Sourcing Strategies for the New Economy

Are you ready for the upcoming recovery? If your primary sourcing technique is to find active candidates through ads, you may soon find this tactic is insufficient to meet your basic hiring needs. First of all, here are some basic indicators that the economy is recovering:

  • Everybody is writing about it. In the first week of May, 2002, Business Week, the LA Times and the NY Times all had articles about the improvement in the hiring outlook. The Business Week article was especially relevant in describing the reasons for a tightening employment market.
  • Candidates start calling to cancel interviews, mentioning they have just accepted other offers.
  • A decline in overall responses to ads, combined with a bigger decline in good candidates.
  • Candidates stop returning your calls after submitting a resume.

There are probably other more accurate indicators, but these should suffice as good early warnings. With an economic recovery and long-term demographics making the labor supply tighter, it’s important to start now to develop more sophisticated sourcing strategies. In a slow economy, you can find great candidates on the jobs boards. A decent ad, an adequate recruiting process, and reasonably competent interviewers is all it really takes. When supply for good talent exceeds demand, it doesn’t take much to hire top people. Hopefully, you took advantage of this situation and proactively eliminated the bottom 15% of your labor force, replacing them with some top performers. If not, it’s now too late. However, it’s not too late to begin planning for the upswing. Over the next three to six months, how you find and hire top people will change dramatically?? and, except for temporary slowdowns, forever. Here are 10 things you can do now to minimize the impact of fewer top candidates actively pursuing new jobs:

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  1. Write outrageous ads. Make sure your ads are fun to read and compelling. The best people will continue to look at the job boards, but if your ad doesn’t stand out, it won’t do much good. Long titles work best. Make sure the ad copy focuses on what the person will learn, do, and become. Reduce the emphasis on skills. Here are some examples of good ads.
  2. Upgrade your website from a process standpoint. Make sure candidates can find job opportunities within three to four minutes and apply quickly. The best will opt out if it takes longer than this. Treat these candidates as customers; don’t ask trivial questions (like drug test, relocation, amount of skills, etc. Email me at lou@powerhiring.com if you want to know when you should ask these questions). Fifty percent of your candidates will opt out from the application process if it’s cumbersome or demeaning. Unfortunately, the ones who drop out will be the better candidates.
  3. Add job branding to your website. Make sure the web page with the job listings tells the prospective candidate why this class of jobs is important to the company’s success. Link these jobs to the company vision and strategy. This way, candidates are more likely to spend time looking for a job that matches their interests. Something like this works well: “Our engineering team is designing the next wave of game electronics. You’ll find your next career on these pages.”
  4. Move fast. As the economy strengthens, the best candidates will get multiple offers. Speed counts. Get to them fast. First contact must be made within 12 to 24 hours after the person applies. Try for the same day with a phone call.
  5. Conduct a critical job-needs analysis today. Talk to all your hiring managers and find out now who they’ll be hiring in the next 60 to 90 days. Do this before the req is approved. Then start building a pipeline of these candidates.
  6. Expand your networking; get on the phone. You’ll need to be better at networking than ever before. Read my article on networking to help you get started today. Start calling 20 minutes later. Speed counts.
  7. Build a pipeline. Build a database of five to ten people for every open position you’ve identified on your critical needs list. Use advertising, networking, employee referrals, and anything else you can think of to get candidates into the funnel. Nurture everyone in the funnel on an ongoing basis.
  8. Upgrade your employee referral program this week. Make it more formal, talk about it, get top executives involved, improve the tracking, take an employee satisfaction survey, and personally talk to each employee in your company and get three to five names from each one. Don’t wait for them to give you the names; there won’t be enough. Recruiters work hard to get good names, so you need to be good at this part. This is the key to an effective employee referral program. Then, let the recruiting team make the calls to these people to expand the network.
  9. Anticipate an increase in turnover. The best people you have just hired will have other opportunities within the next three to six months. If you’ve hired some hot people, make sure you expand their jobs to minimize the chance that they’ll leave.
  10. Evaluate your recruiting team. Do your recruiters develop their own candidates, or do they just work responses from ads? Put your best on the phones to network. Create specialists and have them build their own pipelines of top candidates. Reward them for quality of hire and time per hire, but not cost per hire. Hiring managers should be looking for top candidates, not warm bodies.

As you do all of these things, I’d suggest you immediately eliminate cost per hire as a measure of hiring success. This is a bad metric in good economic times. In fact, it’s counterproductive. Here’s an example of why. We did a recent study of top salespeople across a variety of industries. On average, the top one-third sold $650 thousand more per year than the bottom third. This equated to about $300,000 more profit per salesperson per year. In other words, if you’re hiring 10 salespeople, this equates to a $3 million increase in profit year after year. Just imagine the impact of hiring 100 sales people or 1000. Cost per hire is meaningless if you’re hiring top people. It only counts if you’re hiring average people. The same profit impact is true for engineers, software developers, marketing people and any other important function. Managers who hire these top people have an even more significant revenue and profit impact. And this positive revenue/profit impact happens every year. That’s why cost per hire is a terrible way to judge the effectiveness of a recruiting team. Instead, focus on quality and time per hire and you won’t go wrong. Even if you pay $5,000 to $10,000 more for a top-third person, you’ll get the investment back in a few weeks! Collectively, these 10 steps will buy you some time. Good recruiting is not about posting ads. In weaker economic conditions, this can be a good source of strong candidates, but once this supply runs out it will be ineffective. Recruiting requires networking, consultative selling and forward planning. With these programs in place, you’ll have a foundation to build a flexible sourcing program that you can depend upon as the economy strengthens. Start today. It will soon be too late.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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