I Don’t Know How You Do it Alone

Seriously, how do you do all that recruiting by yourself?

I know, recruiting is typically a solo gig–rarely do you see two experienced recruiters working together on the same search. But I think working solo is a mistake for tough searches. It creates problems and causes delays that could be avoided.

Some of our clients have one person handling every aspect of HR, including recruiting. In larger firms, one recruiter is usually dedicated to handling the needs of a defined group of hiring managers as in “I’ll handle this department, you take that department.” So even when you are part of a larger team, you are still the only one tasked with each search. Really sophisticated recruiting functions might have dedicated candidate researchers (sourcers), but almost never do you see two skilled recruiters working in tandem. And I think that’s unfortunate. As one of my Project Managers observed “The only time we get into trouble is when we think we know what we are doing.”

In a tough search, you need someone to challenge your assumptions and highlight risk factors you might be ignoring. When you are tired, and think you are within sight of the finish line, someone needs to ask “What happens if your only top candidate takes a counter-offer from her current employer?”

Because we work with small organizations, our work is customized–we don’t know what recruiting resources will be needed until we’ve met with the hiring manager. We know from experience that the solution to every recruiting challenge is not to simply present more candidates. There are four common problem areas in recruiting, and three of the them are not about finding more candidates. But when you are busy, and working solo, it’s easier to just “do more of the same.”

We’re process geeks so we have lots of metrics to ensure we stay on track, but when problems arise, the solution is not always obvious. It takes a discussion to fix it. When we’re one week into the search and people are being unresponsive to our outreach, do we need to tweak the message, change who are are reaching out to, or simply double the number of people we contact? If job advertising is not attracting the right candidates, do we change the message, change the title, or simply post the ad somewhere else? To write compelling ad copy, we find it always takes at least 2 people and a third person to proofread it…and after all that, we still tweak most messages at least once during the course of the search.

What happens when the recruiting outreach message is working, and the target candidates are responding, but everyone is above the target salary range? Do we go back and have a discussion with the hiring manager? Or do we tweak the message, alter the title, and go find other people to recruit?  Or do we do all of the above?

Every solution takes serious thought, time, and resources. And if you are working solo on multiple searches, how do you find the time and energy to do all that work, right when it needs to be done? We find it challenging and we only work on a limited number of searches. Our team has been working together for years. We have specialists in defining jobs, writing ad copy, candidate sourcing, interviewing, and hiring decision support.  Our specialists are supported in a 1:1 ratio by a support team that handles ad posting, candidate scheduling, background checking and a variety of other tasks. We have advanced IT systems and 24/7 support. And even with a team of specialists working together, we are still challenged every single day.

So, like I said, I don’t know how you do it alone.

What Kind of Recruiting Problem Do You Have?

Not all recruiting problems are created equal. Sometimes you can just run ads and hire good people. Other times you might engage a search firm to call everyone in their database. Few hiring managers venture beyond those two stark choices: either tell HR to run an ad, or tell a headhunter to go sell your job to people in their Rolodex. But of course, these two fine solutions don’t resolve most recruiting problems. Which explains why very few hiring managers have a team full of top performers (even after they engage search firms). 

Perhaps if you could better clarify your exact recruiting problem, you could solve it more decisively. And, after gathering data from hundreds of our completed executive searches, that’s exactly what we did. Now, before we accept any new search, we carefully assess how much intensity it will require in 4 common problem areas: Definition, Sourcing, Selection, and Decision Support

Although each of these problem areas require very different skills and levels of intensive effort, I notice that nobody ever asks me about three of them.  Instead, new clients only ask me about our candidate sourcing (recruiting) capabilities. I’m while I am happy to answer that we have superb sourcing capabilities, I also know that sourcing is only part of the solution. So let’s get into all four of the most common kinds of recruiting problems, and what you can do about them.

