Should I give equity to entice a new hire?

On March 12, 2012

In the March 13, 2012 Ask The Headhunter Newsletter, the owner of a start-up business asks whether it’s smart to give equity to a new hire:

After years of frustration with the way many professional services firms treat their clients, I decided to launch my own business. I have had modest success in my first six months and I am considering adding an employee. The individual that I am interested in has expressed concern about the added risk of working for a small company. He wants me to give him an equity stake to offset the risk, but I don’t want to give away too much too early, considering the competitive nature of the marketplace and my own business vision. What would you recommend?

Here’s the short version of my advice:

(For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

There are two kinds of people in your start-up world, other than clients: employees and investors. You can’t fill a job with an investor. You must fill it with an employee.

Now, I’m a big believer in sharing profits with good employees. And I think it’s a great idea to make employees owners to a reasonable extent, commensurate with their commitment to the business. That’s what profit-sharing plans are about.

But employees must earn their way into ownership of the business. It’s simply not good management practice to give away ownership of your company before you know what you’re getting in return. If this individual were bringing you new clients or some kind of intellectual property to enhance the value of your company, then and only then would I consider giving him equity from the outset.

If you hire an employee whose contributions become a true investment and a key part of your business, then at some point sharing some equity may be a key to your long-term success.

You can test this candidate’s motivations. Try this:

How to Say It
…(Sorry, this part is only in the newsletter… Don’t miss next week’s edition. Sign up now. It’s free!)…

…This person is clearly looking for security and potential riches without making a solid investment.

I’d find another candidate, or someone who wants to invest in your business as a partner. Take a look around: Even jobs with big, stable companies are risky. There is no such thing as job security.

In the future, I would look for candidates who want to add value to your business and to make you more successful — not ones that want you to protect them from risk. Talk about jobs and salary to potential employees. Talk about investment and risk to investors. But don’t confuse the two.

Does your company offer equity to new hires? Have you ever accepted equity to join a start-up? How did it work out? I’d like to hear what you have to say about the risks of start-ups — and the joys of taking risks!

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Internal recruiting: Is it poaching?

On March 5, 2012

In the March 6, 2012 Ask The Headhunter Newsletter, a manager wonders why employers prohibit internal recruiting but let their best workers get recruited by the competition:

In [last week’s edition] a manager asked about hiring from within the company. I hire internally all the time, and my company’s own employees have been some of my very best hires. While it may be frowned on in some places, here we can request internal references, talk with an employee’s current manager, and check performance reviews. No doubt some companies make it difficult to hire internally even while they talk big about career development and growth! That’s not how to keep your best people. How can managers in companies like this change the rules?

Here’s the short version of my advice:

(For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

It’s a dirty little secret that many companies discourage managers from recruiting internally. Oh, they promote “career growth” as long as an employee initiates the contact. (See JHBWA.) But for a manager to recruit an employee from another department? That’s a no-no!

Should managers be permitted to headhunt internally? Absolutely. While some would abuse the privilege, I think that in any healthy company managers and employees would find a balance. Not encouraging internal mobility only hurts a company.

I’ll tell you a story about how the enormity of this problem came home to me.

A Fortune 50 financial services company hired me to teach recruiters in their HR department to recruit like headhunters. After putting them through an intensive program on how to identify and actively pursue the best people for a job, it dawned on the recruiting manager that the best candidates were often already working somewhere else in the company.

That should be no surprise in any large company. If the company is successful, of course some of the best people in the industry already work there.

It was easy for me to convince the manager that the company needed to create an internal headhunting function, to recruit internal people from one department to another — legally.

She wanted to be the internal headhunter, and I helped her sell the concept to management because the company was losing a lot of its best people to the competition. Meanwhile, exciting internal jobs were going begging. The company was paying headhunters like me huge fees to recruit outside the company, when great candidates were right under management’s nose.

Since managers were not permitted to poach employees from one another — they had to wait for employees to come to them — setting up an internal headhunter with freedom to recruit with no-holds-barred seemed to be a good solution. They realized this was preferable to losing their best people to external headhunters.

As soon as they kicked off the project, the company’s managers freaked. Everyone wanted to hire internally, but too many managers objected to having their employees hunted. So the project was cancelled.

