Transactional Recruiting vs. Relationship-based Recruiting

You probably think of the standard hiring process like this:  an employer posts a job online, people apply, employer reviews applicants, interviews the ones they like and eventually makes an offer of employment. There’s no specialist bringing the opportunity to the attention of the candidate so you only get applicants who are actively looking. This is transactional recruiting.

Whether it’s a job board posting, LinkedIn or elsewhere on the internet, people applying are “active job seekers” – meaning, they’re either looking to make a move or are currently unemployed.  Whilst this may be good for some businesses, transactional recruiting does not benefit from candidates who are not in the open market place – the “passive” candidates and these may be just the candidates that you need and fit your role and your company in the best way.

Transactional recruiting can result in quicker turnover, bad hires, lower rates of job satisfaction and so many more negative consequences that come from the transaction based hiring process.

However, Relationship-based recruitment does just that.  It is consultative process that focuses on building trust in the relationship, whether that is employer-candidate, employer-search firm, candidate-search firm or all three together.

The key is the approach to passive candidates, that is, those not actively looking, and taking time and care to develop a relationship that leads to the most effective and successful hires.

Execuive Search firms do just that. They have an extensive network of contacts and market knowledge of specific industries that a single employer alone may not have.  They will actively seek out and build relationships within their networks and identify potential candidates who have not even considered a move – yet.  Executive search and relational recruitment is a art that requires expert knowledge, patience, resilience and more.

Posting on LinkedIn or other jobboards may attract some interest but will not generate interest from candidates who are not “active” in the market.  Executive search firms and recruiters have a much wider reach with their networks resulting a greater number of potential candidates for your role.

Not only that, but what about confidential roles?  You can’t post those on LinkedIn or jobboards.  You absolutely need to engage with a firm who can approach people in the most confidential way.  This is a consultancy led, relational based approach and trust is the essential ingredient.

However, there can be merit transactional recruitment at times but it tends to be a “fix” that requires future strategising, creating more work in the long run. Relationship-based recruiting, with its personal touch and insight into people’s needs beyond a paycheck, offers a more long-term solution. This style also usually builds into a partnership, where a recruiter can supply a constant stream of top tier candidates, rather than just one-off hires.

Why Transactional Recruiting Doesn’t Work

20% of turnover happens in the first 45 days of work at a new company. This can be attributed to several factors, most of which are side effects of transactional recruiting. Maybe the candidate applied to the job description posted online, and accepted the job without knowing all the details. This leads to feelings of distrust. There could have been a lack of support within their first few weeks, where the person who hired them hasn’t made contact since. This absence of a long term relationship leads them to believe there is no one advocating for them behind the scenes.

Transactional recruiting, in its rush to fill a need, ends up leading to more open roles when that early stage turnover sets in. It feeds its own cycle of bringing people in fast, and losing them just as quickly due to poor handling. Sometimes there are too many applicants in the pool and the first one in gets the role.

Other times, the time allotted for hiring fills up quickly with reviewing resumes and contacting references and the decision has to be made before all candidates have been properly evaluated. In a similar situation, hiring managers could be worried about losing talent to competitors and in turn, hire too quickly. Whatever the reason, transactional recruiting often results in cutting corners – and recruiting is all about timing.

The simple nature of posting a job online and gathering a large pool of applicants can speed up the time it takes to get a resume on the desk, but can give hiring managers the anxiety of choice. They always want the best of the best, but it’s hard to know for sure what they’re getting when the market is so vast.

Sometimes too many choices lead to bad decisions, indecisiveness, or dissatisfaction with a decision. Worse yet, by only posting jobs and reviewing candidates from job applications, they’re missing a huge chunk of the market by not approaching currently employed, passive candidates. There aren’t enough hours in the day for leadership to review applicants, interview, run background checks, AND do their normal 9-5. It typically takes companies 100 hours over the course of 4 weeks to get an offer to a viable candidate. With millions of people in the workforce, they don’t have the time to weigh all their options and are often not satisfied with their final decision.

