EmploymentHuman ResourcesRecruitment

Telecom Axe Recruitment Team

By February 21, 2013 10 Comments

In our business the past six months or so has been typified by an ever increasing surge of interest from agency recruiters in defecting transitioning across to the parallel universe of internal corporate recruitment.  I say “parallel” because, whilst many believe internal recruitment to be a cosy utopia of no sales calls, KPI’s or stress, they often find instead the exact same levels of each.  The only difference is that this time the sales are to internal hiring managers who don’t have any faith in the in-house recruitment function and prefer to use their agency of choice who they also play tennis with.  The KPI’s switch from “number of marketing calls” to “time to hire” and “cost per hire” (and if you’re a particular type of corner-cutting recruiter it’s my guess that the former is easiest to manipulate).  As for stress, try handling 30+ jobs that need filling urgently with the hiring managers in the same building as you and none of the luxury of agencies of deciding which jobs to prioritise filling over others.

There is one thing internal recruitment definitely has going for it though: Stability.  Over recent years there has been unabated growth in internal recruitment functions, particularly amongst the large corporates and blue-chip companies making up the bigger end of town.  Growth not just in size, but also in sophistication and capability.  Investment in dedicated sourcing specialists, premium LinkedIn products, snazzy careers pages and social recruiting campaigns.  An agency recruiter going in-house could certainly find themselves under the same levels of pressure they thought they might leave behind, but compared to their floundering compatriots back in agency land, they at least had clearer career paths and stable teams to look upon.

Agencies have spent the same six months hand-wringing, fretting over the employment market, frowning over dwindling Perm fees and generally skittering around their tired client bases like headless chickens.  It’s been tough, unpleasant, frustrating times.  But something seemed to switch this month.  For the last three weeks or so nearly every recruiter I speak to is flat out busy.  It might well be that this will still take time to translate into a resurgence in billing performances and revenue growth, but as has been proven many times in the past, a busy recruitment sector is the perfect barometer for an upturn in fortunes in the employment market, far more accurate than the unemployment figures and hiring intentions produced by various surveys.

So, it was with some confusion, and a sprinkling of dismay, that I started hearing rumblings of change and restructure coming out of Telecom, one of New Zealand’s largest companies.  Yesterday, those rumblings came to bear with startling severity as the entire internal recruitment team of Telecom were told their jobs were going.

This seems like such a drastic, backward step, compared to the patterns I see elsewhere in recruitment, that it has left me genuinely baffled.  Either Telecom know something none of the rest of us do, or they have made this decision long ago, based upon outdated survey data, and are too far down the track to change course now.  How a business of 3,500+ employees can impose a sudden hiring freeze and remove their entire internal recruitment function seems somewhat misguided.  Hopefully the redundancy process will enable some to prove their importance to the organisation and at least some form of function will remain.

The alternative for Telecom, who despite a hiring freeze will certainly need to recruit BAU roles and replace attrition (unless they really were over-bloated with surplus employees – they must be the last company left that is if that’s the case), will be to leave recruitment responsibilities in the hands of a stretched HR department, or the hiring managers themselves.

Those recruitment agencies who recently tendered for the new Telecom recruitment PSA must be rubbing their hands with (reserved) glee by now… This could finally be a PSA that actually delivers decent levels of recruitment work to the agency world.  It’s certainly a poignant moment for internal recruitment in New Zealand though, who might start feeling a bit like us in the agency recruitment side have for a few years now.

Update:  Just noticed this release from NBR Online which further backs up the rumours.  Seems as though all will be revealed at 10am today.

Good luck Telecom, but I sincerely hope you’ve got this terribly wrong.

 

Clarification from Telecom:

Hi Jonathan

Just seen your blog titled “Telecom Axe Recruitment Team”.

While there is a consultation process underway and therefore it’s inappropriate for me to go into details about all the changes proposed with Telecom HR, I would like to point out that the proposal re recruitment is to devolve that responsibility to HR teams within each business unit.  This has implications for the centralised recruitment function, but to say that Telecom is shedding its entire internal recruitment capability is incorrect.  Trust if you could make an appropriate clarification to your blog.

