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.

 

Employee Recognition Program 3 Reasons Why it Works

Employee Recognition Program 3 Reasons Why it Works

A well designed employee recognition program results in higher levels of engagement have proven, repeatedly, higher levels of employee satisfaction, greater increase in productivity, greater company loyalty, higher profits, and better customer satisfaction.

Let’s look at the facts. In 2013, a poll conducted by Gallup found that 87 percent of workers surveyed in countries all over the world were disengaged with their jobs. Only the remaining 13 percent stated that they were satisfied with their jobs and felt deeply engaged with the companies they worked for.

One of the best ways to increase engagement is to make sure that employees feel appreciated and that hard work is suitably rewarded both financially and in some other ways. Having a strategic employee recognition program in place is one of the most effective ways to get results and take advantage of the following three key benefits:

Employee Recognition Program Improves Business

 

It shouldn’t come as any surprise that happy and motivated employees are better equipped to address customer concerns. Staff members need to feel that they have personal stake in selling the brand and its products and services, while also offering impeccable customer support. Around 40 percent of companies that have adopted a peer-to-peer employee recognition program claim to have increased customer satisfaction.

Many senior managers consider them an investment rather than an expense. People want to be rewarded for good work and they’ll be mentally far better equipped to face the monotony of modern corporate culture if they know there’s a good bonus and other rewards waiting for them.

Decreases Employee Turnover Rate

 

While money is obviously a primary motivator in almost any job, offering a pay raise isn’t the most effective method to hold on to employees. In fact, studies have shown that about half of employees leave within two years after accepting a raise, a statistic that clearly indicates that salaries and job satisfaction don’t always correlate.

Often as important is employee recognition, which has proven to lower turnover rate significantly. Employees who are widely recognized and rewarded for their work are about 30 percent less likely to leave the company.  Other benefits of an employee recognition program include increased happiness and productivity and reduced stress and frustration levels. A lower turnover rate also saves money, since a direct replacement cost up to half the previous employee’s annual salary.

Increase Engagement and Productivity

 

An employee recognition program is all about clear communication, transparency, and having a solid rewards-driven system in place. Such a strategy leads to greater employee engagement, since it makes members of staff feel like they’re a part of something bigger.

Employee Recognition Program

An employee who has a personal stake in the direction the company is heading will be genuinely concerned about the day-to-day operations of the business.

By contrast, someone who counts themselves in the 87 percent of people who claim to be disengaged with their jobs will be more likely to sleepwalk through each workday while looking forward to nothing more than the paycheck at the end of the month.

Additionally, the Gallup survey showed that two-thirds of employees considered praise from managerial staff to be the top motivator.

Final Words on Employee Recognition Program

 

There are many ways to implement an employee recognition strategy and most of them don’t require a huge investment. Some of the most popular methods include publishing the company’s greatest achievers in email newsletters, using staff meetings as an opportunity to include praise, or preparing regular status reports. However, a more original and engaging employee recognition program might include an achievement- or score-based system complete with rewards and prizes for top workers.

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