Opinion – 4 Ways to Level the Playing-Field of Small Business Recruitment – Entepeneur – John Gelmini

Dr Alf’s hopes will be dashed if he thinks that the EU or the UK will reform the recruitment industry because now, as in the past, it has served as a convenient scapegoat for businesses which have hired people on the basis of “fit” and “people like us criteria” and then discovered that the new appointees could not or would not perform.

Many recruiters, and more than a few providers of contractors and interims are greedy, and fixated by commissions and fees. They lack the “cojones” to challenge clients, who are misguided, wrong and incapable of facing up to the truth of brutal marketplace trends. They breach EU employment law by asking people’s ages (This has been illegal since October 2006) and for what they do, they charge too much and then say they are doing a great job. They collude with human-resource professionals, who claim to have found “objective processes” to ensure that appointments are made on merit, and that the UK is a “meritocracy”.

A look at hard evidence shows that 50% of senior appointments fail, even with the help of headhunters who charge 33% of first year’s salary.

At a more mundane level, one can look at sales-people and their CVs, all of which claim startling and astonishing performance, worthy of the man who could “walk on water”, Superman and Neo, the hero of the Matrix Trilogy, all rolled into one. On that basis, there would be no need for austerity, the Treasury would be bursting at the seams, with money from burgeoning Corporation tax receipts and personal debt would be nonexistent, rather than £1.4 trillion gbp and rising.

The reality as Dr Alf may recall from his earlier life, as a globe-trotting financial director in corporate life, is as far from this ideal as anyone could imagine, with our UK worker productivity at 20th in the world, and 16% behind the average for the G7, and our exports running at 50% of the £1 trillion gbp target set by David Cameron for 2020.

Recruiters use test batteries, from people like Saville and Holdsworth, to predict on the job performance and since that firm alone has more than 10,000 test batteries, you might imagine that mistakes in hiring would be falling and the recruiters would be improving their “strike rates”. Sadly ‘no’, the results indicate that blindfolding chimpanzees and having them throw darts at wall mounted CVs of recruiter shortlisted applicants and then appointing those candidates whose CVs were skewered by the largest number of darts yields results just as good as any of their so-called “objective processes”.

To summarize, recruiters as a whole, follow the pattern of the 80/20 rule in that the performance of most of them does not do “what is says on the tin”, and certainly not for 4% of first year salary costs.

Dr Alf likes hard-evidence and the truth is that just 1 salesperson in 250 in the UK and America consistently reaches their monthly targets, and just 10% of a given field sales persons time is actually spent selling (Source:The Management Consultancy Group PLC).

The same is true of the measurable effectiveness of”Human Resource Professionals”, HR consultants who assist them and the testing providers —In most cases it falls far short of what is actually needed.

As with the BSE crisis, the solution initially is a “contiguous cull” of the worst cases followed by the outsourcing and BPO of most of the worst HR and training functions within organisations.

With recruiters no further investigation is needed, just more dis-intermediation by web–sites, like Linked In to reduce their numbers, neural net technology applied to the recruitment process, more competent and better trained managers and directors and more automation to eliminate the need for as much hiring in the first place.

Against this background, it’s not surprising that great hopes are being placed on small-businesses – they at least do not have the bureaucracies of big-business, banks and bloated public sectors, with their cronies in recruitment, outsourcing and business services.

John Gelmini

Stumbling and Mumbling: The productivity policy paradox

Here are some first-rate suggestions to close the UK’s productivity gap.

via Stumbling and Mumbling: The productivity policy paradox.

Why aren’t the UK’s political classes focused on productivity?