My headhunter is competing with me!

My headhunter is competing with me!
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In the August 20, 2019 Ask The Headhunter Newsletter a reader is confused about how a headhunter operates.

Question

headhunterIs it an ethical or typical practice that a recruiting agency submits more than one person for the same position? A headhunter contacted me about a management role in information security. I went in for the interview first, and while following up with the headhunter afterwards I did a bit of a brain dump about the way it went and what their personalities were like. As I was telling the recruiter my experience, I heard her clicking away at the keyboard and instantly I was thinking who is helping whom? So I asked, are you submitting someone else, and she said yes, the agency was, but she was not personally. The information I shared was used to help the next person they sent to interview after me.

It seems there is a conflict of interest and cannibalization when you send two people for the same position.

Nick’s Reply

That’s exactly how recruiting agencies (headhunters) work. Unless this is some unusual situation where you are paying the agency a fee to get placed (Please don’t ever do that!), the agency’s customer is the employer, not you. The employer pays a fee to get a job filled.

On a typical assignment a headhunter will submit several candidates to an employer, not because the headhunter is gambling, but because the client wants several candidates from which to choose. The goal is to fill the job, not to get you a job. Even if this is an employee-fee agency, I doubt your agreement with the agency prohibits them from submitting other candidates anyway. But at your level, it’s safe to guess this is a traditional employer-fee deal.

One headhunter, several candidates

Because this is how the business works, there’s nothing unethical about it. An agency will use whatever information is available to help them get one of their candidates hired, including anything you told them during your debriefing. When you think about it this way, there’s no cannibalization or conflict of interest. The objective is to fill the job with a candidate, any candidate.

I wouldn’t hold it against the recruiter, but in the future I would refrain from telling her anything that might help another candidate from the firm to compete against you. Don’t compete with yourself or with the headhunter’s other candidates.

How the headhunter gets paid

This reminds me of a learning experience I had when I first started headhunting. It illustrates how headhunters get paid. I submitted a candidate to a company and they hired him without telling me. When I complained, they said they had received the same candidate from another search firm that was paid the fee. I was livid. My boss sat me down and explained the rules. I learned my lesson. Headhunters don’t have any exclusive control over a candidate. (See How long does the headhunter control me?)

When I confronted the candidate I had “lost,” he sheepishly admitted he’d already interviewed at the same company in another department. Did he behave unethically? I’m not sure about that, because his goal was to get a job. Did he know he was putting me in competition with another headhunter? Let’s call it an error of omission. Sure, he should have told me, but not for the reason you might think. In this case, the candidate was lucky. He might have gotten rejected for both jobs if the company realized it was interviewing him through two sources at almost the same time, because employers don’t like getting into the middle of fee fights between headhunters. If I’d started a legal battle for that fee, I would have lost — but the company’s lawyers probably would have advised that the employer stop dealing with both search firms!

I became more careful about submitting candidates, and always asked whether they’d already talked to company X.

Understand headhunters

I’d have a talk with the recruiter. Decide whether you trust her. Ask her to explain how the firm operates. If they’re going to refer you for another position, ask whether you’ll have competition from other candidates from the same firm. Keep in mind that even if you’re the headhunter’s only candidate, you’ll face competition from other candidates anyway.

There’s nothing you can do but decline the interview or avoid headhunters altogether, but why would you do that? More important, now that you’ve been rejected by that employer, and now that you know other headhunters at the agency work on similar jobs, ask about other opportunities they may be working on. Optimize your chances of getting placed by learning how headhunters work. But please remember that the agency’s business is to fill a job — not to find you one.

Additional resources

I know you’re frustrated. This is why I tell job seekers not to rely too much on headhunters! These articles might be helpful:

Headhunters find people, not jobs

Why do headhunters act like this?

If you need in-depth advice about headhunters, please check my PDF book, How to Work With Headhunters — and how to make headhunters work for you.

Hope it goes better next time!

Have you ever had a rude awakening when working with a headhunter? Do the rules of this game confuse you? What would you like to know about how headhunters operate?

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Unemployment 3.7%, slow-down in hiring up 84%

Unemployment 3.7%, slow-down in hiring up 84%
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For a flat fee, an employer that’s hiring can get over 9 million resumes from ZipRecruiter. That’s great news, because with unemployment in the U.S. at record lows (3.7% in July 2019), employers need more job applicants!

Not. Actually, employers are drowning in resumes and job applicants.

News I want you to use

The HCM Technology Report says Indecisive Hiring Managers Cause Employers to Lose Talent. Do ya think???

“In 2018, hiring managers took 33 days to make an offer after interviewing a candidate. That’s an 84 percent increase compared to 2010. The extended timeframe led to a 16 percent reduction in accepted offers.”

What changed in 8 years? An employer can get over 9 million resumes for a few bucks.

And you wonder why hiring managers take forever to decide whether to hire you? More jobs stay vacant longer because HR and hiring managers are so overwhelmed with wrong job applicants that they can’t decide who are the good ones.

What hiring slow-down means to job seekers

  • You need to account for poor management when you interview for a job.
  • You should avoid the cattle call of the job boards.

