Reporting Monster lost $1.4 million loss on $223 million in revenue, CEO Sal Iannuzzi said he was nonetheless “cautiously optimistic” about the job market. While he discounted any notion of a quick recovery, he told analysts on the financial call, “We are seeing encouraging signs of stabilization.”

Speaking of the company’s customers, he said they seem to be turning away from further job cuts and there’s even some signs of increased recruiting activity.

Echoing those comments, CFO Timothy Yates said the “overall tone of our discussions with customers is more positive.” He predicted that for the current (3rd) quarter, Monster would continue to see a revenue decline, but in single, rather than double, digits.

If the optimism translates into hiring activity, it would be a welcome development for an industry that has been hard hit by the global recession. For the second quarter of 2008, Monster had $354 million in revenue and earned $30.8 million.

CareerBuilder, too, is suffering. The privately held company, which voluntarily reports only its North American revenue, saw a 31 percent drop, going from $195 million for the 2nd quarter of 2008 to $135 million for this year’s same quarter. (HotJobs numbers are not broken out by Yahoo.)

Wall Street had been expecting the worst, estimating Monster’s revenues at $225 million and earnings at a penny a share. Not including $5 million in legal fees from its now-settled stock backdating problems, and in reorganization and severance costs, Monster actually beat the Street, posting a 3 cent a share profit.

Earlier this week, comScore Media Metrix released U.S. traffic numbers that showed Monster up 6 percent over the last 12 months, its biggest U.S. competitor off 1 percent, while the category as a whole grew 10 percent and HotJobs jumped 23 percent. Our story on the release prompted a rebuttal by Monster’s VP of marketing, Ted Gilvar, who challenged some of the connections between traffic and market share and insisted that a change in counting by comScore (undisclosed in the release) flawed the analysis.

During the hour-long conference call today (listen to the replay here), Iannuzzi said Monster was growing its market share in revenue by taking business from its competitors, but didn’t discuss traffic. He also spoke at length about Monster’s product improvements, its relaunched website, and especially about its integration with Trovix, the job search and matching company it bought last year, and its global market plans.

Saying Monster was “unbeatable and unmatched” in the recruitment advertising market, Iannuzzi claimed the work done over the last year or more is now paying off as employers who once spread budgets among multiple sites now give “more share of wallet; in some cases, all of wallet” to Monster. The global reach of the company he called a “clear differentiator.” Monster’s presence in more than 40 nations, its reentry to Australia in partnership with CareerOne, and its planned expansion in the Middle East and Latin America, give it a leg up with multinationals who recruit globally, he said.

His most intriguing comments came during the question-and-answer session with analysts. Iannuzzi was asked about the growing pay for performance trend in job postings, a business model aggressively pushed by sites like Indeed.com and SimplyHired.com.

He said Monster was headed down that path in company with the Trovix search. He didn’t detail how PPP fits into the mix, except to say it will be a part of it. But somewhat cryptically he declared, “With the power of Trovix, we will have a value proposition that will be very attractive to our users.”

A Trovix search for recruiters is currently in beta, deployed enough weeks ago now that Darko Dejanovic, Monster’s global CIO and Chief of Product, said the recruiters testing it in candidate searches overwhelmingly prefer it to the classic, keyword search. The more and better trained they are in its use, he said, the more they like it.

Iannuzzi said the Trovix search tool is so efficient that it can reduce the number of recruiters an employer previously needed to handle the same volume of searches.

“What we will be offering very soon,” Iannuzzi said, “at the risk of overselling it, will be a game changer.”

If you want to know what God thinks of money, just look at the people he gave it to. –Parker

The world is so full of a number of things, I am sure we should all be happy as kings; and you know how happy kings are. –Thurber

I am not sure of why, but many recruiters I know are not very good with money, myself included. Perhaps it’s the stress of the business or our belief that we can always make more that allows us to use money as a balm to soothe our aching souls. This is unfortunate because there is nothing less valuable then money you have just spent. (Honestly, which first-year agency person does not have his Porsche picked out?)

The following ideas can preserve precious resources and give you a sense of control and dominion in these difficult times. This list is by no means comprehensive but it is good starting point in terms of employing the belief that a penny saved really is a penny earned. If you try to do this and it is not painful, you are not trying hard enough.

1. Coffee. The days of hanging in expensive coffee houses connected to ear buds looking the part of an out-of-work writer in deep thought is over. Furthermore, the days of bizarre coffee concoctions sold at silly prices are disappearing rapidly as value is the new ideal. Find good coffee at a good price and save hundreds a year in the process. Forget that they claim to support rain forests, wild jackals, and icecap stabilization. If you are that concerned, send them your own money.
2. Buy Nothing. I mean it just as it reads. Absolutely, positively nothing. Do without, make it last, or get it fixed. You have enough clothes, gadgets, and everything else one needs in your overstuffed closets. No one will be impressed with your new watch. You will not look European, cool, or like a connoisseur or all things fine. You will simply look like a person who spent too much on a watch. Want to go one step further? Toss or donate everything you do not need, and get a tax write-off like the big criminals (Sorry; I meant to use the word “company” — honest mistake) and enjoy the Zen of having less junk.
3. Consolidate. Consolidate all your credit cards into one and then look for another card that has a low rate for one-year and transfer the funds over to that card. Many cards will now give you one year at 2.9%. That’s a good deal. (It should be a good deal; it’s your tax money that bailed them out.) This will involve some phone work and the great negotiating skills that recruiters use every day, but it is worth it. Honestly, do you want them to have even one more dime of your money?
4. Cable. Many of us have a threesome of Internet, cable, and phone. Call your cable company and see exactly what you are paying for and determine if you really need it. Make it your goal to get that bill down by a third, and make them your partner in doing so. If you can get a better deal from another vendor, do so, because if they could trade you for a more profitable customer, they would do it in a New York minute.
5. Dine In. I love going out to eat as much as the next person. Corinne once cooked so little that field mice ate the lining of the stove and we had to buy another one. (I kid you not.) If you really want to have great food and cut your bill by 50%, order food to go, pick it up, and just do your drinking at home. Paying $7.50 for each glass of wine and $8.50 for each martini is bizarre, adds up fast, and makes for a dangerous driver.
6. Cook. This is a close relative of number five. Can you even imagine how much you might save if you not only drink at home but also cook your own food? As a society, I wonder why we seem to have lost the ability to cook our own food and seem to be OK with others doing that for us on an almost daily basis. Make something you love and make enough for two days.
7. Insurance. Few things are as boring as meeting by phone with those who broker/sell/manage your insurance. I personally am insured for everything; home, auto, accident, dismemberment, workers’ comp, and Martians abducting my kids. This is crazy. Shop around for competitive rates and see about putting all of your insurance with one agent. Look for wasteful overlap of multiple coverages. Be sure to shop around to get competitive rates in writing. Do not let anyone sell you anything!
8. Maintain and Repair. All of us would love to buy a new car, but that might not be a good idea. Beware of the low interest rates, rebates, and showrooms with big balloons. If your car needs maintenance, bring it in and get the work done as soon a possible. If you do this, you will not have increases in excise tax or insurance, and best of all, you will not be making car payments until you die.
9. Your Car is Dead. Can’t repair? Buy a Honda Accord or a Toyota Camry. These cars in the four-cylinder model are a great value, comfortable, fast, and good on gas. Truth be told, I suspect that 80% of the drivers out there would have their needs met with either of these two cars. American cars are getting better, but the shaky financials of the big three frightens me. When GM folds, do you really want to own an Impala?
10. Banker. Do you know your banker? You should be on first-name basis with first-line management at your bank, and should at least know the branch manager. Banks are getting very innovative in terms of new products and services, so I strongly suggest that you get a bit chummy and make the bank your partner in supporting your efforts to survive this economic downturn. If you adopt a “what can we do” as opposed to a “what can I do” approach to finances, you will discover more options.
11. Pay to join. Barnes & Noble has a deal that allows you to get lower prices on purchases by giving it $25 for a membership. Perhaps I do not get it, but paying for the privilege of getting a lower price is insane. (See Retail Anarchy by Sam Pocker.) Like a book at B&N? Get it on the Internet at its lowest price and get it used in its poorest condition. I know it works because I do it every single day. Alibris is wonderful.
12. Look Closely. Examine every charge and every line of each bill for 60 days. Do not pay for anything you do not understand without a clear and definitive phone conversation. Ask how you can reduce the bill by one third. Look for programs, deals, or special incentives. Make the person you are dealing with feel your pain. If you do not get what you want, it is time to crawl up through the organization to higher levels. Be pleasant. Be relentless.

To the untrained eye, this might look like a plan for those in poverty. It is not. From a numbers standpoint, it is a plan for those who appreciate the maxim that it is not how much you earn: it is how much you keep. From a philosophical standpoint, it is a plan for those who need to feel empowered, as there is something noble, something extraordinary, about hanging tough from day to day and refusing to give into fear and frustration.

Interesting paradigm shifts have occurred. An interview has gone from a job function to an event worthy of a phone call to mom; I no longer screen my calls, and in fact, am excited when the phone rings; and, of course, the worst of it all: I’ve become the target of a billion-dollar industry of profiteers who promise to give my search the winning edge, but they’re no longer contingency recruiters on biz dev calls. That, at least, would represent a career opportunity.

Let me be clear: I actually admire those who have figured out a way to monetize providing services to the unemployed. Most marketers would probably, conducting a SWOT analysis, point to the fact that categorically, those without jobs who are “actively looking” likely lack disposable income. But, you see, that’s capitalism in action.

Perhaps the most common service offered is professional resume writing. These services promise that, for anywhere between 400 and 800 dollars, a professional resume writer will not only critique your resume, but also work with you to create a resume guaranteed to “break through the clutter” by using better verbs to craft the “story of your career.” Corporate recruiters, apparently, have very strict guidelines for formatting on a resume, and a secret code known only to them and somehow cracked by the Professional Resume Writer’s Association. I must have missed that workshop at ERE, but I suppose so too did a lot of my colleagues, who I have seen commit such violations to code as cut and pasting resumes off of Monster into Word or forwarding horrifically misformatted LinkedIn profiles to hiring managers.

Since there seems to be an interesting amount of conspiracy theory around how recruiters read resumes (if they do at all, since apparently, talent acquisition systems are to candidates what the Meadowlands are to Jimmy Hoffa), I hope to add to the body of knowledge and present, from first-hand observation, how recruiters read resumes. And we do. Hundreds of them, every day, but there’s a method to our madness: overstaffed, overworked, we’ve developed a short-hand to get through that resume. It involves a few simple steps.

