Executive recruitment decision

by 29 May 2007

In a tight labour market, its easy to blow your executive recruitment budget or end up with an unmanageable number of consultants looking for that next perfect hire. Teresa Russell talks with two organisations that have taken control and are now reaping the benefits

Good economic times have always heralded growth in the executive recruitment market. As organisations grow, more jobs are created. Companies spend more money in all HR related costs, including recruitment. The national skills shortage increases the likelihood that recruitment consultancies will remain prosperous, as companies adopt a “whatever it takes” attitude to finding the right person for a job.

The challenge

In the first week she started working for Genworth Financial, HR director Julie Ryan was presented with a challenge. “My finance guys came and told me that we could employ two in-house recruiters with the money we were spending on executive recruitment consultants. I didn’t want to bring it in-house, so I set about finding a way to do things differently,” says Ryan.

Genworth is the leading mortgage insurance company in Australia, providing lender’s mortgage insurance and other credit enhancement products in a business-to-business market. Globally, the US-based company employs 7,000 people, 320 of whom work in Australia. Most of these are based in Sydney, but 50 are spread through offices in each capital city and in New Zealand.

Ryan’s investigations revealed that Genworth used about 40 different agencies for different levels of resourcing and in all sorts of specialisations. Although recruitment was supposed to be coordinated through HR, line managers often managed their own requirements.

“The organisation has doubled in size in the last two years. We are now in acquisition mode and have a potential to more than double again in the next 12 months. We were grappling with the scale of business growth and needed a new recruitment policy that would better suit our size,” explains Ryan.

Linda Delamotte, team leader of employment at Brisbane City Council, also had no formal arrangement with the 12 recruitment agencies used historically for executive recruitment. There is one person in HR that oversees executive recruitment across the largest local government body in the South-East Asian region.

“One of the drivers for change was to ensure that our approach aligned with our organisational values. ‘Value for money’, ‘working together’ and ‘customer focused’ are three of the seven values that are reflected in our revised policy on executive recruitment,” says Delamotte.

Brisbane City Council is different to many other local government authorities around Australia because of its size. It has 8,000 staff and the largest budget of any other local government in Australia. The council employs an incredibly diverse workforce, including bus operators, road builders, major construction project managers, corporate services, tradespeople, water and sewerage workers, city waste, cemetery, parks and library staff and town planners.

A panel solution

Both Genworth and Brisbane City Council chose to appoint a panel of preferred recruitment consultancies to manage executive recruitment into the future.

Ryan put out a request for proposals and identified eight areas of specialisation within the organisation to which she wanted to appoint two different consultancies. She is just finalising the process now. “My responsibility was to get the best price, but I don’t ever want to be in a situation where we’ve screwed them down so far on price that they hold on to a candidate, because they could get a better commission elsewhere,” she says.

Delamotte’s panel arrangement has been in place for 12 months. After the procurement department led the tender process, the council appointed five consultancies on two-year contracts with an option to extend for another year. At times, the council will send a brief to just one agency. At others, they send a brief to a few of them, asking for a recruitment proposal detailing the approach they recommend, including the costing.

“It has made my budget easier to manage. I don’t have to negotiate each assignment on a case-by-case basis,” says Delamotte.

Getting to know you

One of the advantages of appointing a panel of preferred executive recruiters is that both the client and the consultants get to know how the other works. Both Delamotte and Ryan stress that their panels of providers are their organisations’ public faces and part of their employment brand – so they have to be a good cultural fit and very professional.

“Limiting the number of agencies allows us to build relationships with each one of them. It also lets them learn about the 11 businesses in our organisation. After 12 months, the panel is more aware of council processes and our internal intricacies,” says Delamotte who liaises with each agency’s client relationship manager.

“They may not initially understand our business, but they have to understand the financial services industry. Their values and level of professionalism is critical,”says Ryan, who is also setting down a formal internal process to help the agency do their job better. This includes a 24-hour turnaround time for CVs on a manager’s desk; giving the agency a reason why the applicant was rejected – so they don’t send the same sort of person next time; and making a decision as quickly as possible, so the agency can keep the candidate hot.

Both Ryan and Delamotte oversee executive recruitment from their positions in HR, however the relationships that are the focus during a recruitment assignment are those of the consultant with the candidates and the line manager.

“That’s the one area of improvement that needs to be emphasised. We haven’t always been kept in the loop when our line managers deal with the agencies directly,” says Delamotte.

Ryan says it is important to build strong relationships with the consultants so that you both succeed. “You can learn a lot from the agencies about how to do things better because they have insights into how other successful companies manage their recruitment,” she says.

From the coalface

Terry Hogan is a divisional manager for city policy and strategy at Brisbane City Council – a division that covers the major activity areas of the council, such as traffic and transport, water, gardens, city assets and city planning. He has used executive recruiters from the new panel of providers and has been delighted with the outcome.

“I have been very impressed with the quality of people HJB and First-Place have found – not just the people who eventually got the position, but the quality of the whole candidate pool. It helps to clarify in your own mind what you want to do with the position. Outstanding candidates can add an extra dimension to the job,” he says.

Hogan believes it is critical to use consultants who understand where his business has come from and its strategic direction. “You have to trust the consultants, sit down with them and tell them what issues should weed out people who won’t fit into the organisation.”

“Running your own ad winkles out the usual suspects. But good recruitment consultants are able to sell great candidates on our strong employment brand in the marketplace,” says Hogan. He stresses that a great consultant doesn’t just find someone who fits the professional requirements of a position, but also who fits into the culture of the organisation.

The current problem facing employers like Hogan’s division in the council is the massive infrastructure boom in South-East Queensland. “All the other players in the field are looking for the same people. We have to send a message to the market [via executive recruiters] and let them know what we need. The consultants have to represent us and reinforce our strong employment brand to outstanding candidates,” he says.

Ideal executive recruiters

Linda Delamotte, team leader of employment at Brisbane City Council, says good executive recruitment consultants should:

communicate clearly;

be more client relationship focused (than sales focused);

understand your business;

provide top-class candidate care;

promote your organisation; and

respond quickly.