What this means to employers

HCM says:

“Companies that encourage decisive behavior by hiring managers reduce time-to-fill by 17 percent.”

“Hiring managers should spend more time engaging with candidates. This is critical… because candidates trust hiring managers four times as much as they trust recruiters.”

Maybe HR departments should turn off the fire hose of resumes and teach hiring managers how to hire.

There’s lots more news you can use in the HCM Technology Report.

How long did it take to get hired or rejected by the last employer that interviewed you? Did the hiring manager seem to know what they were doing?

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Age 70, working and job hunting again

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In the August 13, 2019 Ask The Headhunter Newsletter a reader fends off age discrimination.

Question

ageI am 70 years old and still actively working. I have been a consultant for an energy company since early this year, serving in an interim role. The company had a disastrous last year. I was brought in to help turn some of this around in the first quarter and “stand in” until a full-time person arrived. This was to have been a 4-5 month assignment; I am still here. I know I will not be brought on because of my age and I accept this.

I have started searching again, now that the assignment is drawing to a close. I had a recruiter locate me on Monster.com and ask for my “full” resume, which I sent. Later in the day I received a text asking for “your DOB.” I responded “16 July,” to which I received a note saying, “Before I submit your resume to my client I need the year.”

I told her to remove me from her database and thanked her for bringing ageism into play. Is there anything I should have done? Just because I am 70 doesn’t mean I’m senile or moving around using a walker!

Thank you for your column. Even in my “advanced age,” I get what you teach.

Nick’s Reply

I collect stories from people who continue to work well into their 60s, 70s and even 80s. Thanks for yours! They all have one thing in common: They are forthright and spirited.

The age question

No recruiter needs your date of birth (DOB) for any reason I can think of, so I’m glad you told that one to take a hike. But please consider that if you’re going to swim in shark-infested waters, you’re likely to get bitten. Monster.com and its ilk are thick with recruiters like the one that found you. It’s up to you to avoid risky waters.

You could be discriminated against anyway, but job hunting online makes it even more likely a person will be rejected due to their age. The impersonal, rapid-fire Q&A that recruiters can do via e-mail, chat and texts with eager job seekers makes it easier to discriminate.

So, no, there’s nothing else you should have done. You avoided wasting your time further. If you expect to get hired because of your qualifications, then it’s up to you to control how a recruiting exchange occurs.

Show them the green

The only way I know to test a recruiting pitch is to expect the recruiter to evaluate you for what you can do to make the employer more successful. That’s also how you will get past biases. In the case of age, you want to arrange it so you can show them the green — how you will benefit their business — before they get distracted by the grey of your hair or your birth date. (See Age Discrimination: Help me market my dad!)

You don’t say how you’ve gotten your jobs during the past ten years. Whatever it is, keep doing it. My guess is that you rely on your reputation and abilities, not on random queries. Don’t be distracted by recruiters demanding to know your age. Fast-paced, high-volume, automated online recruiting doesn’t permit you to communicate the information that will get you interviewed and hired. That requires a one-to-one dialogue.

So ask yourself, no matter who is recruiting you, do they take time to talk with you about the job and about how — exactly — you might be able to help do the job profitably for the employer?

If the recruiter declines a substantive discussion about those two topics, you know you’re not being recruited. It’s just a cold call that’s not likely to go anywhere.

Personal contacts

If a recruiter indicates they don’t really know anything about you, don’t waste your time because that’s not really a recruiting call. I strongly suggest you rely on your personal contacts – and develop more of them – for your job search. Here’s a four-step outline for how to leverage this: Ask The Headhunter in a nutshell.

You’ve been doing this long enough that you probably know everything in that article. I just want to remind you that it works, and that the likes of Monster.com don’t.

Are you still working in your 60s, 70s or later (hopefully by choice)? How do you do it? How do you handle queries from recruiters? Have you encountered age discrimination? What can we do about it?

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At last: HR gets an upgrade!

At last: HR gets an upgrade!
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HROur good buddies across the pond at BBC News have revealed HR’s newest weapon against to help job candidates get hired. (Oops.)  Yep — HR has gotten an upgrade! Recruiting robots!

News I want you to use

Read it on BBC News: Meet Tengai, the job interview robot who won’t judge you

If this seems far-fetched, some employers in the U.S. are already using robots to interview you on your mobile-device camera — and then other robots (algorithms) watch your interview video to decide whether you will “proceed to the next step.”

Look, Ma! No hands!

A couple of years ago, we covered a U.S. company the BBC references — “HireVue, a US-based video platform that enables candidates to be interviewed at any time of day and uses algorithms to evaluate their answers and facial expressions.”

Look, Ma! No hands! human HR managers! Or you could just Tell HR you don’t talk to the hand.

Heads up! Like it or not, you’re going to encounter recruiter bots. Maybe you already have. 

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Should I extort a salary raise out of my boss?

Should I extort a salary raise out of my boss?
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In the August 6, 2019 Ask The Headhunter Newsletter a reader wants to use a job offer to get a raise.

Question

A competitor offered me a job with a higher salary. What is the best way to use this to ask my boss for a raise, and what could be the best speech to convince him?