1. Recruiter tears off cover letter (or, more likely, doesn’t bother opening the attachment in the ATS). Since most resumes lead with an objective statement (which are always subjective, in a nice bit of irony), we can only handle so much generic doublespeak in one sitting. Recruiters also don’t normally read objective statements, because the objective is pretty apparent when you send in a resume … to get a job. Everything else is window dressing.
2. Recruiter looks at the candidate’s mailing address. If it’s going to require relocation or there’s any chance the commute is going to come up during salary negotiation, then on to the next candidate. Many resumes do indicate that the person will pay out of pocket to relocate and interview, which raises an immediate red flag as to why. We have enough desperation in our lives already. We’re recruiters, for heaven’s sake. This rule, of course, only applies to applicants, not passive candidates. If you’re top talent with a niche skill set, we’ll relocate you from Zanzibar, if that’s what it takes. Unless, of course, you require visa sponsorship. We have our limits, you know.
3. Recruiter looks at company name. If we, in our infinite wisdom of all companies, do not recognize the company, we will move on, because there’s so much truth that branding is everything. You’re only as good as your last company, unless you have the letters CPA, MD, or JD after your name. Conversely, if the company has been in the news as either an acquisition target or a source of corporate scandal, on to the next resume (assuming the recruiter reads anything BUT resumes, which most do not). So it goes.
4. The candidate’s most recent title must be in the same ballpark as the job for which they are being considered. There are some notable exceptions: candidates coming from the financial services industry, for instance, where we well know that interns are Assistant Vice Presidents, or consulting, where the titles are intentionally vague (Analyst, Associate, etc.) and flat so that everyone can be billed out at the same exorbitant rate. Traditionally, though, if you’re a Marketing Manager applying for a Marketing Manager job, then we’re still reading. If you’re looking for a step up, well, best of luck to you, because we promote from within, which will later be transformed into a selling point when offered a lateral move. If you’re looking to gain experience and aren’t title conscious, and are willing to lop off silly corporate constructs such as the word “Senior” or “Executive” from your title for a clearly better opportunity, you are the ideal candidate. But not for our corporate culture, which as a heavily matrixed, hierarchical organization, is obsessed with titles as a designator of worth. Without them, how would you know your place?
5. If you don’t require relo, work for a brand name company and have the same title as the position you’re applying for, then it’s on to the first listed experience on the resume. Then we become Goldilocks … too heavy or too light? Here’s a rule of thumb. Refer back to the job description. Take the number of years of experience and add two … postings are a lot like dating in reverse. If the job’s looking for five years, the recruiter is looking for seven; 10 years means 12, and so on, until you hit the 20-year mark, whereby it’s onto the next resume because you’re “overqualified.” Besides, anyone who began their career prior to 1985 likely wears cardigans, talks about Andy Rooney around the water cooler, and will complain incessantly about how cold the office is when they’re not using their Dictaphones to compose correspondence. It’s a strange new world out there … and your Facebook page does little to convince the recruiter otherwise. Although interesting Matlock widget … It’s all about millennial now, which is why recent college grads are so successful in finding immediate, meaningful employment.
6. Education check: Recruiters assign a baseline value of zero for a bachelor’s degree in a related discipline, which is to say, none of you crazy liberal or fine arts majors who spent your way doping through college while the rest of us were studying differential calculus need apply. We’re still bitter. A.A. on a resume? Take 12 steps back. Add one point for a Master’s, add two points for an M.B.A. (2.5 if it’s from a top-25 program), and subtract one point for a PhD. You’re probably either too smart to function here, or you’ve come crawling back from the Ivory Tower with a foiled plan B and the debt to prove it. Subtract the term “viable candidate” if secondary education has come from an institution whose admissions criteria involve clicking through pop-up ads or calling an 800 number on the side of the bus. While you’re obviously easy to close, we’ve got our shareholders to think about, and you’ve demonstrated little knowledge of the concept of “ROI.” The Phoenix will rise from the ashes only in myth. In reality, you should have saved those 30k for the premiums you’re about to pay on our “comprehensive” health benefits package. Oh, yeah. And we offer tuition reimbursement. Eh, too late.

Average time for these steps for an experienced corporate recruiter: 15 to 20 seconds. If you pass this initial scan, maybe then we’ll drill down past the keywords, unless you’re so impressive you’re out of our price range.

Alternatively, if you have a funny name, or if there’s obvious irony (a “Lean Executive” at Krispy Kreme, for instance, or the recent Monster headline, “Desperate Single Mom Willing To Do Anything”) or mention your work as a runway model or professional athlete, prepare to have your resume circulated to the entire staffing department.

Of course, what do I know? If I was such an expert, I’d have a job. Like being a professional resume writer.

Yahoo Finance says analysts are expecting Monster to earn a penny a share on revenues of about $225 million. Last year for the same quarter, the company had sales of $354.3 million. In the first quarter of this year, Monster had a loss.

I have no particular insight on what the revenue and expense numbers will be. Instead, I’m looking at traffic numbers released by comScore the other day that show Monster’s job audience grew 6 percent in the 12 months since June 2008. Meanwhile, the number of Americans visiting all career services and development sites grew 10 percent.

That means Monster captured only 60 percent of the category’s growth. CareerBuilder, the leading job board by traffic and North American revenue, saw its traffic decline by 1 percent. Among the big three general job boards in the U.S., only Yahoo’s HotJobs bested the category growth, growing at a brisk 23 percent.

However, the clear winner among the top 10 most trafficked sites is Indeed.com, which grew at a blistering 59 percent. The job search engine now ranks fourth among the most trafficked job sites, according to comScore.

At the other end, and surprisingly still among the top 10 sites, is Brassring.com. Traffic there dropped 11 percent over the year, a not-surprising turn considering the site became a job board for Kenexa since its acquisition by the HR software firm at the end of 2006. What is surprising is that the site still gets 2 million unique visitors a month.

Monster’s traffic growth is particularly troubling for the company, which relaunched the site in January with a big marketing push, including, in February, its first Super Bowl commercials since 2004. Much of Monster’s first quarter loss — some $27 million — was attributed to the big marketing push.

CEO Sal Iannuzzi told analysts when the 1st quarter numbers were released that the millions spent on marketing were already showing results. “We are gaining market share,” Iannuzzi declared. “We are declining less than the competition.”

On a traffic basis, that isn’t the case. The evidence from comScore suggests that Monster isn’t even back to the numbers it saw in Sept. 2008, when it had 17.92 million unique visitors. In January, when the revamped site launched and Monster’s Super Bowl buildup gave it a boost, it had 17.91 million visitors. Bad news for Monster, though. The site’s traffic dropped 12 percent the next month, despite the Feb. 1 Super Bowl ads and a fan promotion with the NFL.

CareerBuilder, which had its own Super Bowl ads, also saw a February decline. It went from 24.75 million visitors to 20.08 million.

Declines from January to February are fairly typical for job boards. Job searching tends to be cyclical, with big jumps in January as people make good on resolutions and shift out of holiday mode. The numbers drop, level off, then decline during the summer for what should be obvious reasons.  So every one of the top 10 job sites saw a one-month decline and, in fact, the entire category saw a drop of 9 percent.

I contacted Monster and CareerBuilder to discuss the numbers, but have yet to hear from Monster. CareerBuilder spokeswoman Jennifer Grasz sent an email saying only, “CareerBuilder has been and continues to be the category leader.”

On the other hand, Paul Forster, co-founder and CEO of Indeed, called back to say the search engine’s torrid growth is “Very nice to see. Our model is providing to be very good from the point of view of the job seeker.”

Indeed, and its nearest competitor, SimplyHired (also in the top 10) launched five years ago and have quickly built a following through word of mouth and aggressive partnering. Both sites aggregate job listings from other job boards, direct employers, and elsewhere and also sell their own postings. Besides searching directly on the main sites, both Indeed and SimplyHired redistribute listings through their partners and other job boards, which use them to plump up their own offerings.

Over a three year period, Indeed has grown 659 percent while SimplyHired has grown 1,209 percent.

Monster, on the other hand, has lost ground during those same three years. My numbers show that in June 2006 Monster had 15.43 million unique visitors. Since then, it has lost 6.2 percent of its traffic. CareerBuilder has grown a meager 3.3 percent, while HotJobs has jumped 115.6 percent. The category itself has grown 28 percent.

What all these numbers mean is that instead of gaining job seeker market share, Monster has lost it. So has CareerBuilder. Hotjobs, once the third place job board that seemed headed out of the top 10 altogether, has meanwhile moved comfortably into second place and could, if the trend continues, become the most-trafficked job board.

The other site to watch is Indeed. It’s not likely to see a repeat of its 59 percent traffic growth, given how large the site’s traffic has already grown. But even at a growth rate of half that, Indeed could overtake Monster at about the same time HotJobs captures the top spot.

Sometimes the recruiters who been laid off have just been unlucky enough to have worked for an organization that is failing or in an industry that has been strongly affected by the recession. Yet, others have been laid off partly because of performance or attitude. Many recruiters remain tactical, and fail to grasp how strategic their function is to a firm. Many have remained working for leaders and organizations that do not appreciate how much they could contribute to the success of the business. And even fewer have become leaders who take command of the recruiting process and forge a function that competes effectively against other organizations and consistently supplies their organization with quality talent without relying on the use of extraordinary measures.

In my many years in the profession I have only known a handful of these people. Most corporate recruiters become recruiters by accident and leave the profession for some other HR or related field after a short stay. Their stay is a roller coaster of half-completed technology implementations, high staff turnover, muddled objectives, and often leaves a legacy of unhappy hiring managers. To achieve even the simplest objectives, they have to use outside resources, employ a large number of recruiters, or seek to outsource the function.

Unfortunately HR has not positioned the recruitment function as strategic, nor has HR realized that the role of talent manager, aka recruiting and development leader, is emerging as one of the most potentially needed (and influential) professions within the organization.

Generally, those recruiters who lead the effort to supply scarce talent are filled with bad habits and uncertainty that create a revolving door of leadership and produce lackluster results.

To change this and move toward a position of respect and strategic leverage, recruiting leaders should examine their own behaviors and thoughts and see if they reflect any of the habits I list below. If so, now is the time to change.

Bad habit 1: Arrogance about yesterday’s tools and techniques
Yesterday’s successes probably will not be repeated by using the same techniques or technologies. Over-reliance on techniques like cold calling, telephone screening, and resume reviewing are examples of methods that have seen their heyday but are still widely championed and loved. I frequently talk with recruiters who swear that the old ways are the only ways — the best ways — and insist that everything from interactive websites to LinkedIn are just fads.

Tomorrow belongs to recruiters who embrace such emerging practices as social networking, video interviewing, online assessment, and candidate relationship management. Recruiters experimenting with virtual communities and with building online relationships already have a advantage over the recruiter who is tied to geography and to face-to-face meetings. Labor markets are not confined to single countries, work can increasingly be done anywhere, and recruiting is a virtual, global game.

Bad habit 2: Filling requisitions instead of meeting business objectives
Most recruiters are obsessed with filling slots. That is what they have been taught to do without regard to need or effectiveness. They have a hard time discussing the value of positions with hiring managers who often regard the recruiter as little more than a clerk trusted to filter piles of resumes that are supposed to magically be arriving each day because of the organization’s prominence or brand. They are given requisition to fill and they dutifully go forth and do so — even if it is a poorly defined job or one that might be done by someone with a different skill set.

Recruiters who have the respect of the organization’s leadership have to be brave enough and well-enough informed about current issues and business needs to engage in meaningful conversation with a hiring manager. They have to be equipped with knowledge about the organization’s strategic business objectives, the needs of the hiring manager, and the state of the talent marketplace. They need to present numbers and data and make a case for hiring the competencies and skills that will be most effective in meeting the business needs of the organization.

In short, they need to act as a resource and consultant to hiring authorities and show a deep knowledge and understanding of the needs of the business. And, on top of this, they then need to be able to fill the position from a talent community they have built in anticipation of the need.

Bad habit 3: Failing to build new competencies
The emerging competencies for recruiters include the ability to engage people in conversation using virtual tools, the ability to collaborate virtually on projects, to influence hiring managers, and build targeted marketing strategies. These are totally different skills from those that dominated the profession a decade ago. In fact, over 80% of the skills that made a recruiter successful in 1997 are of little value today. For example, interviewing skills, cold calling, and reviewing and screening resumes are not critical skills. Even less understandable are the recruiters who are competent at interviewing and who then focus on getting even better at it instead of on developing skills that might be more useful. It is very easy to rely on the competencies that made us successful and not notice that times change as do the skills we need.

Far more important are the ability to write a blog, influence a candidate, and identify the value proposition of an offer.

Bad habit 4: Functional Shortsightedness
More and more of the most strategic recruiters I run into have a background in disciplines such as marketing, sales, and operations. Fewer are coming out of traditional HR disciplines. And an elite handful is morphing into talent managers — people who can understand and integrate recruiting with employee development, competency analysis, performance management, and succession planning. These recruiters are not afraid to try out new approaches, nor are they afraid to experiment and leverage technology. The most innovative websites and process improvements are emerging from recruiting leaders who have no training as recruiters and who have recently entered the field. They are writing exciting blogs, using search engine optimization techniques, and experimenting with interactive websites and tools.

