By Simon Mortlock*
While there still aren’t many vacancies opening up in Australian financial services, going for a sales job via an internal referral is a better bet than most.
An emphasis on cost control means firms are prioritising revenue-generating roles and milking their employees’ networks for candidates, according to the 16 senior HR professionals who attended a roundtable organised by eFinancialCareers earlier last week.
The attendees, all of whom asked not to be named in this report, were reluctant to talk in detail about 2013 recruitment as their companies are waiting to assess global market conditions in Q1.
They expect hiring will be “by exception” early next year, with a strong justification needed as to why a candidate cannot be found internally.
There are, however, already small pockets of growth. A delegate from a Big Four Australian bank said her company has recently “released the brakes” on recruiting salespeople in retail and commercial banking.
“There’s been a high response rate and we are receiving some good-quality applications. Quite a few people seem to be actively looking now after staying put for a while.”
Sales and business-development roles, rather than support ones, make up about 95 per cent of vacancies at a regional Australian bank, its representative told the roundtable. “But we’re not advertising many of these – most of the people we get are from referrals. We make sure that staff know that referrals are part of their job,” she added.
The rush to referrals
Referrals are becoming a more important recruitment tool at other organisations, too. A Big Four accounting firm now makes 40 per cent of its placements this way in Australia. “And we’ve had a shift from reward to recognition,” said its delegate. “Yes, we still make payments for successful referrals, but we also give people recognition in things like leadership groups.”
An HR professional from an international finance company said her team typically does 30 to 40 per cent of its hiring via referrals, but is constantly having to remind people about the programme in meetings and correspondence.
Many firms have gone beyond asking employees to make sudden, reactive referrals only when new vacancies crop up. They instead have an ongoing referrals process for making opportunistic hires of strong candidates and for pipelining people in advance of potential headcount needs.
“We still keep in touch with the referral group that we started to set up two years ago,” explained an attendee from an accounting firm. “And we have talent continuity managers who can tap into this group at any time.”
Float like a resume
As referrals grow in popularity, so too are HR teams aiming to reduce recruitment-agency costs. Some recruiters are trying to drum up business in a dull job market by “floating” more CVs directly to the line, bypassing HR and potentially meaning the employer pays fees for a candidate who is already on its database. “We insist that all floated CVs must be sent to HR first before the manager replies to the recruiter, so we can check whether we already know the person,” said one roundtable delegate.
Non-compliance with recruitment regulations is often most prevalent among executives. “Senior managers don’t understand the rules or they choose to ignore them,” bemoaned an attendee. “But when they then hear of the high recruitment fees we have to pay, they are surprised.”
Two firms are tackling the problem by involving hiring mangers in the choice of agencies for preferred supplier agreements (PSAs). The CVs that arrive from these recruiters are thus no longer unauthorised. “We engage with the business first, instead of just imposing certain recruiters on them that may not meet their needs,” said a delegate from a Big Four bank.
Another attendee, however, questioned the whole value of PSAs because her accounting firm now mainly uses niche agencies on an ad hoc basis for specialist roles. “Is it fair to them that we persist with putting them through the trouble of a PSA when we aren’t offering them much recruitment work?” An all-contingency approach might be better for both parties, she added.
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Simon Mortlock is the senior editor of efinancialcareers.com.au
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