Nick’s Reply

salaryUsing a new job offer to leverage a counter-offer — a raise in salary — from your current employer is almost always a costly mistake. In fact, it’s a kind of extortion, so let’s call it that, and let’s consider some of the risks you could face.

You’re marked

Even if this gambit works, you will likely be marked as disloyal and untrustworthy. The next time cuts have to be made, you’ll be on the list because you already threatened to quit over money. Management will be concerned you’ll be likely to pull this again the next time you get a better offer. (No matter how much your boss likes you, business exigencies usually trump friendships.)

Instant termination?

If you’re using this new offer to leverage more money from your current boss, be ready to start that new job ASAP, because you may be walked to the exit immediately. Some bosses don’t take kindly to threats, no matter how diplomatically you make them.

Paying for your own raise

If you succeed in getting a raise by holding your boss over a barrel, where do you think that extra money will come from? It will likely be an advance against a future raise or promotion. You usually can’t win at this game because the bean counters are counting dollars. Most likely, you will wind up paying that raise to yourself in some way.

They want you, so be happy

But there’s good news here, too. You’ve found a new job where they want you! If you’re motivated to take a new job in a new place because you’re unhappy now, getting a few more bucks to stay (assuming you can get it) isn’t going to change the fundamental problem of job dissatisfaction. If that new job is really great for you, just take it.

Go where they’re making you happy!

If what you really want is a raise, ask your boss for it before you go interview somewhere else. Please see Should I ask for a raise one more time?

The “best speech” to give your boss is one sentence, and it should be in writing. You’ll find it here: Quit, Fired, Downsized: Leave on your own terms.

Do you want a raise, or a better job?

The bottom line is this. You need to make a choice, so compare your two options: Do you want a raise from your boss, or do you want a new job with a raise?

  • Your current employer apparently doesn’t recognize your value, or it would have offered you a raise and/or a promotion.
  • The new employer is putting its money where its mouth is — without any prodding. That’s worth a lot by itself. If it’s a good job, that’s who I’d want to work for.

I’ve seen people leverage higher salary out of their current employers when they get a bigger offer elsewhere — and it works out in the long run. But it’s very rare. Such a negotiation and accommodation requires great integrity on the part of the employer and the employee.

Work where it’s better

My advice: If the work, the job, the new employer and the money are all better, just resign and move on. Don’t look back at an employer who wasn’t willing to do right by you without a threat. Don’t forgo your future.

Have you ever tried to use a new job offer to get a raise from your current employer? What happened? Is there a way to extort a raise and mitigate the risks I’ve listed? Am I over the top when I refer to this gambit for getting a raise as extortion?

Don’t miss this new feature!
News I want you to use highlights articles that can give you an edge in unexpected ways!

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Dirty little (HUGE) salary secrets revealed

Dirty little (HUGE) salary secrets revealed
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  • How do you decide whether an employer is going to give you a fair — or better than average — salary shake in the coming years, if you accept a job there?
  • How do you judge whether that employer is still going to be in business a few years down the road, before you accept its job offer?
  • Should you take that job?

News I want you to use

salaryHere’s an inside look at how investors judge companies on how they pay their people — in particular, their CEOs and, for our purposes, how CEO pay compares to the median pay of all a company’s employees.

The 100 Most Overpaid CEOs:
Are fund managers asleep at the wheel?

In March 2019  As You Sow, a shareholder advocacy group, revealed some dirty little (HUGE) salary secrets that job candidates can use.

As You Sow monitors, among other things, CEO pay and evaluates its impact on investors. It turns out big institutional investors really do give a rat’s patootie about how much CEOs are paid — because it seems to correlate with a company’s performance and success.

Thanks to the 2010 Dodd-Frank financial reform bill, shareholders gained access to new information this year. Companies must now disclose the ratio of pay between the CEO and the company’s median employee, shining a brighter light on how high CEO pay has become. This new information can also be used in other ways.

Yep! It’s news we can use!

What this means to you

Digest as much of this report as you can, and let’s discuss what it means to you as you pick your next employer.

Will a company give you a fair salary shake? Skip to the appendices in the report (pp. 19-25).

  • Pick a company.
  • Take a look at how much it pays its CEO.
  • Then look at the median pay of all its employees.
  • Before you accept a job offer, follow the money!

Some good bits

As You Sow reports that:

The companies with overpaid CEOs we identified in our first report have markedly underperformed the S&P 500. Two years ago, we analyzed how these firms’ stock price performed since we originally identified their CEOs as overpaid. We found then that the 10 companies we identified as having the most overpaid CEOs, in aggregate, underperformed the S&P 500 index by an incredible 10.5 percentage points and actually destroyed shareholder value, with a negative 5.7 percent financial return… Last year, these 10 firms again, in aggregate, dramatically underperformed the S&P 500 index, this time by an embarrassing 15.6 percentage points.

Sheesh! Gotta wonder how the HR departments at these companies explain to job candidates how CEO pay reflects company performance. Do the candidates know to ask?

When shareholders were evaluating compensation packages in spring 2018, they had a new piece of information: the ratio of the pay of the CEO to the pay of the corporation’s median worker… The average of these CEO pay to median worker pay ratios as of Sep. 5, 2018 was approximately 273:1.

