Contents...Exclusive: Same as contingency with the exception that you are only using one search...

How To Find Great Candidates!

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Contents

Introduction ............................................................................................................................................... 3

Chapter 1: Identifying Candidates ....................................................................................................... 4

Employee Referrals ................................................................................................................................................... 4

Job Postings ................................................................................................................................................................ 4

Resume Search Via Job Boards .......................................................................................................................... 4

Human Resource Department ............................................................................................................................. 5

Linkedin Is A Good Tool For Identifying Candidates. ................................................................................ 5

Third Party Recruiters ............................................................................................................................................. 5

Chapter 2: Working With A Third-Party Search Firm...................................................................... 6

Types Of Search Agreements And Typical Fees: ........................................................................................ 6

Getting The Best From Your Recruiting Firm ................................................................................................ 7

Chapter 3 : How To Determine Best Candidates .............................................................................. 9

Performance ................................................................................................................................................................ 9

Company Size ............................................................................................................................................................. 9

Industry Experience .................................................................................................................................................. 9

Responsibilities........................................................................................................................................................... 9

Interviewing ............................................................................................................................................................... 10

Personality Testing ................................................................................................................................................ 10

Reference Checking ............................................................................................................................................... 10

Chapter 4: Making The Offer ................................................................................................................ 11

Advantages Of Letting The Recruiting Firm Verbally Present Your Offer. .................................... 11

The Offer Process .................................................................................................................................................... 12


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Introduction

This e-Book was written to help hiring mangers enjoy more success in hiring future employees.

Most managers only hire 1-3 new employees per year. With such infrequent experience, it is difficult to become proficient at the recruiting process.

After 18 years as a recruiter and my firm placing 100 or more candidates per year, I am hopeful that my experience will help you hire the appropriate candidate.


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Chapter 1: Identifying Candidates

A review of the six most popular ways to find candidates.

1. Employee Referrals Employee referrals are an inexpensive and effective way to find candidates. Most companies have a formal process for employee referrals and usually offer a small finder’s fee for a referral that is hired.

The downside is that many times the candidates that are referred are not an exact fit but more of a friend of your employee. This is also not a great option for an early stage company with a limited number of employees.

The upside is that you avoided paying a recruiter or job posting fee and you may find the perfect candidate. Regardless it is always a good idea to ask current employees for referrals.

2. Job Postings Posting a job and finding an excellent candidate is like buying a $1 lottery ticket with hopes of winning $100MM. It only takes a few minutes to post a job and the rewards could be massive, so you try. On the other hand, who has time to go through 300 resumes when 90% of them are not qualified? Typically, the best candidates are the ones that you must recruit. Beware of candidates that are actively looking. It is hard to tell why they are looking, they may be on performance improvement plan with their current company.

3. Resume search via job boards This is the most laborious and worthless process of searching for candidates. You can spend hours searching for candidates and when you do find one that looks decent, they will not return your call. You encounter the same problem mentioned in #2 above. If you don’t have a covert reference (not a reference provided by the candidate) then you may be hiring a candidate with issues. Not worth the effort!


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4. Human Resource Department HR professionals are stretched thin and may not have time to conduct a full search for your new employee. Depending on the size of your company, they may be busy working on 5 or more searches. Some companies have internal recruiting groups that may have more time to assist you. If your internal group does not actively recruit candidates, then most likely the candidates they present will not be top-tier. If the position is important to you, then you should be the person that drives the process. No one else will care as much as you do!

5. LinkedIn is a good tool for identifying candidates. The only issue is that the response time can be long depending on how frequently the person you are pursuing checks their account. As more recruiters and hiring managers use LinkedIn, candidates will become less responsive to request. You will encounter the same problem we have previously discussed regarding referencing candidates. How do you know if the candidate you are pursuing is a good as advertised?

6. Third Party Recruiters Third party recruiters can be an excellent choice if the firm is reputable and they specialize in your industry. Many employers don’t realize how complex the hiring process is and the value that a good recruiter can add. For start-up companies that cannot rely on their reputation to attract candidates a recruiter serves as an advocate for the company by selling positive attributes of that company. The best candidates do not respond to job postings or LinkedIn connection requests. They must be aggressively pursued and led to realize that your company is a good place to work. A good recruiter will know how to match a candidate’s desires to the companies benefits. Recruiters are sales people that know how to get candidates to reveal their desires and/or problems and solve them by placing them at the appropriate company. Companies that think recruiting is posting jobs on the internet and waiting for candidates to apply will have a less talented team than a company that actively recruits candidates.


