Where do companies find the people they hire? (Hint: Dumpster diving is alive and well in Human Resources.)

4% come from Monster.com
3% come from CareerBuilder
1% come from HotJobs

These figures have not changed since these job boards have been online. 90% of companies surveyed have contracts with Monster.com. 80% with CareerBuilder.

60% of corporate recruiting budgets are spent in online job advertising. (Source for most data in this post: CareerXroads 2009 8th Annual Source of Hire Study.)

The single biggest source of hires (30%-40%) is personal referrals. But spending on it is virtually nil. A top HR exec at a Fortune 50 company complains to me that he has no budget to go out and recruit through personal contacts because execs from the big job boards wine and dine his top execs — and the bulk of the available budget is thereby dumped into the job boards. He’s livid. There is no budget for The Manager’s #1 Job.

But that’s not the main reason the board of directors should heave its own HR operation into a dumpster.

Here’s the real problem. Some HR departments invest in “direct sourcing.” That is, actually pursuing people who are not necessarily looking for new jobs. The so-called “passive job hunter.” It’s what headhunters do. Good idea, eh? So what does direct sourcing actually mean to most HR departments? According to the CareerXroads survey, it means combing through old resumes in their files or buying new files of resumes to comb through. Gimme a break. Is the problem passive job hunters, or passive employers?

It’s hard to feel sorry for companies crying about the Great Talent Shortage when you see them garbage-picking for hires. The problem starts at the top, with the board of directors: that corporate crew responsible for long-term governance and policy. I wonder what they see from up there.

At the stockholder’s meeting, the chairman pounds his fist on the podium and proclaims, “People are our most important asset!” Meanwhile, down in the HR department, a personnel jockey is digging through resumes on a job board. Has the chairman been down there lately?

What the chairman reads in the news: The Great Talent Shortage is destroying the company’s ability to compete. Even in this lousy economy, companies are hiring, but more selectively. And they can’t find the qualified job candidates they need.

That personnel jockey is paying Monster 35 cents per resume ($7,000 for one year’s access to 20,000 resumes.) That ain’t bad. But the total cost of dumpster diving for hires all the year long is another question — one for the board of directors.

George Carlin posed one of the great paradoxes: “Imagine you could have everything in the world! Where would you put it?” Well, in its little corner of the world, HR has resolved the paradox. HR now owns every resume on the planet — and it even has a place to put them. All the resumes are in a data base outsourced to HotCareerMonsterBuilder.com. No sweat. Everyone’s been cataloged, sorted, and ready for job offers. HR has invested billions in the data base ($1.3 billion in 2006 alone, according to IDC; it ain’t easy to find newer figures because HR doesn’t like to talk about it) — and continues to.

So what’s the matter with everybody? Talent shortage? We don’t have no stinking talent shortage. All the talent is in the data base. The challenge of getting access to candidates has been solved. They are all available. They are the 3% solution.

Managers are dying for good hires. HR is busy “recruiting.” Crank up an SQL query. Just who or what are they looking for? The chairman of the board has to stick his head way down into the garbage can. Hey, is there anybody in there? What are we paying for, anyway?

The lesson? If you want to hire somebody (or find a job), go talk to people. You’ll have little competition.

  1. I wonder if this same critique is applicable to local or more specialized job boards. It seems to me that, when the focus is smaller or narrower, they do a better job, partially because that have to keep contact with a smaller community of which they depend. Your thoughts ?

  2. Nick:

    Absolutely right. And those same people give a total pass when a position for a NEEDED job is open for months, and months, and months…

    Upper execs should be asking, ‘where is everybody?’



  3. Wow, this is an awesome article. I had no idea about those statistics. Thank you for the info!

  4. Mario,

    Smaller “niche” job boards do indeed seem to perform better, and I think it’s for the reasons you state. I think that because they are smaller, it’s more obvious when they leave old dogmeat posted (dead job listings start to smell) – so they don’t. And they don’t attract as many “garbage listings” – resumes or jobs. Nonetheless, I think it’s important to see any job board for what it is: a board. It’s far better to rely on personal contacts.

  5. Thanks for a great article that clearly states the insanity of the big job boards. The public’s been brainwashed to think job boards are the way to go. Plus people will usually take the path of least resistance, and it’s a heck of a lot easier (in the short term, until you’re broke) to surf the boards, spending hours applying for positions for which you’ll be deselected at every pass, even if you are qualified.

    Resume tracking software is programmed to whittle down the vast numbers of resumes to a few cookie cutter matches (which BTW, never seem to satisfy hiring managers). With a horrific 1% to 3% success rate, why would anyone spend any more than 3% of their time (0% really) applying to the major job boards?

    The return on effort just isn’t there. In fact, it’s not even a wash, its a vastly negative return, since being tethered to the boards means job seekers have limited time for the networking, researching, and developing solutions needed for productive face time with target companies (if they even know what those companies are).

    People are desperate, they are shell-shocked by the speed at which they’ve been let go, or by the depth of fear of being let go. They are completely unprepared for job search. Many have never had to look for a job as they were always networked into new positions. Yet, when they are actively looking for a new position, they forget that networking and being a solutions provider got them their previous jobs. They think they are being productive as they troll the net for job listings; they would be surprised to know that their actions are really “active disengagement” that disconnects them from the proven activities that work.

    Thanks for putting the truth out there, NIck. Your perspective has always been valuable; now it’s a critical public service!

  6. In 25 years, over 1500 executive search assignments, less than 1% of the candidates came from a posted advertisement. 99% came from a referral – 2-3 levels deep in the network.

    These numbers have not changed much in 25 years. I think one of the reasons corporations continue to dump money into ineffective web solutions and advertising is that the corporate recruiter business model is not effective in sourcing candidates through networking – the number one method to find great talent.