Why Relationships are Better

Relationship-based recruiting helps alleviate buyer’s remorse. Because of their in-depth understanding of the hiring need, and the market the role is competing in, relationship-based executive search firms can create long-term matches resulting in better retention. They take time to understand client and candidate needs, delivering thoughtful results. Hiring is motivated by more than money. People invest a lot of emotion, time, and effort into career changes, relocations, and job moves. Recruiters know how to sympathetically yet effectively manage money, relationships, and emotions throughout the entire process. They offer onboarding support, ongoing candidate follow up, and act as an advocate for both the candidate and the client company when communicating between the two parties – making sure both are happy in the long run.

Relationship-based recruiters are looking for just that – a relationship that develops over time and leads to more than just one placement. You will trust them and they will deliver for you by establishing a 360° understanding of your organisation, the team, and needs both currently and strategically for the future.

Importantly, they will advocate for your business by constantly scanning the industry and market you work in, capturing talent when it’s available – not after it’s needed – sending clients alerts about top talent even when they aren’t actively hiring.

When actively hiring, these recruiters don’t waste a hiring manager’s time by just sending whatever applicants come their way – but by pre-screening candidates to ensure they are qualified with both the background experience AND the soft skills needed to do the job and feel at home with the company.

Relational recruiters and Executive search firms seek to learn from what’s working and what’s not in the world of employee retention before a business has to learn the hard way with a bad hire. By consulting on what employees actually want, they can advocate for what the candidate wants from their job, and give the client company positive action items they can use to make measurable outcomes with employee satisfaction. As more good matches are made, this mutually beneficial relationship grows and continues to produce good hiring outcomes for years to come.

Break out of the cycle of costly, unsuccessful Transactional Recruiting

Transactional recruiting does remain fairly commonplace.  However, if you’re working like this now, try to determine what’s driving your recruiter and what is your relationship with them?  Does the recruiter have touchpoints outside of when you speak to them about your role. Do they follow up on the progress and successes of new hires? Do you find yourself wanting to refer other colleagues to them? Do they go beyond just sending CVs?  Do they really understand your business and, importantly, do they really know what type of person and skills you are looking for to “fit” the role and the culture?

You will know if they are building relationships or just sourcing and sending CVs in the hope that some will “stick”.

So now that you know how to identify the bad from the good and the transactional recruiters from the relational recruiters, think about your next hires and how you would prefer to work.  Not only does relational recruitment present opportunity to hire the best candidates in the market but it improves cost per hire and time per hire in the longer term and is not just a “quick fix” that could go badly wrong.  The wrong hire can cost you hundreds of £1000s in lost revenue, business credibility and market growth versus your competitors.  Think relational recruiting and engage with top recruiters in your industry.

DSA Executive is an expert in the Senior Management and Executive Recruitment, particularly in the Transport, Logistics and Supply Chain industries.

We will work closely with you to deeply understand your business ensuring the best candidates are presented for your vacancies and keep you informed of the key influencers and moves in your market.

Consider the benefits of placement guarantees, high recruitment retention rates in placements, and long lasting, mutually beneficial relationships and make the switch to relational recruiting.

Relationships Win –  Transactional recruiting is just that – a transaction

Having worked with a relational recruiter, you will find it difficult  to go back to the old ways of transactional recruiting and will benefit from the close partnership you have with your search firm or executive recruiter.  DSA Executive do exactly that – build relationships built on trust, expertise and proven success in the market. In fact, over 500 successful placements from Business Development Manager to CEO.

Remember that the right recruiter can change the trajectory of your company and present you with candidates who are not just “looking for a job” but looking for an OPPORTUNITY.  They will want to work for you and make a real difference.  That is the difference between transactional and relational recruitment.  Relational recruiting provides extensive cost and time benefits and longer term gains for both client and candidate.  A WIN WIN strategy!

Looking to build a professional and dedicated recruitment relationship today? DSA Executive offers a range of services for Executive and Management recruitment with specialisms in the Logistics, Supply Chain and Transport Industry sectors across all functions: operations, IT, HR, Sales or Finance, from Manager to Board and CEO level.

With over 25 years’ experience in helping businesses recruit from SMEs to Global Corporates in the UK and worldwide, we are experts in finding and recruiting the right candidates.  And if you have a “difficult to fill” role, we have extensive experience in finding the “needle in a haystack” and will leave no stone unturned to find the right person to fit your role and importantly, your culture.   

Help us to help you and contact us todayinfo@dsaexecutive.com or call us on +44(0)1675 464 060