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Are Passive Candidates a Waste of Time in a Volume Hiring Model?

by Mar 15, 2005

Let’s first agree that no staffing model is solely based on identifying and finding only passive candidates. It makes sense to have a solid strategy built around quick hits, such as candidates in your own ATS or candidates on job boards. Most companies still need an active component to their hiring process, even as they attempt to identify and hire passive candidates. We have seen many an article about passive candidates, semi-passive candidates, and semi-active candidates, and how the overall passive talent pool (90%) is made up of candidates that are not actively looking. But has anyone taken the time to actually sit down and capture the pre-ATS activities and metrics here?

  1. Identifying prospects. How many prospects (to steal a sales term that refers to people before they become candidates) actually need to be identified through primary and secondary research? This could be through personal networking, name-generation services, cold calling, etc. These are basically candidates who are not in your ATS or active on job boards.
  2. Pre-qualifying interest. How many prospects that you’ve identified are actually interested in talking with you about potential opportunities with your company or client?
  3. Qualifying candidates. How many of the remaining pool are actually qualified?

I will argue that most companies don’t even think of these metrics. Of those that do, most can’t or don’t know how to capture them. Let me give you an example of how this might look. Some companies will have better or worse ratios than this so I have taken a conservative middle ground (based on data our team has captured through numerous projects as a reference point and questions asked of other companies working in a volume model). Example scenario:

  • 80 passive candidates are actually identified through primary and secondary intelligence for a research project.
  • 25% (or 20 candidates) are actually interested in talking with you to further explore the opportunity.
  • 25% (or five) of those interested candidates are considered pre-qualified, based on a look at the resume, an initial phone call, or biographical data you’ve captured elsewhere.
  • Still fewer of the five pre-qualified are actually fully qualified, thus the numbers dwindle down even further.

If we assume a short-list-interview-to-hire ratio of 5:1, and further assume that the five pre-qualified candidates are actually fully qualified, then the above scenario would result in one hire. Now let’s imagine you represent a company that needs to make 500 hires in a year. Reverse the metrics back up, and you will see that you would need to initially identify 40,000 passive candidates to meet your hiring goal. Scary, huh? While you’re considering the implications of the above, consider the following questions:

  • Are you resourced to handle a true passive candidate model?
  • How many of the other four candidates on the shortlist above might map to other roles in your business? Do you know the most effective method to shop them around?
  • Do you know how to improve this number and metric to your favor?
  • Can you keep the candidate experience high while volume sourcing?
  • Does an active candidate strategy make more sense? It might seem like it, but are you really getting top talent that way? For that matter, can you even reach your hire numbers through just an active strategy alone (job boards and candidates coming to you)?
  • Do you know how much of your strategy needs to be passive and how many resources or costs need to be aligned to get there?
  • Do your hiring managers, staffing leaders, or business-aligned recruiters scream for passive talent they can’t find? If so, what is their real reasoning for making this statement? Are passive candidates really better anyway?
  • Does the actual passive talent pool supply equal your business demand for the target area?
  • Do you have a CRM strategy to capture passive candidates who might not be interested today but could be interested months from now? How many of those initial 80% in the scenario above who said “no interest” could transformed into interested or active candidates down the road?
  • Do you have a permission-based one-to-one marketing strategy to continually target this audience?
  • Are you aware of the EEOC and PII implications of approaching passive candidates?

Granted, if you represent an executive search firm, where you might fill a handful of positions a year, then your strategy of seeking passive candidates by reaching into your rolodex (or for the young recruiters reading this, your contact management system) and networking makes perfect sense. But what if you overload your recruiters with too many reqs that have diverse requirements? Then the passive candidate strategy becomes a little more tricky, given the fact that it takes more time to produce results. So what does this all really mean? First, I know a lot of you will be up late at night thinking about passive candidate strategies and will split the atom every which way to Sunday on the metrics example I have given above. Don’t get hung up on the specific numbers in the example. Rather, you should be thinking about what you really need to understand in order to make a passive candidate strategy work for your situation. There are lots of questions that a single article like this could not answer anyway, but I can leave you with one thought that is worth pondering: Passive candidates might potentially equal better quality talent, but ask yourself if you are ready to pay the price (in terms of cost, resources, processes, strategy, technology, etc.) to get this kind of quality in volume and whether you are structured to successfully deliver on that promise. Do you even know where to start? If you don’t know the answer to all of the questions posed here but you believe that a passive candidate strategy is critical to the success of your business, then there is no time like the present to start putting your previous assumptions under the microscope!

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Michael Homula

    Just an exceptional piece outlining the importance of aligning your recruiting strategy, structure and process to specific corporate, regional and line of business plans. Essentially, start thinking like a line of business by looking at the outcomes you want to achieve and work backwards.