Betcha didn’t know the CEO of CSX Corp. makes over $150 million — 1,531 times more than the median employee. The ratio of Oracle Corp.’s CEO compensation to the median at the company is 907:1. Comcast’s CEO gets 458 times more than the company’s median employee salary.

Remember: The benchmark average ratio is 273:1.

Sheesh! Gotta wonder how the HR departments at these companies explain such dirty little (HUGE) salary secrets to incoming job candidates. Do the candidates know to ask?

Shareholders freak out

As Bloomberg columnist Nir Kaissar noted in a recent editorial, “As the grim pay disclosures pile up year after year, the backlash against the corporate elite will intensify. If corporate boards can’t find a better balance in their pay structure, outside forces will, and at a potentially far greater cost to companies and their shareholders.”

Opposition to high CEO pay has risen, and more companies have seen their CEO pay packages receive less and less support from their shareholders.

And we’re talking big shareholders:

California Public Employees’ Retirement System (CalPERS)… voted against 45.4 percent of pay packages of the S&P 500 companies; it voted against 73 percent of the 100 most overpaid CEO pay packages.

New York State Common Retirement Fund… voted against 26 percent of pay packages of the S&P 500; it voted against 53 percent of the 100 most overpaid CEO pay packages.

But what about the rank and file?

Big institutional investors are not voting against big pay packages for top executives — but they are voting against huge pay disparities that seem to reveal underlying problems.

Are employees at these companies freaking out? If you’re applying for a job at a company with a huge CEO-to-median-pay ratio — well, would you apply for a job in such a company?

What do you think it would mean for your compensation over time?

Should you take that job?

How to use it

When HR asks if you have any questions, try this one, courtesy of the good folks at As You Sow: What’s the ratio of your CEO’s pay to the median employee salary here?

How else can we use this news?

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NEW! News I want you to USE!

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news

In the July  30, 2019 Ask The Headhunter Newsletter we skip the Q&A and look at the news!

News?? Hey — where’s the Q&A???

Curated News with a point!

In place of the regular, weekly Q&A column, I want to introduce you to a new Ask The Headhunter feature section, News I want you to use!

(The Q&A will be back next week! Catch up on some of the recent Q&A columns in the Latest Posts list on the right sidebar.)

If you want to skip this introduction, you may jump right over to the first edition of News I want you to use: Employers are hiring all wrong! Published in the Harvard Business Review, it’s a devastating analysis by Wharton labor researcher Peter Cappelli of why companies can’t fill key jobs and why you can’t get hired. I can’t wait to see your comments about it.

What’s it mean?

Like many of you, I’m a voracious reader of news. Readers send me links to useful articles every day, and I learn something new about topics that affect job hunting and hiring from almost every one of them.

But what good is all this information if we can’t share, digest and discuss it? You’ve helped make Ask The Headhunter the leading community of thoughtful, serious job seekers and managers who gather regularly to discuss the problems and challenges of job hunting and hiring. We share great advice — but I think we’re missing a big bet.

The great links you frequently share tell me Ask The Headhunter needs a digest of curated news we can all use — content from other good sources, curated by us and for us!

News I want you to use will include:

  • A link to a provocative news item
  • Dialogue about what it means for job hunters and employers
  • How you might be able to benefit from it
  • And, most important, your comments and insights — and loads of discussion!

News I want you to USE!

There are loads of lists of rehashed career stories all over the web. But there are also many news items that can make a difference in your professional life — if you know how to interpret them. This isn’t the same-old “career news” — it’s business news that can give you an edge when job hunting or hiring! By highlighting useful articles, I hope we can put an even sharper edge on what we do around here — help one another advance our careers.

News I want you to use is just the first of several new features I plan to add to Ask The Headhunter to stimulate more great ideas and dialogue about job hunting, hiring and success at work.

New menu

I’ve created a new pull-down on the main menu above — Sections — and I’ve added a graphic at the top of the right-sidebar of this new section so you’ll know where you are. Like a themed section in a magazine, News I want you to use will be self-contained, so you’ll find only recent News items in the right sidebar. You can always click Home to return to the Ask The Headhunter home page, or go to the Q&A section from the main menu above.

(The weekly Q&A column will also get its own section shortly. And there’s more to come.)

Keep ’em coming!

Most of the curated news items presented will be brief — the first one is longer because I’m experimenting, and I’d love your input on how you would like this to work.

I promise you I’ll try to find the best online content that you can use to advance your job hunting, hiring and career efforts — and, of course, I expect you’ll send me links to content, news and articles you think we should share and discuss. To all of you that regularly send me great links, please keep ’em coming — now our entire community will be able to enjoy them.

News will be updated several times between the regular, weekly Q&A columns. I hope you enjoy this new Ask The Headhunter section. Please help me shape it as a great new resource.

Let’s have some fun with this!

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Employers are hiring all wrong

Employers are hiring all wrong
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Most employers don’t know whether their hiring methods actually produce good hires, or how much time or money it costs to fill jobs. They don’t review the outcomes of their methods.

