You can’t recruit for competitive advantage if everybody’s got the same algorithm

On May 28, 2018

In the May 29, 2018 Ask The Headhunter Newsletter we take a look at how companies recruit the same and why it’s unwise.

Question

recruit

I run a sizable company. Like our competitors, we’re finding it difficult to recruit the people we need to grow our business. We all talk about competitive advantage being the crucial factor, and I’ve always believed a company’s competitive advantage comes from its people. But it’s easier said than done to find people with the skills we need. My vice president of HR gave me some of your articles and I find what you say troubling, that the tools we’re using to find talent are leading us astray. It’s easy enough for a headhunter to say that. Can you back up your claims that we’re doing it wrong?

Nick’s Reply

When I do presentations for Executive MBA (EMBA) programs at schools like UCLA, Wharton, Cornell, and Northwestern, I always take the opportunity to ask one of my favorite questions: How do you actually recruit the people you need to hire?

The managers in the audience — who are investing a lot of money to learn how to leverage talent into profits — almost always answer like this: “We create detailed job descriptions and post them, or we use headhunters.”

Then I make them nervous and ask why they pay a headhunter $30,000 to fill a $120,000 position, if they can just post jobs for five bucks apiece.

“Well, sometimes we need help.”

And how many candidates does the headhunter deliver?

“Usually four or five.”

Algorithms don’t recruit

Now I’ve got them. But I’m not trying to sell them headhunting services. I want them to realize that one recruiting method delivers just a handful of good candidates, while the other — automated, algorithmic recruiting — turns on a fire hose of applicants that all their competitors are looking at, too.

Why don’t they go off the beaten track and use a competitive recruiting advantage? I suggest that they should invest the time—personally—to go out into their professional communities and recruit as few candidates as possible, but make sure they’re all the right ones. (See Talent Crisis: Managers who don’t recruit.)

Their answer is embarrassing, and it usually goes like this:

“That’s incredibly time intensive! We have this model: We post a job description, and we get 2,000 applicants. But you want us to risk everything—all this time and effort—on four or five applicants? What about the other 1,995 applicants? What do we do with them?”

“You take a pass,” says Gilman Louie, a venture investor who rejects mass recruiting methods. And I think he’s absolutely right. Don’t listen to me. Listen to him.

What a VC knows about hiring

Gilman Louie is a founder of Silicon Valley VC (venture capital) firm Alsop Louie Partners, which invests in sectors including security and privacy, data and analytics, consumer products and services, and education technologies. In the 1980s Louie licensed the blockbuster video game Tetris from its developers in the Soviet Union. He’s also listed as one of 50 scientific visionaries by Scientific American.

You and your HR department would do well to consider that Louie is probably much more successful at hiring than your company is because he knows how to recruit. He doesn’t rely on LinkedIn, job postings, and the mass recruiting efforts HR departments use.

Employers love to proclaim their goal is to find the unusual, the star, the talent that will lead the organization into the future. So why does virtually every company rely on a recruiting method that’s designed to deliver staggering numbers of “candidates” that are all wrong?

You’re using the same algorithm

Gilman Louie: “Because of the competition for talent, employers are unfortunately using those typical HR filtering systems to put resumes in the right piles and to line up the interviews. The problem with that is, whether you’re an established company or a start-up, everybody has the same algorithm.”

I tested the question I ask EMBA students on Louie: “You can get 2,000 resumes online for about five bucks. Why not just get lots of candidates into HR’s pipeline?”

Louie: “You can’t go through 2,000 candidates! HR processes 2,000 candidates! They don’t look through 2,000 candidates! And at the end of the process, what they get is the same candidate that everybody else running PeopleSoft gets! So where’s your competitive advantage if everybody turns up with the same candidates?”

Eliminate the perfect resumes

You don’t review lots of resumes to find the best candidates?

Louie: “I put a job description out and all this stuff starts flowing in. I lay out those 100 or 1,000 resumes, or those LinkedIn files—and, all the things that everybody has that are the same, I just draw a line through them. What’s left over is what I look at because I’m trying to find the thing that distinguishes one candidate from another candidate. I’m not looking for the perfect resume. The perfect resume is vanilla.”

Louie spends a lot of time in his professional community meeting people. (See The Manager’s #1 Job.) That personal investment in face time yields the best hires for the startups he funds.