Definition intensity:  The owner of a small company needed more sales. He could not figure out how to get them, despite having worked in his industry for many years. His solution? Hire some salespeople to beat the streets, and let them figure it out. (He spent an hour trying to convince me what a great opportunity it was for a salesperson to come work for him). Like a medieval alchemist, he was trying to turn his sales problem into a recruiting problem. Except recruiting can’t solve a problem you cannot define.  This is true for any newly created role, or for the leader of any new initiative, but it is epidemic in sales hiring (just read this).

The intensity of defining job requirements might be as quick and easy as “Find me another person with attributes like Sally” or might be as complex and intensive as asking ”Are we looking for someone to execute a strategy that already works, or are we looking for someone to discover a strategy that works?”  If you are hiring a search firm for their great Rolodex, but what you really have is a definition problem, all their sourcing cannot help you figure out who will be successful in the job.

Sourcing intensity:  One of the most grueling searches we ever conducted was for a nonprofit manager who decided that the only way she could meet her business objectives within her budget was to create a job that combined two fairly common skills that are almost never found together in nature. Kind of like looking for someone who is both a supermodel and a construction worker – theoretically possible, but highly unlikely. (Yes, I still kick myself for accepting this search). The problem was clearly defined, the skills desired were crystal clear, but the candidate sourcing intensity it required was off the charts. Not even 1% of the qualified people we contacted had any interest in the job as it was defined.  

Sourcing intensity comes in two forms: it is either hard to find people with the skills you desire, or else the people you seek are plentiful, but just not that receptive to your job. Just because you can define what you want, and find people who can do it, there is no guarantee anyone actually wants your job. When you don’t have a compelling story to tell, you will lay flame to a lot of sourcing time. Is your location terrible, pay low, or job unappealing in some way? Are you looking for a left-handed, bi-lingual, Russian nuclear physicist? Does your ideal candidate receive more than 2 calls a week from search firms? Then your level of sourcing intensity will be equal to 10 other searches. And remember, if you hire a search firm to flatter, cajole, and sweet talk these rare, elusive, or high-maintenance people into your firm – you better know what was promised to accomplish that … and you will need an equally intensive plan to retain them. 

Selection intensity: Once you have people interested in talking with you, how hard is it to decide who to spend your precious time with? In lower level positions, you need to know how to quickly winnow down hundreds of resumes without overlooking the “diamonds in the rough,” but in executive searches, you need a skilled interviewer to hone in on cultural fit, and to assess skills and strategic thinking. Very different skills.

To present a slate of 6 qualified candidates, sometimes we have to talk to 30 people.  Sometimes it’s just 12 people – but the conversations might last an hour and half each. We’ve found that the interviewing skill required and the interview time needed varies widely from search to search.

Here is a test of selection intensity: How keenly does your recruiter listen to you? Do they really understand what you are trying to achieve by making this hire? If your recruiter is better at talking than listening, or lacks business acumen, then this aspect of your search is probably being done only superficially. In fact, your search might be just a mindless hunt for the perfect resume. Without the proper selection intensity, you will almost certainly overlook great “out of the box” candidates and instead waste time talking with people who have a nice resume but are not a good fit. 

Decision Support intensity: Searches often fail right at the finish line. Once you have a good candidate sitting in front of you for the interview, how hard will it be to forge a consensus among all the decision makers? Do you have a dysfunctional board or executive team? Is everyone rowing in the same direction, or are there stark differences in approach between key executives? Do you have a hiring manager who is so risk averse that they find almost any excuse not to hire?

If you cannot make a hiring decision in a timely manner, all of your other efforts might be in vain. Good candidates are repelled by internal political battles, and they certainly don’t wait around for indecisive managers. They (correctly) ask “If being hired is this haphazard and slow, am I really a good fit? And “If I am a good fit but decision-making is this slow, how excruciating will it be to work for them?”

So once you have a better definition of your recruiting problem what do you do next?