Long a target of headhunters, the company continued to bleed talent. To top it off, the HR recruiter who started the internal headhunting project got so disillusioned that she left.

Of course managers don’t want their talent poached by other managers. But it happens every day. The question is, does the board of directors want its talent poached by other companies — after investing a lot of money to cultivate that talent? In many companies, the geniuses in HR like to refer to people as a resource. But until HR recognizes that people are an investment, the ROI (return on investment) will accrue to the company that recruits them. Internal headhunters, anyone?

I think managers can help stem the loss of good employees by working together to create responsible internal recruiting practices. Hire an internal headhunter, and protect your company’s ROI. Pretending no one is poaching your best people from outside is a losing proposition.

Does your company recruit internally? Or does management play games about who must approach whom? And, if you’re a manager, what does this mean to you? What do you think about poaching, stealing, and recruiting your own company’s employees!

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Manager Asks: Should I hire without face-to-face interviews?

On February 27, 2012

In the February 28, 2012 Ask The Headhunter Newsletter, a manager loses a “star” employee and asks how to hire — but the manager cannot interview candidates in person:

A star employee left my team and I need to replace him. I can recruit only from inside the company, which has over 100,000 staff, so it’s not so much of a limitation. More of a limitation is that I will never get to meet candidates face-to-face before I hire anyone because I most likely will be recruiting people in another country. I love all of your advice about candidates showing how they can do the job in their interview, but how can I turn that around as a manager so that I can get the best possible candidates?

In recruiting the original star employee I used your advice and had my short list of candidates present a piece of work to me, similar to what they would be required to do in the job, and from there I picked the ones I wanted to interview. The star candidate made the best impression in the face-to-face interview (which I was able to do then) and I hired him because he approached the interview the way I needed him to approach the job. This method obviously worked, because I got a star employee.

These techniques are so much harder to do when there’s no interview in person, and you have no idea who might have helped candidates put together the piece of work that they turn in. Do you have any tips?

Finally, I can’t obtain reference information about applicants who haven’t told their boss or co-workers they are applying for another job. If I start asking around about them in a division I don’t work in, it can cause a nasty situation. How would you suggest getting sound information about the candidates’ reputations without creating an internal HR nightmare?

Here’s the short version of my advice: (For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

First, thanks for confirming that asking candidates to “do the job to win the job” is a very effective way to hire — and stars, no less! (See the Readers’ Comments section of the newsletter, at upper right, for another confirmation that this works nicely.)

You seem to be facing two problems:

  • In-person interviews are not possible, and
  • You can’t check references.

More important, you know that meeting candidates face to face — and asking them to show how they’d do the work right there in front of you — pays off handsomely, because that’s how you hired your last star.

Your real challenge isn’t how to hire in spite of the two problems. It’s how to overcome them. Hiring in spite of those two problems could be disastrous. The reference problem is probably insurmountable because it could create a lot of trouble for you and for anyone you investigate. You’d probably also be violating company policy.

The first problem is one that I think you have to tackle and solve.

Find a way to meet your candidates. Explain to your management that the cost of hiring the wrong person could be staggering. The cost of bringing candidates in for meetings might be significant, but is not staggering. It’s a very wise investment. Do all you can to minimize that cost — but I would go out of my way to make in-person interviews happen. Hiring remotely is just too risky for the company, for you, and for the candidates.

I would nonetheless mention the reference problem to your boss…

… Sorry, this part of my advice is available only in the newsletter… Don’t miss another edition! Subscribe to the weekly newsletter now! It’s FREE!)…

Sometimes we must remember that our bosses pay us to tell them the truth, even if they don’t want to hear it. I would not risk hiring sight unseen. Your job is to tell your boss the truth. Explain the potentially huge cost of making the wrong hire in the interest of saving a few dollars on travel.

Finally, I would outline to your boss the Ask The Headhunter methods you use when you interview. Demonstrate how you will apply the extra investment. Your boss will see that you hire for the bottom line: You want to see your candidates perform before you hire them. Your department will be more successful. The candidate is far more likely to be successful. Your boss will be very happy. You might get a raise later for thinking so strategically. And I’ll be proud.

Have you ever hired anyone — or been hired — without an in-person interview? More significantly, have you ever been in an interview — as the employer or the candidate — where “doing the job in the interview” was required? How did you handle either situation?

