By Aaron Dodd, Operations Director

My company, Mindset or I personally are members of a number of professional bodies; the Recruitment and Consulting Services Association (RCSA), the Institute of Management Consultants (IMC), Australian Institute of Company Directors (AICD), and the Australian Human Resources Institute (AHRI) to name a few.

I have also in the past been a member of the Institute of Professional Engineers of New Zealand (IPENZ) and its Australian equivalent the IPEA. I’ve even been a member of union, the Association of Professional Engineers, Scientists and Managers of Australia (APESMA).

These institutions have a variety of missions, but at their core they strive to;

1.   Advance their respective professions through education and training
2.   Represent their professions as lobbyists to governments and other bodies
3.   Protect their members’ interests, both at personal and professional levels
4.   Provide a ‘badge of credibility’ for members, particularly those who have completed their member body’s certification courses.

Another often unstated but very important function of these bodies is to provide an avenue for professional networking and through this, employment and business opportunities. In fact a major reason why members join these bodies is for this purpose alone. Some of these organisations have attempted to involve themselves more in social media, but most have only scratched the surface. The RCSA for example seems to be non-existent in cyberspace except for its poorly functioning website. AHRI at least has a twitter profile (sort of anyway @AHRIevents).

As a result of this lack of institutionalised Web2.0 involvement informal social media networks have sprung up, particularly in the recruitment and HR sectors that I operate in. These social networks are expanding via a word of mouth (word of media?) and are free to join. The discussions and debates that flow through them are un-moderated or at least peer-moderated and many close professional relationships amongst peers and even competitors are formed. Ideas are exchanged, topics discussed (sometimes hotly). Most participants and observers will grow professionally as a result of their interaction. More formalised groups and activities are evolving from these. The forthcoming TRU events in Australia and New Zealand are prime examples. These are commercialised recruitment industry events being held, by Web 2.0 networks wholly outside the controls and auspices of the traditional controlling institutions such as the RCSA. I think this is a good thing as a wider range of views and ideas will continue to be raised and debated.

As Web2.0 moves inexorably towards so-called Society2.0, these web-based social networks and their more formalised commercial offshoots will pose a continued threat to the established old-guard institutions. I see a time (in the not too distant future) when they will either be reduced to rump formal training accreditation institutions or will be subsumed completely by a variety of ever growing, evolving, melding and splintering cyber-groups.

The current institutions are largely controlled by members of the baby boomer and Gen Y generations. To many of this era, Society 2.0 with its fluid movement, freedom of expression and direct unmodified input into debates will seem like anarchy, but in order to preserve their relevance and be part of the debate and discussions these institutions must embrace social media and engage with the groups that have and will form to satisfy needs that the establishment is not currently meeting. Ignoring it will be their ultimate demise. They will be like King Canute, trying to hold back the sea.

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By Aaron Dodd, Operation Director of the Mindset Group

In 23 November's Recruiter Daily Daryl Keeley, MD of specialist recruiter MACRO commented that “Low-balling” clients damage recruiters’ reputations. He is right of course, but the issue is more directly related to the contingent recruitment model.

If a recruiter is retained they are done so on a project fee basis, incorporating staged payments. The fee is negotiated up-front and is usually based on a percentage of the EXPECTED final salary package. The very act of up-front negotiation ensures that both the recruiter and the client are very aware of the salary on offer. There is no room for surprises down the track at offer time, so the low-balling scenario will not exist and the recruiter’s and client’s reputations will not be compromised. Further it commits both parties to a ‘shared risk’ model. Under the contingent model, all the risk lies with the consultant, hardly an equitable fair contract!

The other point to note is that if a client is offering a very low salary for a role and will not change their mind or their offer, why accept the assignment in the first place? If the role is going to be impossible to fill (or retain an effective candidate in) why do work that you ultimately won’t be paid for? It will make better use of time to use that non-billable time to find better new clients than to spend billable hours doing unbillable work recruiting for roles that can’t be filled due to low salary offers.

In summary therefore the Daryl Keeley’s accurate consequences of low-balling can be effectively negated with the retained model and a more selective approach to the work a recruiter actually takes on.

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By Aaron Dodd, Operations Director at The Mindset Group.

Much has been written of late about the many flaws in the contingent recruitment business model.  Last week I experienced first-hand just how seriously poor the model is. Those that promulgate it and try to run their recruitment businesses with it will ultimately fail their businesses, clients and candidates. They also act as the best advertising money can’t buy for those recruiters who operate with better proven exclusive and ideally, retained models. The case story follows;

Preamble; Mindset only operates on retained exclusive recruitment and selection assignments. We will walk away from non-exclusive jobs and only work on a retained basis as we like to be paid for the work we do. The client in question has an exclusive retained services agreement with Mindset that commits them to use Mindset exclusively for all their recruitment activities for 12 months, in return for a set competitive fee structure. This is not a preferred supplier agreement but an exclusive supplier agreement. Mindset has many such agreements with its clients.