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Chapter 2: Working with a third-party search firm

Types of search agreements and typical fees: Contingency: You pay only if you hire a candidate from the firm. Typical fees are 20-25% of the candidate’s base salary. Many firms will offer a flat fee to make it easier to budget and to eliminate any concern that the recruiter is trying to increase their fee by encouraging the candidate to ask for a higher base salary.

Exclusive: Same as contingency with the exception that you are only using one search firm. If you are doing a contingency search then I would recommend this option. Find a firm you trust and partner with them to get the job done. Fees are 20-25% of the candidate’s base salary. Many firms will offer a flat fee for sales reps or multiple searches. Flat fees for sales reps vary from $15,000 to $20,000 depending on the base salary offered.

Retained: You pay a portion (typically 1/3 of the total fee) of the fee upfront and retain one firm to conduct your search. This option is best suited for employers that are seeking more service than contingent or exclusive search; such as meeting senior level decision makers to better understand the desired criteria, creating job descriptions, recommending compensation ranges, etc. Once the candidate pool has been identified the search firm meets the candidates in person and prepares a written summary of each. The search firm is involved in negotiating the offer to ensure the candidate accepts. For more information on how to negotiate a retained agreement, please read “Don’t get burned on a retained search.”

If you have questions about appropriate fees,

email me at [email protected]

mailto:[email protected]


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Getting the Best from your Recruiting Firm 1.Work on an exclusive basis

All search firms have criteria they use when deciding how to prioritize search assignments. One critical factor is how many other search firms will be working on the search. If multiple recruiters are working a search, then you are less likely to get a full effort from any of the firms you have involved. Some hiring managers think that having more recruiters involved translates into more candidates and as a result a quicker placement. You may receive more candidates as each firm ensures that they get to the candidates first, but the quality will decrease. Also consider that amount of time you will be spending interacting with multiple firms and screening many candidates.

Statistics on the success rate on various search options:

(The below statistics show the rate of success of the recruiting firm. Most recruiters are 100% commission and would prefer to work on Exclusive or Retained searches.)

Retained search > 90% success rate

Exclusive Contingency >60% Success Rate

Using multiple recruiters <20% Success Rate

(Please adjust graph to reflect the above %)

Success Rate of Search Types

Retained search Exclusive Contingency Using multiple recruiters


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2. Information exchange between the hiring manager and recruiter

A good recruiter will spend at least 45 minutes to one hour with the hiring manager asking questions to better understand the type of candidate that you are trying to hire.

Job descriptions are not sufficient. To gain a deep understanding of the position you are trying to fill, there is no substitute for in depth conversation between the hiring manager and recruiter.

I realize that some companies require recruiters to work through HR to save the hiring manager time. This is detrimental to the success of the search and should be avoided. HR certainly needs to be involved but an initial conversation between the hiring manager and the recruiter is essential for success.

3. Timely feedback on candidates that have been submitted

Recruiters pace themselves based on the hiring manager’s sense of urgency. If the hiring manager is slow to respond, then the recruiter will be concerned that the search is stalled and will not actively work the search. Quick feedback on submitted candidates will ensure that the recruiter is identifying appropriate candidates and will keep them working with a sense of urgency on your search.

4. Honest and frequent communication between you and your recruiter

If you find a candidate that you like through another source then let you recruiter know. That way they can manage their candidate’s expectations and keep them warm for you if the candidate you have chosen does not accept your offer. Also, your recruiter should be honest with you and provide insight about the candidates they have presented and provide information about the status of the search. If they are struggling to find candidates, then they should tell you. Weekly conversations should be the norm when working together to fill an open position.

I realize that there are a lot of bad recruiters out there and that the above ideas only work if the recruiter you are working with provides excellent service. If you have not found that recruiter, then keep looking so that you can enjoy the benefits of working with a professional.


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Chapter 3 : How to determine best candidates

Performance Past = future success

The easiest way to determine if a candidate will be successful is from reviewing their past. If they have a consistent track record of success, then you can be confident that they will continue to be successful. To verify their success, talk to their previous managers and ask questions that will reveal their intangible attributes; how they like to learn, how well they work with others and their work ethic. If you would like a list of reference questions, please email me with the type (sales, marketing, operations, etc.) of candidate that you are referencing. My email is [email protected]

Company Size If you are a small company with limited resources, then hire someone that has worked for a similar size company. If you are a large company, then hire a candidate that currently works for a large company. Anything else is a risk!

Industry experience If you are a service oriented company and are hiring a sales rep, then hire someone that works for a company that sells services. It is best to hire a candidate that has extensive knowledge in your industry.