    Understanding the niche target recruiting strategy that works best for a specific position or line of business will enable a recruiter/recruiting team to bring the best talent to the table in the shortest amount of time and leverage your recruiting function into a line of business rather than a just a support function.

    We asked many of the same questions Rob outlines in this article when we set out to rebuild our talent acquisition function and strategy. The results have been great.

    If you want to become a business partner in your organization and become a best in class recruiting function you should read this article, honestly answer the questions Rob profers and then work…and work hard…to execute what you discover.

    Thanks Rob! Great article.

  • Fred St Laurent

    I really enjoyed thinking through Rob McIntosh?s article at lunch today!
    In it Rob brings into focus the need for multiple streams of candidate sources required for volume hiring in a dynamic market that is high on numbers of applicants and low on numbers of specific fits for a diverse open req environment.

    I took Rob?s advice and did not get bogged down in the metrics but rather considered the bigger picture here; the question that I zeroed in on was:

    ?Does an active candidate strategy make more sense? It might seem like it, but are you really getting top talent that way??

    The tricky part in this situation is; how can we as recruiters put seemingly ?immovable objects? into motion? (A phrase which in this case means, ?How do we make ?passive candidates? into ?active candidates???)

    The key to any recruiting effort that includes gathering active (internet) candidates and seemingly passive candidates boils down to marketing. (a phrase which in this case means that it all comes down to the real opportunity is what gets people?s attention)

    This is just my opinion but it has been my experience that the majority of ?passive candidates? I speak with are almost always open to discussing something better than what they are involved in now.

    Marketing is the key to any good campaign to hire a large volume of people.
    Marketing must be targeted to the audience of choice and this is the secret; find the audience, (in this case ?passive candidates?); discover the medium that will reach them and finally; present the opportunity in such a way that it grabs their attention thus creating the momentum needed to push the passive into action.

    Easier said than done? Absolutely! But this is a formula that will work on small scale- one off executive searches as well as high volume searches.

    The conundrum is best resolved by rethinking how to reach out and touch more passive candidates (a phrase in this case that means; ?how do we get our message out to a larger number of qualified people and make a meaningful statement about our opportunity that has an impact on them that makes them want to reach out and touch us??)

    In his challenging and rather thought provoking article, Rob mentioned that one would need to reach out to 40,000 passive candidates, with the given ratios, to hire 500. This is indeed a daunting figure if one?s strategy is to call each and every individual.
    Emailing this many people would be fruitless to say the very least, massive email campaigns are no longer productive.

    Still we live in a world where it is possible to contact many millions of people simultaneously, in an instant. The media has endless possibilities and nothing is impossible to those who can think outside of the box. So the answer itself isn?t in the box? (a phrase that in this case means ?I really do not know what the answer is but I am sure that if the right people put their heads together and think hard enough, they will come up with a solution that normal people would never have considered?)

    Great article?

  • Larry St Pierre

    I agree that no one model takes care of the whole candidate sourcing needs. One should access what best gets the results desired. Although I am a great fan and love finding talent passively, I use both active and passive needs to find the talent I need. If I need several candidates, I use both active (job boards, job postings, referrals, internal candidate databases, etc.) and passive means (Google, Altavista, AIRS, AIRS Oxygen, cold and warm calling, User and professional groups, etc.).

    If you have 2 or more recruiters, you could use a model I was involved with in a recent contract position, where the two permanent recruiters used job boards and I, as a passive sourcing expert, was used to find other candidates and to also build their future candidate pipeline needs. During my contact period, I was able to find and place just as many candidates as the two permanent recruiters. This consulting firm was very happy with the quality of the passive candidates I found.

    Bottom line: Use the strategy and models that work the best given the particular sourcing needs. Remain flexible and adaptable to the sourcing and recruting needs of your organization. Ask advice from other members of ERE, which I have found to be the best source of recruiting info, knowledge, expertise and assistance anywhere.

  • Jennifer Nelson

    Thank you Rob for your article. I often read articles about sourcing for the ‘best talent’ and the need to source passive candidates in order to achieve this.

    I agree that there will be times when a passive candidate sourcing strategy is required. However, there often seems to be an underlying assumption that there is something wrong with people who are actively looking for work, and that the ‘best talent’ can only be found in passive candidates.

    These articles also imply that it is imperative to find ‘THE BEST PERSON’ out there, somewhere, for the job in order for an organisation to be competitive.

    I would argue that for many roles, the active candidate pool will provide a suitable and well qualified person for the job. That person is already motivated to find new employment and availability is usually less of an issue. (Most of us at some stage in our career have been active candidates).

    I don’t think we should settle for mediocracy, however I do argue for pragmatism. All people have flaws; many people are talented and have the capacity to learn and excel.

    Your article was most welcome.

  • Russ Moon,MBA

    Rob,

    Once again you have ‘stirred it up.’ Thank you for taking the time and effort to ponder this issue and throw the gauntlet out, which sharpens us all.