Go where your competitors are not looking

For example, Louie teaches MBA classes at Vanderbilt and Stanford Universities. He explains why it’s so important to go out into the wild and recruit in person.

Louie: “I recruited a kid who was a high-school dropout during a presentation we did at MIT. He was clearly different from all the other students. So I went and asked the admissions department about him. They said, when we interviewed him, one of our admission officers recognized the custom bikes the kid made when he lived on the wrong side of the tracks in Glasgow. He said, ‘We need this kid; he’s entrepreneurial! He doesn’t look like any of the other kids. He has a mediocre GPA, doesn’t have straight As, didn’t go to a private school, didn’t have any of the things MIT kids have. The resume popped.’ So he got in because he was different. We hired him, and he’s phenomenal.”

Employers look for their hires on LinkedIn, via job postings, and through the mass recruiting efforts of their HR departments. Louie refers to the kind of thinking that’s behind such hiring methods as too conventional, or “on the line.”

Get off the line

Louie: “The question that Steve Jobs always asked was not about the way the world is going to be, but the way the world should be, based on his point of view, based on his distorted reality. It’s some place off that line. So the trick is to get off the expected path line. It turns out, by the way, if you do the actual analysis, the world never turns out to be on that line. And the reason for that is, all the incentives go to the guy who figures out how to move off that line!”

If that sounds like natural selection—survival of the winner—it is.

Louie: “All the value that you create between the line you are on and the line everybody else is on is yours. When you’re selecting people, you can’t select people who are going to be on that line. You’ve got to select people who are off that line.”

Competency is not competitive advantage

Let’s get back to your question about whether the algorithmic recruiting tools your company uses are leading you astray. Your company’s HR department is not recruiting in some pool of rarefied talent, like Gilman Louie does when he sits in on a seminar comprising unusual participants. (See Smart Hiring: How a savvy manager finds great hires.)

Your HR department is drowning in the same rush of job applicants fed through the same fire hose every other HR department subscribes to — Indeed, LinkedIn, ZipRecruiter, Taleo, and a raft of other undifferentiated keyword-matching systems. Worst of all, you’re paying dearly for their services.

Louie: “Here’s the problem with the algorithms. The algorithms are all looking for the same. Everybody is fighting for a handful of talent that the algorithm brings up. This jacks up the price, and it communicates that employees are kind of fungible. Employees are not fungible. I’m not saying those tools aren’t helpful. They will get you to competency. But competency is not competitive advantage. Competitive advantage is finding the unusual that everybody else missed.”

It’s personal

Gilman Louie makes it very simple when I ask him to summarize how he hires for competitive advantage.

You just told us three crucial things. One, you recruit by watching people in their native habitat. Two, you find people others missed. Three, you don’t rely on resumes, you go ask someone.

Louie: “Exactly.”

None of those steps have anything to do with traditional or automated recruiting.

Louie: “You’ve got to get there, and it’s personal. And personal is not digital.”

(Gilman Louie’s comments are from a discussion I had with him a few years ago while working on another project. If I thought he was prescient about “digital recruiting” back then, now I think Gilman’s advice is timeless wisdom.)

What does this venture investor’s advice about hiring tell us about the state of recruiting in today’s economy? Can these methods work in normal company settings? If you’re an employer — a hiring manager or an HR exec — can you “get off the line?” How can you put these ideas to work if you’re a job hunter?

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You can’t CLICK to change careers

On May 21, 2018

In the May 22, 2018 Ask The Headhunter Newsletter a reader wants to change careers… without the necessary experience.

Question

change careersAs someone who has only been out of work a few months, I am finding it really difficult to even get interviews, and all of them but one have been through networking. That being said, I’m trying to shift career paths since I was working in retail banking before and now, at 27, I’d really like to get away from being a teller.

Do you have any advice on how to change careers, especially with no experience in other industries?

Nick’s Reply

What makes career change difficult is that you need to be able to do the work you want to get hired to do. If you can’t do it, you won’t get hired.

But heavy marketing by the big job boards produces — as intended! — a lot of silly wishful thinking. We’d like to think that, because a cool job is posted, we can and should apply for it. (Hey, why not take a chance?) But wanting a job and being worth hiring are two very different things.

You can’t click to change careers

Career change requires a lot of preparation. You can’t just click APPLY like Indeed or Glassdoor suggest, or write a clever resume that gets you an interview or gets you hired. The sad mistake people make is that they think they can pay someone to produce a magical resume that will yield a job interview for a job they can’t really do! There’s no magic.

