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Choosing the Type of Search Firm Retained, Contingency, or RPO?

Choosing the Type of Search Firm Retained, Contingency, or RPO?

According to Leadership IQ, 46% of new hires will fail within 18 months. The statistics only get worse.  Take a hard look at the expanded facts as presented by Dr. John Sullivan on ERE. About the 6 Ugly Numbers Revealing Recruiting’s Dirty Little Secret.  Choosing the type of search firm to work with is not an easy choice.  It is astonishing but not surprising.  When the agenda is how cheap can recruiting be done, the results are obvious.

Instead of looking deeply at the process a recruitment firm uses to identify, assess, and deliver potential candidates. When filling a key role, the cost of the fees is the first mindset.  What you should be thinking about is the end game – the services offering differentiation and the results.

 

Does the search firm accept verbatim the job spec verbatim?

 

    1. brief overview of the company culture, benefits, and market position. Rather than on the opportunity (USPs) of what this role will do to elevate one’s career. As well as the challenge being offered to entice interest
    2. Job specs focus on responsibilities when the focus should be on short- and long-term objectives with timelines.
    3. Too much emphasis on boiler plate requirements including skills and experience. The focus should be on prior directly related accomplishments & key performance indicators. What the new hire has done and will do with those skills and experiences. Not simply the number of years he/she has had them.

Simple economics is that the supply of good candidates is low while the demand to fill key roles is high.  As such, using job boards or career websites means that only active job seekers. Sadly in today’s market that is most often the underemployed and unemployable.  Because with low unemployment rates, good candidates are very passive.

They don’t look at job postings and they rarely respond to recruiter type emails. Those who are happy with their role, current employer, compensation; as such they are rarely ever looking for a job.  They are open to a challenge, the opportunity (unique selling points), possibly location, product or service, and company size.

 

Does the search firm have a verifiable track record of new hire retention?

 

It seems odd to me that one would not ask for proof of this.  Case in point is I have a direct competitor who is larger than my firm with more offices.  We both have done retained search for the same client.  We have each placed 3 at the C suite and VP levels.  All three of my competitor’s placements departed within 2 years while the three we placed are not only still there at 3.5 years but have been promoted and are meeting or exceeding the objectives for their respective roles.

What makes the difference?  The search process, assessments methodology, using psychometrics and the type of relationship.  My competitor interfaces with and is managed by the client’s HR group while we work directly with Executive Hiring Managers.    One more thing – look at the firm’s replacement guarantee clause.  If it is ranges from 90 days to one year, that tells you they don’t stand behind their work.  At NextGen Global, we stand behind our work with a 24 to 36 months replacement guarantee.

 

Does the search firm use science based methods and AI to identify team dynamics?

 

Let’s go back to that Leadership IQ study where it found that not only do 46% of new hires will fail within 18 months, but at the executive level it is for lack of interpersonal communications skills.  The truth is EACH team is unique.  By creating a composite of the team profile measuring values, motivations, decision-making traits, conflict resolution skills, relational communications traits, leadership and people skills, the recruiter can then compare the potential candidates’ capabilities to make sure they are either a strong or potential match. Choosing the type of search firm as you can see is part science, part experienced based skill set.

 

Choosing the type of search firm based on niche specialty

 

 

Choosing the type of search firm - Retained Search has a Lower Cost

We pride ourselves on being startup experts.  While we do perform retained and succession bench search for one role at a time, over the years we have partnered with an outsourced HR and payroll services firm to offer Team Building talent acquisition management services for startups with less than 25 employees in the initial startup phase.

We save clients hundreds of thousands of dollars while filling key roles they need to meet customer or product/service design and roll-outs. Our work is primarily with startups, mid-cap, and spin-offs.  We rarely recruit for publicly traded companies or companies large than 5k employees.  The reason is simple.

As entrepreneurs ourselves, we understand how VC and PE forms work, we work often with board members in recruiting entrepreneurs, risk-takers, movers and shakers who focus more on the value proposition of equity and generous stock options based on meeting performance objectives. For large companies the latter are generally limited to a select few senior executives.