The recession may be tough on recruiters, but it is also forging a new breed of talent expert. Recruiting inside organizations is evolving into talent management and the focus will be on ensuring that the organization has the critical talent it needs to achieve business goals. The talent manager will need to be able to run scenarios, produce numbers, and show where the best talent comes from whether it is developed internally, hired from inside or brought in from outside.

Out of every recession have come new ideas, new functions, and exciting change. Recruiting is at the forefront of many of the changes and for a small number of you it will be an invigorating time of learning new skills and adopting new techniques, habits, and technologies.

In this article, I refer to my experience turning in a leased car. I always treat the companies I encounter anonymously; let’s just say this organization’s first name rhymes with “smells” and its last name rhymes with “cargo.”

Its logo, a cute little stagecoach pulled by a team of fast-moving horses, is so engaging that one can almost smell the sweat and manure. But enough about sweat. Let’s talk about manure.

When I asked the company representative where to return the car, the rep said I could not return it to a dealer (unlike every other leased car I owned). The rep explained they only had ONE (1!) drop-off location in Georgia. I would have to drive there … so much for convenience. On the other hand, the drop-off point could have been Guatemala.

A few days after I delivered the car to the inconvenient drop-off location, I received a bill for damage to the door. Since I had taken 360-degree pictures of the car before I turned it in, I knew the charge was nonsense. I called another customer-service rep in the End-of-Lease Department. After a short argument, they said they would look at the pictures I sent and call me back in 24 to 48 hours.

144 hours later

After 144 hours, I called again. This time I struck pay-dirt! An agent answered the phone in a droll, bored voice (I could tell I was interfering with his latte). I explained my situation and, although he sounded greatly inconvenienced, he grudgingly went to look at the pictures I emailed 144 hours earlier.

When he came back on the line, he said my pictures were inadequate. Another department would have to examine them (apparently, full-color digital photographs taken with a very expensive camera are insufficient proof when compared to personal opinion).

I said, “I was told that last week.”

He replied, and I quote, “Well, I’m telling you now.”

Stunned silence.

I said, “Can you please have your name?”

He was not intimidated. “M”, he drolled. (Again, I will be socially sensitive and not name names; suffice it to say M is the first name of a jar used to store fruits and vegetables).

I pressed onward. “And, what is the name of your supervisor?”

“We do not give out that information. You have to go through our process. You can’t just ask to talk to a supervisor.”

My mind raced: “Am I in a stooge in one of those reality TV shows?”, “Is Howie Mandel going to pop out of my phone?” … “Was ‘M’ in training for a government healthcare position?”, “Will I have to sacrifice a blemish-free goat before I can talk to a supervisor?”

Fast-Forward

I could go on about “M” and his smells-cargo employer, but the real point of this article is that hiring front-line customer service people is more important than most managers believe. Organizations are happy to get our money, but the true test of sincerity begins when things go wrong. Unless the organization is the only game in town, customer service is one of its few opportunities to show customers it cares — or not.

Clearly, M and his employer cared less.

A good customer service agent needs five critical skills. Some can be trained and some cannot. They need skills to: 1) empathize with the customer’s plight; 2) listen and gather relevant information; 3) use questions to clarify the problem; 4) engage in joint problem solving; 5) and, do follow-up.

Why These Five?

When a customer complains, he or she is experiencing two problems: 1) a task problem with the product or service; and 2) an emotional problem. Most people would agree they are not in the mood to solve problems when are angry or upset. This is why customer-service reps need empathizing skills. Empathizing helps the customer and representative relate to each other.

Only when the customer calms down can the representative begin to ask questions and gather information. This skill requires active listening skills and well-honed questions. Discovering what went wrong, and why, minimizes the potential for a repeat problem and maximizes the potential for a happy customer.

Joint problem-solving is the natural next step. It’s the time when customer and organization come together to work out a mutually acceptable solution. This does not mean giving away the store, nor does it mean the customer is entirely wrong (see the M-jar, smells-cargo example above). Finally, it takes some form of action in the form of follow-up or next-steps.

So what should recruiting look for in an applicant? What is trainable? Well, based on your experience, do you find it easier to hire someone without empathy and tell him or her to be empathetic, or hire someone with natural empathy skills? Is it easier to hire someone who is not smart enough, or hire someone intelligent enough to probe for information? Is it easier to hire someone with poor listening skills, or, hire someone with natural listening skills?

Back to the Ranch

From a customer’s perspective, M-Jar was in the wrong job. Instead of customer service, I would suggest he seek a career that used his natural ability to be snide and insolent … a career where he does not have to deal with intelligent life forms …

As for the company who hired M? Its hiring system either failed to identify all the critical factors important to performing a customer service job in a competitive environment, or it had no clue what to look for.

As for me, I’m out there sharing my story about a well-known company and using them as a personal example of what not to look for in a customer service job.

The analogy doesn’t hold up perfectly because friend collecting is a Facebook pastime, and if you ask around you can almost always find someone to let you into any network. But it’s still not recruiter friendly. Unlike LinkedIn, where the search tools were designed with recruiters in mind, Facebook’s tools seem intended to discourage sourcing.

Yet those millions of Facebook members are too tempting a target to resist. Since the beginning of the year Appirio and Jobvite have both come up with applications that connect HR tech systems of their own or their partners with Facebook. Both however, are intended for corporate recruiters using either Salesforce or Jobvite’s recruitment system. Both focus on referrals.

InSide Job is different. It’s a Facebook application that individual users choose to deploy, making them searchable and findable to other InSide Job users.

The idea came to Lorne Epstein, a career recruiter, as he tried to get contacts out of LinkedIn for free.

Says Epstein, “They charge $10 for an email (there are corporate accounts, but he’s talking about an individual search) and there’s 40 million profiles. Facebook has 250 million and it’s only getting bigger.”

So Epstein, author of You’re Hired! Interview Skills to Get the Job, came up with a simple way to connect recruiters with Facebook users, and job seekers with the people who might be able to help them get a job.

It’s called InSide Job and it’s an application that allows its users to search other InSide Job users.

The process is straightforward enough. You must choose to use InSide Job and allow it to import resume information from your Facebook page or enter it manually. Then sit back and wait for a recruiter to contact you or search for people in the InSide Job network who might be helpful in your job search.

Coincidentally, Epstein pulled together the people to develop InSide Job from his own personal network.

Epstein freely acknowledges that the challenge for Inside Job is adoption. In order for it to be a moneymaker for Arlington Soho, the company he set up to manage and market the application, he figures the user volume would have to be around 100,000 or more. Considering there are hundreds of available applications, growing the 5,000 current users is no mean feat.

Musical Chairs – InSide Job from Lorne Epstein on Vimeo.

Flashmob marketing with musical chairs in Washington’s Dupont Circle can’t hurt, but the competition for attention is keen, and Jobvite and Appirio have a head start.

Still, InSide Job is further evidence that recession or not, there’s intense interest in leveraging the social media.

As a result, says CareerBuilder, 63 percent of the 55 and up group have applied for lower-level jobs, including entry-level positions and even internships.

That’s probably not much of a surprise to recruiters; 37 percent of them told CareerBuilder they have received applications for entry-level jobs from retirees and workers over 50.

What may well come as a surprise is the rise in older workers and the impact the recession is having on their ranks.

Layoffs and job losses have hit the younger workers hardest. According to data from the Bureau of Labor Statistics in the 18 months since January 1, 2008, the number of workers in the 25-54 age group has declined by 5.1 million. For workers over 54 though, there are 624,000 more working. In fact, there were gains in the number of older employed workers in every age group the BLS tracks except one — 55-59 year olds who saw a modest decline of 79,000 in the 18 months.

Before you point out that the sheer number of older Americans has been rising, which is certainly true, consider for a moment the participation rate. Based on a monthly survey conducted by the U.S. Census for the BLS, the participation rate is independent of population size. It describes the percent of various population groups in the labor force.

The data shows that for the last 10 years, more and more older Americans are working. Since 1999, the percent of working Americans 55-64 has grown by 10 percent, while the over 64 age group has jumped — and that’s an apt word — by almost 40 percent. Contrast those changes to the 25-34 year olds who have declined from 84.6 in 1999 to 82.9 percent for the six months ending in June.

In the 61 years for which the BLS has data, this many older Americans have never been employed. In the mid-50s the percentage began to rise until 1967 when, at the peak, an average of 62.3 percent Americans aged 55-64 worked. The percentage began to decline until it bottomed in 1986 at 54 percent of the age group working. There it remained, rising modestly until the recession of the 90s when it started its upward climb.

Even more dramatic has been the number of those 65 and over reentering the workforce. For years, between 11 and 12 percent of retirement age Americans have worked. In 1998, on average, 11.9 percent of the 65 and over group worked. In June, it was 16.8 percent.

The explanation for the uptick in older Americans working is not too difficult to guess at: Longer life spans, better health, and access to health insurance whether private or through Medicare, the decline of the defined benefit pension coupled with the increase in the Social Security age, and, in the last two years, the recession, which has devastated many workers 401(k)s.

The implications, however, are harder to forsee, as is deciding if this is a structural change in the American labor force or a temporary economic blip. A BLS economist told me a colleague of his is researching these very questions.

Regardless of the cause of the return to work by older Americans, there’s no denying the graying of the workforce. For the first six months of this year workers 55 and over accounted for 21.8 percent of the labor force. That’s the highest percentage since 1971.

Meanwhile, the percentage of 25-34 year olds has taken a nose dive. From a high of 36.6 percent in 1986, the percentage has dropped 11.5 points to 25.1 percent for 2009. For the 25-54 year age group as a whole, there’s been a decline of almost eight points since 1993, when 86 percent of the workforce fell into that age group. For the first six months of 2009, 78.2 percent do.

Consider now the demographic factors we’ve detailed: an aging workforce, reentry into the workforce by workers who in years past would be retired, lower workforce participation by workers in the entry-level age group of 25-34, and, finally, the sheer reduction in employment by that age group caused by layoffs and other factors.

The implications of this are immense for employers and recruiters.

Among them is the increase they are seeing in mature workers seeking jobs. That 37 percent of recruiters who told CareerBuilder they’ve received applications from mature and retired workers for entry level jobs is, therefore, not that much of a surprise after all.

Even though the CareerBuilder survey says 65 percent of the employers report being willing to consider overqualified candidates, the reality is probably closer to the 44 percent of mature workers who say they’ve been told they are overqualified. Recruiters who reject overqualified mature workers may find it increasingly difficult to find the young workers who might otherwise take those jobs.

Should recovery from the recession prove to be as long as some economists are now fearing, retirements will continue to get pushed off and retirees with diminishing payouts from their 401(k)s and other savings will reenter the workforce at an accelerating pace.

Evidence of the former is in the CareerBuilder survey. One in five employers report being asked by employees to postpone retirement. Most of those employers (86 percent) said they would consider it.

If the demographics are any guide, 100 percent may come to wish they did.

He’s barely out of the building when he calls his sales manager to debrief on the meeting. “I told him about our latest products and all the great colors that it comes in. It was a great meeting … I talked the whole time … We are going to get this deal!”

Anyone who has been in sales for even a minute can see the glaring flaw in this meeting.

The salesperson talked the entire time and presented features and benefits without knowing what his prospect needed. David completely missed the needs analysis part of the meeting, which is the most critical part of any sales process.

The life of a recruiter parallels that of a salesperson. Recruiters need to develop a needs analysis strategy when recruiting sales candidates just like salespeople do when pursuing prospects. Lecturing candidates on how wonderful the company is does not bring about excitement any more than it did with Mr. Stevens. Sales managers often refer to that approach as throwing darts while blindfolded. A candidate recruiting strategy using David’s approach is destined for the same fate.