From How Can I Change Careers?, p. 10:

I pity the person who thinks career change is about finding a job. Companies don’t give out jobs. They hire people who can help them make more money—and will pay for that.

So when you approach a company, you must explain how you fit. You must create the equivalent of a business plan, mapping your skills to its needs, helping the employer see why hiring you will pay off.

In my experience, the main reason that most attempts at career change fail is because job hunters never expend the effort necessary to understand what the employer’s work is all about. They hand their resume over and essentially say, “Here are my qualifications. Now, you go figure out what to do with me.” Employers won’t do that, especially when you’ve never worked in their business before. What motivates employers is candidates who “get it.”

There is, however, planning and preparation. There is a thoughtful, step-by-step approach that takes time and a big investment.

The first step to a new career

You’re not interested in making a big investment to make that career change? Then, why should an employer make a big salary investment to give you a try?

Here’s one suggestion to get you started down the path to career change. Learn all you can about the industry you want to be in, and the work you want to do. That’s a big step. It’s a lot of hard work. But so’s that new career you want.

Start doing the hard work now.

Break the job and the work down into functions and tasks so that you understand what it’s really all about. Yep — this requires a lot of research and talking to people who do the job you want and jobs related to it.

When you realize there are tasks and functions you’re not able to do, break them down further. The more fundamental, the better. Which of the more basic tasks can you do?

As you start to appreciate the complexity (and the newness) of the job, you’ll also start to see tasks that you probably can do. They may not be the bigger, more specialized tasks that pay well. But if you really want to change careers, pick the tasks that are a match for your skills — even if this is a new world for you.

Get hired for the skills you’ve got

The challenge now is to identify jobs that you could do adequately with the skills you do have — at the company where you want to work.

  • You want a job doing financial analysis? Maybe you have to start with a lower-level job building spreadsheets and entering data for a financial analyst.
  • You want a job handling social media marketing for a company? Maybe you have to start in a job proof-reading advertising copy.

In other words, to change careers you’re probably going to have to take a lower-level job than you have now, and less salary. Most people don’t like that — but employers don’t like paying workers who can’t do a job, either. So face it, and decide whether you’re willing to make the investment to build the skills and cred to do the job you want.

You say you’ve done all your homework and preparation? Now you have to learn about Getting In The Door.

The alternative that most people prefer is to just apply for loads of jobs they want but are not qualified for because the job boards make it so easy.

Education is good, if it’s right

The other investment you can make is in education and training. That costs money. (Unfortunately, few employers today invest in the training and development of their employees, but that’s another problem for another column.)

But be careful. People sometimes identify a new job they want, then run out and pay for special training, expecting that will “qualify” them for a new career. It won’t. (See The Ultimate Test of Any College Degree.)

Before you buy credentials, certifications and education:

  • Contact the employer you’d like to work for.
  • Ask whether a specific training program you’re considering will be sufficient to qualify you for the job you want.
  • Ask what education will best prepare you.
  • Do this before you make the investment. That’s the smart way to go.

(Beware of all the marketing that schools do, suggesting that if you enroll in some cool program, jobs will be waiting for you. Those schools don’t issue the job offers you’re hoping for! They’re selling courses.)

Change Careers: Navigate a new path

If you don’t have experience or skills necessary to do a job, you can build both. But you will probably have to change your path, and navigate through jobs you can do to get to the job you really want. You will probably have to work your way up.

Here’s the little secret: It takes time. You must be patient, diligent, and productive in whatever related job you can get.

So, decide whether you really want that new career.

In the end, before you can start a new career, you must be able to show the employer that you can do the work. That’s a tall order — and it can be a very worthy enterprise that could change your life dramatically for the better. Many people succeed at career change by making the investment in learning and in dedicating themselves to the challenge of building new skills. Building new skills costs money — usually in the form of a lower salary. There is nothing easy about it.

The sooner you start, the sooner you’ll get where you want to go. To learn more, see How to launch a seemingly impossible career change and check out How Can I Change Careers?

Have you changed careers? How’d you pull it off? What obstacles should this reader expect — and what are good ways to deal with them? If you’re a manager, would you hire a career changer?

