This is a discussion paper. It is my very personal view at the work and benefits of recruiters in the IT project business.
I look forward to a discussion that will hopefully lead to optimising project recruiting.
TLDR;: Read the summary
I am a freelance IT consultant in the SAP environment. SAP customers often realize projects with large teams and / or long durations. Often the teams are supported by freelancers or other external consultants.
Recruiting these consultants is not (always) optimal.
Since the clients have to deal with the content of the projects, they usually hand over the recruitment of external consultants to recruiters.
Recruiters advertise that they have a large network of consultants with whom they work closely and whom they can offer for targeted projects.
However, my experience of more than 20 years shows that I do not work closely with any recruiter. Yet I often get enquiries from just that. So how do recruiters find me?
They browse the internet (LinkedIn, XING, Google, ...) and look for profiles that match the search words mentioned by the clients. Then they call these consultants and / or send them a written project request.
There are several weaknesses in this approach.
When the recruiters have found supposed experts, they are introduced to the client.
Most of the time I sit on the side of the consultant (applicant), but in a few cases I have also sat on the other side of the table in my work as a technical project manager.
I have experienced the most bizarre things during such initial telephone contacts with the recommended consultants. Sometimes basic requirements were not met. Once, German was required as the project language and on-site work in Germany. The recruiter organised a telephone interview with an Indian consultant who only spoke English and also only wanted to work remotely from India.
More often it happens that the requested expertise is not available and this becomes clear after the first 3 questions.
So the client still has a not inconsiderable amount of work to do in selecting a suitable consultant.
It is not uncommon for recruiters to charge clients 25% or more of the consultant's turnover as a commission when a consultant is successfully placed.
Assuming a fictitious hourly rate of €100 and 140 working hours per month, this adds up to 140 x 100 x 0.25 = 3,500 euros. With a duration of e.g. 6 months, costs amounting to € 21,000 are incurred for this.
€ 21,000 for a few hours of internet research, exchange of standard contracts and a monthly invoice to the client as well as the transfer of the client's payments to the consultant. The hourly rate that results from this for the recruiter should be calculated by each reader.
Recruiters certainly justify these costs to the clients by saying that they are already pushing down the consultant prices in advance and that their costs are thus partially or completely absorbed. For me personally, I can say that this is not true. I have never changed my hourly consultant rate because of a recruiter request.
Especially in long-running projects, clients sooner or later ask me whether I could also work for them directly or via a cheaper intermediary company. I usually have to reject such requests, because the contracts between recruiter and consultant contain (in Germany, by the way, mostly legally ineffective) blocking clauses.
This leads to dissatisfaction on both sides. The client wonders how long he can continue to pay these high consultant costs, the consultant wonders when he will be replaced by a cheaper person.
Whenever possible, I try to use Recruiting by Recommendation. The principle is very simple:
- I am working on a project where additional support is needed.
- The client asks me if I have someone in my circle of acquaintances who could fill the position.
- I contact my acquaintances who are potential candidates for the support. Since I know the requirements of the project well and also know which of my acquaintances has strengths and weaknesses, I can contact exactly those who come into question.
- After I have found an acquaintance who is suitable and also available, I pass on his contact details to the client, who interviews and commissions him if necessary.
- Since I have referred an acquaintance and they may refer me in a future project, I only receive a "thank you" or possibly an invitation to dinner the next time we meet in person.
In this way, I have already received several project assignments but also placed acquaintances in projects.
Recruiting by recommendation has the following disadvantages, however:
- Often my acquaintances are working on other projects and cannot support.
- I only know a limited number of consultants. The hit rate of finding someone who fits perfectly into the project and is available at the same time is not very high.
- Many large companies have a few framework contract partners through which they hire all external consultants. In Germany, this is often done to avoid the problems of so-called bogus self-employment. What many companies don't seem to know yet is that this procedure does not protect against a presumption of fictitious self-employment.
The technical solution to the problem of Recruiting by Recommendation would be to develop a system that makes it possible to classify and evaluate consultants. Then clients would have to select from this system only those consultants who seem to be a good fit, who are currently available and who have received good ratings. They could then conduct telephone interviews with them and commission them either directly or via their framework contract partners.
Such systems do or did exist. However, they fail because both clients and consultants would have to be active on this platform.
The clients would have to evaluate the consultants after the end of the project so that they would also serve the next client well.
The consultants would have to keep their data in the system up to date so that the clients receive reliable proposals.
Both conditions are not feasible in practice, because what interest should a client have in recommending a good consultant to his competitors? Consultants, on the other hand, are often so busy that they simply forget to maintain profile and availability data or do not consider it important.
My solution to the problems described is Social Media Recruiting.
This idea is also very simple:
- You establish a social platform, similar to Twitter, where primarily consultants, but also clients if interested, meet and exchange ideas and of course proejct needs.
- Project needs could be posted with a #, e.g. #projectneed.
- They would be seen and a chain of recommendations could emerge, at the end of which there would be one or more consultants who could fill a vacant position.
- These consultants, identified via such a Web of Trust, would then be suggested to the project by the consultant who initiated the search.
It is important not to involve the recruiters in the process, as their only goal is to earn money by placing consultants. They can therefore have no interest in supporting such a non-monetarily oriented platform and would let the real Social Media Recruiting enquiries fade into the background through their numerous project enquiries.
I have been thinking about how such a Social Media Recruiting platform could be realised. Of course, one could develop it from scratch. However, one would then have to invest a lot of time and start a big marketing campaign to get consultants and possibly clients onto the platform.
As mentioned above, Twitter would also be very suitable for this. However, you can't form closed groups on Twitter, so recruiters would probably take up a lot of space for their offers like we see it at LinkedIn and XING.
My current interest in Web3 and decentralised systems has led me to Mastodon. Mastodon is a distributed social media platform. This means that anyone can run their own Mastodon instance and integrate it into the large network of Mastodon instances. Each instance defines its own rules of use. Not only can you define what is allowed or forbidden on the instance, but also who has access to it. If someone violates the rules, their account is blocked or deleted.
Mastodon thus fulfils all the requirements described above.
A Mastodon system can be set up and operated with relatively little effort. Therefore, my hope is that some interested parties will quickly be found to participate.
Such a platform could be financed by donations from e.g. clients who have successfully found consultants. Since the costs are low, not many donations would be needed.
Recruiting external staff in projects using recruiters is often an unsatisfactory solution for both clients and contractors (consultants).
One approach to solving this problem is Social Media Recruiting. Open positions in projects are filled via a recommendation network on a social media platform.
Technically, such a platform can be realised at fairly low cost using the decentralised Twitter alternative Mastodon.
If clients are not bound to very few framework contract partners but still do not want to sign a contract with every consultant, there are recruiters who offer organisational processing at very low cost.
I myself know such a company very well.
As described above, this blog post is a basis for discussion. I look forward to a hopefully lively discussion and many more suggestions.