Placement Consultants-Tarnished Image

PLACEMENT CONSULTING: TARNISHED IMAGE

Placement consulting forms a sizeable part of the ever-burgeoning recruitment sector, the other components being e-recruitment, print advertisements, employee referrals and job fairs.  The Indian recruitment sector is estimated to be around Rs.1000 crores and growing at 10% year on year.  One can then imagine the importance of the role that placement consultants play in this sector.

Types

Classification can be based on client (both employer and job seeker) type, functional areas, industry, level or a combination of one or more of these factors.  So we have consultants for IT/ITES, Manufacturing, Services, Entry Level, Senior Level, Sales & Marketing etc.

Source of Revenues

Majority of placement agencies charge their corporate clients and the rest charge the jobseekers.  Only agencies catering to lower level placements generally fall into the latter type.  Organizations pay, anywhere between 8% and 25% of the annual gross package, depending on the position and skill sets.  Those charging candidates take around Rs.50-Rs.500 depending on the city and the availability of jobs in that area.

The Role

Although the exact role depends on the understanding between the consultant and his corporate clients the positioning is more like an intermediary who connects an appropriate job seeker to a relevant employer.

Business Process

A brief generic process is as follows.  Corporate Clients give out candidate requirements to associated placement agencies.  These agencies work on the requirements and source relevant candidate profiles.  After discussing the profile with the candidates, the consultant sends the profiles to the corporate client for feedback.  On receiving positive feedback interviews are scheduled.   The consultant is eligible for payment only if the selected candidate joins the organization.

Payment terms differ from organization to organization and the service level agreement.  Some organizations pay only if the candidate works with them for 2-3 months, while others ask for replacement in case of attrition within 2-3 months. 

Following are some of the possible services that consultants extend to their corporate clients:

(i)                 
Advertising & Short Listing: The consultant announces the positions through suitable media, collects

responses and shortlists relevant profiles.  The evaluation process is done by the corporate client.  The short listing part is not as simple as it sounds.  Adherence to client’s requirements is a pre-requisite.  An auto giant may require an MTech with 10-12 years experience in R & D.  If the responses received do not match these criteria the consultant needs to start all over again.

(ii)                Advertising, Short Listing & Initial Evaluation:

This process takes care of the most difficult part of the recruitment process namely the sourcing, short-listing and meeting all short-listed candidates.  What remains is the most relevant bunch of candidates who are then sent for final evaluation to the client.  This saves lot of corporate time.

(iii)               Short Listing & Initial Evaluation:

The advertising & response collection part is taken care of by the employer.  The consultant is roped in only to sort out the responses and do an initial basic screening.

(iv)              Staffing:

Of late there has been a trend towards a concept called staffing or staff outsourcing in India. Organizations hire employees but place them on payrolls of staffing agents or consultants.  Some of the prominent staffing agencies in India are Teamlease, Mafoi, Kelly Services etc.  This model offers tremendous flexibility to employers.   This model is employed for new pilot projects or for positions where pay structure is considerably lower as compared to on-roll employees. 

As and when the project ends the staff is withdrawn by the agency.  This saves the organization from legal hassles and enables staff replacement as and when required.  However these positions are currently restricted to blue-collared or lower/entry level positions only. 

Dual Frontline & Profile Sourcing

Placement consulting business is unique in the sense that it has two frontlines to manage.  On one front the business development team is accountable for fostering relationships with prospective clients and obtaining their hiring plans.  On the other front we have the recruitment vertical which has to interact with prospective job seekers and co-ordinate their recruitment process.  The challenge in getting the right person for the right job itself is daunting but worse still is the candidate walking out after receiving the offer. 

Newspapers advertisements, job portals, head hunting, networking are some of the common methods of candidate sourcing used by consultants.

The Disconnect

The theoretical idea of placement consulting business looks very exciting.  The number of consultants in Bangalore city itself is close to 1000.  But many of these form what is called a “floating population” as consultants keep coming in and going out of business.  Entry and exit from this business is easy and free from restrictions or legal barriers/requirements.  Majority people assume minimum infrastructure is needed to start off this business.  A detailed study is rarely undertaken.   

There are so many retired employees or even corporate HR executives jumping on to this business without any proper foresight.  Those with financial muscles try and survive, some others adopt unethical means to survive and the rest bite the dust!

Common Misconceptions

• Computer with Internet Connection is the only infrastructure required
• Companies approach consultants when they need people
• Candidates can be found easily using job portals
• Consultants’ role is only to line-up candidates for interviews

The Mediocre Consultant Vs The Top Notch Consultant

Top-notch consultants probe the candidates at length to ensure they are suitable for the role.  They ensure that only closely matching profiles reach the corporate client for approval and further discussions.  Mediocre consultants do exactly the opposite.  This is what they do:

The Mediocre Consultant	The Top Notch Consultant
Uses only public databases to source candidates	Innovative.  Works on referrals, head hunting and social networks as well
Sources candidates who broadly match requirements	Sources candidates who closely match requirements
Speaks to candidate only about job profile and salary expectations	In-depth probing to ascertain interest and suitability
Directly lines up candidates without sending profiles in advance	Sends profiles to client for short listing
Does not fix appointments for candidate’s interview	Fixes interview timings well in advance

Consultants do not realize that candidates from all levels cannot be treated equally.  There was a consultant who was lining up candidates, for the position of Area Manager, for a multinational insurance company.  The consultant simply asked candidates to walk-in to the client’s office with a resume (with the consultant’s name on it so that he can claim his commission later on!!!).  This position, carrying a CTC of around INR 8 to 10 lakhs, reported to the Zonal Manager.  Asking prospective candidates to “walk-in” like freshers was grossly inappropriate.    

