Seven mistakes mining companies make when engaging recruiters (and how to avoid them)

There is a famous saying that even a broken clock is right twice a day. For me, no other quote better sums up the general perception of the broader recruiting industry.

If you feel you are continually getting a lousy deal from these firms, you might be right.  And you may be unknowingly encouraging it.

The old adage “you get what you pay for” regularly crosses our minds in all walks of life. It’s sound advice.  When it comes to recruiting, however, it seems habitually overlooked.  Even worse, I suspect there might even be the feeling you aren’t getting what you thought you paid for.

Why is that?

The problem may be a result of genuinely not understanding (or appreciating) the difference between a specialised/boutique executive search or recruiting firm, and a so-called ‘agency’.

There seems to be a perception that the recruitment industry has no meaningful barrier to entry. In other words, it’s not recognised as a skilled or specialist service that requires investment/infrastructure or resourcing much as any other professional or consultancy service might.

Anyone can be a recruiter, right? It only involves advertising, sifting through CVs until you find someone that matches the skills required or has the right sounding job title, then picking up the fee.

With a process perceived that elementary, it’s no wonder the recruitment industry hasn’t endeared itself to businesses.  And it probably also explains why key stakeholders all too often only appear at the very end of a recruitment process.

We also regularly discover that prospective clients assume that just because a search firm operates in an industry, they are experts.

Take our industry, mining, as an example. I find it hard to understand how a firm can claim to be a genuine expert in all things mining. It’s simply too broad a field. For sure, an agency can reactively recruit (ie advertise) any role in mining, and label themselves an expert.

Hope has never been a strategy.

Consider these two pain points for your business: First, even if you think you have found someone who is the right candidate, research shows that 80% of people are hired based on skill assessment (e.g. a process you might be familiar with – review CV, interview, take refrences). However, a staggering 80% of people leave companies for behavioural reasons (company culture, leadership etc).

So, how will you assess for this? Do you have a scientific process?

Second, based on an estimated 25% annual turnover at site, it’s safe to assume that a mining company would typically recruit a Mine General Manager or one of their direct reports at least once a year. Statistically, it’s two of these roles, if not more.

These are senior, business-critical roles, often indirectly responsible for a company’s entire turnover (or a major contributor). Significant time and financial investment will be ploughed into through recruitment/acquisition, induction, development, a generous reward package, and so forth. With this in mind, the hiring process must be planned and executed by a professional.

Yet, many of these senior roles find themselves onto the market, advertised by several so-called recruitment agents, and almost certainly “managed” by a low-paid database trawler matching keywords.

It doesn’t take a skilled data analyst to recognise that such basic, reactive processes simply do not cater for the complexity involved in hiring high-level asset-based, or executive HQ-based positions.

We call this reactive advertising-driven practice outsourced administration, not recruitment.

So, what can be done?

It requires an appropriately qualified partner organisation to come up with a solution. One experienced enough to understand and facilitate a process recognising the intricacies involved in successfully matching an individual with unique personality traits and idiosyncrasies, to a business that brings its own.

A specialist Partner at a Search firm will challenge a client’s thinking to help reduce risk and increase ROI. And they will use data-driven science, not guesswork.

Qualified partners bring expertise, knowledge and innovative thinking, which is painstakingly acquired and continually invested in, so they can offer businesses a process that works.

However, recent research in the UK indicates that 94% of all recruitment firms are generic mainstream contingency agents, and only 1% are genuine sector specialists.

It is, therefore, a significant misconception that all recruiters are the same or offer the same ‘product’, no doubt adding to the complexity clients face when trying to identify a qualified consulting partner.

To help unpick what that means for businesses in practical terms and how they can avoid a blanket approach to recruitment, I have compiled a checklist of common mistakes companies make when engaging recruiters.

I would encourage you to think carefully about the following, so you can take stock, and change tack:

  1. Hiring isn’t a straightforward transaction (people are involved, and those people are the critical component of your business). It’s a decision that needs to have a strategic, carefully planned approach. The hiring process is also a reflection of your brand/positioning in the market, so it’s about much more than mere recruitment. If you are asking an outside firm to take on that responsibility, why would you trust that a low-cost agency would uphold your brand values? Especially when you expect them to work for free, and for the highest bidder (see point three, below).

    It’s a massive wasted opportunity not to engage your chosen search firm as a partner, so they work as an extension of your business/brand, who will prioritise your needs and be careful to make the right decision for your business. It will be worth the investment – if you choose the right firm.