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Natural Networking: An End to Stupid Networking

On May 14, 2018

In the May 15, 2018 Ask The Headhunter Newsletter another novel — I’d argue natural — networking opportunity turns up painlessly.

Question

There’s no question from a reader this week. Just a suggestion and a challenge. Are you ready to play?

networkingAn example of natural networking

We recently discussed Shared Experiences: The key to good networking. Lots of great ideas came up, but what does it mean to have shared experiences?

Networking is not about strained, engineered, icky socializing to find a job when you desperately need it. (See Please! Stop Networking!) Frankly, that’s the stupidest way to network, and everyone should be appalled that any “career expert” is stupid enough to think they can sell that “advice” to desperate job seekers.

Networking should and must be natural. An example is hanging out with people who play board games you like playing.

Playing games together

Yep — I said board games. Monopoly. Settlers of Catan. Trajan. Power Grid. Natural networking is a room full of people sitting elbow to elbow rolling dice. Corporate travel agents, forty-something lawyers, new college grads, entrepreneurs and bankers. Software developers. Journalists.

The other day during breakfast (I do my heavy-duty reading over Cheerios and Raisin Bran Crunch) I was reading The Power of Play by Mark Ellwood in Bloomberg Businessweek.

Halfway through the article I dropped my spoon and ran to my desk to write this column. I’d found another good example of how to network naturally without getting icky.

Ellwood interviewed people while they played games together on scheduled game nights.

Camaraderie with benefits

In his mind-altering article Ellwood recounted the offhand benefits gamers told him about:

  • A programmer met a CEO.
  • A hedge fund manager raised money for charity.
  • A media executive lined up an internship for his niece.
  • A lawyer showed another lawyer how to start a pro bono program at his law firm.
  • A financier landed a new job.
  • A manager got to see how a colleague handles losing.
  • An employer met potential hires from local universities while they all played games together.

They all fell into benefits naturally. During game time there’s no ick, no rehearsed elevator pitches, no resumes, no job seekers pestering you. “There’s an atmosphere of camaraderie,” notes Ellwood. The setting “erases the hierarchies of 9 to 5.”

One of the gamers revealed to Ellwood a natural artifact of playing together:

“You’re sitting around pieces of cardboard, leaning in close, and it all feels a little more intimate.”

Rolling the dice with friends

There can be an end to stupid networking if people get physically close to one another, do something together that’s enjoyable and challenging, and forget about work until it comes up in conversation. But, networking? What’s that? Hey, please pass the dice!

For every stupid “networking event” promoted to job seekers, I think there’s a pleasant gathering untainted by job hunting that coincidentally yields new jobs for some people some of the time while they’re doing something else.

Doing something else seems to be the key. What else do people do that’s enjoyable, social, and mentally liberating enough that it enables people to make new friends — and maybe realize they could work together?

An end to stupid networking?

If we can unlock these events and change how we think about them, we may never need to — urgh! — “network” again!

It’s your turn: What other kinds of gatherings lead naturally to job opportunities for some people some of the time while virtually guaranteeing fun and fellowship all the time?

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5 rules to test for the best job opportunities

On May 7, 2018

In the May 8, 2018 Ask The Headhunter Newsletter, a reader reveals how he identifies the best job opportunities by applying for fewer jobs.

Question

I’d like your opinion about how I choose employers and jobs to apply to. Does my approach make sense to you?

job opportunitiesWhen I encounter a job I’m interested in, I don’t apply, I don’t send out my resume on spec, and I don’t write cover letters highlighting relevant experience or how well I might do the job. I don’t sell myself at all.

Instead, when I learn about an opportunity, I follow up with simple questions about the role, the company, the manager, or the hiring process to help me decide on the fit. What I’m really doing is probing the employer to see how serious they are about selecting a serious, motivated candidate. In most cases, I don’t get a response.

My take-away is that if a company that wants to fill a job can’t be bothered to answer some simple, constructive questions, then they’re not genuine. They’re not worth starting an arduous process with because they’re probably going to waste my time.

Am I missing out on good opportunities by doing it this way? Thanks for your help.

Nick’s Reply

Your e-mail made my day. You reveal that you expect employers to be conscientious about how they deal with job applicants. That says a lot about you. I think it also helps you identify the best, most real opportunities.

