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GUEST COMMENT: Officious in-house recruiters are making this market a nightmare

Spot the in-house recruiter (Photo credit: Wikipedia)

There comes a time in the recruitment cycle, when your average in-house recruiter working in an investment bank, starts to swell with self-importance.

This man, or woman – for many are female – is often an individual who has previously tried swimming in the deeper and wilder waters of the external recruitment market and decided it’s not for them. The depth was too much, the waves were too big or too difficult to control. They swallowed a bit of water and they didn’t like it. And so they went in-house, often with an RPO and have enjoyed splashing about in the shallow-end of the financial services recruitment world in a nice corporate bikini ever since.

Recently, however, times have changed. The recruitment waters have darkened. Nowadays, the deep end is deeper than ever, the water is full of bodily fluids and those people in the corporate bikinis are the most niftily dressed. This is their chance to start strutting their stuff and lauding it over all the bigger, bolder recruiters who are coughing up chlorine.

Ok, so maybe the pool metaphor is a little overdone, but it would not be an understatement to say that in-house ‘recruiters’ have become the bane of my life and I suspect many of my colleagues in recruitment firms would agree.

The problem is twofold. In the first place, many of these people are inept. They themselves couldn’t make it as recruiters and they therefore carry chips on their shoulders for all those who could. In the second place, they are working within a system which encourages them to compete against their suppliers in a manner that’s detrimental for the business they’re supposed to be working for.

How? Well, if you’re an in-house recruiter working for an RPO (recruitment process outsourcing firm), your raison d’etre is reducing the cost of recruitment for the company employing your services. And how can you do this? By conducting more of its recruitment yourself.

Therefore, when a company such as mine produces an exemplary candidate, who is desired by the business and will almost certainly be hired, the RPO recruiter will sense a threat: they may need to pay a fee and that fee will damage them in their quest to cut costs.

They respond to this in the only way they know: bureaucracy. RPO recruiters like rules. They like to insist external recruiters play by their rules and if any are broken, however insignificantly, they will stand in your way like a hippopotamus in body armour.

Their most common complaint is a problem in the ‘process.’  Maybe we didn’t speak to HR before we spoke to the business (maybe the business specifically requested that this was the case). Maybe we didn’t loop HR into each and every email we sent. Maybe we didn’t ask HR before we got out of bed.

Either way, any infraction is an excuse for obstructionism. They won’t pay our fee. They won’t put our candidate forward to the business. They’ll just sit on our candidate for a while whilst they try desperately to find a candidate of their own, so that they can cut us out of the loop.

For the most part, internal recruiters are a huge and bureaucratic waste of space. They may be ok when it comes to filling commoditised positions. But even in a buyer’s market they’re not much help at hiring senior individuals who want to remain anonymous for a long as possible. These resentful bureaucrats are losing banks business. And the whole banking recruitment system is set up so that it involves a massive conflict of interest.   It’s time someone was told.

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AUTHORAnonymous chief executive of a London recruitment firm Insider Comment
  • he
    headhunter2
    1 October 2012

    It is true that some internal recruiters go out of their way to disrupt and delay hiring so they can try and do it themselves. I know banking MDs with 30 years experience who have to hold off 6 months so a 24 year old internal recruiter can have a go first. Then after six months we return back to our original candidates and finish the process. But six months lost from a revenue generator can easily be many £mns, and annoy everyone else who has to cover their job while its vacant.

    Most internal recruiters are ex-head-hunters/recruiters, why would they leave the head-hunting industry? I doubt any investment bank is going to pay me £300k to do a HR job. So most firms are effectively paying for the worst people in the market to come and takeover their recruitment.

    I also know a hedge fund which hates to pay fees, last year they hired the 2 worst strategists in the market by advertising direct, literally people who have been out of the market and interviewed at every single firm and been turned down 25+ times. This fund returned minus 10%. I laughed when I heard who they hired and the outcome was obvious!

    By the same token, there are recruitment firms which literally just spam everyone on linkedin, efin. then fire out CVs. Firms recruiting need to make efforts to distinguish recruitment firms which can actually add value - and that's not an easy process... especially when it's the failed recruiter doing it.
    There are recruiters who specialise by niche, or employ ex-industry staff - that's the better way to go.

  • FX
    FXDesk
    24 September 2012

    The presumption amongst headhunters and agents that in-house/RPO teams are getting in the way of the "business's objectives" seems to be because hiring managers tell them so.

    In actual fact the control applied by the RPO or in-house team on recruitment cost, usually takes its mandate from the COOs office and so it may annoy individual line managers, but from a leadership perspective its exactly what the bank wants strategically.

    But difficult for external agents to know that, they dont work for the company so can only go on what they are told and repeat it as fact. As far as incentives are concerned - the external Recruiters incentive is entirely to secure the mandate, or make the hire - however imprudent that might be for the organisation itself in the long term from a business case standpoint.

    I dont buy this line that in-house recruiters are failed external headhunters and pathologically bitter and jealous, if anything the author of the article comes off as the one with the most issues - the in house role is different, much more varied and closer to the way the business works - it has a lower variable pay component, because its not a sales role.

  • he
    headhunter
    24 September 2012

    Recruitment (fortunately or unfortunately) is evolving and RPOs and in-house recruitment are here to stay. The days where one could sit around on CV databases, writing adverts, tweeting vacancies and then justifying 25% fees for the 'work' put in are fading, fast.

    However I believe that this is a good thing. Headhunting should be a profession where the firm brings detailed research, insight and connections that are substantially more in-depth than a LinkedIn 'network', and can act as an experienced advisor to the company on a hiring brief, compensation levels and benchmark that against the external market. If one could do it with an iPad and a Costa coffee then in my book it's not really headhunting at all.

    Proper headhunters will survive, but if I was a CV Chucker then I'd be getting worried...

  • CD
    CDOHero
    23 September 2012

    Interesting article and debate - it is all a problem of incentives.
    Having said that the Headhunting job is a very low tech (all you need is an iPad and a Costa coffee nearby), very simple one, that almost anyone with average intellect can do, the real question is: is it better to outsource it or to do in-house? The answer is: outsource it. It is a market-driven concept, the external headhunters will give their heart and their soul (and in some cases, even more...) to get the job done. An internal headhunter instead has other objectives, in some cases she likes the comfort of the bigger company, in other cases she will want to step up the ladder and maybe do another job; slowly but surely her incentives will be distorted by the hideous large company machine, with so much emphasis placed on face time, ability to shine in meetings, how you dress, what jokes you can crack at the pub after work, your chemistry with the boss and all the sorts of gimmicks that make work environment in large financial firms absolutely unproductive

  • Ho
    HowItIs
    23 September 2012

    The author is correct.

    Inhouse recruiting is often just an extra layer of bureaucracy and adds no value unless the recruiter knows how to filter out cvs. Looking through databases in an offshore location and taking a box-ticking approach to cv selection means you will have a narrow range of candidates and may not find the best person for the position. There are some good inhouse recruiters out there, but it very much comes down to the personality of the individual recruiter, which is wrong.

    I'm all for direct application without a middleman, but it needs to be driven by hiring managers, not HR bods who don't know precisely what the role they're supposed to fill involves.

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