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It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall


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Enlarge The Pie II

(August 06, 2003) -  Somehow, we're getting flooded with straight thinking but anonymous analysts. The trend, started in the blogs, has the effect of obscuring the value of some impressive thinking. "Why," we ask ourselves, "are they so afraid to be accountable?"

Public accountability is an unpleasant but necessary part of participation in public markets. You can be sure that we do not like the various pot shots we take as a part of doing business. But, it comes with the territory. We all have a right to express opinion anonymously, it will be argued. Somehow, those who are unwilling to take both credit and blame in public seem to rely on the notion that the purity of their truth will stand for itself.

The latest rant on Talent Management's extraordinary blog is a case in point. We've never seen a more cogent analysis of the Applicant Tracking System industry's weaknesses. This person understands the rhythms of the vendors and has offered a vital service by detailing a very wise set of observations. There are some problems with the perspective, of course. The author's anonymity does nothing but reduce the effectiveness of the material.

The industry has a chicken and egg problem in its current configurations. Customers budgets and mindsets are limited to the point of absurdity. Vendors, trying to stand out from a non-differentiated pack offer value added services. Customers drive a Volkswagen price and then expect Mercedes levels of service quality.

Cost per hire is a fundamental culprit. The prevailing industry standard metric takes no account of the way that workload and responsibility gets sloughed off to hiring managers. The easiest way to manage cost per hire is by reducing the Recruiting staff and forcing hiring managers to pick up the slack. It's far easier to manage the cost per hire downward with nonsensical cost cutting than it is to fully account for the entire impact on the organization. Even the most advanced variations on Human Capital Metrics leave this staggering loophole intact.

We've had many experiences with groups of HR based Recruiters who proudly point to their efficiencies in cost per hire as a way of denigrating the service levels provided by the staffing industry. We've even occasionally tried to bring representative members of the two groups together. At the bottom line, in-house Recruiters dislike third party folks for a simple reason. The third party price point is a reasonable representation of the value of a placement. Third party staffing professionals have the funding required to deliver the level of service that hiring managers desire. When compared, at the level of service quality, to a third party staffing firm, the in-house team usually comes up wanting.

This silly arrogance about cost extends deeply into the relationships between HR and their vendors. We've had our pockets picked by high visibility Recruiters from well heeled companies. All of the vendors we know have had similar experiences. "Tire kickers" who want a free lunch are a significant part of the industry. Believing that they are entitled to get more than they pay for because they are desirable customers, they string vendors along and milk the one sided relationship for all that it is worth.

In a very meaningful way, you get what you pay for. Most vendors' problems are rooted in trying to give customers more than they paid for. Most customers' problems come from the unrealistic expectation that they are entitled to more than they paid for.

John Sumser

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