Job applicants worry

Job applicants worry their keywords won’t match a job posting. They worry about filling out job applications properly. They worry that if they leave their salary history off an application, that’s grounds for automatic rejection. They worry their resume isn’t customized enough. They worry about violating the rules HR wants job applicants to follow. They worry that contacting the hiring manager will tick off a personnel jockey.

Job applicants worry too much that they will get rejected. They don’t worry enough about whether the employer is worthy of a serious job applicant.

Employers and personnel jockeys should worry more. Unemployment is at record lows in many industries and geographical areas, and competition for good workers is stiff. So, what are employers doing to demonstrate their worthiness?

Not much.

Questions about job opportunities

I think what you’re doing is absolutely the right thing. Asking good questions before pursuing job opportunities reveals your intelligence and diligence. It reveals that you are a serious prospect. You’re testing the employer.  You’re probing to see if there’s a smart human being in there who gives a sh-t. If they don’t, then why bother applying for a job?

Imagine you saw an ad for a pricey product and, rather than rush to buy it, you called the company to get more details about the product’s specifications. Imagine no one would talk to you. Would you buy the product?

Why would you entertain job opportunities when you can’t get answers?

Who’s worth working for?

Even companies that make and sell inexpensive commodities will talk to customers and possible customers. They care about how they are perceived and they invest a lot in their image — so they want to be what they project. They welcome good questions because it tells them their marketing worked! Somebody’s paying attention!

I recently called Gillette to ask a question about their $5 Fusion razor blades. A smart, helpful human answered the phone instantly and helped me out. Isn’t it astonishing when you can’t get answers about a job that’s probably priced at $50,000 or $75,000 or $100,000 or more?

In today’s job market, most employers and their personnel departments can’t be bothered. That instantly reveals who’s worth working for and who’s not. It also reveals which “job opportunities” are worth applying for.

Rules for applying

The informal rules you lay out about how to handle job opportunities and how to vet companies with your follow-up methods are succinct, smart and priceless. I’d summarize your rules for testing employers like this.

  1. Identify an opportunity any way you like — a job posting, word of mouth, a recruiter’s solicitation.
  2. Don’t respond with what they’ve requested. Be a bit coy. Make them work for it. Before you submit a resume, or use the automated job application channel, test the company’s direct communication channel. Send a few good, substantive questions as you suggested — about the job, the company, the hiring manager, he company’s products, the hiring process, even about the salary range. (See Say NO to job applications.)
  3. If you get a meaningful, relevant response, ask some more questions by phone. Yes — call! Press them a bit. Expect a lot. Test the employer before you let them test you. (I’m going to be buying Gillette Fusion razor blades because Gillette gives a sh-t — and the answers I got were enough for me to believe their blades really are worth $5 apiece. They earned my attention.)
  4. If the employer doesn’t earn your attention with an appropriate response, don’t buy what they’re selling. Don’t apply. Don’t send a resume.
  5. Did the company earn your attention — and your job application? Job apps take a lot of work nowadays. (No kidding, right?!) Only apply where the employer goes to the trouble to demonstrate it’s worthy.

(For more tips about judging jobs, see Giving & Getting Information: Mistakes Job Seekers Make.)

Serious employers recognize serious job applicants

The bonus is this: If a company takes you seriously enough to answer your questions, and takes time to talk with you, then you probably won’t have to fill out an application! That’s because they’re serious about filling a job. They welcome serious job applicants who naturally have good questions.

Their courteous response to you will probably turn into a mini-interview that helps them decide you’re worth meeting.

And that’s how this is all really supposed to work. That’s how to apply only for the best job opportunities.

Don’t be afraid to test job opportunities

Most people are terrified to take the simple approach you’ve described. Rather than invest time in just a handful of deserving companies, they really believe it’s better to apply thoughtlessly to loads and loads of jobs just because they were invited to do so. They’re wrong.

In a highly competitive hiring market, it’s the employers that should be afraid they aren’t behaving properly. Job seekers who don’t test job opportunities will be treated like a cheap commodity.

(See Forget Glassdoor: Use these killer tips to judge employers.)

My compliments on your method. Few people apply common sense and sound business practices in the job hunt. Some of them are job seekers, and some of them are employers. Your method is a good way to meet the best employers — without wasting your time with “job opportunities” that aren’t.

How do you test a job opportunity? Please contribute your rules to the five above — and let’s develop a rigorous and reasonable way to identify opportunities worth pursuing. There’s just not enough time or energy to waste on everything else!

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