“Obsessed with new technologies and driving down costs, they largely ignore the ultimate goal: making the best possible hires,” says Wharton labor researcher Peter Cappelli, in the Harvard Business Review article, “Your Approach to Hiring Is All Wrong.”

What this means to you

Go around the recruiting and hiring systems employers want you to use, because they don’t work.

Summary

Cappelli says the root cause of most hiring is drastically poor retention. You’re most likely to change jobs and employers because your current employer is unlikely to promote you and provide new opportunities internally. This creates churn in the labor market and, ultimately, results in tremendous costs to fill jobs — an average of $4,129 per job in the United States.

Excerpts

Where are the hiring metrics?

Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire. Imagine if the CEO asked how an advertising campaign had gone, and the response was “We have a good idea how long it took to roll out and what it cost, but we haven’t looked to see whether we’re selling more.”

Failure to develop employees

In the era of lifetime employment, from the end of World War II through the 1970s, corporations filled roughly 90% of their vacancies through promotions and lateral assignments. Today the figure is a third or less. When they hire from outside, organizations don’t have to pay to train and develop their employees. Since the restructuring waves of the early 1980s, it has been relatively easy to find experienced talent outside. Only 28% of talent acquisition leaders today report that internal candidates are an important source of people to fill vacancies—presumably because of less internal development and fewer clear career ladders.

More is bad, so scare away the applicants

Recruiting and hiring consultants and vendors estimate that about 2% of applicants receive offers. Unfortunately, the main effort to improve hiring—virtually always aimed at making it faster and cheaper—has been to shovel more applicants into the funnel.

Much better to go in the other direction: Create a smaller but better-qualified applicant pool to improve the yield… If the goal is to get better hires in a cost-effective manner, it’s more important to scare away candidates who don’t fit than to jam more candidates into the recruiting funnel.

Hiring good employees

How to determine which candidates to hire—what predicts who will be a good employee—has been rigorously studied at least since World War I. The personnel psychologists who investigated this have learned much about predicting good hires that contemporary organizations have since forgotten, such as that neither college grades nor unstructured sequential interviews (hopping from office to office) are a good predictor, whereas past performance is.

Since it can be difficult (if not impossible) to glean sufficient information about an outside applicant’s past performance, what other predictors are good? … There is general agreement… that testing to see whether individuals have standard skills is about the best we can do… Only 40% of employers, however, do any tests of skills or general abilities, including IQ. What are they doing instead? Seventy-four percent do drug tests, including for marijuana use…

The advice on selection is straightforward: Test for skills. Ask assessments vendors to show evidence that they can actually predict who the good employees will be. Do fewer, more-consistent interviews.

HR vendors: Fresh & cool but unvalidated

Be wary of vendors bearing high-tech gifts. Into the testing void has come a new group of entrepreneurs who either are data scientists or have them in tow. They bring a fresh approach to the hiring process—but often with little understanding of how hiring actually works… These vendors have all sorts of cool-sounding assessments, such as computer games that can be scored to predict who will be a good hire. We don’t know whether any of these actually lead to better hires, because few of them are validated against actual job performance.

Wild HR technology

When applications come—always electronically—applicant-tracking software sifts through them for key words that the hiring managers want to see. Then the process moves into the Wild West, where a new industry of vendors offer an astonishing array of smart-sounding tools that claim to predict who will be a good hire. They use voice recognition, body language, clues on social media, and especially machine learning algorithms—everything but tea leaves. Entire publications are devoted to what these vendors are doing.

News I want you to use

What all this tells us is that employers suck at hiring, and if you follow the rules the Employment System itself is likely to prevent you from landing a new job — because it doesn’t work. Go around!

Employers don’t assess outcomes of hiring methods

It’s impossible to get better at hiring if you can’t tell whether the candidates you select become good employees. If you don’t know where you’re going, any road will take you there. You must have a way to measure which employees are the best ones.

Why is that not getting through to companies? Surveyed employers say the main reason they don’t examine whether their practices lead to better hires is that measuring employee performance is difficult.

Treat your job search like a business task

Like the sales manager who asks, “Is what we’re doing generating sales?”, you must learn to ask, “Is what I’m doing getting me job offers?”

Your boss checks to see whether the work you are doing yields the expected results — that’s a business task.

  • Pursue companies carefully — don’t chase job postings
  • Look for managers who know how to recruit and hire
  • Control your interactions with every employer

Just because employers behave like dummies when it comes to hiring doesn’t mean you have to play along or encourage them. Apply your business skills to the business task of getting the right job.

Organizations that don’t check to see how well their practices predict the quality of their hires are lacking in one of the most consequential aspects of modern business.

The truth hurts employers, but it hurts job seekers even more. I’ve only touched on what you can do to capitalize on Cappelli’s findings and suggestions. How can we use this news?

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Why does HR waste time, money and the best job candidates?

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In the July  23, 2019 Ask The Headhunter Newsletter we take a look at how HR actually spends money to recruit the talent — or not.

In a recent column (10 reasons your company’s HR can’t fill jobs) we discussed how HR organizations bungle recruiting and hiring — when they have massive resources at their disposal. Reader David posted a comment and some questions that have nagged at me ever since. Why does HR reinvent the wheel every time it needs to fill a job?