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How Employers Can Help You Get Hired

On December 5, 2011

In the December 6, 2011 Ask The Headhunter Newsletter, a reader who helps seniors find jobs shares an “interview invitation” one of his clients received. It’s a landmark! Why don’t more employers do this? Join me below to discuss other ways employers can help you get hired.

I’m a training and placement specialist and a long-time subscriber. I’d like to share an e-mail one of our clients received confirming an interview. I’ve changed the identifying information, but otherwise this is exactly how it was written. I love it when employers tell us what they expect. Too often, we are left to guess. What do you think of this approach to interview invitations?

Chris Walker
Senior Employment Center
Akron, Ohio

***
[Letter received by a job applicant]
Dear Joe,

You are confirmed to interview on Thursday November 17, 2011. You will be interviewing for the Mechanic position with XYZ Compost Services, Inc. The meeting will take place at the address and time listed below

ADDRESS
1234 Main St
Akron, OH 44313
(330) 888-8888

INTERVIEW SCHEDULE
10:00 am – 11:30 am

INTERVIEWERS
[name], Vice President, Operations
[name], Manager, Process Control
[name], Electrical Engineer

INTERVIEW PREPARATION
During your interview, you should expect to be asked behavioral-based questions where your responses need to be specific and detailed. Be ready to share several examples from your past experience — jobs, projects, teams, volunteer work — where you demonstrated strong behaviors and skills, and think in terms of examples that will show off your selling points. Be sure to come prepared with both positive and negative examples.

To learn more about XYZ products and services visit [our website].

Contact me with any questions.

Thank you.

[name], MBA
Director, Human Resources
**

Here’s the short version of my advice: (For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

Gee — Imagine that! An interview invitation that includes the actual names of interviewers a candidate will meet and talk with. Most employers won’t disclose this information for fear that the candidate might actually call them prior to the interview. Perish the thought!

That’s right, employers don’t want anyone bothering their managers with questions about an open job — least of all people who are about to invest their valuable time in a job interview. It’s better to let the applicant show up guessing what the employer wants, rather than help a candidate get hired by sharing a clear set of expectations. (The alternative for managers is to Open the door.)

Why don’t employers do everything they can to help you get hired? (For that matter, why don’t managers invest heavily in Interview futures, rather than shop for talent at the last minute?)

Most employers don’t want to tip their hand about what you will be asked in a job interview. That would be giving it all away and it would destroy the element of surprise! Why enable candidates to prepare before they interview? Better to let them show up wondering! Do these same managers also give their employees surprise assignments without any suggestions about how to do the work?

Employers behave like total dopes when they schedule interviews. It’s a rare employer that actually helps the candidate prepare. My hat is off to this organization — it clearly believes that helping a candidate succeed in the job interview will help it make a better hire.

But I’d take this further. As an employer, I would:

  • Call the candidate in advance, on the phone, and suggest specific resources the candidate should use to prepare for the interview.
  • Offer to let the candidate talk with team members to ask questions so he or she can prepare fully for the interview.
  • Conduct a “cook’s tour” of the facility prior to the interview, so the candidate can see firsthand what the work — and the business — is all about.
  • (…this last suggestion is only in the newsletter… Don’t miss next week’s edition. Sign up now. It’s free!)

Some employers might scoff that this would be a waste of time, and claim that the purpose of the interview is to discuss all these things. I say bunk. A good manager would never blind-side an employee with a work assignment. A good manager would encourage and help an employee prepare in advance, to help ensure success. The point of a job interview is to expedite hiring a capable candidate — so why not help ensure success by prepping the candidate? It’s all the same challenge: to get the work done!

This edition of the newsletter is intended to be more even more interactive than usual. Please help extend my list of what an employer can do to help a candidate prepare for an interview — and to help the candidate succeed.

What would you like to see employers do to help you get hired — and to help themselves efficiently fill a job and get the work done? What would you add to the list of helpful information offered by the employer in Chris Walker’s example? Is anything “too much,” or how extreme could an employer get?

Special thanks to Chris Walker for sharing “a live one” from one of his clients. This is a great topic — especially if hiring managers are out there “listening!”