  2. Don’t assume bigger is always better. Large firms tend to be more generalist, and you are less likely to get substantial if any, Partner-level involvement. Yes, boutique firms are probably small, but that is by design. Ironically, they may have a mining desk that is more comprehensive or have a greater focus on specific aspects of the mining industry relevant to your business. Engage a peer-level partner, with substantial access to the right level of listener, rather than someone to find your CV’s. One is strategic, the other commoditised.
  3. Have you unwittingly drawn up an arrangement with your recruiting partners that effectively means you expect them to work for free? By that, I mean not retaining one firm, but choosing two or three agencies to find a candidate and ultimately paying the fee only to the recruiter that comes up with the goods the fastest.At best, the fill-ratio in success-based recruiting is 1:4, meaning your supposed search “partner” is essentially working for free the first nine months of the year. Because they know this, they aggressively sell their candidate to the highest bidder – or any taker.  And you wonder why they don’t care about you?  Or maybe you wonder why so many candidates keep falling by the wayside during a recruitment process?

    This setup is also unlikely to attract any industry professional or thought leader because it’s rewarding speed over quality, rarely offers stakeholder-level access or investment. Top-tier professionals seek each other out – they are peers, networkers, mentors, etc. Make sure you find one on the other side of the table.

  4. How robust is your vetting process when on-boarding a search firm? Have you gone beneath the sales patter to check you have engaged a genuine professional services firm, a management consultancy, rather than a CV pushing agency? The difference is vital. The former is based on being proactive, specialised and generating intellectual property; the latter is reactive.

    Also, check if the firm is specialist in a particular area of mining or if it recruits across the board (in which case it cannot describe itself as a specialist unless they have Consultants each dedicated to specific silo’s). Ask about its track record in hiring specific roles – just “mining” is too broad. Gather information on placements the company has made, how many previous interviews they have conducted specifically in the discipline, how global its reach is, and so forth. Also, if possible, request named case studies and referees. And not just clients!  The candidate experience is equally important, and a genuine boutique firm knows this.

  5. How will the recruiter present your company and mandate to the market? Do they rely on advertising? Challenge this if they do. If the firm is genuinely specialist and claims to have deep access to the market, ask why they need to advertise and deep-dive to understand what other avenues they are pursuing to get the right candidate. Advertising generates fewer than 10% of top candidates; or put differently, 90% of top tier candidates will never respond. At that level, talent is usually headhunted.
  6. Intellectual property will most often be overlooked, but it’s an essential indication of the level of service you can expect to receive. Find out if the firm is reactively filling roles, or whether they have a valid process. For example, at Stratum, we have interviewed 6,000-plus professionals, many ‘passive’ in the mining market, in concentrated role functions ( mining executive, operational, project and exploration leadership at HQ and site). We use cutting-edge technology and behavioural/psychometric profiling as standard.

    We have also invested more than $1 million (and counting) over eight years to keep our internal database updated – it’s a daily process, independently managed from executive search, recruitment or consulting assignments, by a team of in-house specialists.

  7. Check how the firm is innovating or what other activities it is engaged with. For example, Stratum invests in original research, so our approach is data-driven. Ask whether your search firm publishes reports or studies that demonstrate its knowledge and expertise. Is the firm involved/visible/respected in the industry? Do they support future leaders? Who are their advocates? What level of access do they have?

And finally….

Not technically linked to engaging third party representation, but most companies choose to have a go at hiring highly specialist or niche roles themselves. This “go-to” formula often works, but I wanted to flag a few pitfalls companies can fall into when it comes to DIY recruiting. Look out for an article on that, coming very soon.

Will Coetzer is Managing Partner at Stratum

SUMMARY

Find a genuine headhunter – an industry expert with a verifiable track record of delivery and market knowledge and access.

The real value of engaging a top tier headhunter is not to find a name; it’s to be a risk manager, an advisor, a mediator, and a source of access.  A search firm’s primary responsibility is to ensure you are making the right decision for your business.

And that might even be to advise against hiring what you thought you needed.

Key takeaways on how to vet your Search Partner:

  1. Verify the type of roles they recruit for. Go granular. Is it genuinely a specialist firm? Request case studies or stats and metrics around performance.
  2. Dig deep to find out their strategy for hiring, and also how they manage candidate relationships and data. Be wary if the company is reliant on advertising. Ask for evidence on how many candidates have been interviewed/placed in specific disciplines.
  3. Ask yourself if you might be encouraging bad agency behaviour by not partnering up. Alarm bells should ring if a recruiter says yes too often!
  4. Don’t assume bigger teams mean the job will be done properly. Due diligence is required on the company’s setup, approach, access, track record, process and IP.
  5. Be realistic about the investment required: a quality service will require a higher investment but is likely to result in significant ROI upside, less pain and more time for you to focus on value-accretive tasks.

 

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