No such thing as a great salesperson. To develop your needs analysis strategy, you need to start with a foundational question. What is your goal of the sales recruiting process? “It’s obvious … hire great sales people!” Wrong! Folks, there is no such thing as a great salesperson. You read correctly. Don’t believe me? How many of these so-called great salespeople have been hired by your company and failed? How can you explain this rock star failing in your company? If you believe that great salespeople exist, then the explanation for their failure is one of two things. Your company is the absolute worst for which to sell. Or, the salesperson completely forgot how to sell when they arrived on your doorstep. There is no door number three.

A salesperson’s success isn’t just based on their sales skills. Success is based on the synergistic match of needs, wants, and desires between the role and the salesperson. This means that the goal of the process is to serve as a matchmaker between these two entities. In essence, you are formulating a sales marriage between the candidate and the firm.

Who do you want to hire? The first step is to develop a profile of your ideal sales candidate and prioritize the attributes between required and desired ones. Just like the salesperson needs a profile of the ideal client, the recruiter needs a profile of the ideal candidate to develop their needs analysis strategy. This detailed, written description presents a comprehensive picture of the successful candidate for the role. This document serves as the basis for the entire sales talent screening program. Interviews, mock roleplays, and assessments should compare the candidate to this profile. The needs analysis strategy should be geared toward identifying synergies, or lack thereof, between the candidate and the opportunity.

Knowing what to ask and when. In sales, the needs analysis serves a number of purposes, including exposing prospects who are more like suspects. The same goes for the recruiter. Part of the needs analysis strategy is to quickly identify fatal flaws in the candidate that would remove him or her from employment consideration. They say if you are going to lose, lose early.

Ah, but what are those areas for the recruiter to explore? It comes back to the profile of the ideal candidate. Those areas that are deemed “required” attributes of the successful candidate provide the exploration list. For example, if one of the requirements in the profile is that the candidate must have extensive experience selling services in the C-suite, a question asking about the candidate’s prowess in doing so brings this to light.

Getting ready to propose. When a salesperson conducts an effective needs analysis, they gather information that helps them develop the scope for a proposal, including pricing. However, asking intimate questions about the prospect’s current situation cannot be effectively done unless the salesperson has earned the right to do so. It may occur in a first meeting, but it may be a little later in the process. However, the strong seller knows that they can’t develop a winning proposal without knowing as much as possible about the current situation.

The same holds true when you get to the offer stage of the sales talent-screening program. When you reach the time to extend an offer, much like the well-skilled salesperson, the expectation is that it will be accepted. Who has time to waste on prospects who aren’t going to buy? It’s a rather ugly day for the sales rep who gets blind-sided by a competitor who wins the account.

The recruiting experience is much the same. Making a huge investment in a candidate only to lose them to another opportunity is costly and wasteful. A recruiter should never be surprised by a candidate rejecting an offer because it was $20,000 lower than what they were looking for. This requirement should have been uncovered and worked through well-before the offer stage … during the needs analysis.

As part of the needs analysis strategy, the recruiter also needs to know what it will take for a candidate to leave their current employer, if they are looking at other opportunities, and where this opportunity ranks in contrast with the others — just to name a few. Keep in mind that the No. 1 killer of sales pipelines is status quo: the decision to do nothing. The common cause of this affliction is a poor needs analysis strategy. The same holds true when recruiting. If the candidate elects to keep their current position, your needs analysis strategy may be the root cause of status quo keeping the candidate from accepting the position.

The big picture is that every question asked in the needs analysis strategy must have a purpose, which is to identify the matches to the ideal candidate profile. The stronger the match, the stronger your sales marriage. If you would like my tip sheet on developing an effective sales recruiting needs analysis strategy, send me an email.

To suggest that recruiters are control freaks is not an epiphany or an “ah-ha moment,” as being controlling is one of the traits that make recruiters good at our jobs.  We are managers of a set of projects called search assignments or requisitions and are required to direct a volume that easily reaches the double digits. And we need to control as much as possible to be successful.

Recruiters like the idea of community and having a relationship with prospects and/or candidates. But when recruiters take a deeper dive, they begin to understand that some of the conversations that transpire in community are outside of their control, they lose some enthusiasm. So why advocate community if one cannot control the outcome?

In my upcoming Fall 2009 ERE presentation, I am weaving five topics/questions/discussion points into the storyline. One discussion point is “Web 2.0 solutions proclaim that this is the new way to pipeline candidates into a private talent community. What is a talent community and how do I build one? In this article, I will deal with the “why” of talent communities.  And if you are in Florida in September, I will discuss the “how to” at length.

So why advocate community if one cannot control the outcome? There are several reasons why community and the relationships that are formed and built are essential in the 21st century Web 2.0 model of recruiting; they include:

Communities Can Be Influenced

Most community experts indicate that while a community is not controllable, it can be influenced. On a brand level, thought leaders argue that conversations about your brand are going to take place with or without you. The question becomes: Do you want to participate in the conversation? Participating in the conversation allows you to have some influence over the opinion of a given community’s members.

Communicate With Your Audience Where They Are

The growth of social networking sites is staggering. Sometimes the size of a social networking site is larger than smaller companies. How long do you think it will take Facebook (225 million members) to eclipse the population of the United States? If our target audiences are joining Facebook, Twitter, LinkedIn, MySpace, and communities on Ning, shouldn’t we want to join them? 

Your Target Audience Has Moved Online

If you target audience has not formed a online community or affinity group, they will do so in the very near future. The growth in social networking sites has been accompanied by a growth in all sorts of online groups and communities. Most of us have a segment of the labor market that includes the talent we’re interested in and has migrated online. These affinity-driven communities segment themselves naturally into ideal groups in which to build relationship and share your organization’s story.

Transparency Is a Byproduct of Community

One of the biggest results of Web 2.0 and social networking sites is a move toward transparency with respect to process and conversation. With everyone watching, it is better to be a truth teller. With everyone watching, it requires us to engage in the conversation. With everyone watching, it makes us better citizens of a group.  And above all, it enhances the experience of the prospective employees who engage in our recruitment process.

The question on everyone’s lips can often be answered by having just one person comment.

Leverage is an important aspect of community. It allows us to communicate one thought and have it seen by many. In a previous article, I discussed the aspect that most members are in the crowd and do not engage in conversation. But they are listening. That is why it is important to engage the members who are asking questions or making comments.

Community Makes Navigation of Enterprise-size Companies is Easier

In a company the size of Microsoft, the inner workings are somewhat of a mystery to a job seeker (and to some employees as well). The transparency of the connections that are seen in a LinkedIn Group make it easy to reach out and engage. Questions can be answered; issues clarified; and relationships built.

Community Is Counterintuitive

Community isn’t intuitive. Previously, I compared the counterintuitive nature of community to learning how to snow ski. It took a while for me to get my head around “leaning away from the mountain.” Talk about counterintuitive. If I lost balance while turning, my instructor said to lean away from the mountain; away from apparent safety; away from the natural pull of gravity. Every instinct told me leaning away was wrong. Yet, I could not move off the bunny slope until I stopped trusting my instincts and listened to my instructor. I had to change my mindset. In the same way, we must move from a transactional recruiting process, to get closer to community, regardless of what our recruiting instincts suggest.

Community Is Guanxi (and that is a good thing)

Guanxi [guan-shee] is the basic dynamic in personalized networks of influence in Chinese society and seems to be most fitting when we think about community.  Guanxi suggests that the relationship is more important that the transaction itself.  So when one considers Guanxi in recruiting, it opens the door to the following possibilities:

• Exploring ways to begin and capture a relationship with desired prospects even if they aren’t currently looking for a job
• Developing a longer-term relationship with prospects during their entire careers
• Discovering ways to bring value to your prospect community even if they do not take your job
• Becoming more transparent to target talent and enhance prospect experiences
• Moving away from transactional recruiting and into relationship recruiting

So why is community so important in recruiting? At an elementary level, the move of our target audience online mandates that we meet them where they are. And the rule of the road in Web 2.0 is that people online must have the capability to have a conversation. Gone are the days of Web 1.0 and static content and organizations just creating content. At its heart, Web 2.0 is user-generated content and creating conversation. Conversation is expected by our target audiences who have moved to these online communities. And for the most part, we in corporate recruiting have disappointed our target talent (by necessity third party recruiters engage in relationships to a greater degree than corporate counterparts). And if we don’t change, we will not be successful.

Why community? If we are going to attract the best talent in the world, we must connect with them where they are visible — online social networks and affinity groups. How do we build community? That is a discussion for September.

For more information on the benefits of building an executive search function internally, see my article from last week entitled “The Benefits of Internal Executive Search and Why Now Is the Perfect Time to Make the Move.“

Selecting the Appropriate Strategy or Model

Models abound in talent acquisition, so when it comes to recruiting executive level talent it should come as no surprise that organizations can pursue a wide range of approaches. In addition to the major approaches listed below, some organizations opt to position the executive search function outside of the core talent acquisition function or HR, opting instead to have it report directly to the executive committee. The six major models used by organizations with established executive search practices include:

1. The comprehensive model — this model establishes a full life-cycle recruiting process focused on executive hiring within the organization. The individual/team charged with executive recruiting is responsible for all aspects of competitive intelligence gathering, sourcing, screening, assessment, and closing.
2. The hybrid model — this model consolidates responsibility for recruiting higher volume executive roles with an internal function while continuing to use external service providers for lower volume roles or roles requiring a unique expertise.
3. The final stage model — executive recruiting is a process, and like all processes different stages consume varied resources. The final stage model offloads the resource intensive stages of the recruiting lifecycle to research organizations willing to unbundle sourcing from the rest of the process, freeing up internal resources to focus on relationship building, screening, assessment, and closing.
4. The inverted model — outsourcing isn’t new to the recruiting profession; a majority of corporate functions outsource some aspect or another of the process already. However, for many organizations executive recruiting has always been outsourced while non-executive recruiting was executed internally. The inverted model flips those conditions, outsourcing the recruitment of lower-level professional and wage-labor roles to service providers while transitioning the core talent acquisition function to focus on high level professional, managerial, and executive leadership roles.
5. The competition model — under this model, searches for executive level roles are allocated to a selected mix of internal and external recruiters at the hiring manager’s discretion on the premise that the competition will more rapidly strengthen the internal team.
6. The TA specialist (gradual change) model — this model, by far the most common, allocates a portion of executive searches to specialists within the core talent acquisition team who have prior executive search experience, or that possess a unique combination of skills and knowledge relevant to the search. As more and more searches are executed internally, the TA function gradually assumes responsibility for internal executive search.

Benchmark the Best Firms
The second step should be to benchmark some of the major corporations that have in the past used internal executive search. This research should include understanding how they made the business case, what benefits they anticipated, and what outcomes were both in line and out of line with expectations. A list of potential problems and characteristics of an outstanding internal search function should also be put together. Some firms know to execute executive searches internally include:

• Cardinal Health
• PepsiCo
• Keane, Inc.
• Research in Motion
• Key Bank
• Sodexo
• Kohl’s Department Stores
• Target
• MetLife
• VMware
• Microsoft
• Wachovia

Build the Business Case for Internal Executive Search

The next stage in developing your plan should be to build a convincing business case that convinces the executive committee that the internal function would be capable of producing superior results, not only from a financial perspective, but also qualitatively. Work with CEO players within the executive committee including the CEO, CFO, COO, and CHRO to develop a long list of potential benefits and drawbacks of bringing the function in-house. With the list developed, work with the CFO to monetize those list items he/she determines to be the most financially relevant. Elements of the business case should include estimates of:

• The program’s projected ROI
• The performance differential i.e. a prediction of the difference in quality the internal function will produce compared to that of external service providers (measured via the candidates post hire on-the-job performance)
• The cycle time differential between internal and external searches. Where possible, work with the CFO’s office to monetize the value of any predicted time savings.
• The candidate diversity differential — i.e. a prediction of the difference in diversity rates the internal function will produce compared to that of external service providers.
• The retention differential — i.e. a prediction of the difference in retention the internal function will produce compared to that of external service providers
• The process success rate — i.e. the improved position fill rate as a result of dropping external firms.

