talent management

How do you know if your recruiting strategy is about to fail?

A collaborative blog post with Pete Smith.

Before the holidays, we were talking to a manager who was bemoaning their workload. On top of everything else, they were conducting candidate screening interviews because they had four open positions and their internal HR team was too busy to get the screening interviews done. Kudos to the manager for picking up the slack—but as a CEO, is this how you want to run your company? 

In our last post, we asked: Would you run your sales process like you run recruiting? We are in a talent war. Tech CEOs know this, yet most lack metrics to understand whether their recruiting process is working well, about to fail, or already on life-support.

No CEO runs their business by periodically looking at their financial results to see how they performed. Instead they use forward-looking metrics and trends such as size of their sales pipeline, average time to close a deal, average deal size, and the trends underlying these metrics to predict their future financial performance.

The same goes for recruiting. If you aren’t already tracking, measuring, and diagnosing your future recruitment success, here are six metrics to get you started.

1.      Is your time-to-hire more than 52 days?

52 days is the average time-to-hire, and that metric hasn’t changed much over the past ten years. Obviously there will be outliers (such as an average of more than 250 days to hire a sales rep in San Francisco), but this 52-day benchmark provides a good diagnostic to understand whether your recruiting team and hiring managers are executing well.

2.      Are 90% of the applicants for any open position unqualified for the job?

This metric is the ratio of applicants rejected prior to screening interviews divided by the total number of candidates who have applied. Beyond the obvious waste of time in filtering, a too-large applicant pool makes it difficult to pick the best fit candidates. Hiring managers should spend 20-30% of their week recruiting, but not on filtering applicants. This time is best used on networking, generating referrals, having ‘coffee’ conversations with passive prospects to build future talent pipelines, and of course interviewing only the most qualified (short-listed) candidates. If you can’t map these tasks to your hiring managers’ activities, you have a problem.

3.      Are less than 20% of your hires coming from employee referrals?

If less than 20% of your hires come from referrals, then you may not be tapping into the best talent pool.  Multiple studies show that employee referrals are better quality candidates, take less time to hire and are happier and more productive than other sources of hire.

4.      Do you interview more than ten short-listed candidates for any role?

A 10:1 ratio is very generous. Ideally five short-listed candidates should yield a good hire if your process is working. This metric is calculated from the ratio of candidates hired to the total number of applicants that pass the screening interviews and are recommended for further interviews by hiring managers. Interviewing more than ten short-listed candidates either means that your recruiters and hiring managers aren’t aligned on the job requirements, or that they can’t tell the candidate a compelling story about the position and why they should want it. It could also mean that you are mostly interviewing active job seekers and not searching out enough passive candidates (which are often the stronger candidate). Five short-listed candidates or fewer per hire is a good metric.

5.      Are 20% or more of your job offers declined?

If more than 20% of the offers you extend are declined, you’ll never be able to keep pace with your growth. This may indicate that your compensation and benefits package is not competitive, or reveal that the candidate experience during the interview process is turning off short-listed candidates. Bad reviews on sites such as Glassdoor, especially recent ones that go unaddressed, can also have a big impact in the eleventh hour. 

6.      Is your Glassdoor score higher or lower than 3.1?

If your score is lower than the state average of 3.1 (according to Bersin by Deloitte) your company will raise a red flag in the candidate’s mind. A higher score, coupled with authentic, positive, and engaging employee comments, can mean the difference between a passive candidate rejecting or accepting your request to talk. Current stats show that approximately 67% of candidates use Glassdoor as part of their decision making process, and on average a candidate will use up to 14 different pieces of online information to assist in deciding whether to accept an offer with your company.

If you like our benchmarks, feel free to use them in your business. If your metrics aren’t measuring up, our next post will tell you what you can do to change the game.

 

Kim Benedict                                           Peter Smith

CEO / Co-Founder,                                 Managing Partner, 

TalentMinded Inc                                                   The Meaford Group Inc

Would you run your sales process like you run recruiting?

A collaborative blog post with Pete Smith.

“We are in a talent war”. Maybe you’ve heard this statement recently. We certainly are hearing it frequently from CEOs and other senior executives of software companies. Yet, in this war, so many of the wounds seem to be self-inflicted or from friendly fire.

To win a war, you need to commit resources, take risks, act with urgency and often invoke a flair for dramatic or brazen acts. Sales professionals will say the same applies to selling. We argue this equally applies to talent acquisition strategy and recruiting so our question to you is: “Would you run your sales process like you run recruiting?”

These days, it’s harder to find great talent than it is to find new customers. Recruitment is a sales process. Yet, while leaders state that talent is a competitive advantage, few companies run their recruitment function with the rigor, foresight, or resources that they devote to their sales function. In other words, if companies are losing at the “war for talent,” then they’re doing so not because of competition or external forces, but because they’re fighting ineffectively: no strategy, old and ineffective tactics, poor messaging, and lack of data or forecasts to guide decisions.

To make our point, we would like to compare and contrast typical sales and recruiting processes.