The larger the company, the less effective we can be as they tend to want their HR or TA group “manage the recruiter” demanding we adapt our search process to conform to theirs. This is what we call “tying one hand behind my back” syndrome.  We turn down companies asking us to do that.  If you are a large conglomerate or have more than 5k employees, it is best to go with a very large firm for most positions.  However, if you are looking for a senior executive or functional leader who is a change agent, a turnaround expert, a solid risk-taking decision maker or motivator, for those roles your best bet is the smaller boutique search firm.

 

Two neat tricks to help you choose

 

  1. Look at the Linkedin connections of the recruiters you are considering. If you need to recruit a senior executive, does the recruiter have those connections with both your industry and with C-levels?  If the need is to recruit a VP of Sales of a Director of Engineering, do they have those relevant connections”?  You’ll be surprised to find most recruiters’ connections are with Human Resources and other recruiters which means they have few relationships with the type of people you seek.
  2. Does the recruiter have intimate knowledge and experience in your industry? Look at articles and posts they’ve written.  If they are all about just recruiting or job seekers instead of Artificial Intelligence, Wireless, or whatever your industry is, how well do you suppose they understand your products, services, marketplace, or customers>

When you consider the cost of retained search look past the initial fee.  Look at the results of the person hired via the firm.  If the new hire assimilates quickly, is immediately productive, and meets or exceeds the objectives of the role, the cost of the search fee is irrelevant.  And remember, good search firm ONLY recruit “A players” who by definition produce 8 to 10 times more than “B players”.  It’s really a no-brainer in the value.

Performance Objectives Focused Recruiting

Performance Objectives Focused Recruiting

Let’s look at defining the Key Performance Indicators or even better defining how performance objectives focused recruiting can be used in the recruitment screening process.  Many hiring managers and recruiters for that matter have a misconception that these are used only after the hire or limited to executive leadership roles.

To understand why performance objectives focused recruiting is effective, let’s look at a why it should be utilized as enhance both job postings and the screening process.  Typical job descriptions delivers poor results, negative advertising, and lousy applicants. Generally they bespeak of a little company branding, responsibilities, requirements to apply, and a brief overview of benefits.

What does work is to use defining the performance objectives focused recruiting in the job description and developing ideal candidate profiling of a position. The issue is most Human Resource departments, corporate recruiters, and external recruiters lack any sense of understanding of how to analyze how a potential candidate may perform or what they will do to meet those defined objectives.

Performance Objectives Focused Recruiting NOT Requisitions

 

Performance Objectives Focused RecruitingOne of the gurus I learned from to define performance objectives focused recruiting is Lou Adler.  Here is a link to his site.  The best description of the SMART techniques come from Lou Adler’s point of view as I believe he states it best.

What do you want the new hire to achieve with “x responsibility”?  Take each required skill and ask what are the objectives of using this skill and how well the candidate may meet those objectives based on accomplishments and similar tasks performed by using SMART techniques.

  1. Specific – details of what needs to be done (task, challenge, project, or problem)?
  2. Measurable – amounts of change / % of change required
  3. Action – what will the person in this role actually do?
  4. Results – what needs to happen to accomplish the major objectives?
  5. Time – how long will it take from start to finish for this objective to be reached?

Once you have defined the near-term performance objectives, move onto the long-term objectives that will bring real added-value to the company.

Candidate Profiling Performance Objectives Focused Recruiting

 

After discovering how to map those objectives you need to develop the ideal candidate profile. Next we will examine how a retained search firm performs these tasks including:

  1. when and who should be involved in defining the team profile (not the corporate profile but the actual team the new hire will work within)
  2. analyzing behavioral traits of ideal candidates measured against the team profile to determine effect of new hore on team dynamics
  3. refining how performance objectives focused recruiting uses team fit and candidate profiling to target and identify the candidates who can meet or exceed the management objectives.

 

Job Boards Impending Death Recruiting Insights

Job Boards Impending Death Recruiting Insights

From an executive recruiting standpoint, job boards impeding death is apparent.  Job boards have always been a non-issue. The voluminous lists of pedestrian “McJobs” offered on job boards are targeted towards “active” job seekers. Largely all “C players” that make up 55% of the workforce. Who could easily be replaced by automation, software, Ai, or robotics. While they can actively show up and do a job, they add no real value. They are unlikely to contribute to or develop IP, fixing or resolving key issues or revenue rainmaking.  In essence what stockholders call overhead.