• If your challenge is Definition, be sure you are working with someone who is thorough in understanding the job before they begin recruiting. You are at risk if all you had was a 15 minute phone call with the recruiter, or if they never “pushed back” or challenged your thinking.
• If your challenge is Sourcing, be sure you understand how compelling your job will be to candidates.  Most hiring managers overrate how attractive their job is relative to other opportunities in the market.
• If your challenge is Selection, be sure you have confidence in the person who is pre-screening candidates for you.  Challenge their thinking to be sure they are looking at candidates the same way you will.
• If your challenge is Decision Support, be sure you are working with someone who has a process to resolve those differences.  Winging it and hoping for the best is not a strategy.

An Executive Search Firm Leaving Money on the Table? Huh?

Let’s play a word association game.  I’ll say a phrase and you think of the first thing that comes to mind … Ready? 

“Retained Executive Search Firm”

Hey, by any chance did the words  “bargain” or  “great value for the money” come to mind?  No?

The Economist recently published a jaunty little analysis comparing the societal benefit generated by IBM during their first 100 years of existence, vs. the benefits generated by that “flagship of American philanthropy” – the Carnegie Corporation.  And while it was an odd pairing,  it was a fascinating perspective on how corporations can potentially make a larger positive impact on society than even a major philanthropy.   (Key word: Potentially)

In gauging the impact of IBM, the article used a term I had not heard before - ”consumer surplus.” 

“… companies create what is known as “consumer surplus”—the difference between the market price and what a consumer would be willing to pay. This surplus benefits society, not shareholders.”

Southwest Airlines and Costco regularly create a consumer surplus.  Lots of organizations are organized to generate a consumer surplus.  You recognize it as a customer when you get that thrill of feeling smart – knowing you are getting more than what you paid for.    But to create it, a company has to “leave money on the table” and not harvest every last nickel from every last transaction.   Companies must design their process to leave money on the table … on purpose.

Creating consumer surplus is definitely not something that most retained executive search firms are good at.   (If you want to understand why executive search remains so stubbornly expensive, read my post in Fistful of Talent about the two biggest myths in executive search).

Who is the Heart of your Company?

Ellen, our Operations Manager just returned from maternity leave.  We muddled through just fine while she was out, in fact we had one of our busiest months ever.

Ellen did a great job dividing up her workload and cross-training everyone before she left.  We all knew who has responsible for everything and it all got done.  

But while she was out, we were all just a bit disconnected from each other.   Our collective go-to person was missing.  We had all our highly effective people working in isolation, but without the glue.  We had lots of successes, but less job satisfaction.  It was, quite simply, less fun for all of us.

I knew Ellen was valuable to us, but it was really fascinating to discover that so much of her value was completely separate from the tasks she completes.  (You never find that sort of thing on an organization chart or in a job description).

Do you have someone who is the heart of your company?

How Corporate Recruiting Budgets Are Wasted

A big chunk of corporate recruiting budgets are wasted … but not by HR.  It’s the hiring managers who lay flame to it with actions like starting the recruiting process without a clear job definition, stacks of resumes going un-reviewed, and indecision with scheduling interviews.  

But does HR get any credit for allowing hiring managers to be so reckless? Heck no.  The Corporate Executive Board is reporting that fully two thirds of hiring managers are dissatisfied with the influence recruiting has on their organizations.    

If you work as a recruiter in a large organization, you work at a massive disadvantage.  If your hiring managers are unresponsive, unrealistic, or indecisive, you still have a responsibility to fill their job openings.   Sure, over time, smart recruiters can build influence with hiring managers … but they rarely have the clout to say “Sorry Jim, your search is not workable until we resolve these issues.”

As the owner of a retained search firm, I have recruiting advantages that most corporate recruiters would kill for.  First I can improve a process, introduce a new productivity tool, or allocate more recruiting resources whenever I want to. But more importantly, I can choose what searches we accept.  Before a client engages us, and before we accept a search, we spend two hours with all the hiring stakeholders:

• We have time to discuss the year one performance expectations, challenges, and what a top performer would find attractive about the job.
• We can review ideal candidate profiles with the hiring manager, so we know how they will evaluate resumes.
• We can put time on everyone’s calendar for interviews, and everything else we need to move the hiring process along.    That’s right, we pre-schedule interview time, so we don’t have to beg for hiring manager time later in the search. 
• We can align salary expectations with market realities, and make the necessary trade-offs that happen in every hire – but we make them before we start recruiting.

