Why do Top Performers Leave Their Jobs?

Why do top performers leave their current jobs? Can you predict turnover? As it turns out, research shows you can.

We interview thousands of people every year. And as I go through the candidate interview notes, certain themes emerge again and again. There are four factors that predict employee turnover and I’ve posted them over at The Washington Business Journal.

What Do Executive Search Firms Charge?

Most of the people in my neighborhood have never used an executive search firm, they are doctors, teachers, dentists, college professors, and government workers. They work in organizations where it’s incredibly uncommon to use executive search firms.

Even in Washington’s huge nonprofit and association market, where the use of search firms is prevalent, some organizations choose to engage search firms very rarely. We regularly work with people who have never engaged the services of an executive search firm before. So naturally people have questions about who pays (the employer always pays), when the fee is due (it depends on the search firm), how much the fee will be (it depends on the search firm), what services are delivered (it depends on the search firm) and what replacement guarantee is in place if the placement does not work out (it depend on the search firm).

Let’s start with fees. Search fees vary widely depending on the business model the firm uses.

Retained executive search firms typically charge 25 – 33% of the estimated total annual compensation a candidate is expected to receive in their first year in the position. (Many search firms include first year commissions and bonuses in the estimated total compensation figure, but not the cost of benefits.) Some portion of the fee is always due when the search commences, but the final fee is often dependent on what salary the candidate accepts. So if a search firm charges 30% of annual salary and places someone earning $100k, their search fee will be $30k. But if that same candidate negotiates for a starting salary of $110k, or a salary of $100k with a sign-on bonus of $10k, the search fee would rise to $33k.  Additionally, some firms charge back their expenses to the client, so the total fee can easily rise to 35% of total annual compensation. Staffing Advisors is a retained search firm, but instead of tying our fee to the candidate compensation, we prefer to charge a simple flat fee with no charge back for expenses. We set our fee in advance of the search based on the level of effort we anticipate, and our fees are typically 15% of less of total compensation. Like many retained search firms, Staffing Advisors handles executive searches in a wide variety of functional areas (and not just Accounting, or IT, or HR). Consistent with most retained search firms, we offer a replacement guarantee of a full year if a placement does not work out for any reason.

Contingency search firms do not guarantee to fill positions, but if they do, their fees are often between 20 and 25% of annual compensation. Contingency fees are usually due only after the candidate starts work, so if nobody is hired, no fee is due. Some contingency search firms are even willing to negotiate placement fees, but negotiating lower fees can sometimes result in a lower level of effort being spent on your search and a lower chance of filling it. Contingency based firms tend to specialize in one functional area (like accounting). If a placement does not work out, contingency search firms typically offer replacement guarantees from 30 days up to six months.

Some firms take a hybrid approach of requiring some portion of the fee in advance, and making the remainder contingent upon the placement. They key for you as the buyer is to understand which business model best suits your needs. For more insight into the differences between retained firms and contingency firms, read Contingency vs. Retained Search, Common Fallacies.

Job Posting Strategies for Small Employers

I’ve been surveying the strategies most small employers use to attract new employees. The process looks quite a bit like it did 5 or 10 years ago. Very few employers take into account where the best candidates actually are, and how to best reach them. So when candidate behavior changes, as it has … most employers miss it because job postings follow tradition. Of course, when you ignore where the best candidates are, you doom your recruiting process from the start.

Most employers try to save time and money in one of two ways:

• They try to select job advertising venues that yield a relatively small number of resumes–niche job boards for example. In theory, only “insiders” know about the job board, so “outsiders” apply less frequently and there are fewer bad resumes to wade through. The rationale is that it is worth paying a bit more for a job board if you don’t have to review so many bad resumes.
• They post on inexpensive job boards like Craigslist because it’s inexpensive. (In fact, when we factored in all our internal costs, we found that Craigslist was our most expensive source of hire.)

The unrecognized, unstated underlying assumption in most hiring is this:

“I have limited time and a limited budget, so what can I get for $500 in ads and 5 hours of interviewing?”

But if your goal is to hire the best qualified person, you might ask a different question:

“I have limited resources. How can I organize the hiring process to make the maximum impact on my business results this year?”

You may decide that saving time on interviewing gives you more time to do other things. Or you may decide that putting in the effort to find someone extraordinary will make a far larger impact.

But you have to ask yourself the question.

Reviewing Resumes? Don’t Make This Common Mistake

Imagine you advertised an open position, and are now sitting down to review a stack of 100 resumes.

