

Does this make me think about moving Dayak to Microsoft products and trying to qualify Dayak?  No, the minimal administration needs and no hardware benefit of Google Apps is still a compelling reason for Dayak to remain with our current setup.  Could we make a switch later?  Sure, anything is possible but a big unknown is how difficult it is to get approved.

Outside of the internal use of Microsoft’s offering, there is a more compelling reason to use Microsoft for development and production environment.  By deferring the cost of Microsoft Server products, this initiative offers a startup enough runway to validate their business model without incurring the heavy upfront cost of software licensing.  This may prove useful to many startups.

When something is rare, or difficult to locate, it has high value and can be sold at a substantial cost. Conversely, when something becomes common and easy to acquire, it’s value and cost becomes lower.

Assume you have a client who needs a sales manager for their office in Atlanta. You offer to fill the position in return for a fee equal to 25% of the first years’ salary. At a hypothetical base salary of $80k a year, you fantasize about the day you send your client a $20,000 invoice at the conclusion of your search. What you may not know is that your client has received phone calls from 5 other contingency recruiters offering to work for a 10% fee, a 15% fee and even a flat fee of $10,000.

From your perspective, these other recruiters are ruining your business. After all, you do quality work. You do reference checks before submitting your candidates. Heck, you even talk to them on the phone first. Or who knows, maybe you’re one of the throwbacks that actually meets candidates in person before submitting their resume to your client. And you won’t send your client dozens of resumes to review; no, you’ll actually find the top three candidates and your client will want to hire one of them. In your mind, you’re a real recruiter. All those people looking to work for lower fees are simply interlopers out to ruin the industry.

But let’s see this from your client’s perspective. They just want to hire the right candidate for the job, do so quickly and hopefully without spending a ton of money. You may feel that your relationship with the hiring manager is worth the extra $10,000, but are you sure that your client will still think so when their recruiting budget gets cut next year?

And let’s look at the ‘interloper’ who is ruining the industry by agreeing to work for lower fees. Joe has the same job boards as you and he used to work for a big staffing firm for several years, so he’s well trained and experienced when it comes to negotiating, screening candidates and reading resumes. But Joe doesn’t have the overhead of his competitors at the large staffing firms. At the same time, Joe needs to close a deal quickly to cover his healthcare, mortgage and car payment. His only concern is being competitive, making a placement and brining in a paycheck. He can afford to provide the exact same services as you, yet he has infinite price flexibility.

Sounds like you’ve got competition, doesn’t it? And we haven’t even begun to talk about the other options your clients have, including RPOs, hourly contract recruiters and of course the client’s internal recruiting staff.

What do all of these same parties have in common? They all have access to the same internet databases and online networks. They all bring recruiting experience to the table, they can all read resumes, set up interviews and outsource reference checking services for a few dollars. However, you are the only one still charging the same fee structure established in 1972.

In part two of our discussion, we are going to discuss how the basic tenant underlying contingency staffing fees is being forced to change due to the internet and resulting economic forces.

In the early 1970’s, if you were trying to locate a candidate for one of your clients, you were likely doing hundreds of cold calls, attending industry events, and living off of their rolodex (ask your parents; they’ll tell you what a Rolodex is). Each candidate search was an exhausting, manually intensive process. The highest paid recruiters were those that were highly specialized and those who had the most experience. This is because, without the internet, the number of years’ experience you had in the industry had a direct correlation to the size of your Rolodex of contacts. And of course, being highly specialized added substantial gravitas to the Rolodex itself.

Fast forward to today. We now live in a world where millions of contacts can be searched for a nominal monthly fee. As ‘ownership’ of your private vast network of contacts is becoming less rare, the value of this network becomes less valuable. Few would argue that as the internet has consolidated vast amounts of searchable indexed data, the workload required to locate any one candidate has decreased substantially. And this is where economics rears its head.

More on this topic in Part 3, coming soon!

