Innovate or Die: It’s time for tech recruiters to evolve

The Oxford Dictionary definition of ‘disruption’ is ‘disturbance or problems which interrupt an event, activity or process’.

The word ‘disruption’ is widely used in Tech, and in a broader sense when we talk about the momentum hurtling us at pace in to the 4th Industrial Revolution.  But the word ‘disruption’ often comes with negative connotations.  Disruption to the railways is bad.  Disruption to the markets is bad.  But disruption to established industries?  Bad for some, but surely good progress overall?  

A better term would probably be ‘innovation’.  The process of ‘making changes to something established, especially by introducing new methods, ideas or products’.

Lazslow Bock, the ex SVP of People at Google and co-founder of Humu, talks about the need for firms to be truly innovative to keep pace with the disruption of the 4th industrial revolution.  At a HR and Recruitment Tech event we attended in Las Vegas in October, he talked about two distinct methods of innovation:  the ‘roof tops’ vs. the ‘moon shots’.  Put simply, ‘roof top’ innovation is the process of continually improving something.  For example, Microsoft launching newer and better versions of it’s Windows operating system every couple of years … the same core product and purpose, but better each time.  It’s a roof top because it’s like someone standing on the ground and then jumping to the top of a building – they’re higher than they were before, therefore they’re better than they were before.

A moon shot by contrast is a seismic event that fundamentally disrupts or even destroys established products, services and, sometime, entire industries.  And with it, it can cause the demise of a number of established firms.  It’s like someone standing on the ground, watching everyone else jump on top of the roofs of higher and higher buildings, before taking a giant leap and jumping to the moon, leaving the roof top innovators in their wake.  Think the iPhone and iPod destroying CDs and music shops.  Think Netflix destroying Blockbuster and other video rental providers.  A roof top innovation in video rental was Love Film delivering DVDs through the post – we thought this was fantastic.  And then, all of a sudden, you could live stream thousands of films and box sets whenever you wanted direct to your TV through Netflix.  No more trips to Blockbuster or long waits for the postman.

Whilst technological advancements and the onset of the 4th industrial revolution present both major opportunities for people and firms to create something new and successful, and for improvements in the quality of life for everyone, it also poses a major threat to established firms and to traditional jobs.  CEOs and Boards often underestimate the impact that disruption can and will have on their own industry, and as such, continue to focus on ‘roof top’ innovation as a way to improve their products or services, and to win market share from their competitors.  Potentially blind to the very real possibility that the market itself could disappear in the near future.  What’s the point in having a larger portion of the pie if the pie itself is shrinking?  Jim Keys, the ex-CEO of Blockbuster once said ‘Redbox and Google aren’t even on the radar screen in terms of competition’ some 18 months before putting his company in to administration.  I guarantee he’s not the only CEO to underestimate the risk posed to traditional industry.

So, who’s next?  Car manufacturing?  Already underway.  Law?  A.I. has proven already to be more adept at a lot of para-legal activity and standard legal advice.  Medicine?  Check out the Babylon app where you can get a GP appointment 24/7 via your phone rather than have to take the dreaded trip to the surgery.   

One industry that is definitely entering a major period of disruption (or innovation if you like) is recruitment.  Driven by a number of different factors, from major advancements in recruitment and HR technology, to changing demographics (and therefore demands), to the ease of global communication, remote working and industry disruption, the traditional models of recruiting alone or of utilising recruitment agencies who source suitable candidates for you, charging a % of salary and then rewarding their consultants via commission, is becoming less and less popular, and less and less successful.

Recruitment in tech, in particular, has to change, and it will.  But will it be through roof-top or moon-shot innovation?   

The war on talent in tech is getting more and more challenging.  In London especially, competition for talented people is quickly becoming the single biggest cause of stagnation and failure of new, highly promising tech firms.  The arrival of Facebook and Google in a big way (combined they will employ over 10,000 Engineers in London by the middle of 2019) turns up the heat even more.  With salary inflation going through the roof, and large established tech firms willing to pay over the odds to attract the best people, how can UK SMEs possibly compete?   

For a typical recruitment agency specialising in tech, the news in the short term is good.  Average tenure is dropping, average pay is rising.  In fact, 61% of people in tech expect to change jobs in the next 12 months.  So, there will be plenty more people to place in to new roles, with higher salaries, meaning higher charges and more commission.  But it won’t last.

Tech SMEs are realising that their approach to sourcing and recruiting staff needs to evolve.  They realise that there needs to be a major focus on things like employer brand, on different sourcing routes, on ways to reward and motivate people when you can’t compete on pay, on development and progression, on culture and engagement.  Their focus needs to be on some of the less tangible things that people look for in an employer – fun, opportunity, diversity, flexibility, excitement, value.  They need to create a positive cycle that enables them to grow.

Traditional recruitment typically covers that tasks of sourcing candidates, screening them and helping the employer to select the best people.  They don’t have a great deal of involvement after that.  But what about helping firms to make the right choices, like which location to search in, what type of contract to set, whether they can search overseas, whether they can become attractive to people who need real flexibility?  What about the on-boarding experience?  We all know that if you have a bad start at a company, it doesn’t take much to make up your mind that you want to quit and find a new employer again.  What about leadership – ensuring the new hire truly gets what it is you’re trying to accomplish and fully understands their part in that journey, whilst knowing that their individual needs are met?  What about efforts to retain individuals through proper objective and transparent reward and bespoke approaches to recognising performance and potential?  What about development and progression opportunities that not only incentivise a lot of people to stay with a firm, but also means your firm’s productivity will improve, in turn meaning you’ll need to hire less people in the future?

The approach to recruitment in tech needs to change, and it will.  It needs to focus on genuinely helping SMEs to grow through really creative and value adding people planning, sourcing and retention.  And it needs to embrace technology to help out.  And, the sooner we get rid of high, front loaded commission practices for charging and consultant reward, the sooner we can collaborate and help UK Tech SMEs to compete in a truly global, highly competitive market.