We are currently recruiting a State Manager for just such a client. Mindset has advertised the position and has also carried out a parallel search process to uncover suitable passive candidates. On Wednesday I commenced a first interview with a candidate who had responded to an advertisement. The first thing he said to me was “you should be aware that I was already interviewed for this position by another agency on Monday”. Further investigation revealed that a contingent recruiter without permission of the client had advertised the position and was interviewing candidates, telling them that he represented the client.

The client was duly forwarded a copy of the web advertisement and was rightly furious. He issued an immediate request to the contingent recruiter to immediately cease and desist all actions “on their behalf”. The MD and owner of our client is a former practicing solicitor and prior to running the business was partner in a major Melbourne law firm specialising in commercial law. He believes that the actions of this recruiter may well indeed be fraudulent as he is misrepresenting to candidates (and others) that he represents Mindset’s client.

Further it then transpired that Mindset had interviewed a candidate that we had uncovered through our search processes. This candidate had been “floated” to the local manager of our clients business a week or two earlier by the said recruiter. This local manager had met with the candidate but no offer had been made. No contract had been entered into either as the local manager does not have the authority to commit to such contracts.

The contingent recruiter then started to send threatening and unpleasant emails to our client about “his” candidates and that even if they were employed via Mindset (by no means a foregone conclusion for either) that he would be invoicing our client. The more these emails came in, the more the MD hardened his attitudes towards him and better yet, the more professional and ethical Mindset was perceived to be! Naturally the legally-trained MD wasn’t the least bit perturbed about the contingent recruiter’s threats. He was more annoyed that his time was being wasted by him.

Reading these emails it became clear to me that this contingent recruiter had assumed that ALL recruiters work with the same non-exclusive competitive model that he operates under. His thinking was so set that he was unable to conceive of an alternative way to run a recruitment business. He refused to accept the definition of “exclusive”, let alone “retained”. This recruiter also had 22 separate positions listed on a major job board. It needs to be asked; how could a client possibly get a quality service from someone with allegedly so much work on their desk already? How many of these jobs were even legitimate? Our client’s listing certainly wasn’t!

To summarise the effect that the non-exclusive contingent business model has;

• Candidates are pissed off as their time is being wasted and their hopes dashed by recruiters interviewing them for jobs that they either don’t have or don’t exist.
• Clients are pissed off as most MDs would prefer to select the company that represents them in the marketplace.
• Clients get poor service as the clear focus is speed of getting a backside on a seat, not necessarily the right backside!
• Antics such as the above give the recruitment industry a bad name, but conversely make the ethical professional ones that create real value look fantastic.

I recognise that there will be shonky operators in any industry and trust that market-forces will ultimately weed them out. However in the meantime I thank them profusely and encourage them wholeheartedly. They entrench our clients with us and drive new ones to us in their scores. Once they are with us they don’t leave!

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By Aaron Dodd, Operations Director of the Mindset Group

Prior to the GFC we saw articles almost daily on the so-called talent shortage. Such clichéd headlines as “Winning the War for Talent” were commonplace. My own company, Mindset used them as did everyone else. These headlines and articles have subsided of late but the talent shortage is still there. It's like a wild beast hibernating; waiting for the thaw - which will be here sooner than most Australians think. In fact, many would argue that it’s waking now as the extra cold metaphorical winter we've just experienced comes to an end.

Apart from the shortage of growth capital that the GFC has induced, the biggest threat to corporate growth in Australia (indeed the Western world) is the shortage of talent. The only reason the headlines have subsided is that the demand side of the economic equation has dropped. The supply side has not moved.

So what has caused this talent shortage?

• The populations of Western economies, such as Australia, are aging. As more of the population retire and leave the workforce, we have relatively fewer productive members remaining in it.

• The dwindling labour supply is increasingly less qualified. In Australia this is the result of decades of financial neglect of the country's schools, TAFEs and universities. Both Labor and Liberal parties have been guilty of this, although under John Howard, the issue  became noticeably worse with a corresponding increase in expensive private school enrollments as desperate aspirational parents attempted to provide their kids with an education supposedly better than the States' systems (although often not).

• The increasing affluence of Australian society has meant that most people are wealthier. Many formerly working-class families are now economically classed as “middle-class” although most would not realise or acknowledge it. What this has meant is that their children now have different career expectations  and are now no longer interested in the sorts of labour-intensive jobs their parents may well have been happy to accept at their age.

• Like any economic equation the shortage of talent has put pressure on its cost; i.e. wages have increased relative to their productive merit. This has in turn put pressure on the prices of services and manufactured goods. In numerous cases it has become more cost effective to manufacture goods in talent rich, low-cost countries such as China and India. Even services are now often outsourced to call-centres in India, the Philippines and others. 
• If a business cannot pay more for its staff, find more productive ways of utilising their people or relocate then it is likely to be in serious financial trouble in the medium-term. As we move out of the effects of the GFC, there will be a significant period of employment turmoil within Australia. Many unhappy employees who were biding their time will start actively looking for alternative employment. Adding to this, as employer confidence returns they will start seeking more employees to help them grow their businesses...i.e. the demand side of the equation will rise again increasing the gap between the static supply side and the rising demand side still further.