If the first ten resumes you read are terrible, you feel a sense of dread coming over you. Without realizing it, you lower the bar, so if the 11th resume is even close to being qualified, you breathe a sigh of relief and eagerly move them to the “Yes” pile.

But if the first ten resumes you read look well-qualified, you raise the bar. You become very selective about who makes it into the “Yes” pile. You invent new criteria to help you winnow the field.

In both cases, that 11th resume is not being judged strictly on its own merits, it’s evaluated primarily by what came before it.

In the first case, all those unqualified resumes are corrosive to your selectivity. You get desperate and lower your standards. This happens with astonishing frequency in hiring.

In the second case, an abundance of apparently good choices leads to hyper-selectivity. You get picky on criteria unrelated to job performance just to save time interviewing. You become desperate to “weed out” some people that would have been perfectly fine otherwise. You rule out people without stopping to consider that you only have a resume and your assumptions … but none of the facts. In my experience, the best candidate rarely has the best resume, so being hyper-selective in resume review always causes you to overlook potentially great people.

So how do you prevent yourself from arbitrarily raising or lowering your standards?

You have to notice what is not in front of you. That stack of 100 resumes may or may not be representative of the available pool of people for your job. And each resume may or may not be representative of the true talents of each person.

Ask yourself two questions:

• Before you select candidates from the stack of 100 bad resumes, ask yourself, “Am I confident that this candidate pool represents the best people I could attract to this job?” 
• Before you rule out good people from the stack of great resumes, ask yourself, “Have I fairly considered everyone potentially qualified for the job, or have I ruled out people based on factors that may be irrelevant and assumptions that might be inaccurate?”

You may find that in both cases, you forged ahead, trying to “save time” in the interview sequence, instead of taking the necessary time to hire the best possible person for the job.

One Reason Nobody Great is Answering Your Job Ads

Do you want to hire someone who is always finding faster ways to complete tasks? Someone who works efficiently? Someone who is current with technology?

You want to avoid speaking with desperate people who have few career options. Instead, you prefer interviewing candidates with the kinds of skills that most employer would welcome, right?

You don’t want people who use their work computer  to conduct a job search. You want  someone more discreet, right?

Congratulations. You just described the kind of person who is probably using their mobile phone to be alerted to job opportunities. And if your recruiting process is not mobile-friendly, you have a 40% chance of never seeing their resume.

Your Recruiting Ads Are Being Dropped Like a Cell Phone Call

There’s a good reason why your job advertising is not giving you a steady flow of great candidates. You got left behind. Candidates have gone mobile in their job search. Nearly a third of candidates who are visiting career sites like CareerBuilder and Indeed are using a mobile device.

And CareerBuilder tracking shows that as many as 40% of those mobile visitors will abandon your application process when it is not mobile-friendly.

Indeed’s job search app highlights ads with “Apply From Your Phone” functionality, but CareerBuilder goes a step further– candidates can check a box and never see your ad in the first place.

And here is another nugget from the research:

“Companies who are mobile-optimized have a distinct advantage. A recent CareerBuilder survey found that, of the 20 percent of companies who have mobile-optimized career sites, one in five applications come through mobile devices.”

I shared these statistics with a client today. She asked a great question, “Shouldn’t the candidate show some initiative in the hiring process? Shouldn’t getting hired be difficult?” The answer is absolutely yes.

But the key is where you make it difficult.

Your hiring process should be rigorous. But the applying part needs to be easy. When you make applying difficult, you tend to end up with the most desperate candidates. The highly employable people, who have lots of options? They simply move on to someone else with a bigger “Welcome” sign out front.

Once you have a steady flow of highly qualified candidates coming your way, feel free to make things as difficult as you like, but don’t turn off the welcome sign until you do.

Are Your Recruiting Emails Mobile Friendly?

Are your recruiting emails mobile-friendly? They need to be. If you know me, you know I’m about to back this up with a statistic. (I’ve never met a research study I didn’t like, hat tip to Kelly Dingee for forwarding this one to me).

The good people at Knotice took the trouble to do a composite cross sampling of 500 million emails sent in the last 6 months of 2012. (I’m not entirely sure what all that means, but it sounds like a lot of work.)

Their findings?

41% of emails are opened on a mobile device. 

And further, if your recipient does not “…act right away, our data shows only about 2% will reopen that email on another device – whether on their desktop computer, smartphone, or tablet … This means that even if you created a compelling subject line and delivered the right offer, if it renders poorly on the device or if there isn’t a seamless optimization of the post-click experience, you have missed your window.”

It’s a mad, mad, mobile world we live in folks.