Regards
Andrew Pirie
General Manager Corporate Relations

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Hi Andrew

Thanks for the clarification, although it is the centralised recruitment team that I’m referring to.  I have no doubt that Telecom will retain capability to recruit internally, which is where I said it would go out to HR, or to hiring managers, or consequently onto agencies.

I can clarify and update the blog that it will business unit HR teams doing internal recruitment if you like?  Or please feel free to leave a comment on the blog, if you can without overstepping the consultation process.

Many thanks

Jonathan Rice

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Hi Jonathan, the point is simply that telecom will continue to have recruitment capabilities internally just in a different way.  would be good if you could clarify.

Jonathan Rice

Jonathan Rice

MD at New Zealand rec-to-rec firm Rice Consulting and co-founder of on-demand recruiter offering Joyn. Recruitment agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.

10 Comments

  • Avatar Kevin C says:

    I’m not surprised and I suspect that many companies and Government entities will look long and hard at any fixed overhead.  In Government particularly, now that external recruitment fees are where they should have been in the first place, I think we’ll see this action becoming a trend, as the outsourced model again becomes a way to control overheads better.  I have said before and say it again, that as a profession, we shot ourselves in the foot with a regime of overcharging and created our own competition with the “internal recruitment boom”. 

    Whilst we will never see the internal recruitment disappear, it will become leaner and fulfill a different function.

  • Avatar Guest says:

    But hasn’t Rice also got rid of people and shared ownership to survive or spread the risk?
    Your staff roster from last year to now seems shorter, so I suspect we all need to adjust as and where we need to?
    I’d say your grandstanding hasn’t really helped with any future business that may have been available for you within Telecom or managers that may move on from Telecom into hiring roles  , and also noted by other clients that read this ??

    From memory Telecom has more around 6 to 7 000 employee’s, so factually a little misguided as well 

    Just a thought.

    • Jonathan Jonathan says:

      Thanks for the contribution Guest, and for your many others in the past which have always been interesting and helped the discussion develop.  Not so sure this time though.  I haven’t criticised Telecom, merely expressed surprise and confusion, as it is at odds with other developments in recruitment.  Of course we all need to adjust to suit the circumstances and as you noted yes we have at Rice Consulting too.  The number of people working at Telecom isn’t important really, for the purposes of the blog post.  I was told that figure by an ex-employee of Telecom who said that the Chorus break-away had reduced numbers to that level – but whatever.

      If me encouraging some industry debate and commentary around Telecom’s approach to internal recruitment is “grandstanding” and preventing me from doing any business there in the future then I’m not working in the country I thought I was…

      – Jon Rice

      • Avatar Kevin C says:

         Interesting because that’s how the media portrayed it.  I thought you had defended the internal recruitment function!  In the end, it will be as it should be – up to each business unit to utilise either internal or external resource, and live or die on their decision.  Clearly a good move.  Let’s hope Telecom’s move is one that is followed by many others.

      • Avatar Guest says:

        Why thankyou 🙂
        Anyway, the internal team whilst effective, were not universally loved by all and sundry.
        Watching them all market themselves madly as being “available now for contract and permanent roles”  would suggest their phones are not ringing off the hook with roles with other companies agreeing with their value proposition.
        I would imagine a high performing successful team in any sector would be jumped on immediately – if they were high performing and successful……

  • Avatar RF says:

    Outsource to FutureStep, then employ their staff directly with no change to the service level. The in house team were not performance driven and not managed by a specialist. Preferred suppliers were frustrated, project teams infuriated. The fact is HR does not understand the recruitment process. This may be a move for operational teams to control their resource. But the flip side is a ballooning of cost if recruitment behaviour is FTE evasive, or subject to weak compliance. Maybe they’re ready for me to go back?

    • Avatar Rl says:

      Might not have been “performance” driven but the internal team had taken hiring manager satisfaction from 65% to above 90% for the last 8months. Agency spend had been reduced from7% on average to 2%…. I think the internal recruitment team had “performed” just the greater hr direction had changed… RF back at ur own discretion… Excuse the spelling on mob device

  • Avatar Guest says:

    Andrew, I think you are splitting hairs here. The entire internal recruitment function at Telecom has been proposed to be dis-established nationwide. Yes, there will be still some need to manage recruitment and this is being pushed on to HR managers. To suggest resource is being ‘devolved’ however is not the case. Let’s not sugarcoat it!

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