As an employer, what can you do?

• Proactivebusinesses are focusing on their existing staff NOW. They are putting in place whatever measures they can to retain their staff and minimise the losses they expect from the coming turmoil. My company Mindset, has been active with numerous clients determining staff engagement levels, coaching managers to be better motivational leaders and putting in place effective performance management, feed-back and feed-forward systems.

• Other businesses are utilising Mindset's talent-mapping processes to effectively understand and develop relationships with the key people in their sector so that when they need those people they can simply tap them on the shoulder and draw them into their businesses with minimal fuss and expense.

•  Many organisations are reviewing their relationships with their recruitment suppliers. They are re-establishing relationships so that when the need comes they can speed up the briefing process. Most companies are now looking for relationships with highly consultative recruitment suppliers recognising that traditional transactional contingent recruiters offer little value, especially when the going gets tough and they have to find candidates from outside the industry or from alternative more innovative sources.

   

For maximum strategic impact these actions need to start NOW. For a confidential discussion on how Mindset's transformation, talent and technology divisions can work together to deliver an integrated approach to delivering  solutions to your business's forthcoming recruitment and retention challenges, please contact us. 

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By Aaron Dodd, Operation Director of the Mindset Group

This week has seen us witness the hilarious and ongoing Kraft iSnack2.0 marketing debacle. Although no longer Australian owned, the Vegemite brand is an icon in Australia and New Zealand. Like any icon brand, it takes a brave marketer to try and change it. The only comparative episode I can think of was the global “new’ Coca Cola of few years back. This was met with such significant public uproar that Coke eventually dropped the “new” Coke and reverted back to Coke “Classic”. Arguably iSnack2.0 is a new product, it hasn’t replaced Vegemite, but the icon brand has been seriously compromised. It’s not a lethal blow, but the brand will carry some scars for some time yet. After only 4 days Kraft have now announced that the brand will change as Australians don’t like it! How many millions has this cost Kraft? A 30sec advert in the middle of the AFL Grand Final was selling for over $120,000 alone.

What has made this worse for Kraft, is the publicity leading up to the new name launch during the AFL Grand Final (one of the biggest TV viewing events in Australia each year). For months we have seen the product on our Supermarket shelves with label marked “name me”. A competition has been running to source name ideas. According to Kraft they have had over 48,000 suggestions from 35,000 different people, with 16,000 unique suggestions. So from this, the best they could come up with was iSnack2.0.

So how does something like this happen? Kraft has a large consumer marketing team, probably well paid, well qualified and experienced. In my experience when situations such as this arise, it’s usually due to one or both of the following;

1. Groupthink (according to Wikipedia) is a type of thought exhibited by group members who try to minimise conflict and reach consensus without critically testing, analysing, and evaluating ideas. This can occur most commonly if the dominant team member likes an idea and is surrounded by position-security team members (“yes men or women”). Anecdotally there has been a rise in groupthink occurrence during the GFC as team members can be more reluctant to challenge the status quo or their Manager.

2. A lack of external perspective. Creative marketers need to be constantly stimulated by the world and people around them. They need to have their finger on the pulse of their target demographics and come up with product and campaigns that will grab their demographics’ attention. If a marketer is so out of touch that they make a decision based on their gut feel and personal preference, then it is likely to be out of touch with reality and fail

No doubt Kraft had some sort of external Marketing advice. Did that external advice have the acuity, confidence and independence to challenge the selection of the iSnack2.0 brand? If so was the advice heeded, or was it ignored? We will probably never know.

Mindset’s consulting business prides itself on its ability and willingness to challenge the established ways of doing something in a client organisation. After all when a consultant is engaged, you are seeking their external perspective and ability to bring something new to the table. A good consultant will break down Groupthink and throw new ideas into the mix.

Whether it’s recruiting a new team member, establishing new leadership paradigms or aligning individual performance with corporate goals, each of these can often be better achieved by bringing in an external consultant.

Recruitment and selection is especially prone to Groupthink when handled internally. How often have I heard the common refrain “we want another Roger” (or Bill or Diane etc)? A critical analysis of the position may in fact reveal a very different type of person is now required in the role. In fact the reason good old Roger left was that the role’s critical demands had changed quite markedly over time and the role no longer suited him. Mindset’s consultative transformational recruitment approach can and will uncover these anomalies and allow you to make better selection decisions.

Contact Mindset next time you need to make a critical strategic HR decision. How costly would an iSnack2.0 selection decision be to your business? Probably many times more than the investment you would make with the Mindset Group. 

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