Risk in Recruitment

Risk in Recruitment

by Keith McGrane

It is interesting to see what has been happening to the recruitment industry over the last 4 to 5 years. In 2007, the recruitment industry in the United Kingdom was a ÂŁ27 billion business. In 2010, that figure dropped to ÂŁ19 billion. Much of this is attributable to our extremely challenging economic climate with employment levels dropping from 72.6% to 70.3% during this time.

However it is clear that unemployment levels alone are not the only cause for the dramatic decline in the recruitment industry.

Recruitment is a business that has always relied heavily on the expertise and calibre of its people and their ability to find high-quality candidates. However, the role of the recruiter has become increasingly complex. There is a requirement to develop expertise across the many facets of recruitment, such as the high technology of IT or the sophistication of the Finance sector. Coupled with this, the internet has changed the playing field with regards to acquiring and filtering candidates. Increasingly, employers are becoming better at filtering candidates for themselves. Networking websites such as LinkedIn allow potential job candidates to be broadcasted and headhunted by employers without the need for recruitment consultancy. According to the CIPD, 72% of vacancies do not even make it to the public domain. As a result the recruitment industry is being forced to change its long-lasting model in favour of a more flexible approach. Internetbased innovation has already had a dramatic impact on recruitment practices.

While the core element of the recruitment industry is sales and profit, the industry deviates from traditional sales roles in terms of the amount of risk involved. While traditional sales roles involve finding a match between a customer and a product, the need for the recruitment consultant to establish a match acceptable to both parties effectively doubles the risk of failing to secure a placement. Likewise, recruiters need to remain innovative in order to access a wider pool of talent. It is no longer an industry characterised by face-to-face interviewing and handshakes. Rather, recruiters need to be willing to face uncertainty and try new things if they wish to remain competitive in a rapidly changing economic environment.

Recruitment requires the ability to be proactive, resilient and to persevere despite inevitably frequent setbacks.

Copyright Š 2011 Psychological Consultancy Ltd

www.psychological-consultancy.com

Risk Types SPONTANEOUS Uninhibited and excitable, this Risk Type enjoys the spontaneity of unplanned decisions. They are attracted to risk like moths to a flame, but are distraught when things go wrong. Their passion and imprudence make them exciting but unpredictable.

INTENSE The Intense Type tends to be highly strung, pessimistic and nervous about any threat to their equilibrium. In extreme examples, personal relationships and decision-making can become an emotional minefield. Passionate and self-critical by nature, they react strongly to disappointment, taking it personally when things don’t work out.

WARY Self-disciplined and cautious of risk, the Wary Type is organised but unadventurous and puts security at the top of the agenda. They will be drawn to the idea of securing their future but anxious that however well something worked for others, in their case it will go wrong.

PRUDENT Very self-controlled and detailed in their planning, the Prudent Type is organised, systematic, conservative and conforming.

Conventional in their approach, they prefer continuity to variety and are most comfortable sticking to what they know.

DELIBERATE Self-confident, systematic and compliant, the Deliberate Type tends to be unusually calm and optimistic. They experience little anxiety and tackle risk and uncertainty in a business-like and unemotional way. They never walk into anything unprepared.

COMPOSED The Composed Type is cool headed, calm and optimistic, but at the extreme may seem almost oblivious to risk and unaware of its effect on others. They take everything confidently in their stride, seem quite imperturbable and manage stress well.

ADVENTUROUS The Adventurous Type is both impulsive and fearless. At the extreme, they combine a deeply constitutional calmness with high impulsivity and a willingness to challenge tradition and convention. Intrepid and never discouraged, they quickly rebound from any setback.

CAREFREE Spontaneous and unconventional, the Carefree Type is daring, excitement seeking and sometimes reckless. Not good at detail or careful preparation, they often seem unclear about their objectives. Their impatience and imprudence can lead to hasty decisions.

Copyright Š 2011 Psychological Consultancy Ltd

www.psychological-consultancy.com

Risk Type Distribution We anticipated that recruiters would have a distinctive risk profile, with a higher proportion of recruiters compared to the general population being in the higher risk tolerant types such as Adventurous, Composed and Carefree. Results indicate that this was the case (see Figure 1). The most frequently occurring Risk Types amongst the recruiter sample are at the most risk tolerant side of the Risk-Type Compass™. The proportion of these Risk Types compared to the general population is striking. Carefree Types made up the highest proportion of recruiters (28%) with the second most prevalent Type being Adventurous (22%). The least common Risk Types included the Deliberate (3%), Prudent (4%) and Wary Types (4%).

Figure 1: Proportion of Recruiter Risk Types in Comparison to the General Population The epicentre of the approach to risk amongst our sample of recruiters is captured by the following Carefree Risk Type description: At the root of this Risk Type are high levels of spontaneity, challenge to convention and a preference for novelty and excitement over routine. The most extreme examples are likely to opt for variety over consistency, excitement over caution, action over planning and individuality over conformity. They feel constrained by petty rules, traditions or being micro-managed. Although not naturally methodical or attentive to detail, this type will provide a challenge to dogma and relish opportunities to break new ground. Interestingly, this Risk Type is relevant to recruiter profession in that it is one that thrives on innovation and action rather than cautious preparation or planning, thus reflective of the competitive, ever-changing, results-oriented atmosphere of recruitment. Recruiters must be willing to proactively and fearlessly cold-call potential clients and candidates. In doing so, the risk of failure is generally very high. As such, they must adopt a working style that doesn’t take failure or negative feedback too personally. Those who are more likely to risk failure would expectedly outperform those who are reluctant to risk failure as failure and rejection is often an inevitable aspect of any sales role.

This picture has to be moderated by a strong Adventurous Type influence (see Figure 1), which implies high levels of composure, resilience and optimism. Of course, in a sample that has many different levels and specialisms, this will be something of a caricature. All the Risk Types are in fact represented to some degree but the overall results of this survey are nevertheless very distinctive.

Copyright Š 2011 Psychological Consultancy Ltd

www.psychological-consultancy.com

Risk Attitude in Recruitment

Figure 2: Percentage of Risk Attitude amongst Recruiter Sample in Comparison with the General Population Unlike with Risk Type, a person’s Risk Attitude is typically quite variable depending on the situation or circumstances. The Risk-Type Compass™ makes a distinction between inherent personality characteristics and those transient influences on risk taking. The Risk-Type Compass™ measures risk attitude using ipsative assessment to identify individual differences in risk attitude across each of the domains of Ethical, Financial, Health and Safety and Social risk attitudes.

Our results indicate that the recruiter sample do not deviate substantially from the general population in how comfortable they are in taking risks across each of the five domains (see Figure 2). One area of deviation from the general population is in the recruiter’s approach to Financial risks as opposed to Health risks. Recruiters are somewhat more inclined to take risks where money is involved and this is reflective of the risk-taking nature of the recruitment industry.

Copyright © 2011 Psychological Consultancy Ltd

www.psychological-consultancy.com