We require the ability to make these critical trade-offs before we start recruiting because we know that faster hiring speed cuts the total cost of recruiting in half.

Taking Action vs. “Thinking”

Almost everyone I know is really, really busy.   It’s hard to find time to think, so  tasks that can be done without much thinking end up getting most of our attention. Things like hiring, that require deep thought,  just slow us down.  So we set them aside for later, saying “I need to think about that some more.” 

It all sounds so … thoughtful and responsible.   

Except, like Winnie the Pooh, “Did you ever stop to think, and forget to start again?”  

Hiring new people is risky and often a bit unfamiliar to managers.  It’s not “on fire” so in most organizations you can get away with delaying for a good long while.   You can’t really ignore it completely, so you tell yourself  “I’m thinking about the job description.”   or “I’m still thinking about who I want to interview from that stack of resumes.”  or “I’m deciding who to bring back for a final interview.” 

And three months later the job is still vacant.  

As it turns out, you were not “thinking” at all.  You were simply delaying  … and making the problem worse by not taking decisive action.

So when you catch yourself saying “I want to think about that” I suggest you do what we do at Staffing Advisors.   When something is important but unfamiliar, when we might find ourselves procrastinating, we just turn it over to our scheduling mavens – our Project Coordinators.  They grab our Outlook calendars and schedule time to deal with it.  When the Outlook event pops up, then we ”have time” to think about it.  We deal with it, and move on.   This keeps our projects running on schedule, and frees our attention from trying to remember all those things we “have to think about.”   We either handle an issue right now,  decide not to handle it at all, or schedule a specific time in the future to handle it. 

Because long ago, we realized that “thinking about it” is not really doing anything at all.

Why is Executive Search so Expensive?

Once upon a time, twenty years ago, in a backwards country called telephone-land, all your news came from a thing called a newspaper.  And all your mail was delivered by the postal service.  And the telephone (land line of course) was the fastest way to reach someone.   Yes, twenty years ago, finding candidates and presenting job opportunities over the phone was a pretty expensive thing to do - so executive search services had to be expensive.  

But now, if you live in a place I call “the world,” your news comes to you on your computer, most of your mail comes to you on … your computer (or your phone), and, if you still have a land line, your telephone calls disappear into a place called voicemail.

So if all the technology to find and reach candidates has changed, why is executive search still so expensive?

There are two big myths that have prevented executive search firms from using technology to lower the price of executive search.   But you’ll have to read my guest post on Fistful of Talent to find out what they are.

Who is your Staffing Consigliere?

I have a confession.

I’m don’t think of myself as a Headhunter or Executive Search Consultant.  I think of myself as a Staffing Consigliere – like Robert Duvall in the Godfather.  (That’s him … quietly in the background).  

For those of you who don’t run organized crime syndicates … or go to the movies:

A consigliere is “a close, trusted friend and confidant, the mob’s version of an elder statesman. He is devoid of ambition and dispenses disinterested advice.”  (From Wikipedia -  the repository of all human knowledge).

How do I know I’m a consigliere?  Because senior executives call me every day to get perspective on complex, emotionally charged, high stakes problems.   They don’t just call when they need to engage us for a search, they often call me just to talk them down off the ledge. 

This is personal, I don’t do this for strangers, but my clients know they can call me without it turning into a “sales call.”  The cash register doesn’t need to ring to get my attention.  I just solve the problems, and the money takes care of itself in the long run.   

Sometimes it’s a hiring manager who is desperately afraid of making another hiring mistake.  I just talked to someone who had engaged another search firm to help them fill a very specialized job.  They were coming into the interview sequence and looking for a pre-employment assessment tool or anything that will help lower their risk in this high-stakes hiring decision.   In fifteen minutes of conversation we developed a much simpler solution.  (Again, this call was not about one of our searches, it was just an executive calling for advice).

