There is a dark side to a company’s ability to identify and recruit high-potential fully-employed passive candidates. The problem: the fully employed people they’re identifying, recruiting, and hiring now work for your company.
So as LinkedIn’s “auto-connect your employees with every job posting” feature becomes more pervasive, and Doug Berg at Jobs2Web figures out how to get everyone in the world into your talent community, and Monster makes sure your employees see that your competitor’s opportunities are better than what they’re doing now, expect some ugly consequences.
Here’s what I consider the domino effect of what on the surface appears to be a good thing — identifying great people and offering them what appears to be better career opportunities:
Short-term and Narrow Domino Effect
- Increased employee turnover at the professional level.
- Increasing use of counteroffers to retain key employees.
- Across the board salary increases to minimize the “grass is greener” mentality.
- Hire more recruiters to assist filling the open positions.
- Increase salaries and signing bonuses to attract key people.
- Develop aggressive retention programs.
- Turnover rates at all companies increase as employees proactively seek greener pastures.
- Aggressively negotiate offers to compete for people who have multiple offers.
- The use of outside recruiters increases and fees escalate dramatically.
- Ask for increases in your recruiting budget for 2011, now.
Long-term and Broader Impact
- Wage inflation at the company and national level accelerates sharply.
- Succession planning is thrown for a loop as key employees depart.
- Turnover trends worsen as companies hire people for 2-3 year stints. This becomes the new normal for tenure.
- Lack of experienced and capable leaders causes shortages at the mid-management level within 4-6 years, with comparable shortages within 5-10 years at the executive level.
- The U.S. world competitive position deteriorates further.
Some might call this the good old days. But whatever it’s called, external recruiters are having a field day.
Some of these deleterious effects can be mitigated by implementing the Larry Clifton (CACI’s VP of Talent) counter-measure, aka his unspoken seventh law of motion: react first and faster before the other side knows what you’re doing, or be proactively proactive. I call this the “Clifton Rule.”
Geoffrey Moore offers some critical strategic advice on how you should implement the Clifton Rule in his classic marketing book Crossing the Chasm. While the book is geared toward developing marketing strategies for high-technology products, his definition of customer behavior is useful as you increase your level of proactivity. Moore categorizes buyers of technology into these five groups:
- Innovators who try stuff out the moment it’s available. Have you seen the iPad with camera and GPS yet?
- Early-adopters who wait until the beta proves out. They create the buzz. These are the people who bought their iPads earlier this year.
- The Early Majority who recognize a good thing when they hear the buzz. These are the people buying iPads now.
- The Late Majority who wait until the buzz is so loud they’re embarrassed into proceeding. They’ll be buying their iPads for Christmas 2011.
- The Laggards who never hear the buzz, or they’re convinced it’s a passing fad. They’re thinking about getting a cell phone with SMS and maybe email.
With this in mind, and for all of those talent managers and leaders out there, here’s how I’d go about becoming proactively proactive.
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Guide: Practical Tips for Remote Hiring
Become an innovator and early adopter for every new idea that comes up. Be part of the beta program. If you haven’t yet bought into LinkedIn’s talent suite of products or Jobs2Web’s talent community programs, you’re already too late. These products are changing the face of recruiting today and you need to be using them. At best you’re still in the Early Majority, if you act today. (For the sake of disclosure, I work closely with both of these companies, primarily because they’re leading edge.)
Implement PERP. Employee referral programs (ERP) need to be expanded to take advantage of LinkedIn’s auto-matching capability. Get your employees to proactively connect with the best people they’ve worked with in the past, so they’re identified with your open jobs as soon as they’re posted. This is PERP. But remember, other companies are now starting to connect with your best employees, so act yesterday. I’m sure LinkedIn has a heat map that demonstrates your vulnerability, or if not, will soon have one.
Implement robust retention programs. This must be a multi-pronged strategy to prevent your best employees from leaving. As a minimum it needs to consist of these measures:
- Determine if your compensation if competitive. If not, pull a Google and give everyone an immediate increase. This will buy you 3-6 months.
- Increase your internal mobility efforts. Your workforce is tired so you need to do something about this. A recent survey we conducted with LinkedIn indicated that 78% of your fully employed professional workforce was either looking for another job or open to talking with a recruiter about new opportunities. Giving people different lateral positions will buy you an additional 3-6 months. If they’re stretch jobs you’ll gain a year or two. You’ll gain even more than this, if you implement some type of continuous stretching. You’re already doing this for your high-potential group, so it makes sense to broaden this to the top-third of your workforce you can’t afford to lose.
- Sample your workforce satisfaction levels on a monthly basis. On the LinkedIn survey mentioned earlier, we measured employee satisfaction levels in comparison to job-seeking behavior. Surprisingly, those who were most active were not overtly dissatisfied, just more neutral about their future prospects. By tracking satisfaction, you’ll be able to implement corrective active programs once you observer a change from satisfied to neutral. (We’re holding a webcast with LinkedIn on Dec 7, 2010, to review these survey findings.)
- Energize and upgrade your employee satisfaction programs. Your employees are at the starting blocks just waiting for something different to do. Don’t wait for them to leave before you implement all of the great ideas your OD people are now considering.
- Establish a quick-response task force to address those now pursuing other jobs. Figure out who’s ripe for leaving, figure out why, and put in some aggressive programs to stem the upcoming rush to the exit doors. Have a well-thought counter-insurgency plan in place before people start turning in their resignations. Reacting with a competitive counteroffer is the worst thing you can do. By then it’s too late. It still might be appropriate, but if you don’t do all of the above in parallel, you’re just postponing the inevitable.
Stop using skills-based job descriptions to attract, screen, and hire people. I wrote a rather contentious article on ERE recently — “A Zillion Reasons to Eliminate Traditional Job Descriptions“ — that made a convincing case that job descriptions emphasizing skills and experiences are the root cause of turnover. The big point: people who accept lateral transfers, generally active candidates, based on some economic need, do so until something better comes along.
Hire people using the same criteria you’d use to retain them. Top performers tend to like the work they’re doing; there is some intrinsic long-term motivator that keeps them highly motivated; they are respected; their managers support and develop them; and they are provided with continuous growth opportunities. It makes sense to offer new hires these same opportunities. This is the primary reason why I suggest using performance profiles with strong EVPs, rather than skills-based job descriptions for sourcing, screening, and recruiting purposes. A performance profile defines the work the person will be doing defined as a series of projects and performance objectives. Candidates should be screened on this from both a competency and motivation standpoint. The EVP, or employee value proposition, describes why a top person who is fully employed and not looking would want the job. This should represent the core of all recruitment advertising efforts. This approach attracts the best and ensures they’re hired for long-term career rather than short-term economic reasons.
Emerging social media tools like LinkedIn and Jobs2Web are providing early adopters an opportunity to find and recruit everyone else’s best talent. This represents a fundamental shift in the balance of power, and more hiring turmoil can be expected over the next few years. The post-and-pray model of yesteryear is rapidly being replaced by a new version of “poach and prey.” Since everyone will soon have access to the same tools and the same people, the difference maker will be the implementers — recruiters and front-line hiring managers — and companies who have established themselves as early adopters of systems integrating their hiring, retention, and performance management system. However, until internal talent development becomes more important than hiring, our economy is in for a rocky ride.