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Employer Fined for Stupid Recruiting

On November 14, 2011

New Jersey is the only state where it’s illegal to publish job ads that exclude unemployed people. Is that because New Jersey has especially stupid employers, or because New Jersey is the first state to recognize that there are too many employers everywhere that behave stupidly?

Does it matter? Here’s what matters: The company that took the first bust under this new law reveals a lot about Stupid Recruiting.

CEO J. Michael Goodson explained Crestek’s recruiting strategy. The job posting for a service manager included the requirement, “Must be currently employed” because Crestek wanted someone “at the top of their game and not people who have been unemployed for 18 months.”

Now for the punchline: According to the Star-Ledger, Goodson “spent three years seeking the right person and sifting through resumes was time-consuming…” [Emphasis added.]

Recruiting is hard work: You have to sit and wait an awfully long time.

This $185 million company spent three years trying to fill a position so important that the CEO waited leisurely for a resume to come along and nibble on his job-ad line. Translation: Hiring what comes along. Gee — I wonder how much it cost Crestek to leave that job unfilled for three years while Goodson sifted incoming resumes. Did it ever occur to Goodson to go out and find, cultivate, cajole, steal and otherwise recruit the person he needed?

The Talent-Shortage Brain Fart

Waiting for job ads to deliver a top candidate to your front door is like waiting for customers to show up. Doesn’t Crestek have a sales force that goes out to find customers? Then why doesn’t Goodson get out there to find top talent? Why is this company banking its future on want ads? I can see Goodson’s next initiative: Fire the sales force and run more ads!

Why did this company resort to warning jobless applicants away? “This was the only time we ever advertised that way and we only ran it when the other ads failed to produce any viable candidates.”

Ahhh… this was an experimental, state-of-the-art job ad. A new way address the talent shortage. A brain fart.

Remember the talent shortage? 4.2 million Americans are out of work, and almost half a million of them in New Jersey. Not one qualified applicant came along while Crestek was dipping its line in the water. Must be the talent shortage at play — or poor management?

Stupid Recruiting: A sign of lousy management

Says Goodson: “For this job, I wanted somebody that’s in the service business and is employed. If someone is out of work for 18 months, my concern would be that their last job was in a bakery or pumping gas.”

If I were looking for a job at a good company, my concern would be that the service manager’s job at Crestek was empty for three years because the CEO didn’t know how to fill it. I’d wonder whether the the company might be better off if the CEO would go pump gas.

Running ads and waiting for Mr. or Ms. Right to show up at your company is passive recruiting and poor management. Now that the CEO has tripped over his tangled recruiting line, Crestek’s corporate resume has been updated with a rap sheet for violating New Jersey employment law. But no state in the union fines companies for Stupid Recruiting.

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How to manage gang-up interviews

On October 17, 2011

In the October 18, 2011 Ask The Headhunter Newsletter, a manager indicts “panel” interviews and says he’d never consent to one — or conduct one. Are panel interviews a bad idea?

I was taken aback recently when my HR department scheduled me as a part of a panel interview. When I queried our hiring team, they claimed this was the “latest thing” and it provided a “challenging atmosphere for the candidate while minimizing expenditure of company resources.”

I was on my way to register my discontent with the HR VP when my Blackberry indicated the interview had been cancelled because the candidate had accepted another offer. That didn’t shock me—I wouldn’t accept a panel interview, either. Shortly thereafter, the HR VP “innovator” left to “pursue other career opportunities.” Good riddance!

This doesn’t mean some other “idea person” in our company won’t try to resurrect this sort of thing, but not on my watch. I believe in giving each candidate a chance, as much as possible, to “do the job.” It’s much more productive.

Don’t get me wrong, I’m all for candidates meeting the teams they will work with, just not in a formal interview environment. Is this panel interview approach really creeping into our already dysfunctional job interviewing system?

Kudos for the continuing wisdom emanating from your Ask the Headhunter empire! Your straightforward approach is a win-win for employers and candidates and removes the HR-injected “smoke and mirrors” from the hiring process. It certainly has helped me in many ways. Good luck and keep ‘em coming!

Here’s the short version of my advice: (For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

Thanks for the laugh, and for your kind words. No, I don’t see ganging up on a job candidate as a new trend — although in some organizations this has long been routine. Innovative HR VPs… unfortunately, they’re not a trend, either.

