Understanding 3 Key Differences Between the Old and New Ways of Recruiting

When it comes to talent acquisition, it’s important to know what you don’t know

The popular saying “Everything old is new again” doesn’t really apply when it comes to your strategy for hiring talent for the most important positions on your team.

At least it shouldn’t.

Truth is, if your approach to identifying, recruiting, and hiring talent for mission-critical roles is the same today as it was, say, five or 10 years ago, you’re being left behind.

You can put your recruiting strategy on a fast track to sustained growth by understanding three key differences between old and new ways of hiring.

Staffing vs. Recruiting

People often use the terms “staffing” and “recruiting” interchangeably. Honestly, they’re quite different.  

Staffing is a traditional form of hiring in which a company strives to fill numerous open positions within the organization as quickly as possible (think contract hires, temp to perm, etc.).

With staffing, the focus tends to be on short-term, less-skilled roles or project-based assignments that last for several months or less. Seasonal hiring at a warehouse facility is a good example of staffing.

Permanent Placement Recruiting, on the other hand, is a longer-term process that’s typically reserved for higher-level professional positions within a company.

The goal of recruiting is to find the most qualified candidates that meet specific criteria and hiring profile requirements and then place them permanently in a full-time role. Identifying, pursuing, and ultimately hiring a global sales and marketing director for a venture capital-backed startup illustrates recruiting in the modern sense.

Although HR managers and internal recruiters frequently perform both staffing and recruiting functions within their companies, progressive enterprises are increasingly moving to a hybrid approach. Many companies will seek the help of a staffing agency to fill their hourly jobs, concentrating their internal recruiting efforts on entry-level and more routine positions.

Then, they’ll partner with specialty recruiting firms to identify, attract, and place the most qualified professionals in their leadership as well as sales and marketing roles.

Active Recruitment vs. Passive Recruitment

When seeking to better understand the dynamics of hiring in the 21st century, you must also consider the difference between active and passive candidates.

Active candidates are those who are actively searching for a new job. They could be unemployed or employed but seeking a better opportunity. Either way, they want or need a new job.

Conversely, passive candidates are currently employed and likely happy where they are. These individuals—who account for about 70 percent of the global workforce—aren’t necessarily looking to make a move, but might consider it if conditions were right.

From a recruiting standpoint, passive candidates are generally the most attractive. They have the skills and experience you desire, and they’re good at their jobs.

Passive candidates are also the most difficult to discover. Particularly if you’re relying on internal personnel to search for them.

That’s not a slight against HR departments and internal recruiters.

It’s simply acknowledging the fact that internal talent acquisition teams are usually so overloaded with vacancies (30-40+ job orders assigned per recruiter) that they seldom (if ever) have the chance to perform outbound recruiting to identify strong passive candidates.

Recognizing the huge upside of this untapped talent pool, many forward-looking companies engage third-party recruiting firms.

External recruiters use their industry expertise to develop an extensive network of passive candidates who excel in their respective fields.

So, when their clients have key leadership and revenue-generating positions that come open or are created, these specialists leverage the relationships they’ve built to match a passive professional who best meets the organization’s needs.

Contingency Search vs. Retained Search

The final—and arguably most important—distinction between timeworn (old) and contemporary (new) recruiting relates to contingency versus retained search agreements. 

With contingency recruiting arrangements, a company with one or more vacancies will often select a handful of outside firms and instruct them to bring them candidates. There are no upfront costs, and the agency only gets paid if the client hires one of their candidates (i.e., contingent upon hire).

For employers, the obvious advantage of contingency searches is being able to cast a wider net without having to pay for the services until (or unless) their position is filled. It seems like a staffing no-brainer at first glance.

However, after working with some of the nation’s leading medical device, diagnostics, and healthcare technology companies over the past 15 years, we’ve found that traditional contingency recruiting actually produces the least desirable results for everyone involved.

The reason? Incentive.

Since there’s no engagement fee or retainer involved (up-front money exchanging hands), there’s less accountability or commitment from any of the firms. They’ll send some emails and make a few calls—which may or may not prove fruitful—but you won’t get any firm’s best effort.

Given that the average closing percentage for most traditional contingency firms is approximately 12%, there’s little wonder companies aren’t getting recruiting firms’ full attention. They don’t have any sort of “skin in the game” because the probability of success is so low when compared to the amount of time they risk spending on the project and the opportunity cost of not working on a different client’s search. 

On the flipside, you have retained search. Recent history proves that this approach delivers optimum results for everyone involved.

You see, when a company opts for a retained search, it enters into an exclusive arrangement with one firm for a specific period of time. The client puts down money  (usually a third of the overall search fee) and agrees to pay the balance once a candidate is hired.

Although the retainer only covers a fraction of the recruiting firm’s investment of time and resources, it fosters goodwill and underscores the client’s commitment to mutual success.

The recruiting firm, in turn, will interview and vet candidates more thoroughly, ultimately delivering a short list of three to five highly qualified candidates.

From these finalists, the client can enter immediately into more thorough interviews and discussions and choose the individual who they believe best fits their needs and company culture.

A New Solution

Regardless of the size of your company or the industry you’re in, the way to find, attract, and hire employees at every level is changing. The war for talent in the U.S. is real and raging!

You can continue using the same approach or adjust your strategy to keep pace with the evolution by investing in a true external recruiting partner via a retained approach. 

Since internal recruiters and HR specialists can’t be experts in everything, consider outsourcing leadership and sales and marketing searches to a specialized recruiting firm, freeing up your hiring managers to drive revenue and work with their own teams. Then, have internal talent acquisition specialists focus their efforts on more entry-level and routine or regular hires. 

That’s a simple yet effective strategy for success now and moving forward in this dynamic business climate.

Lee Kester is the CEO and founder of Kester Search Group LLC, a consultative talent acquisition firm that specializes in executive search and commercial expansion projects for diagnostic, medical device and healthcare technology companies throughout the United States.  Lee can be contacted via email at lee@kestersearch.com