Sometimes the call comes from a senior executive who is considering quitting their job (again, not the people we’ve placed, just colleagues).    They need perspective because the pressure on them is so intense.

• “Is this job salvageable or should I pack it all it and work at the local wine store until I get my next VP gig?” 
• “Is it time I tried my hand as a consultant?” 
• “How would my resume look if I quit now?”
• “How’s the job market looking for someone like me?”
• “Hey, quick question, I had a headhunter call me and they said …. should I believe them?”

Often I will tell people what they don’t want to hear.   “That key executive you are so happy with?  That’s the source of your problems.”  Or “If you quit now, you’ll make yourself far less marketable.”

So who is your consigliere? 

Who do you trust for informed, unbiased advice about the job market, about your own marketability, and for agenda-free advice on how to handle a complex staffing problem?   Because if your vendor relationships are with people who you don’t really trust, or people who just agree with you, or worst of all – people you trust who are uninformed,  then you are not getting full value from your vendors.

Because while many people think work is “strictly business” we both know, it’s personal.

Who’s That Driving Around in Your Employment Brand?

Hiring managers, who is that behind the wheel of your employment brand?  You’ve had 5 internal meetings to discuss the language on your new website, but then you hired a contingent recruiter to work on your job opening after talking to them on the phone for what, half an hour?  

What exactly are they telling people about you, your company, and your open job?

When you engage a search firm, you hand over your reputation as an employer.  They are authorized to represent you (for the duration of their engagement).  It’s like handing over the keys to your car … with your company name emblazoned on the side of it.  They ARE your employment brand while they are behind the wheel.   And remember, they are talking to a lot of people about your company.

So how much control do you have over what they say?  In most cases, none at all.  So yeah, you probably want to know who you are dealing with, what their reputation is, and precisely what they will say about your job opportunity.

At Staffing Advisors, we craft a written marketing message for you, and give you a chance to look it over before we use it.  (You told us that you offer great work/life balance, but really don’t want to want to over-promise that?  Ok, no problem, we’ll delete that sentence…).  We want to be sure the message sets the right tone for skills, performance expectations, cultural fit … everything.  

Then, when we deliver the message, someone with real credibility reaches out.  Kelly Dingee, our Strategic Recruiting Manager has real digital credibility.  She writes well enough to meet Jessica Lee’s demanding standards at Fistful of Talent (no easy feat), she was named one of the Top HR Digital Influencers by John Sumser over at The HR Examiner, and then publicly praised this week by both Kris Dunn and Glenn Cathey - that’s doing pretty well with HR’s digital royalty I’d say. 

So yeah, Kelly looks legit when she reaches out to someone.  And that is reflected in how people respond to her.  (Test this for yourself.  Google the name of whoever you are trusting with your brand.  That’s what smart candidates do before they respond.  So how does it look?) 

We’ve connected with over 25,000 candidates this year (people who were referred to us, or people we reached out to).   I hear about every single person who has had a complaint with the service.  This year, I talked to less than a dozen disappointed people – that’s less than one in two thousand who had a complaint - and remember, 24,900 of those people ended their experience with us by getting a rejection letter.   

I’m not saying you need to hire us to protect preserve and defend your employment brand (although that is an excellent idea), and I’m not bashing how other search firms do business (Relax third-party recruiters, I’ve said for years that the contingency search model is perfectly valid).

 I’m just saying you need to think harder about who you let drive your reputation around.  Because it matters more than you may realize.

The Recession is Over … As a Retention Tool

The recession is over … well, at least as a recruiting and retention tool for employers.  If you are hiring, you can’t miss the pronounced shift in the DC job market.  This year the power is shifting back to the job seekers.   With the national economic news still looking dicey, how can this be happening?   We explain it all in our monthly client newsletter, and you can read it here.