It’s refreshing to hear from a manager who doesn’t support contrived methods of assessment. It seems that many HR execs think the more over-defined the interview process is, the better. They’ll accuse me of being a yokel, but whatever happened to just talking with someone and working together, to figure out if there’s a match?

I believe that a simple, engaging, no-tricks, personal interview experience is what gets people’s attention and interest. The more direct and one-on-one the assessment, the better. As you point out, there are good ways for candidates to meet the entire team. Candidates are sick to death of “the process.” They want to work with managers and people who truly want to get to know them. The happiest candidate is one who’s hearing about the work that needs to be done, and who’s being asked how he or she would help do it. I encourage you to go that route at your company.

A thorough assessment can include other activities, but any interview should start with a respectful, “working” meeting — not a confrontation by a gang.

So, what should a job applicant do when the employer schedules a panel interview? Like the candidate who took the other offer and declined the panel interview, the manager who asked this question has the answer: “I wouldn’t accept a panel interview.” What you do, of course, is up to you. (Maybe you like panel interviews!)

While an employer may be taken aback, there’s nothing wrong with saying you’d prefer to meet the hiring manager one on one, and that you’d be glad to meet the rest of the team if that first meeting goes well. Remember — the candidate gets to judge the employer in an interview, too, and doesn’t have to proceed with more discussions unless the experience is satisfactory. Alternately, if you find yourself stuck in a panel interview, try this: How to Beat The Stress Interview.

You can get relief from situations you don’t like by politely and firmly saying no. It’s the sign of a credible job candidate.

Are panel (gang-up) interviews legit? If you’re a manager, do you do panel interviews? What’s your experience been?

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This Employer Earns an A in Hiring

On August 1, 2011

In the August 2, 2011 Ask The Headhunter Newsletter, a manager explains hiring like it ought to be done and earns an A:

I’m a hiring manager and I like to ask candidates to:

  • Review our web site and provide written recommendations for improvement prior to the initial interview;
  • Meet with a sales manager who can assess their knowledge of our market;
  • Do a presentation;
  • Participate in some relevant pre-employment training to see how well they learn and interact with others.

This works for us and it keeps our turnover very low. From a hiring manager’s point of view, I think it’s important to get multiple looks at a candidate, and to give a candidate multiple looks at us. However, this takes quite a bit of time. What do you think?

Here’s the short version of my advice:

(For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

This is hiring like it ought to be. What you’re doing earns high marks, because you’re not conducting junk interviews. A candidate who is really interested in working for you will gladly invest time in your hiring process.

Often, the problem isn’t that companies spend too much time interviewing; it’s that they don’t spend it profitably. I believe hiring a person is like marrying them. Before you tie the knot, you should talk and work together in more than one context, and you should meet one another’s friends (or co-workers). That’s how to decide whether you belong together. In other words, the courting process must be substantive. I’ll offer three suggestions. (You’re already doing the first one, in your own way.)

First, Kick the candidate out of your office. Get the candidate out on the work floor, to meet your team and see how the work is done. Let the candidate participate. Don’t just test them; try them out.

Second, make sure you let candidates know from the start… (This is where some of my advice is omitted. To get the whole story next week, subscribe to the newsletter. It’s free! Don’t miss another edition!)…

Third, if you’re going to ask candidates to do a presentation and meet people in other departments, help them prepare. Suggest resources, discuss your company’s preferences and style, and offer guidance, just as you would to your employees. For example, you might offer to let the candidate talk with one or two members of your team, by phone, prior to the interview. (If this seems like a waste of time, reconsider filling the position, because if you’re not willing to make this investment, why should anyone invest time to meet with you?) To get the best out of candidates, I believe you have to help them, just as you would your employees when you assign them a project.

Hiring is a manager’s #1 job, and you do it intelligently. Most employers barely earn a passing grade at hiring, and their turnover shows it. I challenge them to reach for an A at interviewing. Your “very low” turnover proves what a valuable investment you’re making. My compliments. Thanks for sharing a manager’s point of view.

In today’s newsletter, we hear from an employer who knows how to hire for success and profit. What do you think of these interviewing methods? What else would you like to see employers do in the job interview? Tell us about an employer you know that deserves an A for interviewing and hiring — and why!

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Interview Questions: You need just one

On May 4, 2011

Dying to become relevant again, Monster.com sent out a promotional e-mail today, with a big, fat, blue title at the top:

There’s more to recruiting than finding the right candidates.