To further our assumption, there is empirical evidence that job boards impending death is near. It is agreed they have lost value even for active job seekers, some of the primary reasons being:

  1. Companies using job boards rely on applicant tracking systems (ATS) or HRIS systems. These house, sort, and store applicants and employee records.  This means that your resume must be fully optimized to get past the 3-5 second look to be noticed.
  2. Because of the sheer volume of responses most companies receive, many will only look at the top handful of qualified results. So active job seekers are competing with hundreds, or even thousands of other people for the same job.
  3. A job board submission rarely goes directly to the decision maker or Hiring Manager.  You first must get through the Human Resources or corporate recruiter gauntlet. Many of these are simply not qualified to screen and assess for key roles.
  4. Quality positions are just not posted on job boards.  In fact estimates are that as much as 80 % of new jobs are never listed. Instead filled internally or via networking.  Referrals on the other hand, make up 40% of new hires.

Who or What Caused Job Boards Impending Death?

 

Suspect number one: Social Media

 

One of the key trends that is driving job-seeking is the rise of social media networking. With the right research and approach, a job-seeker can generally locate and connect directly with people and companies.  LinkedIn, Twitter, or Facebook are the go to social networks.  This will hasten Job boards impending death and probably a big bonus for job seekers everywhere. But in terms of executive recruitment, it’s a non-issue. The passive candidates we seek won’t be lurking about in either local in a job-hunting mode.

Suspect number two: the companies themselves

 

Of the thousands of job boards that are out there – from Monster, Indeed and Career Builder to LinkedIn and all the niche sites dedicated to specific industries – there is not one that successfully connects with passive candidates. These A-players, who make up approximately 14% of the workforce, are rarely, if ever, unemployed, and don’t ever use job boards or post their resume online, even if they are searching for opportunities. Of that 14%, only 15% don’t want to move at all, and almost half of them are open to dialogue with a recruiter.

There are a few boards that claim to target passive candidates, but they levy an additional cost on top of your paid recruitment campaign, and still the resulting applicants are (most often) not ideal: they are, in fact, active job seekers and not passive candidates. They now push the idea that new algorithms and predictive data based on utilizing artificial intelligence means they can attract and better match applicants to jobs, yet these are still targeted to those who overwhelmingly use job boards – active job seekers.  So basically, by buying into this thinly veiled cash-grab and stalling job boards impending death, you are wasting valuable time and money when you should be focusing on more traditional recruitment techniques such as networking and relationship building to get the results you need.

Where are all the A-players?

 

The top players, known as “A players” who exist at every level from CEO to janitor, are rarely, if ever, unemployed, they are never actively looking for a job, they don’t post their resume online and they don’t ever use job boards – and for good reason.

For the most part, the job boards don’t do a good job of attracting A-listers. Jobs posted on job boards focus solely on responsibilities, skills required and corporate culture selling points. This amounts to mostly boring descriptions of positions that mention nothing about the actual opportunity in terms of learning or career growth.

Further proof in the death of the job board is their postings also rarely mention “performance objectives.” They rarely, if ever, describe the “team culture,” preferring to use ambiguous terms like “corporate culture,” or “vision,” creating a huge disconnect between our A-players and any available positions.

Be Part of The Team

Team culture is also important, but you’ll never see anything about that on a job board. Individual work groups are unique and have their own “team culture.” A team culture is defined according to the personalities and behavioral patterns of each individual team member, as well as how they all work together.

The only way to determine whether a candidate will fit with a team culture is through personal connection – something you just won’t get with a job board.  When recruiting A-players, you must present them with opportunities that are significant. This could be reflected in title, objectives, location, an attractive company size, growth, and product/service market share, but at least one of these things must be present to assure that you are piquing their interest enough to even have a shot.  As for how and where to find the A-players, if you take away the online and the bulk of social media, traditional recruitment methods always win the day.

Numbers never lie

 

If you’re looking for proof that job boards impending death is near, look no further than your own ROI. Numbers never lie. For every job board you invested in over the course of a year

  1. how many hires occurred?
  2. how much did each hire cost you?
  3. what was the level of the positions you placed from a job board candidate?
  4. were there any critical roles filled? What is the retention rate of those hired from a job board?