10 Signs Your Search is “Going Off the Rails”

Every week I get at least one call from a frustrated HR executive or hiring manager who has just had a search “go off the rails.”  Disappointed and at their wits end, they call me.   And in about 10 minutes I usually have a pretty good idea what was not working for them … because most searches don’t fail suddenly and for mysterious reasons.  Most searches fail for fairly predictable reasons and they often give quite a few warning signs along the way.

So, help keep your searches on track, here are 10 common warning signs that signal your search is heading for trouble.   Hopefully you won’t have to waste three months on a doomed search, because as you will see, most of these warning signs actually appear very early in the process. 

1. The hiring manager either never defined what they were looking for, or key managers disagreed on what they were looking for.   A sure sign of  trouble is an old, borrowed, or vague job description or one that is mostly a laundry list of qualifications.   (Be sure you know what is expected of new hires and how their performance will be judged before you start recruiting and outreach).
2. The primary “recruiting” method was to post a dull job description on job boards.  Bad ads attract bad candidates - period.  (Be sure you also reach out to the networks of your current employees.  You simply must look beyond job ads if you want to develop a strong candidate pool).
3. After weeks of collecting resumes, nobody has looked at the resumes yet.  (Be responsive, get back to people quickly – good people almost never stay on the job market very long.  Think about the impression you make on candidates with a haphazard, sluggish, indecisive hiring process. )
4. Resumes are screened looking for “the perfect fit” instead of looking broadly at qualifications.   Hiring managers often try to use the resume to make assumptions about the candidates, rather than actually talking to the candidates.  Often hiring managers pre-judge a candidate by their title alone.  (The resume never tells the whole story and most attempts to “save time” by carefully screening resumes … only wastes more time.)
5. Hiring Managers did not pre-schedule interview times, so when a good candidate comes along, it can take weeks to get them scheduled for a first interview.  Then long lags occur between first and second interviews.     (Schedule your hiring process like you would schedule any other project. Cluster your interviews into one week, so you act decisively and move quickly from first interviews into second interviews.)
6. Qualified, interested candidates are ruled out of consideration based on the budgeted salary number, instead of looking at the most qualified candidates, and then determining the fair “market rate” for their skills.   (Ignoring market realities and hiring to fit the budget often leads to hiring the wrong people, chronic turnover and poor productivity – it dooms a search right from the start.   Sometimes smart hiring requires the courage to stand up to internal politics and fight for the budget you need.)
7. Hiring decisions were made based solely on an unstructured interview with a busy executive.  (See what the research says on that – the unstructured interview is only the 9th best way to predict job performance.)
8. At the end of a long, grueling interview sequence there is only one finalist, and you have serious reservations about their ability to do the job.
9. References are not checked, and background checks are not performed before making the job offer.
10. Salary negotiations are left to chance, and not addressed early in the interview sequence.   (Never make an offer without knowing how it might be received).

Consistent, predictable hiring is not only possible – it’s a business imperative.  So if you are settling for anything less, maybe you should stop and look at the staggering cost of an executive mis-hire.

Why Pay a Search Fee When You Can Do it Yourself?

My new clients are often referred to me when they are at their wit’s end.  When they have looked and looked everywhere to find that one great employee and have been disappointed.  

They come to me when they are frustrated by their own search process dragging on month after month without success.  Only then, do they reluctantly consider paying an agency fee to get some assistance. 

“Well of course!” you say.   ”Search firm fees are so expensive!  Why pay someone else to do what you can on your own and save all that money?” 

Let’s examine the logic there.  

