Obituary: The Death of Transactional Recruiting

November 11, 2015

LinkedIn and the latest HR technology offerings are killing the transactional recruiter.

This is a good thing.

What is transactional recruiting?

I contend there are two employment markets. The first offers active candidates ill-defined lateral transfers -- aka jobs. People interested in these types of jobs represent only about 15% of the total talent market for any class of job. Due to the lack of clarification around real job needs, people taking these jobs are more disengaged and, as a result, underperform and have more turnover.

LinkedIn is automating just about everything needed to bring active candidates together with open job requisitions without a middleman. This is called disintermediation or now known as the Uberization of traditional business process. In a few years this will relegate recruiters who work in this market to mere cogs in the hiring process.

Filling jobs this way is called transactional recruiting. Technological advances are reducing the need for recruiters to engage with candidates other than as customer service agents. The trend will be that those recruiters who remain in this role will handle ever increasing requisitions and spend far less time advising and counseling hiring managers and candidates.

The consultative recruiting process is winning over

The second employment market targets the 85% of the talent market who are interested in meaningful career moves. People in this group are largely passive candidates and the best active candidates. A career move is defined as a job switch that offers the person a minimum 30% non-monetary increase. This is the sum of job stretch, faster job growth and a richer mix of more satisfying work. People taking career moves tend to have increased performance, higher job satisfaction and engagement and, as a result, less turnover.

Matching top performing candidates with career opportunities requires superior consultative recruiting skills. This is comparable to solution selling involving discovery, needs analysis and the crafting of custom solutions that result in a win-win for both the candidate and the hiring manager.

Offering candidates career moves rather than lateral transfers offers companies an opportunity to raise the talent level of every person hired, increase on-the-job performance, improve job satisfaction and reduce turnover. Skilled consultative recruiters are essential for achieving these important strategic objectives.

Here are some things you can do on your next search project to test this consultative recruiting process out.

Testing the Impact of Shifting to a Consultative Recruiting Model

1. Define the actual work, not the skills needed to do the work.

The recruiter and hiring manager both need to understand what the person in the job will actually do. Creating 5-6 SMARTe tasks is one way to prepare these types of performance-based job descriptions. The difference between this job and what the candidate is now doing represents the career move.

2. Slow down – it’s about time.

It takes hours spread out over weeks for a top person to learn enough about a job opening to determine if it represents a career move and is worth changing positions. To start the process when contacting passive candidates, don’t sell the job, sell a 10-minute discussion to see if one of your openings has the potential to represent a career move. This takes the pressure off and leads to a more open and natural career conversation.

3. Add an exploratory phone conversation with the hiring manager.

The best people want to talk to the hiring manager before they’ll agree to become candidates. Hiring managers interested in hiring the best are always willing to add this step into the process. The objective of the call is to mutually share information about the job and the person’s background to determine if it could represent a career move.

4. Determine or create the career move possibility.

You need to use a Performance-based Interview to determine the difference between the candidate’s past accomplishments and your actual job needs. This is how you determine if your opening represents a 30% non-monetary increase.

5. Test the offer – it’s not about the money.

Before you make the formal offer ask your candidate to put the compensation package in the parking lot. Then ask the person to tell you why he or she believes the job represents a career move. If the answer is not convincing, you’re hiring the wrong person.

Once you use this consultative approach a few times just compare the quality of the candidates at the top of the funnel and the finalists at the bottom to those found using the more traditional transactional process. A consultative recruiting process is not about reducing costs or hiring people more quickly. It’s about hiring the best people. Slowly.

* image by Mike Beauregard

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