Talking with sales leaders, we’ve found common sales processes and management techniques across industries. Sales starts with defining the value proposition, which is converted into messaging aimed at a target market of prospects to generate leads. Leads are qualified and scored against their propensity to convert to a sale. Through this process, sales professionals create a lead funnel, measure leads against stages in the sales pipeline, and track conversion rates to create a time-phased sales forecast.

Throughout this process, lead qualification is important to avoid wasting time on deals that have a low probability of closing. Urgency is also prevalent in the actions of sales reps in order to keep leads and prospects warm, and moving towards a closed deal. Prospecting is an ongoing marketing and sales activity and rarely will a sales leader say that they have too many leads.

And in today’s world, how many sales organization operate without CRM technology to manage to sales process? NONE.

Now consider your recruiting process and what of the above is missing.

In our experience, companies start their recruitment process at a disadvantage by not articulating their value proposition, or by neglecting to turn that value proposition into compelling candidate-focused messaging. Most companies post an internally written job description—a boring, text-heavy document that describes the tasks, duties, and responsibilities of the role. Rarely will the job posting be a “marketing” document which describes and sells the benefits that the candidate will get from joining your company, such as skills development, career advancement, culture, or environment.

This is analogous to sending out product specifications fact sheet as sales and marketing material in order to attract prospects. It does not work!

Once the job is posted, applications are received, but often one of two things happens: almost no one applies, or there is a flood of applications. In the first situation, recruiters must scramble to find someone, anyone to put before a hiring manager—with no leads, no prospects, and no line of sight on where to find the right candidates. In the second, recruiters are overwhelmed with the task of sorting through applications from people who are unsuitable for the role. In both cases, the hiring manager ends up frustrated: “Why can’t I just see a few great candidates? No one seems right for the job.”

When it comes to dealing with applications, some companies use a screening process based on University marks to complete the initial sort and discard. As Pete argued in his post, "I don't get it: Why are Employers Fixated on Marks", this is the wrong strategy and potentially eliminates great candidates for no other reason than work efficiency.

Where are these companies going wrong? Consider how many sales organizations rely solely on inbound leads to stumble upon them. The answer is NONE. Instead they invest in tools and techniques to help them be found, nurturing campaigns to develop prospects and outbound prospecting to target potential customers. So why do we expect this ineffective strategy, (often called “Spray and Pray”) in which a company posts a job description on multiple job boards and then hope for the best, to work for recruitment?

Your best candidates are likely passive—not currently looking for a job because they are happy in their current role—and need to be identified, nurtured, and encouraged to consider a role with your company. Just as with sales, this often comes down to building a relationship over time, not desperately reaching out at the last minute in the hope of grabbing a “quick sale”.

For example, a small software company could never find enough qualified developers or professional services candidates to meet their growing needs. We recommended to the CEO that he become the face of recruiting. To build a candidate pipeline, he personally spent a summer reaching out to potential future employees on LinkedIn. Although this sounds daunting, it really meant evenings, when he was in front of the TV, with his laptop searching LinkedIn. His search criteria was competitors or companies selling similar software into his target industries and when he found a profile of the current or former employee that he liked, he personalized an invitation for that person to connect. Most accepted. After building a pool of a few hundred candidates, his normal LinkedIn activity of posting relevant, interesting news about his company nurtured these candidates, built their interest and exposed them to current job openings. The result: No more talent storage.

Just as with sales, prospecting should be an ongoing recruitment activity—and rarely will a great sales leader say that they have too many leads. In recruiting, leads are people—candidates who may come work for your company, if not immediately, then in the next six months to two years.

Yet to be able to effectively build a recruitment pipeline of potential future hires, the recruitment team needs to be baked into your company. This means being kept up to date on upcoming corporate changes and new projects, understanding what roles are likely to need new people through growth or turnover, having a line-of-sight on what makes a successful hire for particular roles, and understanding the unique factors that makes each department “tick.”

Armed with this information, recruitment can build a predictable talent pipeline months in advance: developing targeted messaging aimed to the target candidate group (sales messaging), reaching out to potential candidates (generating leads), screening candidates and conducting preliminary interviews (qualifying leads), and targeting those individuals most suited and most likely to consider a role (convert to sales). Top recruiters say that for many roles it may take up to 100 candidates, researched and contacted, to find that one perfect hire. Lead qualification is critical throughout this process to avoid wasting time and energy on candidates that have a low probability of closing.

Finally, if this really is a talent war, you don’t send your army into battle armed with sticks and clubs. Analogous to the sales CRM system, Google AdWords, marketing automation technology and SEO tools, your team needs modern recruiting technology. It starts with an ATS (Applicant Tracking System). If your job posting says “please email your resume to careers@yourcompany.com “, the battle is over and you have lost before the first shot was fired. Other tools your team will also need are social recruiting tools such as premium or recruiter subscriptions to LinkedIn, niche job boards and advocacy marketing tools like Techvibes, a strong employer brand message and sourcing technologies like Entelo - just to name a few.

Again and again, leaders ask, “How can I get the people I need to help my company reach its targets?” The answer is simple: look to your sales process and mirror it in recruiting. 

Kim Benedict                                           Peter Smith

CEO / Co-Founder,                                 Managing Partner, 

TalentMinded                                           The Meaford Group