 

Most evident is just to take a at Indeed, a job aggregator service and you will find that the same jobs are not only posted by the actual employer / company, but also by numerous contingency search firms. and RPOs  Its recycling the same “C players” – that 55% of the workforce that are bodies and will show up to work to be paid, but contribute nothing to the bottom line.  Once you start crunching the numbers, the evidence will probably give you a clear picture of the unfortunate, unvarnished truth.

 

Personal connections always yield the best results

 

Retained executive search companies have always relied on interpersonal and industry relationships to bring about successful results. As anybody in this niche knows, the discovery of most A-players come from actual conversations that bring forth referrals. Technology has infiltrated our society and industry, changing the way the world around us turns. It is still the tried-and-true grass-roots efforts that win the day.

The verdict on Job Boards Impending Death

 

 

In closing, let’s consider the advantages that a niche, retained executive search consultant brings to the table.  If using a retained executive search professional, the hiring manager doesn’t end up with an inbox full of “flypaper” resumes. They instead receive a shortlist of 2-3 “finalists” who can meet the performance objectives of the position. These people are truly A-players who will produce 8-10 times more value than B-players.

This proves that the result is well worth the placement fee and time investment. Leading us to conclude with confidence that this is a far more valuable. Not to mention a more viable and cost-effective solution over the waste in the death off the job board.

Forward-Looking Interviews Work Best in Recruiting

Forward-Looking Interviews Work Best in Recruiting

The objective is to conduct forward-looking interviews  about what this person would do in short and long term coming on board.  Many recruiters lack depth in screening, interviews, assessments; rarely discover how a candidate will affect team dynamics.

This causes the Hiring Team to waste valuable time in an interview performing screening of candidates’ background and experience.  This tells you that the recruiter failed to do their job.     Which begs the question – exactly WHY and HOW is your recruiter earning a fee?

 

Why do Forward-Looking Interviews Work?

 

forward-looking interviews groupThe recruiter should provide detailed documentation about relevant experience, accomplishments, leadership/staffing abilities, budget/P&L performance, analysis of industry expertise; depth of industry relationships.

For Engineering and Product Management roles, the recruiter needs to document patents and intellectual property development.  In addition, address how they affected product or service R&D, delivery, market impact;  customer / vendor relationships, GTM strategies.

For sales and business development roles it’s all about how did the candidate grow existing or creating new markets, quota vs. actual, average sales volume / sales cycles.

For senior executives the recruiter needs to determine key accomplishments such as turnarounds and growth types; industry leadership by being a major speaker at industry trade shows / conferences and relationships w/ customers, vendors, analysts, and investors.

Doing these allow for the  Board or CXOs to conduct forward-looking interviews.

 

 

Forward-Looking Interviews Get the Best Candidates

 

If the recruiter began the search by identifying the short and long term objectives of the role. everything  else falls into place.   Combine that with scientifically based team profiling and determining a strong team fit.  It is important to know the leadership qualities, relational communications style, decision making traits, selling of ideas or products / services, and conflict resolution skills.  These types of interviews will reveal much more than rehashing what is on a resume.

For an in-depth look at how to utilize proper recruiting methods that will prepare your team to schedule time ONLY the best candidates in forward looking interviews,  please view of download the PDF titled Why Forward-Looking Interviews Work Best in Recruiting.

 

Improve Talent Acquisition with a Competitive Edge

Improve Talent Acquisition with a Competitive Edge

How do you improve talent acquisition to be more efficient, less costly, and produce results when it comes to executive management and functional leadership roles?  Today companies have a hectic schedule due to keeping up with the competitiveness of the industry. Resources and time becomes constricted and companies do not have the time to implement a thorough recruitment and screening process.

Relying upon job boards, LinkedIn, focusing on branding and “social responsibility” on web site career portals brings in hundreds of applicants, but rarely the right applicants and most of those applicants are “C players”, the 55% of the workforce that  can show up to do a job but don’t add to increasing revenues, lowering cost, or creating new intellectual property.

Many companies employ internal recruiters of contract recruiters, and while they can produce more applicants, the quality of the candidates is at best “okay”.  Contingency search firms are internally measured on the number of sendouts (resumes) emailed each day, the focus in on quantity, not quality. If a company must conduct a phone screen, simply put the recruiter failed to do a good job in screening and assessment.

