In this guest writer article, Lost Group Founder John McArthur discusses the challenges associated with traditional recruitment – and explains how he and his team are addressing them.
During my tenure as CEO of transport technology group Tracsis Plc, one of the most persistent headaches was recruitment. Finding, vetting, and negotiating with the best and brightest people to join your organisation is vitally important but I’ve found that the systems and services that support this task can be limited, and have remained unchanged in my lifetime.
The recruitment process essentially remains one of shopper and shop window. Employees and employers can only find each other by making themselves available in the right places. Job boards, direct advertisements, and word of mouth were the only tools available 20 years ago and sadly this remains the case today. The irony with all these approaches is that whilst the initial ‘sourcing’ activity varies, the subsequent vetting/interviewing/negotiating/onboarding process remains entirely the domain of the employer.
The recruitment process is further hobbled from the outset as some of the best people an organisation would want to employ won’t actively be looking for a new role or making themselves available to approach as they’re already doing a great job somewhere else.
But what about recruitment agencies, search firms or head-hunters? Surely they exist to overcome these very shortcomings? Search agencies are often considered a panacea for finding top talent – and regularly insisted upon by internal corporate governance etiquette, especially for senior hires. The allure of search firms lies in their promise of rapidly delivering top-notch candidates tailored to a company’s needs, sparing management and HR teams the arduous task of sifting through a sea of ill-qualified resumes.
The generally accepted norm is 20-30 per cent of a candidate’s salary as a fee to carry out the ‘search’ (which entails the provision of five-10 relevant CVs from which a candidate will be selected). This is palatable – if not justified – when the results are positive. But, in my experience, outcomes sometimes prove unsatisfactory, with little accountability when things go wrong.
The need for industry specialists in recruitment
I’ve found that recruitment firms cannot be true specialists unless they’ve worked at the coal face of industry. It’s also true to say the recruitment industry suffers one of the worst turnover rates of any service sector at >40 per cent. How is it possible for any firm to develop industry expertise and extensive professional networks if 40 per cent of its workforce is leaving each year?
And while most head-hunters claim to understand a company’s culture and requirements, the disconnect between their promises and the delivered results can, in my experience, be significant. I often found myself frustrated by the mismatched candidates presented, leading me to wonder if the recruiters understood the nuances of our organisation, or even the simple differences between commercial, customer, operational, and administrative functions inherent in any business. I believe that this problem continues to be perpetuated today – an opinion echoed by the organisations I meet across rail.
The need for control in recruitment
Beyond the financial and cultural strains, the lack of control over the recruitment process can become a significant pain point. Employers must wait to be served with CVs but usually with no appreciation of where or how candidates were sourced. I’ve found that the answer is often ‘scrolling LinkedIn’ and ‘cold calling individuals who have turned on their Open to Work badge’. Delays, meanwhile, can have cascading effects on a company’s operations, affecting productivity and morale and impacting an its ability to deliver to customers.
And finally, there is the accountability issue. I believe that, despite the fees, there remains an absence of guarantees regarding the success of the hired candidate. This lack of accountability can amplify the frustration of both employer and employee – who, in my experience, are sometimes left to handle the aftermath of a mismatched hire without any recourse.
The solutions
So, what’s the solution? For starters, organisations need technology to help them rapidly sift a wide variety of CVs from disparate sources and critique these against objective criteria. Most TOCs will receive over 150 applications for every front-line role they openly advertise, and I have found that internal HR teams simply aren’t able to rapidly screen on an equitable basis to keep up with demand. The proliferation of AI and machine learning technology makes this task relatively straightforward and ensures that vetting is done quickly, fairly, and without conscious or unconscious bias getting a look in.
Secondly, the industry would benefit from a dedicated network of transport professionals where people can register their details and then let themselves be ‘found’ by future employers who wish to contact them. Let employers decide for themselves who should be on a short list and make those decisions based on detailed information on their professional background.
Thirdly, I believe the commercial model must change. It can cost between £15,000 and £20,000 for a list of CVs pulled together by a recruitment company. Transport operators (and their executive management) must realise that the money could – be better spent elsewhere. The starting point would be on higher salaries for the benefit of the industry and those working in it or looking to enter.
My aversion to the recruitment industry inevitably led me – against my better judgement! – to start a new venture in the hope of addressing these shortcomings. Lost Group aims to be the exact opposite of traditional ‘search’ and is creating a technology platform that will reside with transport operators and allow them to search our own network of transport professionals (the Lost Network). This will make it far easier for transport firms and transport professionals to find each other whilst avoiding the pitfalls mentioned above. Lost exists to serve the transport industry and gives a percentage of its revenue to the Transport Benevolent Fund. The Lost Network of professionals is now approaching 1,000 and growing every day and later this year we will launch our first product to the market, ‘Talent AI’.
To learn more, contact the Lost Group team here.