Fair Play

As is the case with other walks of life, we have cases of dishonesty and corruption in the recruitment sector as well.  We will take up dishonesty first.

(A)   Dishonesty

Recruiters of BPOs are always reeling under pressure to hire because of high attrition levels.  The selection        process at BPOs/call centres comprises of a test of language comprehension followed by several rounds of interviews.  The test and initial round of interview is generally conducted by a lower level HR executive followed by interviews with functional heads/senior HR Managers.  Considering the volume of recruitment, it is not always possible to source candidates with perfect language skills. 

Entry level HR executives are hands-in-glove with consultants in clearing the tests.  They provide answers to test questions before hand so that candidates are well prepared.  In some cases answers are directly given to candidates at the venue.  This happens primarily due to the mounting pressure to recruit and also the lucrative incentives provided to HR recruiters.

The race among placement agencies is to send relevant profiles to the client before their competitors do.  In this mad race some consultants do not even check with the candidates regarding their interest in the open position.  Instead they send the profiles to the client first.  The candidates are contacted only if the profile gets shortlisted. 

(B)   Corruption

There are hundreds of consultants mushrooming in every nook and corner of the country.  There is very little differentiation in the services provided by consultants. So how do these consultants bag those assignments from corporates?   Sending out sales reps is not a sure shot success formula-at least for start-ups.  This business differs from other services as business depends upon multiple factors like ability to get assignments from corporates, source relevant candidates, client’s decision and candidate’s willingness to take up the offer.  In this sense it is a very complicated sales process. 

This complex but lucrative process drives many to adopt corrupt practices.  An informal understanding with the HR department can do the trick.  Picture this: A company has 3 vendors who source candidates.  Assuming that vendor1 sends in a candidate first and the candidate, on selection, joins the company.  The HR Manager can easily manipulate the source of the profile to divert commission funds to the desired vendor.  Worse still, in many instances the source is even shown as employee referral to share the booty internally!!!!

Competition & Work Pressure

Placement consulting has become highly competitive in the last few years.  Today, it is not important which consultant sources the right candidate.  Who sources the right candidate first is more important now.  This is more so for majority of placement consultants who use commonly available recruitment resources/tools like job boards, databases and job fairs. 

This rat race has diluted the quality of recruitment consulting.  Placement agencies now employ “telecallers” rather than recruiters to “convince” candidates especially for lower level positions in high-attrition sectors like Insurance and BPO.  These telecallers are under-qualified and untrained to talk to job seekers.  As a result, they start “offering” the job to anyone and everyone.  

A fine example to support this: Sales departments employ “Account Managers” to manage corporate clients.  Each client/prospect is termed an account and a sales representative assigned to handle such “accounts” is called an “account manager”.  Unfortunately, the so-called recruiters (read: telecallers) are largely unaware of this fact.  So there was a GM (Finance and Accounts) who was called by such a “smart” telecaller for fixing an interview for the position of “Account Manager”.

I had recently applied for the position of faculty at a leading coaching institute (for their centre in my locality) in Bangalore.  I took their entrance test (the first step in their recruitment process), performed reasonably well and was shortlisted for further evaluation processes. After completing the hiring process I was told that no vacancy was available in my locality.  I was being “convinced to accept” an “alternative locality” till a vacancy arose in my area.   This was deliberately kept under wraps by the consultant and even the HR department. 

Recruiters working in placement consulting agencies are always reeling under pressure (just like their counterparts in sales departments) to source profiles since each position is tagged “urgent” considering the intense competition.  Besides, they also have “targets” and “performance-linked incentives” which makes them all the more desperate to place candidates.  This mad rush of lining up candidates is sometimes a waste of time particularly for job-seekers. 

Placement consultants want their names to be fresh in the HR Managers’ minds.  So sometimes they keep sending irrelevant candidates to either frequently remind the client regarding their existence or simply try their luck.  Either way the candidate becomes the scapegoat.  Picture this: 

Although experience can be an advantage, it is not sufficient. 

This kind of irresponsible management has spoilt the image of the recruitment sector.  Placement consultants are today seen more as a pack of hungry wolves waiting to make a fast buck by somehow getting candidates placed.  Professionalism has taken a back-seat.  The sector has definitely seen tremendous growth in terms of revenue and volume but it is not yet “developed” in the true sense of the word!!  But it is not only the consultant who is to be blamed.  Indian corporate executives have encouraged this culture of disrespect for others’ time, reputation and experience.

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