    Are passive candidates a waste of time in a Volume Hiring Model ?

    No, not if you want to continue to have access to some of the best talent available.

    40,000 to gain 500 – 1 out of 800 ?

    I’d seriously look at the message until the catch ratio approaches at a minimum 1 out of 100. If the SHRM statistics are accurate than many people are prepared to transition, even the passives, for the right opportunity.

    No one approach fits every scenario, no doubt about that. Passives should have a place and with the labor market tightening, must have a place.

    Thanks again for stimulating the dialogue, doing the work that many of us are ‘too busy’ to do, crunching the numbers and posing the hard business questions.

    Best regards,

    Russ Moon,CIR,CDR

  • James Durbin

    It’s shocking to assume that 1 out of 800 people contacted would be hired from passive recruiting – but the numbers are far smaller than that.

    Passive recruiting by its nature is more targeted than active recruiting – which would suggest that the number of 800 to 1 is a mental exercise, not a hard number.

    If you are looking for developers and you know the three places in town that typically produce great programmers for your company, your passive strategy is to target the programmers ready to leave there, not every programmer in the city.

    Pretending you need to hire five programmers, you don’t need to contact 4,000 candidates. You contact the thirty programmers at your source and you can reach a six to one ratio.

    In large numbers, it’s true that passive candidates are no better than active candidates. The power of finding passive candidates is the lack of competition for their services. If you are using your social networks, the targeting becomes much easier – as does the close.

    Numbers are great – but a good recruiter will have the social network to tap the best pools of candidates. From what we are learning of social networks, the great mass of passive candidates are hidden from view and thus should not be counted.

    It becomes that much more important to focus on hiring individuals with large numbers of connections in their community. Selling the employers of choice and utilizing the connections of your current employees makes passive candidate searching far more rewarding when it’s done properly.

  • Armando Guerra

    I believe that Robert makes a good point about volume, but much is only applied to technical organisations. In international companies, especially Latino America is very important to no more than contact two or three people for a position. Is preferable to only contact the people of greater possibility. We take the time to find out about people before we call them.

    Muchas gracias,

  • Victor Gaines

    Hello –

    It looks like someone misread the numbers in the original article, and their subsequent post seems to have side-tracked the discussion a little. The number in the article that is misunderstood is 80 passive candidates, not 800… The article states that out of 80 passive candidates, you may find five who are qualified and go on to hire one. That translates into a respectable interview-to-hire ratio of 5:1 (assuming you interview all five qualified candidates). Sounds reasonable compared with our metrics.

    This general question of whether passive candidates are a waste of time is something we are grappling with now. We would like to source them – and it is something that we need to do to maintain a pipeline of highly-talented sales candidates. The problem is that we just do not have the time. There are too many other positions open and staffing-related issues that demand our attention to be able to spend the time necessary to source passive candidates (imagine the time necessary for sourcing 80 passive folks and whittling that down to five in an already time-starved environment).

    I?m really interested in what other corporate recruiters think about this topic.

    Best,
    Victor

  • Eamonn Coleman

    Victor,

    I’m of the same opinion. As a corporate recruiter we manily are focused on hiring people to fill jobs where their expertise is very focused. They may be software developers or sales people.

    I think all will agree that larger companies of 1000+ employees have a large contingent of people who may be ranked as average or above average. There are only a smaller number who are ranked as exceptional or superior. When hiring for a company such as ours, as a rule we arent pursuing the MIT grad with a Masters and 4.0 GPA. as a developer.

    However there are time when you are looking for the brightest people in the industry to be agents of change in areas such as sales, product strategy, marketing, business strategy. These are the real areas where we do some passive searching.

    My prefered model would be to have a number of recruiters focused on the rank and file tye candidates, and a smaller number focused on recruiting passive and executive candidates in the areas mentioned. Both groups should work together to discuss leads and sources. I believe its impossible to have a strong organizational structure without at least one meeting a week between recruiting teams.

    Best,

    Eamonn

  • Michael Homula

    Eamonn,

    The model you just described is not unlike how we are structured here in FirstMerit Talent Acquisition. We have two teams of 3 Talent Acquisition Consultants each.

    Search – Exempt Hiring – targets passive job seekers, networks their way to talent, researches/name generates, cold calls, focuses on intense CRM and candidate development, gets their mouth around the hook so to speak and reels them in.

    Staffing – Non-Exempt Hiring – also works passive talent but has a lot more active candidates due to the nature of the job, employee/candidate referral generation, some cold calling, intense CRM and candidate development and closes deals quickly. High volume hiring like a staffing company.

    It works for us and we have some pretty impressive numbers to prove it. In my humble opinion this model will work at any company very serious about being great at recruiting. Provided they have/hire the right recruiting talent because, as we have already discussed, not everyone is cut out for this ‘war’ for talent.

    Michael

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