]]> http://dayakblog.wordpress.com/2008/11/06/due-for-a-change-contingency-recruiting-fees-part-2/feed/ 0 andrewstock http://dayakblog.wordpress.com/2008/10/29/a-peak-inside-dayaks-use-of-google-apps/ http://dayakblog.wordpress.com/2008/10/29/a-peak-inside-dayaks-use-of-google-apps/#comments Wed, 29 Oct 2008 10:23:00 +0000 cjjouhal http://dayakblog.wordpress.com/2008/11/05/a-peak-inside-dayaks-use-of-google-apps/ ]]> Who doesn’t know about Google Apps?  Steve Ballmer recently dismissed Google Apps.  I do agree with him to a certain degree that Google Apps can’t fight Microsoft alone BUT the combination of OpenOffice and Google Apps must have Steve Ballmer sweating. 

Its hard to deny that Google Apps and OpenOffice isn’t a compelling option.  Steve Ballmer’s response shows a bit of arrogance that Microsoft could perhaps have afforded 10 years ago but not anymore.  At Dayak we have people that use Microsoft Office and some that use OpenOffice.  Why don’t we have it standardized?  The reasons range from Operating Systems (Mac, Linux and Windows), costs and comfort level of the user them self.  We are ok with that due to what Google Apps provides.

Where Google Apps comes into play is the ability to share, collaborate and view files without installing converters.  So not only does it save us money on Microsoft licenses and Microsoft Sharepoint but also on administration costs of the same. 

We also get 7GB email accounts and calendaring that don’t require us to have an Admin for an in house Microsoft Exchange or equivalent system.  Our employees get a great web interface or the comfort of using Outlook Express or Outlook or Thunderbird. I know there are great options like Zimbra or Spicebird but those do incur administration costs.  For Dayak we have no in house server for any of this and Google Apps takes care of all of our needs including Email backup for a nominal per user fee.  We used to run our own email server using Postfix but the features we get bundled with Google Apps and with no Administration overhead, I couldn’t be happier.

Got Intranet?  Yes, we do with Google Sites.  Another benefit of Google apps that allows us to have an wiki style intranet with no cost of a in house hardware or administration.

So Dayak like probably many startups are following a recent trend.  A trend that will save us a lot of money in the long run.  Just notch us up as a Google Apps fan and avid user.  I hope Steve Ballmer opens his eyes to what is really going on and acknowledge that this compelling option of Google Apps and OpenOffice is something Microsoft will have to compete with.

So… Do you “Google Apps”?

It is also a pricing strategy that pre-dates the internet. And just as the internet has changed how we recruit, it is increasingly changing the fee amounts we charge our clients. The barriers to entry to becoming a recruiter have lowered to being almost non-existent. And the playing field is flatter than ever. Therefore, economics dictates that the cost for services will also decrease correspondingly. As contingency recruiters, we are using a pricing strategy that pre-dates the internet. If you have ignored this fact, you may well be in for a shock in the next five to ten years.

Lets have a brief economics lesson by talking about porcelain. The making of porcelain was once a closely guarded secret, held only by Chinese nobility, and closely guarded by fear of death. By controlling the amount of product on the market, the price was kept high. In fact, it was considerably more valuable by weight than gold throughout most of Europe, even as recent as a few hundred years ago. Of course, technology advances in Europe in the 18^th century made it possible for porcelain to be readily made elsewhere. The secret was out! And what happens to the price of a commodity when you flood the market with it? Well, exactly what you think. In the short term, the makers of porcelain in Europe were fabulously wealthy. And eventually you get to the point where you’re begging your neighbors to take the porcelain rooster for a dollar at your summer garage sale. This same scenario has played out with salt, iron ore and thousands of other commodities in history.

I propose that the internet is doing the same for contingency recruiting that alchemy did for porcelain. For the last decade, we’ve enjoyed an exceptional short term boom. We were benefiting from the ease of recruiting thanks to the internet, but we charged pre-internet prices; acting as if each candidate resume was a rare and valuable gem that could only come from us.

Next week, read part two of this article to learn how economics are catching up with contingency staffing fees

This issue is definitely top of mind in regard to the election.  The effect this is having on recruiting for companies varies, as those companies that are in tough times are not heavily recruiting for obvious reasons, but there are numerous companies/segments where recruitment has not really slowed down.  The big question will be can the candidate that wins the election work to make an impact on the economy as a whole in the short term?

Please take a look (or watch) for some insight into what Dayak is all about.  This is a great piece that really defines our marketplace and what we are trying to accomplish.

http://www.techzulu.com/dayak-the-recruiting-marketplace.html

Best,

J.D.