Companies engage a retained search firm to manage the recruitment process and to get down to a shortlist of highly qualified candidates ready for in-person interviews.  Retained search firms that are niche or boutique working in the company;s industry NEVER look at active job seekers who dominate job board and Linkedin job postings, but instead use their vast internal rolodex, identify and cold call, and reach out to those contacts to being them an opportunity and a challenge.

  • Client-focused in time management – retained search improve talent acquisition as we only work on only a few select searches at a time per executive search consultant. Because the lead recruiter has a team behind him, each task from sourcing to pre-screen to deep interviews is assigned.  Since the focus is on quality, retained executive search consultants are not measured by the contingency search firm focus on sending out x number of resumes daily.
  • Industry Expertise in Your Market – possess a higher level of proficiency when it comes to finding potential candidates for a specific niche industry and market.  These firms specialize in what are the trending news in the market, recruiting, executive changes at your competitors, and news about the current and future strategy of your market and your competitors.

 

Improve Talent Acquisition by Elevating your RecruitmentRather than using a typical job description quoting responsibilities and requirements, the approach is to identify team dynamics and documenting KPIs to ensure potential candidates can meet the objectives of the role.

Instead of focusing on a checklist of x number of years’ experience and skills, retained search focus on what the potential candidate will do with those skills to meet the performance objectives of the role rather than just having x years of experience with that skill.

The costs are much lower in the Long Run –  utilizing the expertise of a good recruitment team shows that retained search lowers the expenses used to screening applicants and potential sourced candidates.

 

Improve Talent Acquisition with Onboarding Tools

 

A custom onboarding tool that works is one that uses a psychometric composite team profile with the corresponding candidate profile and performance objectives of the role.  No lengthy involvement of time and effort by multiple executive staff members.  It is customized and easy to use.  It should include a personal action plan for the new hire that identifies his/her strengths and weaknesses and provides the designated mentor with an effective coaching and evaluation tool.

Retained search improve talent acquisition like NextGen Executive Search as clients has shown that the 72% who use the custom onboarding tool realize quick assimilation into the corporate culture and team dynamics, faster productivity, and longer retention.

Final Thoughts on How to Improve Talent Acquisition

 

 This relieves the company’s HR department of the expenditures that are used in screening processes such as background information, investigating previous employment records, filling up Hiring Managers inboxes with unqualified flypaper (resumes).  Searching for the ideal candidate for the job can take a lot of time and expense if the company does it alone.

Much Higher Retention Rate with Low Turnover – retained search improves talent acquisition with a much higher retention rate for candidates they’ve placed (NextGen Global has a 93% retention rate for placed candidate still working after 3.5 years of being hired and 87% still there at 5 years).

Retained search improve talent acquisition with a competitive edge as the people they place outperform, meet, or exceed your expectations and significantly contribute to the success of the organization.  Hiring the right staff, not just at the senior executive level, can propel the company towards success and development, but hiring the wrong ones stagnates the progress.  Improve Talent Acquisition by Elevating your Recruitment on Improve Talent Acquisition by Elevating your Recruitment to improve talent acquisition.

 

Avoid Common Pitfalls that Harm Recruiting Efforts

Avoid Common Pitfalls that Harm Recruiting Efforts

The HR recruiting process with the highest business impact often has a failure rate of 50 percent according to  Dr. John Sullivan on ERE in his article “The 6 Ugly Numbers Revealing Recruiting’s Dirty Little Secret”      In this article we will address the problems in Human Resources and Talent Acquisition and how to avoid common pitfalls to recruiting efforts.  For the company’s senior executives and board of directors, the dependence and overhead on HR internal recruitment and Talent Acquisition groups does not produce the results desired for the company to achieve success.

 

Stop treating every potential candidate as active job seekers and applicants

 

In a soaring economy where the supply of good candidates is far outweighed by the demand to fill jobs (7.5M jobs currently remain open), the company and the recruiters are the seekers, not the other way around.   Posting job openings on job boards and social media by and large generates applicants who are underemployed or unemployable.  Most good potential candidates are happy with their employer, their current role, and are paid well.  These successful people are not looking at job postings and are so inundated by emails and social media messaging from HR, TA, contingency, and RPOs they don’t read or respond.