Well, no, there’s not. Finding the right candidates is 100% of what recruiting is and must be, or you wind up having to use 50 stupid interview questions to sort out all the wrong candidates.

The e-mail links to an article on the Monster.com website titled The 50 Toughest Interview Questions to Ask or to Answer. Proof positive that Monster.com is still totally irrelevant.

The Top Stupid Interview Questions

There used to be a book, published by Adams, titled 2,800 Top Interview Questions — And Answers! I always had a fantasy about that book. You walk into the interviewer’s office. You smile broadly and shake hands. “Glad to meet you! Let’s get down to business and have an interview!”

Then you slide that baby across the desk. “Here are all the questions… and the answers! Now you’ve got them, and I’ve got them, and we don’t need to waste our time on them. Now we can do something useful, and talk about the work you need to have done!”

Instead of teaching job candidates to talk shop with the hiring manager, career experts outdo themselves rehashing and regurgitating that list. And every book of those questions comes with answers — digested and marinated in expired creative juices, and about as satisfying as a bolus coughed up by the last person who interviewed with the manager.

fast-companyOne Good Interview Question

Back in 2003, the editors of FastCompany magazine put together a cover story titled, All The Right Moves: A guide for the perplexed exec. It was a collection of 21 Q&As for managers. Editor Bill Breen sent me a question and asked me to write a “memo” to managers with my advice. (Later, Breen told me that his boss, FastCompany founder and publisher Alan Webber, thought this one tip was the best of the 21 in the feature. Yah, I was tickled.)

I still think you can toss out every list of Top Stupid Interview Questions, whether it includes 50, 200, or 2,800, and just ask the one question I discuss in this FastCompany column, which is reprinted below. And Monster.com can go suck rocks.

16 . What is the single best interview question ever — and the best answer?

Memo from: Nick Corcodilos, author, headhunter, and publisher of the Web site Ask the Headhunter.
To: Hiring managers everywhere
Re: Reinventing the job interview

The purpose of any interview is simple: to determine whether the candidate can do the job profitably. A smart interview is not an interrogation. It’s not a series of canned questions or a set of scripted tests that have been ginned up by HR. An interview should be a roll-up-your-sleeves, hands-on meeting between you and the candidate, where all of the focus is on the job. Think of the interview as the candidate’s first day at work, with the only question that matters being this: “What’s your business plan for doing this job?”

How Can I Change Careers? picks up where that FastCompany column leaves off. And it’s not just for career changers. It’s for anyone who wants to stand out in the job interview. The book explains why this “single best interview question ever” for hiring managers is also the single best question for candidates to bring up in the interview.

To successfully answer that, the candidate must first demonstrate an understanding of the company’s problems, challenges, and goals — not an easy thing to do. But since you desperately want to make a great hire and get back to work, why don’t you help the best candidate succeed? Two weeks before the interview, call up the candidate and say the following: “We want you to show us how you’re going to do this job. That’s going to take a lot of homework. I suggest that you read through these 10 pages on our Web site, review these publications from our marketing and investor-relations departments, and speak with these three people on my team. When you’re done, you should have something useful to tell us.” This will eliminate 9 out of 10 candidates. Only those who really want the job will put in the effort to research the job.

At the interview, you should expect (or hope) to hear the most compelling question that any candidate can ask: “Would you like me to show how your company will profit from hiring me?” The candidate should be prepared to do the job in the interview. That means walking up to the whiteboard and outlining the steps that he or she would take to solve your company’s problems. The numbers don’t have to be right, but the candidate should be able to defend them intelligently. If the candidate demonstrates an understanding of your culture and competitors — and lays out a plan of attack for solving your problems and adding something to your bottom line — you have some awfully compelling reasons to make the hire. But if you trust only a candidate’s references, credentials, or test results, you still won’t know whether the candidate can do the job.

Recruiting is still — and always has been — about finding the best candidates. But the best candidate isn’t the one who can answer that question. The best candidate is the person who asks it.

More about this topic here.

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Recruiting: Have employers put on their thinking caps?

