The Fake Disruptor Debate

I have read a lot of articles recently about how the recruitment industry is going to be disrupted and how it will spell the end of recruitment agencies, as well as how this is apparently a good thing. For every article that is published here on LinkedIn there are a plethora of comments from experts and otherwise about how it is either a good thing or a bad thing that the recruitment industry be “disrupted” and then of course the general whinges and complaints of the recruitment industry as a whole.

Here is my FIRST interesting take out – no matter what the article is actually about, if it relates to recruitment then there is a plethora of people who just complain about the industry as a whole and recruiters in specific. Usually because they have had a bad experience.

Now some of these articles are actually quite interesting and provide innovative ideas, yes another buzz word, about improving the process of recruitment. Some of these articles are nothing more than ‘infomercials’ for recruiters or tech people trying to get a foothold in a very lucrative industry and they offer very little value to the serious discussion of improving recruitment and the recruitment experience in a way people like Greg Savage or even LinkedIn itself are doing. Whether they be written by tech people looking to “disrupt” the industry in the way that Uber has done to the taxi industry or Airbnb has done to the hotel industry or, oh wait these examples seem to be the two major examples of “disruption” people rely on when quoting how their idea is next big thing to “disrupt” or how recruitment is the next industry to be decimated through “disruption”. Both Uber and AirBnB offered a cheaper, cleaner and in most cases easier to use alternative that allowed private citizens to compete against large company controlled market places. This isn’t “disruption”, this is just a different service at a sometimes cheaper price. it hasn't made the old obsolete. They call this competition. Hotel booking websites are still being used and you will find in most cities that occupancy and room numbers are still being exceeded on a daily basis. Taxis have a few more PR problems but that comes down to those people who purchased a license and have now had that cost diminished. I haven’t seen a sudden large scale sale of unwanted taxis that are no longer being used.

Here is my SECOND interesting takeout – despite the introduction of Uber and AirBnB both “disrupted” industries are still functioning and there are still more customers than actual rooms or cars in general in the marketplace.

As much as I like to call myself a professional recruiter, recruitment is not a profession. We are not the same as accountants and lawyers which is the common comparison. And before you bombard me with examples of how recruitment is a profession, I base this the academic understanding of what a profession is - They have a "professional association, cognitive base, institutionalized training, licensing, work autonomy, colleague control... (and) code of ethics" (1). So I would now like to draw a comparison that will make most of the recruiters blanche and probably a few outsiders giggle.. Recruitment is actually a lot like the travel industry and a recruitment consultant is a lot like a travel consultant. Both roles use a particular process at their core function. Both roles involve dealing with people around an extremely personal and emotional decision. Both roles are working in a market which is price driven AND service driven. And finally to succeed in travel you need to be able to listen to your client, understand what they are looking for, offer advice based in fact, provide them with a cost effective solution or itinerary and be able to sell and close a deal. Sound familiar?

I can remember when online booking engines heralded the great “disruption” of the travel industry and signaled the death of the retail travel agency. There was going to be no need for a bricks and mortar store of suitably trained experts to help you book your travel. These website and booking engines were going to be so easy to use and also much cheaper as they didn’t have the overheads that retail travel agencies had. I joined Flight Centre in this environment, which in itself was a great market “disruptor” although back then it was just called a new way to buy flight tickets and “competition”. That was in 2003 and the industry as a whole had 5 to 10 years before it became obsolete. Flight Centre is still a major travel player in Australia and has opened numerous agencies internationally. That disruption made a dent in the “fees” that were being charged on flight, hotel, package bookings and changed the way they engaged with their clients BUT it did not cause the death of the travel agency model. One could argue that it has actually had the reverse effect given Flight Centre’s growth as well as other new and rebranded travel groups.

So why did this great “disruptor” to the travel industry not kill off travel agents. I have no real scientific evidence, only anecdotal but I believe it could be because booking engines are impersonal. There is no-one to interact with and there is certainly no-one to blame or complain to when you get given a deluxe room instead of the superior room you booked, apparently or maybe you didn’t? Humans like to have that personal touch, they like to communicate and like to have their opinions heard. That is something travel consultants usually do very well, they listen. The second reason is because people still don’t trust the internet or technology to deliver what they requested. And thirdly, technology doesn’t give customers options or ideas or describe the experience they will have when they take a trip. Only a travel consultant can do that.

Here is my THIRD interesting takeout – the only effect online booking engines had to the travel industry was to readjust the fees to be more competitive. Clients still use travel consultants to understand what it is they are buying.

So by now you are scratching your head wondering how this relates to the recruitment industry and the need to be the next “disruptor” and kill off recruitment agencies once and for all. Consider this, there are more candidates applying for jobs than there actual jobs. I don’t mean qualified candidates, I mean actual volume of people applying. The technology that has been designed to find the perfect candidate does not take into consideration that 1 or 2 stars who either have experience outside the program, don’t write the way the program expected or just has a crap CV. Only a recruitment consultant is going to take the time to sort through all the unqualified, time consuming applications and then be able to explain to a hiring manager why that candidate is a gem. If you make a bad hire from technology, who are you going to blame or complain to that the candidate wasn’t actually who you were looking for?

“Disruption” is not happening to the recruitment industry. It IS becoming more competitive through technology and that will cause a readjustment of fees eventually, UNLESS the industry decides to become a profession but that is another discussion. But likewise all this ‘disruption” will not kill off recruitment consultants or agencies. Like travel we are dealing with clients who want to be heard (what they need in a candidate), who want to understand (what candidates in the market) and who want to be advised about an experience that will benefit them (who is and how will someone benefit their business). Only recruitment consultants can do this, technology can’t, yet. And whilst ever the hiring manager is a human and the candidate is a human, there will always be a need for a human recruitment consultant.

If being disruptive is about introducing something new to a market/industry to make something old obsolete, then....

Uber - taxis are not obsolete; AirBnB - hotels are not obsolete; online booking engines - travel agencies are not obsolete; Job boards and then LinkedIn - recruitment agencies are not obsolete.

1. Magali Sarfatti Larson, The Rise of Professionalism: a Sociological Analysis, Berkeley, California: University of California Press, 1978, p. 208