Responsibilities Match past responsibilities to what you need the new employee to accomplish. Candidates are always interested in growth and learning new things so their new position should offer some growth while taking advantage of their expertise. A good ratio is 75% of their responsibilities should be based on current experience and 25% should offer growth, something new.


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Interviewing There are many styles of interviewing and each of them can be effective. Most interviewers compare future applicants to current successful employees. Determine what your current employees have in common and interview to determine if your applicant possess the same attributes. If creativity is a key attribute, then ask questions that will help you determine if the candidate is creative. “Tell me about a time that you were faced with a challenging problem and how you solved the problem?” Listen and ask questions to determine if the applicant was creative in their approach.

Personality testing Personality testing is a controversial topic. Many of our clients use them and others think they are worthless. I think they are useful since they give insight into the candidate’s personality. If you are a hiring manager then I suggest that you become familiar with a variety of resources that will help you learn more about personality traits. Enneagram is one that has been around for many years and seems to accurately reflect personality traits. They also offer a free assessment at http://www.9types.com/rheti/index.php.

Keep in mind that using personality assessments should only comprise a small part of your decision. Interviewing, reference checking and assessments should all be used to help you select the best candidate.

Reference Checking If I were only allowed one method of determining which candidate to hire, it would be refence checking. I realize many of you may think I am crazy, but let me explain. I am not talking about the normal reference checks. Where you ask the candidate for references and they all love the applicant. I am talking about covert referencing. What is covert referencing? It is finding someone that the knows the applicant, but the applicant did not furnish this person as a reference. Recruiters that master an industry niche can effectively use this technique since they have vast connections.

http://www.9types.com/rheti/index.php


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Chapter 4: Making the offer

You have worked hard to find the perfect candidate and now it is time to make the offer. The offer stage is sensitive since the candidate ties their self-esteem to the offer and the hiring manager is concerned with internal equity and operating costs.

The most successful process is to let the recruiting firm verbally present the offer and once the candidate agrees to the terms, the company sends the written offer (with a 48-hour expiration). This makes for a smooth process and is less work for the client, since they are preparing the offer once, not multiple times.

Advantages of letting the recruiting firm verbally present your offer.

• Increases the chances of securing the candidate! If you are working with a well-trained, professional recruiter, then your chances of securing the candidate are drastically improved. A good recruiter will make sure both the candidate and the employer get what they need, resulting in a win-win outcome. If you do not trust your recruiter to assist you with the negotiations, then you should find another recruiter.

• Prevents candidates from having hard feelings toward future employer When the recruiting firm serves as the mediator, there is less chance that the candidate feels like their future employer was unfair during the negotiations. We all know that negotiations have the potential for one of the parties to feel like they lost.

• Keeps the candidate’s compensation requirements realistic The recruiter has spoken to the candidate more than anyone else involved in the process and they will better understand what is motivating the candidate to change companies. Most of the time, money is not the reason a candidate is seeking to make a change. If the recruiter is good, then they will know the candidates reason for making a job change and can keep the candidate realistic with their compensation requirements by reminding them of their real reasons for making a change.


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• Prevent salary creep Once a candidate realizes that they are your number one choice, they become over confident and start asking for a higher base than originally requested. Since the recruiter has gathered compensation information during their first call and gained agreement on their walkaway numbers, they can remind the candidate of those commitments. Most employers are not trained on how to obtain this information, putting them at a disadvantage during negotiations.

The Offer Process 1. The recruiter and employer should establish compensation ranges prior to

starting the search. (In some cases, the employer will not know what the salary should be and will rely on the recruiter to help determine appropriate compensation.) Candidates should NEVER be told what the range is since all they hear is the highest number. If you tell a candidate the base is between $120,000 and $140,000, be prepared to offer $140,000!

2. The recruiter is responsible for obtaining the candidate’s compensation early in the process (first conversation) and the amount they are seeking to make a change should also be determined. Candidates are more reasonable and forthright early in the recruiting process. Ask the candidate what their W2 was last year. Make sure you obtain detailed information such as base, bonus and commission. If you wait to the end of the process to start asking compensation questions, the candidate may be harder to pin down.

3. Once a candidate becomes viable, the recruiter should reveal to the employer the compensation numbers obtained from the candidate. The employer should rely on the recruiters input to determine an acceptable offer. The recruiter will know what the candidate will accept or reject.

I realize that some recruiters are unethical and will try to increase their fee by trying to negotiate a higher base salary for their candidate. There are two ways to avoid this. One is to have a flat fee. The other is to only work with reputable recruiters.

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