Question

HRHR is paying for an ATS [applicant tracking system] to store/file what’s coming through the pipeline. They are already sitting on a pile of resumes. Why not just turn the spigot off, and contact the people you already have in your pile?

Or worse yet, HR engages so-called third-party recruiters or headhunters who present the same people already in your database. I’ve had stuff like this happen to me before. I apply directly and interview for job X, but don’t get it. Later, a third-party agency comes knocking, asking if I’m interested in applying for the same job at the same company!

In other words, if you fill a position, you likely had people that were runners-up and could have done the job nearly as well as the person you hired. When you have another opening for the same role, why not call those people? Why not give them first crack at the job before you pay money for yet another job advert and waste time (we know that time = money) screening a new batch of people?

I’m not necessarily sticking up for ATS usage here, just so we’re clear.

Nick’s Reply

I don’t read your suggestion as an endorsement of ATSes, resume databases or automated recruiting. You’ve cut to the core of what hiring should be all about: relationships between employers and people (aka, talent). Let’s look at why HR wastes good job candidates it has already met.

Personal contacts are a valuable asset

Whether these candidates arrived through an ATS, a third-party recruiter, or a personal referral, we’re talking about a special set of people: those who were judged worthy by the employer after interviews and assessments. That is, these are all now “personal contacts” — people the company knows, who are pre-screened, vetted, and somehow qualified.

In other words, unlike unknown people, they are already deemed good candidates for jobs at the company. That’s an asset worth a lot of money. After all, virtually every hiring survey ever done tells us that most jobs are found and filled through personal contacts. Every candidate a company meets is a new personal contact that it has already paid for. So your question should rattle every corporate finance executive: Why do companies pay again and again to hook the same fish and throw it back into the water?

What’s a personal contact worth?

I’ll let you in on a little secret about the dollar value of personal contacts. When headhunters find good candidates for their client companies, they stay in touch with those people even if they’re not hired. Having already invested in getting to know them, headhunters know these candidates are incredibly valuable — not just as potential placements at other client companies, but as sources of other good candidates.

When a headhunter gets paid $25,000 to fill a $100,000 job, a good-but-rejected job candidate is likely to be worth at least that much money on another assignment. These are people the headhunter keeps close for years to come. The headhunter will bring other opportunities to them, and even do favors for them when possible, to foster good relationships that are likely to pay off later — whether as placements or as sources of referrals to fill other assignments. One well-cultivated personal contact like this can be worth $25,000, $50,000, or upwards of $100,000 in future fees. (See Good Headhunters: They search for living resumes.)

HR: People are a fungible commodity

I suspect that because HR managers and internal recruiters are not paid like headhunters, for actually filling a position, those personnel jockeys aren’t concerned with maintaining relationships with good candidates. Does HR even know whether a hiring manager judged the person a good candidate before hiring someone else?

Because HR’s recruiting model depends on an automated system that delivers scads of new applicants every day, HR is not so concerned with tracking who it doesn’t hire. HR views job applicants as fungible, or interchangeable — and easily replaced.

While HR might pay a headhunter $20,000 or $30,000 for one hire, HR doesn’t see the potential future value in the other good candidates HR interviewed but didn’t hire. There’s no money to cultivate professional connections, but there’s always money to buy more resumes.

Why recruit again and again?

Over 15 years ago I met with top executives at two different companies — major players in their respective industries. They were independently interested in my suggestion that they make better use of time and money they had already invested to recruit, interview and assess job candidates who were qualified — but whom they could not hire. That is, these were surplus job candidates. They were worthy of serious consideration or worth hiring, but someone else was hired instead.

I pointed out to these executives that, when they have already spent a lot of money to recruit people, they should get the full return on their recruiting investment (ROI) by using smart methods to stay close to such good candidates. I offered to help build ongoing relationships with the best candidates without spending money to recruit them again.

The idea is simple, and it’s basically what you’re suggesting. Rather than reinvent the wheel every time a new job needs to be filled; rather than spend funds soliciting new resume submissions; rather than review thousands of unknown applicants (directly or via third-party recruiters); why not go back to candidates you’ve already interviewed — candidates you know? Why not turn to people you have already assessed as good candidates, but could not hire at the time?

The challenge, of course, is how to track and stay close to good candidates you don’t hire. That’s what I was selling. Neither company understood the value. In a moment, I’ll tell you more about what happened.

Excuses

I finally gave up trying to explain recruiting ROI to employers after one of my clients hired me to train its internal recruiters (who worked in the HR department) to “do it like a headhunter.” The recruiters understood everything I taught them about getting close to their candidates. But their HR boss — who paid me to do this training — wouldn’t let them practice what they learned. He didn’t want them spending time building relationships. He wanted them to process the newest batch of incoming job applications from the company’s latest job postings.

Of course, some new jobs really do require finding talent you’ve never encountered before; that’s a given. But it’s certainly true that people who impress us are valuable people to stay close to. The excuses employers offer for failing to keep good talent close are astonishing.