 

Avoid Common Pitfalls to Recruiting in the HR Process

 

Forcing potential candidates that you’re looking for to go to your website to fill out an application is untenable.  Just because you have an HRIS or ATS process that governs every candidate perform this, remember it is you that came looking for him/her; they are NOT applicants.  And demanding potential candidates at the very beginning to reveal their current compensation is unethical or in many states, illegal.

Avoid common pitfalls to recruiting effortsIf you want to attract the ideal candidates, first HR must stop the age old process of creating job postings and messages that don’t work.

The same old blah-blah corporate culture, responsibilities, requirements, and benefits overview is boring to successful people, whose actual interests will be one of the following: a new challenge, more authority, a particular product or service where they can make an impact on the market, location, company and team size, and a competitive compensation package.  Appeal to their desires to attract them.

 

Failure to build relationships with professionals who can become future candidates

 

The HR recruitment process focuses on building a resume database rather than real relationships.  Good executive recruiters are successful because they consistently foster relationships based on common interests with professionals – not by approaching them as potential candidates but as peers and colleagues within an industry by sharing ideas, making introductions, and asking for their advice.

 

Many Hiring Managers assume they are great recruiters

 

All hiring managers like to think they are excellent recruiters.  But the track record is such that only “A players”, the top 10% of the workforce can claim that distinction.  Think about it – regardless of title your primary time is focused on building sales, engineering, product management, operations, etc.   How can you possibly excel at something you spend very little time doing when retained executive search consultants spend most of their time on actual recruiting.

 

Avoid Common Pitfalls to Recruiting in Dual Role Reality

 

Those dual roles of being a CXO or VP with outstanding capability to lead strategy, manage a team, and deliver while at the same time having the skills and time to conduct recruiting is very, very rare.  Want further proof?  About one-third of the hiring managers today just want a few notes and a resume.  The resume is by far the worst presentation tool ever created.  It is generally a one-size-fits-all document.  It reveals experience, skills, education, and accomplishments.

It is generalist in nature and rarely delves into how a person used those skills and expertise in relation to the objectives of the role you need to fill.  Worst of all…and the reason to always avoid looking at the resume as a presentation tool, is once a hiring manager views the resume, 75% of their mind is already made up.  Makes no matter if you provide comprehensive interview notes, measured KPIs, numbers, relevant details of similar accomplishments, and depth of industry relationships to prove the candidates can meet and exceed the objectives of the role; often their mind is already made up based solely on the resume.

 

Salary ranges and corporate culture fit ignore the rule of supply and demand.

 

Many companies have this set-in virtual stone salary ranges.  Thinking that a cyber wireless engineer or AI architect are just software engineers and must fit within the SW engineering salary range is not reality.  Ask Google, Uber, Microsoft – many of these types of engineers make higher compensation that their boss.  It is reality with the law of supply and demand.  Some companies even offer candidates less than they are making now, believing that the in-person interview revealed how much the candidate liked the company and team and expressed desire to come on board.  It is simply absurd and insulting to offer someone less if in same location where cost-of-living makes no difference.

 

Having HR or TA make offers to candidates is not the right way to go

 

The person who has built a relationship of trust, usually the recruiter or hiring manager, should always be the person to make the initial verbal offer.  When someone in HR or TA group makes an official offer, it is usually someone who has no real relationship with the potential new hire.  The results can often be negative as the candidate feels his/her value is not appreciated and they are negotiating and speaking with someone they do not know. Avoid common pitfalls to recruiting where the HR process often fails by causing the recruiter or hiring manager to have to come in and save the day while the damage has already been done.

 

Low retention rates cause teams to not develop properly

 

Most companies have some type of onboarding but, it is more orientation and documentation.  And even expensive one-size-fits-all onboarding plans fail because they require too many people to be involved.  A custom onboarding plan should always consist of two parts: a self-development plan for the new hire and a mentor / coaching plan for the person the new hire will report to.

This simplifies the onboarding process by focusing on utilizing the strengths the new hire brings to the team creating action plans to address potential weaknesses.  This ensures the new hire’s impact on team dynamics is positive by ensuring the objective of proper onboarding is met, which is to promote quick assimilation into the team, faster productivity, and longer retention.  If you adapt your HR process and learn to avoid common pitfalls to recruiting, you will make a positive impact on your business growth.

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