Note that this strongest business cases converts typical HR results measures into dollars. For example, if you state that the turnover rate will be 5% lower, it won’t be as powerful as stating that the higher retention rates increase revenue by $17 million.

To build a strong business case you will need access to real data that is difficult for critics of your solution to criticize. The best way to garner such data is a pilot study that uses a “split sample” approach (like in drug testing). Leveraging this type of pilot would require that an equal distribution of searches be allocated to an internal and external service provider simultaneously. You then compare to see which one produced the best results. You can also do a side-by-side comparison, where both providers are used to source candidates for the same position.

Compile a List of the Top Arguments for Sticking With External Executive Search
It’s important to compare the positive aspects of moving the function inside with arguments for maintaining the status quo. Do your research with benchmark firms and work with your current vendors to compile a list of counterarguments for sticking with the current external approach either completely or in special cases.

Some of those arguments should include:

1. They are more aggressive — there’s just no question here: executive search recruiters are at least 50% more aggressive than the average corporate recruiter. Of course you can hire executive search types for your internal team, but if that isn’t an option, you might find it impossible to convert most corporate recruiters into executive search experts.
2. Privacy capability — executive search firms have a long history of protecting the names of potential candidates from people who don’t need to know. Obviously, a well-designed internal search function can also have privacy process that allows candidates to drop out of consideration without public record.
3. Hire just when you need them — rather than retaining a continuous staff of internal executive recruiters, you need only pay for these services when you have an opening. It’s also hard to maintain recruiter skill level internally if you have infrequent openings.
4. More global capability — some larger firms have a much broader global capability than you could ever develop internally. If you truly need to do a significant amount of global hiring, you’ll find that using agencies will continue to be the norm in many regions. Many of the top candidates only know that system, so using another one might confuse them.
5. Superior closing abilities — in my experience, executive search professionals are markedly better at selling difficult candidates and closing the deal. In the same light, if your firm has a bad external employer brand image, external professionals also excel at overcoming that issue.
6. You only pay with a placement — if you use contingent firms, there’s no fee unless you hire someone the provider introduces.
7. Manager relationships — whether you like or not, executive search firms are good at building relationships with managers. It’s important not to be naïve: if you try to drop a major executive search firm, be aware that they will put tremendous pressure on your executives to stop HR in their tracks.
8. Candidate relationships — if you need candidates immediately but they require a long-term trust relationship in order to be sold, executive recruiters with their long-established relationships may be the only option.
9. A mixed approach is possible — obviously you can build and maintain an internal search function but still occasionally hire an external search firm when their unique capabilities are needed.

Compile a List of Potential Problems with Operating an Internal Search Function
One of the key practices that distinguish individuals’ great at execution versus the average performer is the time they spend identifying potential problems they may encounter and devising potential solutions in advance. Executive searches play out in a high-stakes world where political maneuvering is the norm, so recruiting leaders attempting to move executive search in-house need to be even more aware than ever before what problems they may encounter and be able to enact feasible solutions in rapid succession.

Possible issues include:

• Quality of recruiters — executive sourcing and search requires recruiters of much higher caliber than most corporate functions are built on today. This will create political issues between this function and the broader talent acquisition function. Great executive recruiters leverage tons of competitive intelligence about the business and the industry to become business experts first, recruiters second. Maintaining recruiter aggressiveness may also be difficult once external executive recruiters are brought in house.
• Political issues within HR — the nature of executive recruiting will create a close connection between the individuals executing internal executive search and the executive team, often a stronger connection than that between the operating committee and the HR leadership. This can create jealousies within HR.
• Sufficient compensation — executive recruiting requires a compensation model that can be difficult for those outside the function to tolerate. Imagine an executive recruiter two layers deeper in the organization than the VP earning three times the VP’s annual income.
• Managing recruiters — executive recruiting isn’t a routine activity, which can make those managing the function suspicious as to what those in the function are up to. Executive recruiters may disappear for weeks while sourcing and gathering competitive intelligence, producing little to no visible activity, and then dump a mass of activity all at once. Traditional recruiting managers and your regular recruiters might not understand this process.
• Budgeting — budgeting for executive search is not as simple as budgeting for a defined systematic process. Great recruiters tailor the process and candidate experience to the search. While broad parameters can be established, traditional analytics and budgeting processes may prove to be woefully inadequate.

Select Program Metrics to Demonstrate Performance
Metrics are simply measures that help you and others determine if your actions have led to a situation where you have accomplished your goals. For each program goal you establish in your plan, you need at least one metric that all parties involved agree is indicative of performance related to that goal. The top internal executive search metrics that I recommend include:

1. Quality of candidates presented — what percentage of all candidates introduced meet or exceed the defined requirements. Alternate measures could include the diversity rate of candidates introduced and the percentage introduced that have previous experience at “targeted” benchmark firms.
2. Quality of hire — as measured over three years by job performance scores, number of new products developed or projects completed, amount of bonuses (as a % of salary), number of promotions, 360-degree evaluations, or other job-related measures.
3. User satisfaction — ratings of both candidates and the executive committee.
4. Average tenure — the average tenure of executives sourced via the internal function.
5. Time to fill — the time it takes to fill the position in days from the initial contact.
6. Improved candidate information — the quality of the information provided on the candidate (job switching decision criteria, interests, and dream job requirements).
7. Legal issues — the number and the cost of legal issues related to executive search.

Each of these metrics should be compared to the past performance record of external search firms.

Final Thoughts
Recruiting managers are always seeking the “Holy Grail” when it comes to being more strategic. It doesn’t take a rocket scientist to figure out that recruiting for higher-level positions like the CFO and the director of product development will have a strategic impact on the firm and make the TA function more visible among the executive committee. With that in mind, the decision to move the most impactful recruiting inside is an easy one. Of course there are some risks involved, but taking large risks and acting proactively are part of being a strategic leader.

• Fordyce TV will resume next week with a brand new episode led by Lynn Hazan. If you missed last week’s episode on perm fee negotiations, you can catch it here, along with all of our other past episodes.
  
• There is no ERE webinar this week, but you can sign up for next week’s free webinar on Adjusting Talent Acquisition to a Changing Operations Model, led by Robin Ritter from General Mills and Kristy Sidlar from FutureStep.
• Our Editor-In-Chief Todd Raphael is working on the September issue of the Journal of Corporate Recruiting Leadership. All of the articles have come in and he’s just working on some minor cleanup and the layout/graphics with our designer Barbara. We’re thinking this may be the best issue of the publication so far. We’ve got Richard Newsom from Fifth Third Bank, talking about how the company boiled down their recruiting metrics to a single “stock price” measure. John Zappe is covering customer services issues with recruiting technology. Lisa Edwards is writing about whether recruiting A-players really pays off. Keith Halperin proposes a new recruiting model. And more. So subscribe before August 15 to make sure this is your first issue. In addition, the issue will be distributed for free to all attendees at the upcoming ERE Expo 2009 Fall conference in Hollywood, FL.
• Speaking of the Expo, make sure you register before August 7 to get the $200 early bird rate. In addition, ERE subscribers can save an additional $200 by using product code FL09ERE. If you haven’t seen the agenda featuring over 20 corporate recruiters, practitioners, and thought leaders, check it out now.
• There are still a few weeks to take advantage of $25 job postings on EREjobs. If you are looking to add to your team, your posting will not only be displayed on the site for 30 days, but also in the ERE Daily email newsletter, the ERE homepage, and through the @recruiting_jobs feed on Twitter. And if you are looking for your next opportunity, check the site often and follow the Twitter feed.

Have a great week and please feel free to leave any questions you have in the comments below.

Recently, Fifth Third Bank created a simpler, single metric to represent Recruiting Operations: the Recruiting Stock Price. I’m delving in-depth into that metric in two places: 1) the Fall ERE Expo and 2) in the September Journal of Corporate Recruiting Leadership. But I wanted to give this wide audience a preview.

A Single View of the End-to-End Process

For us, our customers specified that the following were important to them:

• Overall satisfaction with the recruiting process
• 90-day retention rates
• Recruiter efficiency measures
• Diverse candidate pools
• Time-to-fill
• Number-of-fills
• Cost-per-hire

These are fairly typical metrics that many companies currently measure. The key to success though is not just measuring these, but understanding how they relate to the customer experience and how they relate to one another.

Knowing the customers’ needs and how important they are is a huge accomplishment, although it’s not the final piece of the puzzle. We must now determine what level of performance the customer expects for each need. Is filling an open requisition in 30 days sufficient, or do they need it in 15 days? Does it vary by type of position?

For each we will need to know the level of acceptable performance — or the spec limit. For example, our customer satisfaction measures are done on a scale of 1.0 to 5.0. The threshold or spec limit for all of these measures is 4.0. Anything below a 4.0 is not meeting customer needs, whereas anything above 4.0 is exceeding customer needs. If we didn’t know the spec limit we would have no way of evaluating the customer’s feedback. If we received a 3.0 on a survey and we didn’t have a defined spec limit then, as recruiting leaders, we might interpret this as acceptable. In our mind a score of a 1.0 or a 2.0 would certainly be below customer expectations but a 3.0 “seems” decent when in fact, anything below 4.0 is not acceptable. Knowing and understanding the spec limits — the minimum acceptable performance — is another critical component of realizing how we are performing and where we need to focus our efforts.

This gets included on a two-part scorecard. The first is a scorecard that is segmented by our recruiting regions. This shows the detailed performance of every metric for each region with the ability to see infinite detail for all measures within each region. The second version is segmented by individual recruiter. Each measure for every recruiter is included, as is a stack-ranking of all recruiters across the company.

Both versions are public knowledge and available to anyone in recruiting. Both versions also include the ability to drill down and see performance in greater detail.

We show the overall health of the recruiting process summed up with a single chart. At first glance, it’s quite simplistic. The green line represents customer needs. Anything greater than zero (above the green line) indicates that the recruiting organization is exceeding customer needs. Anything less than zero shows that customer needs are not being met.

Beginning with the Recruiting Stock Price in March, by drilling-down we can see that both Quality and Delivery measures were above customer needs, while cost did not meet customer needs. Further diving into cost shows that the recruiting organization was under budget; however, the cost per hire was much too high. Additional analysis revealed that cost per hire was above spec because overall hiring volume was down versus the plan. The resulting action was that we were able to use several recruiters on other projects across the bank until hiring volume picked back up two months later.

Prior to the Recruiting Stock Price, response plans were relatively unused in human resources at Fifth Third Bank. Knowing what actions we would take should certain situations arise was something we practiced very little. For each of our key process drivers — our customer needs — we have thresholds that are even stricter than the customer spec limits. Here, we want to take action and make changes prior to missing a customer spec limit, so acting early and often is critical.

For example, our customer satisfaction measures are on a scale of 1.0 to 5.0 with a customer spec limit of 4.0. In our response plan, we set a threshold of 4.1. For any individual recruiting region, we do further data analysis and provide coaching, make process changes, etc. every time a satisfaction measure drops to 4.1 or lower. By taking action before we drop below 4.0, we increase the likelihood that we can catch problem areas and fix them before it impacts the customer’s ability to manage their business.

Having accurate measures is a huge step toward improving the overall performance of our recruiting process. However, it doesn’t matter how good the measures are if we don’t do anything with them. Fancy graphics and colorful charts by themselves do very little. We must take these measurements and take action.

Here’s why: from a practical standpoint, only 20 to 25% of candidates are actively looking at any one time. This is a high-end estimate, with 15 to 20% more likely, and in normal economic times probably around 15%. This means that 80% of most candidates aren’t looking.

