Recruiting Trends, May 2000, p. 1, 6 and Executive Recruiter News, May 2000, p.1, 4 - ©2000 by Kennedy Information LLC - The new millennium hiring frenzy that has put recruiting and retention at or near the top of most corporation's priorities list if forcing some Fortune 500 companies to think about the best ways to deal with the competition and demand for superior executives and middle managers.
Venture capital firms behind today's emerging portfolio companies and new startups are also recognizing the need to win the War for Talent, especially given their need to attract top quality management. And in many cases, that management will either lead those companies to successful public offerings, or, at worst, to major disappointment.
Given the increased corporate attention being paid to so-called "people issues," a new survey by executive recruiting and human capital consulting firm Jones-Parker/Starr of Chapel Hill, North Carolina, reveals that well-entrenched legacy companies as well as their dot com competitors are equally considering the feasibility of creating an in-house search function to dis-intermediate their staffing functions.
In other words, they're considering cutting the external search function, the outside recruiter, the middle man, entirely from the picture, and that could have major implications on the way they hire talent and the way their companies operate.
Bottom-line impact
As you might expect, there are serious financial considerations behind corporation's deliberations over whether to bring the external search function inside its own walls. More than one-third of survey respondents indicate that the prime reason for considering such a move is financial, while others see possible benefits from faster hiring results and developing greater familiarity between the recruiter and the job candidate. (See chart below.)
But it would be wise for those considering the in-house option to consider that much of the influence on how quickly a new recruit is brought on board is in the hands of the hiring company.
In today's white hot recruiting market, one of the key complaints external recruiters voice about their clients is that many hiring companies are neither prepared or equipped to pull the trigger on a hire as fast as they think and/or as fast as they should to land the best candidates in this hyper-competitive labor market.
Something to consider
Jones-Parker/Starr, which specializes its own search function on finding talented recruiters for retained search firms, surveyed nearly 160 Human Resources executives and found that more than half of the respondents have either already instituted an in-house search function or are considering such a launch.
"In spite of the confusion about language and the definition of in-house search capability, as evident in the number of respondents who said they are satisfied with their 'Staffing Departments,' it is clear that moving external search in-house is an option gaining consideration," says Janet Jones-Parker. "We know that experienced search consultants are being recruited into corporations and venture capital firms."
Jones-Parker says most corporate HR chiefs prefer to staff their own in-house search offices with recruiters who have significant experience at the highest level of corporate staffing and in the increasingly competitive world or recruiting middle management.
The survey found that 57% of respondents most value the experience gained in retained executive search as the most desirable background to staff an in-house search function, followed by recruiters from contingency fee search firms (22%).
"Retained search consulting experience is usually better preparation for these positions. Retained consultants are accustomed to working in highly sophisticated, complex situations with top management," Jones-Parker says, "They know how to determine the fit between experience and talent on the one hand, and culture and organizational need on the other. They bring superb listening skills and objective judgment to the task."
Online implications
Sixty-nine percent of the hiring companies that participated in the survey acknowledge that the Internet will play an increasingly important role in the selection of employees who earn less than $150,000 in annual salary. But there's no question that external recruiters will continue to play a major role in the acquisition of human capital for years to come.
The vast majority, a whopping 93% of respondents, indicate that external consultants can attract better talent at the most senior management levels.
Jones-Parker concludes: "Talent will rule. The recruitment process, both external and internal, will continue to need fine-tuning so that companies can attract the highest quality talent available."
Learn more about Kennedy Information LLC, Recruiting Trends: News, Techniques, and Strategies for the Recruiting Executive and Executive Recruiter News at http://www.kennedyinfo.com. To find out more about the In-house search concept, read the Jones-Parker/Starr press release and survey of recruiting professionals.