  • That’s not how we recruit.
  • Our ATS doesn’t support it.
  • We don’t have time to stay in touch with people.
  • Resumes have a short lifespan — a few months later, they’re out of date and thus worthless.
  • A year, or even a month, after being interviewed, a candidate’s employment status could change.
  • They might not be interested.
  • They might take another job.
  • They might have moved or retired or otherwise be unavailable.

HR: Relationships don’t apply!

But the simpler answers to my questions are painfully obvious:

  • HR is not compensated for cultivating relationships, only for processing applicants.
  • HR is not compensated for filling jobs, but mainly for interview transactions.
  • HR has a budget for job boards, but not for staying in touch with good talent.
  • HR does not fully exploit the single largest channel of good candidates — personal contacts — except with paltry employee-referral programs.
  • HR metrics do not capture the value of relationships, only the degree of matches between keywords on resumes and job descriptions.
  • There is no personal “high touch” protocol for developing relationships and personal contacts in the employer’s professional community.
  • HR relies almost completely on job boards, ATS vendors, and third-party recruiters that make money only when HR keeps paying to search for job candidates again and again.

In a nutshell, HR doesn’t actually recruit, catalog or pursue the best talent. (See HR Managers: Do your job, or get out.) HR pays to churn databases again and again for quick keyword matches.

Talent is not treated as a long-term asset to be held. Instead, people are reduced to job applications and resumes that are traded back and forth on job-board exchanges like commodities, or why would employers pay daily to sort through the same millions of resumes that their competitors repeatedly search?

HR technology vendors control recruiting

The problem is that the dominant hiring model peddled to HR by job-board and ATS providers — and accepted uncritically by HR —  is high-volume automated keyword matching. In other words, high-profit, rinse-and-repeat database services. (See HR Technology: Terrorizing the candidates.)

This churn-and-churn-again model of recruiting is controlled by HR technology vendors. And it is perhaps best exemplified by the manager at a Fortune 50 company who complained to me that he couldn’t get a few bucks to take good candidates out to dinner to recruit them. Why not? Because the big job boards and ATS firms wined and dined his company’s executives to ensure the entire recruiting budget was spent on job boards and ATS services.

If the potential future value of an individual job candidate actually mattered to HR, every applicant would receive a nice note after applying. We know that doesn’t happen because, why bother? There are 100 million more in the database where that one came from. Job applicants are fungible. Who cares about staying in touch with them? We can pay to access all of them anytime!

Our HR isn’t set up to operate this way

So, what happened with the two companies that considered my suggestions about protecting their recruiting ROI by fully capitalizing on good candidates they did not hire?

It was Company A’s V.P. of Public Relations that initiated this discussion with me. She believed building solid, long-term relationships with job candidates would be a good way to enhance the company’s “presence” in its professional community, as well as a good public relations story to help it stand out in general. However, the V.P. of HR squashed the idea because “Our HR isn’t set up to operate this way.”

At Company B, it was an innovative HR manager that wanted to implement methods I had suggested to cultivate and track good candidates that managers had interviewed and liked but could not hire. When time came to execute a contract to develop a program, the company’s legal department squashed it because it had no precedent on which to base an agreement. The HR manager gave up. “We don’t do relationships.”

In both cases, one thing was clear: Recruiting and hiring the best talent was not the mission. Adhering to the status quo was paramount.

Why not turn the spigot off?

Reader David asks, “Why not just turn the spigot off, and contact the people you already have in your pile?” It’s a good question, and it shines a bright light on the dizzy dance of musical chairs that HR calls recruiting — if we might mix metaphors.

Every time HR finishes with a job candidate it does not hire, it wastes time, money and talent when it does not cultivate a relationship to keep the talent close. Should an employer look first at all candidates that it paid to recruit last time, before it pays to recruit again? That’s a bit dicier because a company doesn’t assess (or interview) everyone it recruits, so it doesn’t have judgments — or personal knowledge — about all of them.

I’d be happy if employers fully exploited their contacts with people they already know. This includes anyone and everyone they do business with, including current and past employees! Where do you think we headhunters look to find many of the candidates we present to our clients? We don’t turn on a fire hose; we’d drown.

Why keep screening new batches of people?

What does HR learn after interviewing and rejecting loads of people for a job? What company conducts an outcomes analysis after recruiting for a position? Do companies ever catalog and cultivate the best candidates they meet? Echoing reader David, why do employers keep screening new batches of people when they likely have good candidates in their surplus pile? It seems they do it because they can, and because they don’t know better. (See How HR optimizes rejection of millions of job applicants.)

HR should capitalize on its investment in recruiting, interviewing and assessing people it judges worthy of serious consideration or worth hiring — even if it doesn’t hire them. Paying all over again to search for candidates with every new job opening benefits no one but job-board and ATS vendors who, as we’ve already pointed out, make the most money when employers keep going back to search again and again. That’s what outsourcing recruiting is all about — paying for repeated access to databases and keywords, and avoiding taking people to dinner to forge long-term professional relationships and personal networks that can pay off again and again — for the employer.

Is it smarter for employers to collect and cultivate relationships with the best talent? Or to advertise anew each time they need to fill a job? Are there any employers out there who stay close to good candidates after interviewing them? How do you do it?

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Resigning Your Job? Don’t tell.