So despite my current fondness for Jobs2Web, and the possibility that TalentSeekr and First Advantage’s HireEngine will become powerful talent hubs, I’m concerned that too many recruiting managers are aiming at the wrong target. It doesn’t take a lot of brain power to prove the case that there are more top-10-15% performers among those people who aren’t looking than those who are. So why are we spending so much effort to find candidates we don’t want to hire, even if we’re doing it more efficiently?

The quick counter to this is that even if you don’t hire the precious few good ones you find, you’ll be able to pipeline these prospects into a talent pool and keep them warm for future positions. As long as there are sufficient numbers of A-level candidates in the active pool, this makes good sense, but this has yet to be proven for companies that don’t have a great employer brand. The other counter to this active/passive argument is that corporate recruiters have too many reqs to handle, and the hub and spoke model is the only way to productively deal with filling positions. This is a valid point, since the hub will be seen by far more people than an individual req, especially if you drive traffic here through dynamic spokes, like Twitter, niche sites, and Facebook pages.

Yet while valid, it’s a bit shortsighted to rely on one basket to put your talent eggs in. An ROI case can easily be made that B+ or A-level candidates outperform their less-competent counterparts by at least two to five times, so that any additional cost to acquire these people is insignificant.

While many corporate recruiters are successfully using LinkedIn, ZoomInfo, and Broadlook to identify passive candidates, their productivity metrics are far below their external agency counterparts. The “too much work to do” excuse is part of the problem here, and this is a valid point. It does take more time to contact, persuade, and recruit passive candidates into the fold. However, from what I’ve seen, even with enough time, most corporate recruiters would still fall short. In my opinion, this is totally due to the use of unsophisticated recruiting techniques. This is where the use of the hub and spoke model for passive candidate sourcing can have a significant impact on both productivity and quality.

First, let’s put the metrics of passive candidate recruiting on the table. As a minimum, you need to track outbound return call rates, the percent of prospects agreeing to talk about the job, the percent of these calls resulting in qualified applicants to send out for interviews, and the number of high quality referrals per call. (Here’s a link to a recorded webinar I prepared for LinkedIn with these metrics described.) It turns out that if you don’t get at least 50 percent of your outbound calls returned, the end results are pretty dismal. For example, if you get 50 return calls out of 100 people randomly contacted based on their titles, it’s unlikely that more than six to eight would be interested in your job, fully qualified (considering location, comp, ability, and availability), and ready to go out for an interview. While pretty good, this number would drop to two to three people if the initial callback rate is around 20%, which is a number we’ve found to be about average for most corporate recruiters. This is not so good.

In my mind, these kind of results are no better than any “dial for dollars” process and are what’s preventing corporate recruiters from competing effectively with their external agency counterparts. A hub and spoke approach to sourcing passive candidates changes the underlying rules here by leveling the playing field.

As pointed out in the LinkedIn webinar, if you consider the names of passive candidates not as prospects but as hubs in a network with dozens or hundreds of spokes of other possible contacts, you’ll be able to reap untold rewards. The secret of passive candidate recruiting, known by all the best third-party recruiters on the planet, is getting these initial contacts to give you the names of better contacts. The reason they’re better is that they’re dead-on hits for your job, they’ll call you back 80 to 90% of the time, and everyone will agree to consider your job opportunity. This means if you contact, recruit, and network properly with this hub and spoke mindset, you’ll get 20 to 30 sendouts for every 50 names called!

Too good to be true?

Not really, but there is a lot of technique and skill required to pull it off. For one, you need to leave very compelling voicemails to get the initial group of people to call you back. For another, you have to be someone worth knowing. This is the only way people you don’t know will give you two to three great referrals every time. My favorite technique here is to recruit them first, get them to give you a 10-minute overview of their background before telling them much about the job, and during this screening process build a 360° network of their connections. Then if the person is not qualified, I go back and ask about some of the people in this extended network. As part of this, you must be persistent and not hang up until you get at least 2-3 great names. This is obviously the critical step in the process, but if you’re worth knowing, these first level prospects will go out their way to help you. (Here’s an article with a detailed example of how to do this.)

While not easy, learning these passive candidate recruiting and networking techniques are much more productive than calling 100 people at random and hoping one becomes a candidate. This is equivalent to writing boring job descriptions and posting them on a big board where no one talented will find it.

Third-party recruiters practice this stuff and constantly hone their techniques on getting better referrals. Since 80% of the market is not looking, getting to these people first is the difference in being a good recruiter and a great one. It also represents the difference between hiring good people and great people. Companies are investing a great deal in becoming more efficient finding these good people. Surprisingly, few companies consider investing similar resources to find the best.

After taking a whirlwind tour through some of the things OrcaEyes can do, I have no hesitancy in admitting that “I’m not smarter than those 4th graders.”

Of course the significance of those reports was lost on the kids. Hilbert just wanted to make sure the navigation was easy to use and the red-yellow-green alert system easy to understand. And they are.

But it’s those reports that make the $200k a 20,000-employee firm can spend on OrcaEyes seem like a bargain.

Before I get into how, here’s a bit about the what, as in just what is OrcaEyes? Hilbert describes it as HR System Management Software. You can think of it as ERP for HR. Either way, the system provides an overarching view of how human capital impacts the enterprise. It does this by connecting to a company’s existing business systems — hooking into finance, sales, operations, supply chain, or an ERP (if there is one), the HRIS, HRMS, and whatever others may be there.

OrcaEyes crunches the data it extracts from these systems and combines it — for certain uses, like recruiting and salary setting — with data Hilbert obtains from such external sources as the U.S. Bureau of Labor Statistics, Census, and private data providers. Thus, in an instant, literally, an HR recruiter and a division VP can tell the cost in lost business for staffing shortages in the North Sea unit of Exult Energy’s refining and petrochemical division.

I thought that was nice information to have, but no special feat since any CFO can do revenue averages per year-end headcount. But as every CFO and line manager knows, being down one position doesn’t translate into a direct or immediate loss of revenue. Depending on the size of the unit, other workers will pick up the load.

Here’s where the magic of OrcaEyes comes in. The system is too smart to simply say you’re in danger of losing $1 million in revenue just because that’s the average. Nope. It knows, because you’ve told it during the setup, that losing one worker for a short period will have a minimal impact. But as the number of vacancies increases and the vacancy time lengthens, the bigger the effect and more bars on the OrcaEyes report turn red.

This is also a modeling program, not just a “what is” program. So OrcaEyes knows that besides the current vacancy, the attrition rate is such that there’s a high probability of losing more employees in the unit soon. And retirements will add a few more. Now OrcaEyes can tell you what the impact of all those things occurring — or some of them — will be.

That’s but one example of what this data-based analytics program can do. Even though OrcaEyes has only just recently come out of the incubator, there are plenty of other examples of its value from the 10 Fortune list companies that have been testing it now for several months.

I asked Hilbert for a sampler and here’s what he sent:

• A global manufacturing company discovered that when overtime for operators, maintenance, and skill trade workers exceeds 12.5 hours for three weeks, accidents increase by 105 percent. When the company added staffing to reduce the OT, the savings from fewer accidents came to $370 million in just two quarters;
• A retail company discovered there is a correlation between store clerk overtime and theft and customer complaints. When OT begins to exceed an average of 11.8 hours for three consecutive  weeks, thefts increased by 41 percent and customer service complaints increased 52 percent. The retailer loses one customer for every 2.6 complaints.
• That a manager with poor ratings by their staff affects bottom line performance is not an “Aha” moment. But just how much? Hilbert tell us that a retailer found store sales revenue dropped by 1.2- 1.8 percent for each 10 points below a 75 percent manager approval rating.

OrcaEyes, says Hilbert, provides “just about every metric you can imagine.” And many you might not have thought of.  Another example: Our mythical oil company Exult Energy needs chemical engineers. Where in the U.S. are prospects the best for finding engineers who are most likely to come to work for Exult? Would you believe Bay City, Michigan?

OrcaEyes was born out of Hilbert’s years with the much lauded Valero Energy. He was Global Planning and Talent Lead for the fast-growing oil company, landing the job with almost no direct HR experience, but a broad business knowledge from having CEO’d tech firms. During his four years at Valero Hilbert won award after award for his programs, including five from ERE alone.

It was during those years he came to appreciate the integration of HR and business purpose and metrics. In the process, he turned Valero into a poster child for data-driven recruitment. Dr. John Sullivan, a recruiting thought leader, industry consultant, and proponent of scientific recruiting, wrote of Hilbert and Valero:

“its primary differentiator is that the company takes a business-like, almost scientific, approach to recruiting. Most recruiting departments treat recruiting as an art. Valero, in direct contrast, utilizes and directly borrows from other successful business systems like supply chain, IT, Six Sigma, and process reengineering to craft a function whose performance can be measured (and improved) down to the minutest degree.”

Some two years in the making and months in the testing, OrcaEyes is Hilbert’s effort to bring the same principles and discipline he used to transform Valero’s recruiting to the rest of the world.

Because of its price tag and the system’s hunger for business data, OrcaEyes is clearly not a tool every company can afford or can use. But if you get a chance to do an OrcaEyes demo, do it just for the chance to see what recruiting will be like in the future.

And to ask Hilbert how he came up with the name of the company. (Hint: He didn’t. A marketing acquaintance did. And it has something to do with the fact that orcas — killer whales, as they are often known — don’t ever completely sleep and have sonar vision, just like the program.  And it’s a name people don’t forget.)

But the big questions for many are simple: What are social networks, what do they replace, and what makes them useful?

What Are Social Networks?
Very simply, social networks are Internet-based applications that allow you to expand and grow the number of people you know who have the skills, interests, or abilities that you are looking for. They also give you the opportunity to market your organizations to a targeted group of people.

For most of us the challenge is how to find enough of the right candidates to meet the needs we have and how to find people in markets and geographies that are new and strange. When your boss says that there are positions open in China, and you are in Minneapolis with only a local network, what do you do? This is where social networks can be magical.

Social networks as an idea are neither new nor unusual. We all have our own networks of candidates, friends, college mates, sports mates, relatives, and so forth. The only difference is that our networks are physical, and most likely interactions only occur face-to-face or over the telephone. We also often have very limited information about the people we meet everyday, and really aren’t certain if they could fit an open position we have or not. The Internet-based social networks provide a much broader ability to screen and communicate with potential candidates.

The social networks we all know best are LinkedIn and Facebook — both of which connect you to millions of potential candidates. They have been around for several years and through their own marketing and promotion have assembled a huge number of people. Other well-known social networks include MySpace, Bebo, Orkut, Hi5, Ning, and others. There are also many smaller networks, some more focused on a particular type of candidate or candidates of a certain age group, but still very valuable.

By offering the ability for you to connect to people through other people, you can build a global network of potential candidates. By using your own branding and marketing efforts, you can create a large and robust sub-network of people who know you and your organization and who you can communicate with as frequently as you wish. Some organizations use LinkedIn and Facebook to find people and then invite them to join a private social network that you may create by using a tool such as Ning, for example. By creating your own network, you can tailor the messages to your potential candidates and you can use the members to find more people.

What Do They Replace?
Instead of posting jobs to job boards, you can instead list your job on your career site and invite your network members to refer it to anyone they think is appropriate. If you have a large enough network, you may find enough candidates using only this method. But, for many recruiters you may still have to post to a job board or use some other outreach method to gather enough candidates. But, given a large enough network, it could replace job boards.

And, rather than hire people to do Internet search, you can simply ask your network members to refer someone who has the skills, abilities, or experience you need. The potential of a social network is huge and is only limited by how many people you have in the network. That is why many recruiting functions are taking budget dollars from traditional sourcing and investing them in marketing and promotion to build their social network.

What Are the Benefits of a Social Network?
Social networks also let you reach out to targeted groups of candidates to let them know about new opportunities or to just provide them with background information about your organization. By doing this on a regular basis, you can slowly inform candidates about many aspects of your business, the culture of your organization, and the kinds of opportunities you generally have. This helps candidates to self-select out of organizations they are not comfortable with, and prevents many bad hires. It also creates excitement in potential candidates who feel they are a good fit.

