Thursday, November 12, 2015

Coming Disruption of Recruitment Business

Disruption of higher education gets a lot of attention, and investment dollars. We say Higher Ed is broken, as costs rise and students end up unemployed, or underemployed. However, less mourned is the trouble another industry is in - Recruitment! As workplace transforms and talks of a superstar economy - one with less workers - gain traction, the neat business model of sourcing thousands of workers for a fee gets threatened. Of course, new possibilities are emerging - Headhunting is transforming into Talent Agencies - but those solution shops can not offset the coming loss of the bulk orders. Temp agencies too, with their time in the sun in the emerging economies now threatened by automation at the shop floor or service jobs, stand ripe for disruption.

We talk about this less as this is not the usual public-to-private transformation that draws lot of investment. This is a classic disruption scenario. The recruitment arrangements have become dated, overtly expensive, as the professional abilities of the workers have become more and more important in the job, compared to the initial job specs that recruiters focus on. The companies are having to do a lot more training they would like to, despite being locked in contracts with recruiters. The traditional bulk recruitment model, which worked with a broad criteria to find candidates for a well defined job, is clearly falling short in face of ever more specific criteria for shape-shifting jobs. 

The recruitment business model, as it stands now, fails in three counts

1) It tends to reject people on the basis of technical specification of the job, whereas these technical specifications for the jobs are really provisional and changing all the time.

2) It has no way of addressing any skills deficit, even of any modest nature, and yet, this seems to be needed for most candidates coming out of college. The close integration of training and recruitment businesses have been tried, but most cases, this do not work for they work with different time horizons (see my earlier post here).

3) It has no way of assessing professional abilities in a consistent manner. There are a multiplicity of tools for assessing aptitude, but there is no consensus on what could really work.

The recruitment business model has already gone through two significant disruptions in the last few years, assisted by no less proportion by the general contraction of jobs and openings since 2008. First, there was online recruitment, which expanded the reach but shifted the pecking order in the business. And, then, social recruitment, through platforms such as Linkedin, disrupted the disruption further. And, yet, it is an unfinished disruption - as the business model continues to be inefficient, rejecting threshold candidates, and selecting for wrong set of priorities.

In my posts about education, I often wrote about inverting the education-to-employment flow, and ending the education/employment divide. I shall argue that the models that would emerge in education, would disrupt the recruitment industry first. In fact, an education that produces employable graduates, by definition, would make recruitment mechanisms redundant. Bringing together practice-based education and learning-centered employment changes education, but this disrupts recruitment altogether.

This new model, I shall envision, would look like a system of education that gradually integrates the learner in a workplace. With a model of education that holds central the value of practical work, and employers who recognise the shifting nature of work and adaptability of employees as the key success factor, can together create this model where the learner could be learning while working (and vice versa). This would bring together the technical and professional skills through real work, as well as resilience and other crucial character traits through a commitment to learning and progression. This would create in employees empowered professionals, who are at once enabled to do a job and to anticipate the next one at the same time.

Traditional recruitment companies may be too attached to their business models to bring about this transformation, but Linkedin surely will. It has strategically moved beyond searching to learning, and while it is focused on content at this moment, indulging in recruiters obsession with technical skills, surely it would get to explore the professional skills challenge sooner or later. And, indeed, it would be a great opportunity for an education provider to change this industry from the other end, and creating an elegant recruitment model, more efficient and less wasteful.

  

 

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