• First, is a search firm really just doing the same thing you would do?  Are they just saving you some work -  or is their approach to recruiting fundamentally different than your approach?  If they are just doing the same work you are doing … with all due respect, you are using the wrong search firm.   Your search firm needs to know a heck of a lot more about hiring than you do.   Not just recruiting – because great recruiting is not enough.  No, a search firm needs to fully support your entire hiring process  (your hiring managers are stressed and understaffed, remember?)
• Second, are you really saving any money filling your most critical positions  by yourself?  Leaving a critical position vacant for 4 to 6 months – producing no results, inflicting barely qualified candidates on your understaffed hiring managers,  forcing your already understaffed HR team to spend days plowing through a numbing mile-high stack of bad resumes instead of doing productive work, creating ill will among hundreds of job seekers who did not even receive an acknowledgement of their job application … only to end up hiring some ”best of the worst” mediocre candidate.   Yeah, that sounds like the pinnacle of fiscal prudence right there.  Hey, just because your hiring problems are not visible on your profit and loss statements does not mean that poor hiring practices aren’t costing you a fortune.

So if “saving money” isn’t really the issue, what is the real problem with paying search fees?   (Don’t tell me about your budget.  Of course you can afford the fees – once a position has been vacant a little while, all the money you saved not paying a salary can easily pay the agency fee.  In our case, once the position is vacant for about a month you can afford our fee – and our searches typically complete in just about a month - see how nicely that all works out?  But I digress, now let’s get back to the point of this blog post.)

I think the real problem is not the amount of the fee, but rather the perceived value of the service relative to the price.  Many search firms just do not appear to be a good value to hiring mangers.   “You present me a guy who has been lying around in your database for 3 years and then you charge me 30% of annual salary for it?  What did it take you?  A couple of hours?  That just does not feel like a good deal!”   

It’s true.  That kind of recruiting fee does not feel like a very good deal.   It might get a great outcome, it might be the only way to find a top candidate, but it does not feel very good to the manager paying the fee.

Now let’s look at what our existing clients do:  They don’t beat their head against the wall trying things on their own month after month.   When they invite us to help them with a search, it’s almost invariably at the beginning of a search, not after they tried it on their own.  So what’s the difference?  The difference is that they know the value of all the services they will get, know what the caliber of candidates will be, know how much faster our hiring process will be and they know they will not feel like they overpaid.  

So let’s agree, it’s not about the money – it’s about your perception of value.  The next time you have a critical position to fill, would you pay a search fee if you were absolutely certain that you would end up with a significantly better person hired than you could possibly have attracted on your own?  What if you could get that great person hired far faster than you normally do, spend less time on the hiring process and never have to look at a stack of resumes?  Further, what if your new hire was guaranteed to get results for at least a year or you could replace them at no cost to you?   You’d probably feel pretty good about paying that search fee wouldn’t you?  

So if you are feeling uneasy about paying a search fee, maybe it’s not the fee.  Maybe you are just talking to the wrong search firms.

The Job Market Is a Big Game of Musical Chairs

Robust economic growth and job creation is a wonderful thing, but 2010 is not very likely to look that way.   Yet I still firmly believe (and wrote in our job seeker blog) that 2010 looks good for job seekers in the Washington DC metropolitan area and probably in lots of other areas.  Why?

Churn.  Turnover.  The 2010 job market (for skilled professionals) is going to be one big, global game of musical chairs.

Let’s play it out:  One person (call him Adam) gets fed up and quits, or retires.  The second person (call him Bob), sees Adam’s job and says to himself “Hmmm, that sounds better than my terrible job” so he quits his job and takes Adam’s.  The third person (let’s call her Carol) says “Wow, that open job Bob used to hold (that made Bob miserable) is actually a big step up for me and I’d be happy to have it.”  And so on, Dave takes Carol’s job, Erin takes Dave’s job, Fred grabs Erin’s old job and so on.  Play this out and millions of people quit their current job to accept a new (to them anyway) position … but in reality no net new jobs were created.

This is a fantastic time for employers to trade up from lazy, disgruntled Adam to hard-working Bob, or from hard-working but dim-witted Bob, to witty and intelligent Carol, or from high-maintenance Carol to steady competent Dave.  In fact the resignation of every average (or misfit) employee is a gift to employers.   Over a year ago, I wrote about what a golden opportunity a recession provides employers.  You can trade in disgruntled mediocre performers and hire top performers.   Few employers took advantage of that opportunity in 2009, but with the turnover in 2010, everybody has a fresh, new opportunity to make trades.  The key to success, of course, is to use a better hiring process than the one you used when you hired average people in the first place.