By using Candidate Relationship Management tools, you can build excitement and create a relationship with candidates. CRM allows you to:

• Send messages on birthdays or other special occasions
• Offer the opportunity to come to events and/or job fairs you might hold
• Send information about internships or special assignments
• Share facts and corporate news with them
• Comment on their background or ask for additional information

Social networks allow you to increase the level of trust that candidates have in you and your organization, especially if you offer regular communication through a blog or some other media. Some organizations create regular videocasts or podcast about their business, offer videos of the CEO or other leader, and provide potential candidates with a broad perspective on the organization, its leadership, strategy, and culture.

What Role Does Twitter Play, for Example?
Tools such as Twitter are really micro-blogs and allow you to send messages to a group of followers to build or maintain interest in your organization. Twitter also serves as a type of CRM tool by letting you send job listings or specific messages to those same people on a regular basis. But Twitter is just one of a growing number of applications that either help drive more people to a social network or that keep them interested in your organization or build a relationship with them over time.

As you can see, using social networking well is challenging and time-consuming. It requires you to develop a social media strategy, decide which of these many tools are best for your organization, learn about new technologies, and practice a more proactive type of recruiting.

At the ERE Expo in Florida, there will be several sessions and a panel devoted to how to better use social networking. If you are still uncertain about how to make social networking payoff for you, this would be the event to attend.

While at first it may seem overwhelming to embrace social networking, candidates are getting accustomed to being treated in this more personal way, and the results are a higher quality candidate. Social media will become the primary sourcing tool and will provide the best forum for communicating with prospective candidates.

This scene played out over and over. Sometimes the candidate would even be looking over the interviewer’s shoulder without noticing the poster proudly displayed behind the Microsoft hiring manager. Yes, after 25 years, we were still getting those questions.

That was two years ago. Since then, we have changed the perception of Microsoft Hardware. We have changed the brand Hardware@Microsoft. Hardware@Microsoft has become a profession. The average “person on the street” may not know anything about Hardware@Microsoft. But a target audience of engineers who work in hardware will know about the importance of hardware in terms of Microsoft’s business vision.

ERE acknowledged our work with a “Most Strategic Use of Technology Award” and industry thought leaders like Dr. John Sullivan called our work “pioneering.” (In fairness, this award was shared by a talented group of colleagues who created View My World and incidentally just launched a new careers site.) While being recognized by one’s industry is flattering, the real success of our work was in solving a business need in our division.

The story of making Hardware@Microsoft a profession was an answer to a critical business issue.

As our division is the manufacturing part of Microsoft, we had a billion-dollar problem with respect to the quality of one of our key products. We needed to recruit world-class hardware and “reliability engineering” talent to solve some immediate issues and make certain this did not happen in the future.

The first thing we tried to understand was our target audience and how we could identify the individuals who we needed to attract — where they were employed; the best colleges for hardware engineers; what associations they joined; what they read … you get the picture. At a high level, the graph below illustrates the complexity of identifying hardware engineers. (It is at this point that I lament that IEEE has discontinued publishing a membership directory.)

Undaunted, we segmented hardware engineers from other types of engineers. The difference in our approach is that we use 17 to 20 different sources to identify the target audience. In this initiative we used competitive intelligence and competitive org-charting along with alumni associations, and every free and paid job board available. The filter that we apply to the talent is: would we be interested in that person over the next three to five years?

It is useful to illustrate micro-segmentation with a mini case study.

As the graphic illustrates, out of the 620,000 engineers (estimates provided by the U.S. Bureau of Labor Statistics), we have identified 18,900 hardware engineers. And we identified a micro-segment of 2,500+ reliability engineers from the various aggregated sources.

We had eight openings in reliability engineering and needed to fill those roles with the best of the best. We employed a strategy that we call a TalentStream (a continuous flow of prospects) to make certain we met our business challenge. We targeted this group with four emails over six months. By the fourth email, nearly 40% of the target audience looked at our jobs. This rate was two and one-half times greater than the audience response to one email. By the final email we had three and one-half times more prospects than we had from the first email. The end result was we filled eight positions with candidates from eight different sources of hire. Thirty-eight percent of the hires came from referrals, so the viral aspect of the campaign was evident.

Now we have 2,500 reliability engineers and no openings. These prospects are passive and represent some of the best organizations in consumer electronics. We were faced with the challenge that every recruiter faces. How do you keep talent in orbit when there are not any positions? We choose to create community with these reliability engineers.

We created a LinkedIn Group that is for technical professionals only. Reliability Engineering on a Global Scale is a group (sans recruiters) designed to allow this premier group of professionals communicate and network with one another. Initially, 10% of the target group accepted our invitation. Since that time the membership in the group is increasing at about 5% per month. We do not brand this group with Hardware@Microsoft (although it is obvious Microsoft Hardware is involved). The two reliability engineering roles that our division had this year were filled quickly with high-quality individuals from the efforts described above.

We have just created a hardware@microsoft Facebook page and a hardwarejobs Twitter page. We will invite members of the original 2,500+ reliability engineers to become a “fan” of this Facebook community and also offer them the opportunity to “follow” us on Twitter. One of the discoveries that we learned during this talent community pilot was that we need to take a “community of communities” approach because, not all people will join the same groups. That caused us to rethink our original “uber talent community approach” as it turns out only a percentage of a targeted group will join.

The social networking laws that explain involvement (or lack thereof) by potential members of community caused us to rethink our strategy. Some important thinking on people and community was developed by Jakob Nielsen, who suggested that only 1% of a community were heavy contributors. Nielsen advocated that another 9% were intermittent contributors, while the other 90% were just lurkers. Jake McKee, a thought leader on community, build on Nielsen’s “Participation Inequality” theorem and carried it into the 21st century as the 90:9:1 as a way to describe people’s behaviors in a single online community. More recently the Groundswell folks at Forrester use Social Technographics to explain behaviors of population over multiple online communities. What Forrester Research discovered is that Forrester’s Social Technographics surveys show that when it comes to social content, 21% of online U.S. consumers are Creators, 37% are Critics (those who react to content created by others), and 69% are Spectators.

So what do these studies have to do with talent communities for recruiting? What it means is that if you expect to get a large group of people to join another community that we have formed, even if we are Microsoft, it is just not going to happen. We need to connect with the micro-segmented target audience on the leading communities (Linkedin, Facebook, and Twitter) as well as our proprietary community that is part of our vendor partner, Jobs2Web. So, if we think about our micro-segment of reliability engineers, in order to fully engage the 2,500+ target audience, we may have to form communities on 5 to 10 different social networking and/or community sites.

Micro-segmentation and community go hand in hand. I noted in a previous article that sourcing is marketing. And if we look through our marketing lens we see in this “new world of social media, networking and Web 2.0, much of segmentation occurs naturally” as communities are formed. Micro-segmentation has been built into the DNA of our approach to developing talent communities. And it is the backbone of our Web 2.0 recruitment marketing engine provided by Jobs2Web.

A purpose of this article is a preview of a presentation for the Fall 2009 ERE Event, where our talent community pilot will be discussed in the broader context of Web 2.0 Beyond the Social Recruiting Hype: Microsoft’s Approach to Building Talent Pipelines and Communities. While the presentation will be much broader than a discussion of “micro-segmentation,” this strategy is a cornerstone of our community development workstream.

The list of companies offering resume writing, enhancement, and tracking continues to grow faster than you can say LinkedIn, with new vendors entering the market this summer.

You may have already heard of some of the resume managers, like ResumeBear. The Bear’ll follow your resume and tell you who’s opening it, forwarding it, and printing it. New features are on the way. Or you may have come across the Resume Donkey. The Donkey’ll rewrite your resume, using professional writers.

Let’s not forget VisualCV. Recruiting-industry junkies might recognize this guy’s resume using the VisualCV tool.

Likely, you’ve heard of Zapoint, which will “take a resume and transform it.”

And a friend of mine (who has to toil in the uncomfortable environs of Laguna Beach) will be launching a “free, online professional resume builder.” Jeff says his new tool will allow employees to create or redo their resumes the way employers want ‘em.

Those are just a few. You’ve got your Pongos and your Emurses; you’ve got your Resume Creator, Resume Maker, Resumizer, and resume everything else, some of which seem a little blah compared to all the new multimedia sites out there like VisualCV.

Now, at least three new players, some you may not know about, are joining the field:

• Verbal Summary. Recruiters can use it either to present a candidate to a hiring manager, or to describe a job to candidates. The important part is the audio; see its demos. What Verbal Summary’s doing that’s a little different is focusing on third-party recruiters (the founder was amazed to see how little money is spent by agencies to differentiate their candidates compared to how much is spent on sourcing, social media, tracking applicants, and branding). Verbal Summary is $50 a month, $500 a year paid in full.
• FacesForce, in beta, obviously excluded the word resume and its many variations, deviations, and permutations, from its name; the company hopes to be more than just for job-seekers. FacesForce wants to stay with people throughout their careers, such as if people want to record a video to pitch new business. Pricing, it says, is simple.
• Rezbuzz. This offshoot of Corp Shorts offers a long list of features, but in a nutshell, candidates pay $495 to have a resume made, and housed for a year. For the time being, at least, companies access the resumes for free. It sees consistency as its advantage: one community of quality professional resumes, not a hodge-podge of do-it-yourself bios. The CEO is executive search veteran Mark Sadovnick, who’s enjoying the good PR Rezbuzz is getting.

The careers columnist Joyce Lain Kennedy, author of Resumes For Dummies, says that when it comes to all these new fancy resume variations, she’s “up for anything new and improved that connects people with jobs.”

But, she warns, “the new wave of infinite Internet spotlighting can have unintended consequences.”

For one, Kennedy says, the multimedia features “revive with a heavy dose of steroids the classic photo-on-resume argument — legal exposure to charges of bias against protected classes.”

Kennedy also says the “wild card for the recruiting industry is what will happen when the federal government takes an updated look at discrimination and the ‘Internet Walking, Talking Applicant.’”

One of Kennedy’s favorite resume writers is Kathryn Troutman. Troutman is the CEO of The Resume Place, among the oldest resume services in the U.S. still operated by the original owner. Her firm’s sales doubled this year over last.

Troutman explains the multimedia-resume startup boom this way.

“Entrepreneurs recognize that the vast majority of potential customers have little idea of how to go about living their job hunts in public — adding videos, video clips, audio bites, and even RSS feeds to flesh out their digital beings. Resume providers are counting on a lack of technical skills, especially in adults of earlier generations, to boost demand for their wares. That’s probably why anyone who understands technology and writes well, but who lacks deep pockets for heavy investment in other industries, decides to start a resume-writing service on the cheap and jumps in. This inclination is especially true if the entrepreneur has a background in HR, recruiting, or some other claim to career management fame.”

Troutman says that if history repeats itself, the industry will shrink in a few years when the job market revives. “By then,” she says, “job seekers will have become more adept at preparing their own digital presentations.”

Interestingly, he had been scheduled to talk at a major HR conference about how he was implementing a hiring process free of politics. I believe it was labeled “Tilting at Windmills.” The commissioner was a political appointee, and not necessarily the best qualified person for the job. Of course he may very well have been the best candidate — the fact that the gentleman is the treasurer for a political action committee that contributed to the mayor and a key alderman couldn’t possibly have influenced his selection. Then again, he was perhaps not the best choice to be a spokesperson on acquiring talent. One might as well ask Joe Biden to speak at a Toastmasters convention.

So what exactly was the Commissioner supposed to do to make the hiring process in the Windy City free of politics? An independent review had identified some deficiencies in the city’s process that included:

• Improper interference by several departments in the screening and referral of applicants
• Failure to identify job requirements
• Failure to post job openings
• Hiring from a limited pool of pre-selected applicants
• Placing individuals previously deemed unqualified on eligibility lists

The solutions proposed included documenting all hiring related activities, communications, justifications for hires, using assessments, training managers and the HR staff on interview and selection procedures, etc.