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In the July  16, 2019 Ask The Headhunter Newsletter a reader worries about resigning the wrong way.

Question

resigningI finally landed my next job after months of interviews. Now I don’t want to blow it until I’m actually on board at the new company. I say that because the last time I changed jobs I made the mistake of telling my boss too soon, before I even had a job offer. I thought he respected me enough to wish me well, but it blew up in my face. He told HR and I was walked out the door. I can use some advice. How should I handle it this time?

Nick’s Reply

Congratulations — now be careful!

Before I offer my suggestions, I’ll tell you about a vice president of engineering I placed. I moved Hans from the southern Florida “spook industry” (that’s what he called it) to San Jose, California, where he was hired to run an engineering department at a company that made state-of-the art communications equipment.

Resigning & telling

A week before Hans was to move his entire family and start the new job, the president of my client company called me. “Someone left me a worrisome voicemail. They didn’t leave their name and the number is untraceable. They said Hans has affiliations we should be aware of. What’s this about, Nick?”

The tight-knit Florida “spook industry” (purveyors of electronic equipment that spies use) didn’t like that Hans was leaving their little community and taking his insider knowledge with him. They made that call to nuke Hans’s new job — and his family’s future. Never mind how I found out; that’s my job. In the end, it all worked out and Hans had a long, successful career in San Jose.

What happened? Hans made the mistake of telling someone back home where he was going. Hans knew full well how to keep his mouth shut — that was the business he was in. But Hans also had a healthy ego and he wanted to impress some of his close friends, not realizing the risk he was taking.

Risking getting nuked

When I discussed this with him later — he was incredibly embarrassed at his own behavior — I explained risk to this seasoned executive.

“The risk that someone you told would hurt you was probably very small, so you overlooked it. The trouble is, even the tiniest risk is not worth taking when the potential consequences could be catastrophic. The tourist who climbs over the railing at the Grand Canyon to take a selfie knows the chances they’ll fall into the abyss are tiny. But the consequences are enormous. So it’s not prudent to take that risk.”

That’s why, when you plot your exit from one employer to another, you should never, ever disclose to anyone — least of all your boss and co-workers — what you’re about to do and where you’re going.

Don’t jump the gun

Ask yourself, who needs to know and what do they need to know? Your employer needs to know you’re leaving, but only when it’s safe for you to tell them. No one needs to know where you’re going — that’s private and confidential. And you can tell them later, when it’s safe.

The following is from my PDF book, Parting Company: How to leave your job. It’s just a short excerpt of the chapter, “Resign Yourself To Resigning Right,” pp. 42-43:

Too often, in the throes of deciding whether to accept a job offer, a person will start the resignation process too early. That is, he’ll let his boss know he’s thinking about leaving in an effort to get more input as he’s working through the decision. But he’s looking for advice in the wrong place. (See “Should I tell my boss I’m leaving?”, p. 38.)

Unless you have a rare boss who is more concerned about your future than about his own or the company’s, don’t do it. Regard any discussion about your potential resignation as tantamount to tendering it. Once you let the cat out of the bag… it may be impossible to put it back.

Word may get out among your co-workers, and it may affect their attitude about you. Your boss may view what you’ve divulged as an indication that you’ll continue looking, even if you don’t accept the job offer. And, if you haven’t yet made a decision, all that talk may lead you to make the wrong decision.

I’m a believer in getting advice and insight about a potential job change. But, I think it’s dangerous to seek such advice from people whose own jobs and lives will be impacted by your decision. If you work in a very tight-knit organization of mature professionals who respect one another both personally and professionally, your experience might contradict what I’m suggesting. But most people don’t work in such an environment. If you need advice, get it from a trusted peer or mentor who preferably works in another company. Don’t jump the gun. Don’t disclose your intentions when it might hurt you.

Protect yourself

My advice is to give notice to your employer only after you have a bona fide offer from the new employer in writing, signed by an officer of the company, and after you have accepted the offer in writing. Your acceptance letter should include a statement to the effect that you are “advising that my acceptance of this job will require me to resign my position at [the old employer] and to relinquish my income from that job, and that I will rely on the compensation of [$X — whatever the offer is] from you.”

Also covered in Parting Company:

  • Getting fired is a state of mind
  • Stock option handcuffs
  • Did you get downsized?
  • Should I take a package to quit?
  • How to handle exit interviews
  • What about counter-offers?

That “statement of reliance” is recommended by an employment lawyer who advises that it might protect you legally if the offer is withdrawn. (Please see Lawrence Barty’s comments in Job offer rescinded after I quit my old job, but please understand that this is not offered as legal advice in any particular situation.)

Don’t tell anyone at your old company where you are going, even if you’re so excited you could burst. Tell them you’ll be in touch once you’re settled into your new job (preferably for at least a couple of weeks) because you value your friendships and want to stay in touch. You can decide later whether you really want to do that.

If they beg to know where you’re going, just tell them that some headhunter once cautioned you to keep it confidential — and that when the time comes, they should, too.

Has resigning ever come back to bite you? What does your employer really need to know when you resign? How risky is it to tell people where you’re going? What “parting company” tips would you offer this reader?

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