On February 2, 2011

In a recent Wall Street Journal article, Joe Light (Recruiters Rethink Online Playbook) suggests employers may have put on their recruiting thinking caps. Light discusses whether employers and recruiters are shifting their focus away from job boards and towards more personal (and productive) recruiting methods.

“About 24% of companies plan to decrease their usage of third-party employment websites and job boards this year,” reports Light.

Duh. Why this change?

“We need to reach candidates earlier, before they’re being pursued by competitors.”

Duh.

“Now, the company is hiring different types of recruiters who specialize in headhunting, including finding candidates to poach from competitors, rather than those who are good at processing and filtering applications.”

Duh.

Companies are dumping the job boards, and instead putting recruiters out in the field, to talk to people. Duh.

Why is it so difficult to understand that smart people prefer to do business with others they know and trust, or with folks who are personally referred to them by trusted contacts? While most “headhunters” don’t hunt (just dial for dollars), the best earn their $40,000+ fees (per placement) by going out into the world and talking to, meeting with, forming relationships with, the shining lights in the fields they hunt in. This should tell any job hunter something important: It’s the people, Stupid!

Joe Light is shining the light (sorry!) on a sea change in recruiting. The smartest companies don’t even need headhunters, if they put their best managers out there to find great candidates. This isn’t rocket science. But, nor is it the stupid database game that most seem to think it is. You can’t get a job by having a machine plaster your resume all over kingdom come, using “keywords” and “semantic analysis algorithms.”

TheLadders, Monster, CareerBuilder and that ilk are fascinating businesses — they make wads of money while their products don’t work! (They represent the “source of hires” about 0.7%, 4%, 3% of the time, respectively, according to annual surveys done by CareerXroads.) Yet personnel jockeys continue to throw cash at them.

While the trend seems to be changing, I worry about one of the last bits in Joe Light’s article:

“Instead of using senior recruiters to filter through the company’s applicants, lower-level screeners process them first and only hand off the most-qualified.”

Really? Just how does a company get better candidates, when it uses lower-level clerks to sort out the best candidates? Gimme a break. Sometimes the problem of “mindless recruiting and hiring” is a bigger part of a problem corporate mindset than we realize…

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Readers’ Forum: How much should I pay a new hire?

On December 6, 2010

In the December 7, 2010 Ask The Headhunter Newsletter, an employer asks how to set the salary for a job offer.

I’m an employer, and I need some information on the average salary I should expect to pay an experienced (5-10 years), degreed individual to manage part of my software company. I am looking for someone who can take over and manage with little or no supervision. How do I set a salary on this?

Here’s the short version of my advice: (For the entire column, you need to subscribe to the free weekly newsletter. Don’t miss another edition!)

No salary database describes your position, or the particular manager you want to hire. You might find some data that appear to be relevant, but just one factor could throw off your entire calculus and lead you to make a terrible mistake.

I know that you need to set a range for your budget, but why not think about this person’s salary in a new way that might attract the best candidates? (Why would you want to focus on average salary? Do you want an average hire?)

Ask yourself, Is my hiring strategy to limit my costs, or to boost my profits? That is, are you willing to pay more to get more? This requires some analysis that few employers consider.

How much added profit could a candidate add to my business? In the interview, ask candidates to discuss their abilities in those terms. How would they increase your profits by 10%? Decrease your costs by 15%? Create products that increase market share by 20%?

Then, pay based on added profit.

(You say you can’t calculate profit for a particular position? Well, then your business plan is totally screwed. But don’t feel too badly — few employers have any idea how a single job contributes to profit. Think about that: How can anyone run a company rationally if they don’t know how each job contributes to the bottom line? My suspicion is that this problem is a fundamental cause of business failure.) 

A candidate who can answer those questions in a compelling way may be worth more than the market—or any salary survey—suggests. So, think out of the box. Turn your interviews into working meetings where you and the candidate roll up your sleeves and tackle ways to improve the job to make it more profitable.

This sort of interview turns into a business planning session…

(If you’re a job candidate, don’t let salary surveys limit your job negotiations, either.)

Maybe HR told you there’s $X in the budget for the job you want to fill. Maybe you checked the industry averages and set the salary range accordingly. Maybe you picked a number out of a hat.

Maybe you have no idea how the job is supposed to contribute to your bottom line!

Which is it? How do managers decide what salary to offer a new hire? Let’s talk dollars. How do you think they should do it?

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