Full disclosure here:  Churn is also a gift to executive search firms like ours, who are starting to see business increase, despite a lack of overall job creation.  In my more jaded moments, I acknowledge the harsh reality that search firms earn most of their fees from churn – to make a decent living in the search business we don’t need net new jobs created, we just everyone to change jobs.   (NOTE: I am, EMPHATICALLY, NOT talking about the people WE placed into jobs – we really want them to be happy and we NEVER recruit them away from where we placed them.  In fact we obsess over our long term retention rates).   We are also NOT talking about retention rates at our current clients, all through 2009 we were warning our clients about the looming turnover crisis and sharing information about how to retain their top performers.  In fact, we devoted half of our November newsletter to that very topic.

But … if you are not yet a client of ours  … we’d be delighted to show you a better hiring process, and help you trade-up when your average people quit … even though we’re kind of busy with all these new searches right now.

Why You Need to Keep Score

As human beings, we don’t like looking at our failures.  So we tend not to keep score, or create hard metrics for our own performance.  We’d rather not think about our mistakes and prefer to focus our attention on more pleasant things.  

And while not keeping score may be pleasant, it’s also very expensive.  Because hidden in your failures are some positively huge expenses, and some really valuable lessons about how to prevent similar mistakes in the future.

I recently helped a client analyze the cost of their hiring mistakes, and also the cost of their hiring delays.  It took a few weeks to go back and gather some data about hires, terminations, and lag times between various stages of the hiring process.  And it took a day or so to pull it all together and get it into a spreadsheet.  

We found hundreds of thousands of dollars in (preventable) lost profit.   We found more money than the entire annual budget for the HR department.   Much of the lost profit was in places that were not even considered a “problem area” before we rigorously looked at the numbers.   This is in no way unusual, in fact, I have yet to do one of these projects for a professional services organization where we did not find hundreds of thousands of dollars of lost profit.    Now my client knows exactly where to focus their attention to recover all that lost profit – and that’s great news.

Numbers matter.  So as a big fan of rigorous metrics, you’d think I’d be happy to look at my own data.    I’m not,  I prefer to avoid it.  So knowing that, I set up a process where I have to look at it.   Ellen, our Operations Manager, gathers and publishes our statistics regularly.  Everyone in the company can see the data, and when I look at it  I always find a surprise, some area where I can do better.   I always learn something that I would never have learned otherwise.  For me, failure is a great teacher.

So today, Ellen and I reviewed the retention statistics on our placements.  I must tell you, this is much less fun for me than it was before the recession because we count layoffs against our statistics.  (I think performance problems are often buried inside of layoffs, so we count them ‘against’ our numbers).

And although the search industry prefers to look at retention rates for 18 months, we look at them for 3 years - anything less just lets us off the hook too easily.   Our promise is to help our clients hire people who get results, and it’s devilishly hard to measure real results and long term contribution during an executive’s first eighteen months on the job.   So if we only counted retention rates at 6 months or a year, we would not learn much about how our placements actually contributed to our clients getting results.  

So here are the retention stats on our placements:

• 91% are still on the job at 12 months.
• 90% are still on the job at 18 months.
• 85% are still on the job at 3 years.

I must tell you, these numbers were much better last year, so this was painful to look at, but you know what?  I learned something by forcing myself to look at them.   By sharing them with you, I am challenging myself to further improve next year …. and that’s the real reason you can’t afford not to keep score – it’s fuel for improvement.

The Staffing Advisor Now in Alltop

What’s happening in the world of HR?   It can be hard to keep up.  Now Alltop makes it easier by collecting the latest stories, best sites and blogs on all things HR related.   And now you can find us there too … right along side the people who actually belong there.