Rolling a Rock Uphill

In Greek mythology, Sisyphus was punished by being cursed to roll a huge boulder up a hill, only to watch it roll back down, and to repeat this throughout eternity. That’s pretty much what trying to free hiring from politics is like. Even if the city had a process that addressed all those deficiencies, it would not necessarily be free of politics, as illustrated by the recent Ricci v. DeStefano decision. The case was more about political interference in hiring than discrimination. New Haven’s hiring policies and process produced a result that did not sit well with the powers that be. So the city decided to toss out the results and to find a test of “equal value” that would produce a different, and more palatable result. Letting politics influence hiring is bad, except when it’s good. To some extent, the problem with diversity in recruiting is politics in hiring, and that’s not just limited to governments.

Despite all the technology, assessments, and procedures an employer has in place, no process is perfect. Subjectivity of one sort or another invariably influences the outcome. Any recruiter who has been on the job more than a week has experienced some attempt to influence the process. To some extent this is a matter of degrees; how far does the interference have to go before it becomes unacceptable? Obviously, a person getting hired simply because of patronage is going too far, but it’s less clear when it’s not that blatant, such as when a candidate tries to use connections to improve their chances of getting hired.

There’s something hypocritical about a government claiming to try and eliminate politics in hiring, since usually all of the top jobs, and plenty of the lower ones, are filled by people chosen for their political affiliations more so than any qualifications they may have. It’s too much to expect that politics will not influence hiring in the government, but at least for leadership positions it’s important to keep up appearances and hire people who are qualified and credible. That sets the tone for positions lower down the line. For example, no one would hire a tax cheat to run the U.S. Treasury, since it includes the IRS. Oh, wait. Never mind.

In many organizations, executive search fees consume double-digit portions of the recruiting budget, yet produce results only 45% of the time. Few budget items are more costly and ineffective, but the motivations behind this shift are not solely monetary. Executing executive searches internally dramatically increases the business impact of the talent acquisition function and raises the visibility of talent acquisition as a key contributor to business performance significantly.

After all, what else in recruiting could possibly impact business results more than bringing in a high-quality, innovative executive capable of delivering market-changing increases in efficiency and effectiveness?

The increase in “face time” between talent acquisition and the executive committee further increases the function’s ability to sell the vision of the organization and sustain operations when budgets get tight. In the following section, you will find numerous arguments supporting the shift.

When you add up all the positive benefits, it’s hard to argue that there will be a better time to explore this strategic move.

Changes in the Business Environment Make It a Perfect Time to Act

Economic factors always play a role in determining the feasibility and desirability of business decisions. Some of the economic factors that make this a perfect time to bring executive search in-house include:

• Many organizations have time to focus on building new initiatives. Cost-containment efforts and hiring freezes coupled with reluctance by organizations to eliminate their talent acquisition functions have contributed to a situation where many recruiters are on the payroll but working on many non-recruiting related activities. As hiring volumes are not likely to increase dramatically for at least 8 to 12 months, many organizations have the time to plan and build a robust executive search function internally.
• Available executive recruiters with proven track records. Executive recruiters are in a different league than most corporate recruiters. The great ones often know more about their client organizations than the senior-most HR leader and are viewed by candidates and executives just as much as coaches as they are recruiters. As the economics of third-party search models continues to erode, a significant number of recruiters with proven track records could be enticed to join an organization.
• Executive search openings will become frequent. Historically, the demand for external executives was sporadic, a condition that contributed to a strong argument against building executive search capability in-house. However, increased volatility in global markets, double-digit growth in emerging markets, changing workforce demographics, increasing rates of knowledge obsolescence, and years of pent-up frustration among executives chained to jobs that no longer motivate due to economic conditions will drive a significant increase in the demand for external executive hires as turnover skyrockets. Left unmitigated, the demand for external assistance in recruiting organizational leaders could chew up a majority of existing talent-acquisition budgets.

Changes in Recruiting Tools/Approaches Also Make Now a Perfect Time

In recent years, the Internet has brought a phenomenal amount of transparency to labor markets around the globe. That transparency has enabled many innovative recruiters to gain access to a wide range of cheap but effective recruiting tools that render closed databases of candidates such as those maintained by third-party agencies much less valuable.

Some of the changes in recruiting that make now a perfect time to shift executive search back in-house include:

• Finding executive prospects is now much easier. Finding the names of potential candidates is no longer a challenge. A majority, if not all, of the most visible leaders in an organization are visible externally both on user-maintained websites like LinkedIn and other white collar social networks and system maintained databases like ZoomInfo and Jigsaw. Even the corporate homepage of individual firms now list their executives. In addition, most executives in public companies receive stock as part of their compensation, making it easy to find their name and job title in financial disclosures required by the SEC.
• Building relationships with prospects is easier. Executive recruiters are masters when it comes to building relationships, the key to which is not trading solely on the value of a job opportunity to a candidate. Great executive recruiters use competitive intelligence so that they can deliver value to a candidate during each and every interaction, be it via email, phone call, or face-to-face meeting. Social media tools like Facebook, LinkedIn, Ning, and Twitter, combined with CRM methodologies, make sustaining longer-term relationships with larger masses of professionals much easier. In many respects, these tools have brought executive recruiter type “tickler files” out into the public.
• Search firms aren’t as strong. If you read the business news, you already know that executive search firms have been going through a great deal of turmoil themselves in the past few years. As a result, many have built sourcing functions offshore, shed high-cost relationship builders, and replaced knowledgeable account executives with younger, more sales-oriented professionals who know little about the nuances that characterize an industry. They have added other value-add services to help defray the impact from declining search revenues. Combined, all of these factors result in former powerhouse agencies producing results that most corporate functions can match or exceed at a fraction of the cost.

Factors to Consider When Determining to Shift Executive Search Inside

If you decide to begin a formal assessment as to whether or not it’s a good idea to build an internal executive search function, start with a simple “business case” checklist of factors that can impact organizations, including the benefits and opportunities that accrue to organizations executing executive search in-house and the problems that can occur when using executive search firms.

Benefits and Opportunities Resulting from Internal Search

• Increased sales, partnership, and CI opportunities. No firm wants to lose sales and partnership opportunities. Recruiting for executives requires you to “sell” a large number of influential executives inside and outside your industry on the value of your firm. When you use external executive search, relationships “belong” to and are retained by the external search firm. However, if your own recruiters build these relationships and sell your firm effectively, it’s possible that a significant number of those candidates not hired will hold a more positive image of your firm, and as a result may consider becoming a customer or strategic partner with your firm. The benchmarking and candidate assessment work that is now done by your own recruiters might also yield competitive intelligence that can be used to benefit your firm. The dollar value of this benchmark information and potential sales and partnership opportunities need to be added to the positive ROI of an internal function.
• An opportunity to build a competitive advantage. All high-impact business functions need to provide their firm with a distinct competitive advantage. When you develop your own search function, you have the opportunity to build a truly modern, technology-driven global function that could provide your firm with a distinct competitive advantage. Search firms are generally forced to offer the same services to all clients, so using them seldom provides a major competitive advantage.
• Internal recruiters know your firm. In the past, one of the advantages of search firms was that over time, they got to know your firm, its needs, and its culture. Unfortunately, the downturn has dramatically changed how many third-party search providers operate, reducing their ability to be as knowledgeable as they once were. In addition, in the fast-moving world of business, it is nearly impossible for any outsider to keep up with changes in organizational needs.
• Referral programs can produce amazing results. Traditional employee referral programs routinely produce hires who are better performers and have higher retention rates. Referrals produce these results because top-performing employees tend to know a high percentage of the harder-to-find, “not actively looking,” currently employed top performers. Referrals also work because colleagues are often more willing to talk to their peers at other firms about opportunities, than to recruiters of any type. Although it’s a surprise to some, referral programs focused on executives can have even more dramatic results, in part because executives have much broader networks than the average employee. As a result, specially designed executive referral programs can produce amazing results without the need to pay a referral fee (many such programs donate a reward to a charity of the executive’s choosing).
• A chance to build up HR’s image. Using external search firms for the most critical jobs further reinforces an already weak HR image that they can’t handle the really tough, high-risk assignments. Stepping forward and becoming accountable for the most visible and high-impact recruiting jobs provides HR with an opportunity to build its internal brand image. If HR wants to increase its visibility and impact, it must change its focus toward recruiting at the top of the organization and outsource recruiting at the bottom, rather than vice versa.

Problems That Can Occur When Using Executive Search Firms

• Using executive search might increase your turnover. Research at one major firm revealed that individuals hired through executive search firms have a higher turnover rate than executives recruited by their own internal recruiters (possibly because search firms naturally attract “actives” that are more interested in continuous opportunity and their career than in building a legacy at any one firm). In addition, exposing your executives to executive recruiters might have a separate set of turnover consequences, even though no ethical firm would use the relationships they build with your own firm’s executives during a current search to recruit them away.
• An increased chance that the hire will be a bad “fit”. During all searches, the longer the recruiter is in direct contact with a prospect, the better they will get to know them. This longer relationship makes for a more accurate assessment and a better fit. On the contrary, if you only see the outside candidates in one or two interviews toward the end of the recruiting process, the chances of making a major hiring error increase dramatically. With an internal function, all of that “assessment time” is owned by people living in your culture, thus improving your chances of hiring someone that fits.
• Losing candidates you never see. External recruiters create an initial list of qualified candidates that you never see, and they do 100% of the “selling” to those on that initial list. Because you’re not involved in any aspect of this initial selling, you can never know whether you are losing great candidates because these external recruiters are doing a bad job selling.
• “Bidding” for candidates is expensive. It’s only natural that large executive search firms “shop” top candidates to many different clients. This exposure to many potential clients allows their top candidates to be bid on, like highly valuable auction goods. This competitive process gives their candidates an opportunity to accept a much higher monetary offer, which simultaneously increases the search firm’s income. This means you will pay significantly more for candidates who are externally bid on. In contrast, passive candidates you directly source might only be interested in your firm, and may be up to 25% cheaper than high-demand executive-search candidates.
• Avoid restrictions on candidate availability. Search firms often have agreements not to recruit from their clients. This might seem to be a benefit on the surface, but it also means that large executive search firms with many clients in an industry will have a smaller candidate pool to offer you because they can’t include employees from their current clients. Even though these individuals might be willing to change firms, you’ll never know it because no one will tell you about these restrictions. Internal search allows you to recruit from literally every firm (perhaps with the exception of major customers) and thus it automatically provides you with a broader talent pool.
• Performance issues. Failing to fill all of your open positions is a potential problem with retained firms. As a result, you need to do your research to make sure that the percentage of “unfilled searches” by your retained firm isn’t notably higher than it would be if you were to use internal search. A similar comparison needs to be done for “time to fill,” because external firms can be slower. The last but most important factor to compare is the performance of the hire (on-the-job performance and retention rates). One major corporation that did this external/internal comparison found no performance improvement, slower hiring, and significantly higher costs from external search.
• Cost of recruiting. Some executive recruiting fees have been reduced during the recession but are still markedly higher than corporate recruiting cost per hire. If you hire a retained search firm, you pay even if they fail to fulfill the search. If you hire a contingent firm, you may pay more indirectly, in the time wasted by your managers sorting through mediocre resumes that contingent recruiters might send them in the hopes that one will “stick.”
• Absence of performance metrics. If your CFO or CEO demands every process have performance metrics, you’re probably going to have to develop them yourselves. In my experience, external search firms are notoriously bad at providing business-impact metrics. If you don’t believe me, search their website and invariably you will find numerous “word arguments” but not a single quantified result or dollar impact.
• New clients may occasionally get a preference. Firms that are desperate for attracting new clients may steer their very best candidates toward those clients with whom they hope to sign new contracts. If you’re a long-term client, you have to include that risk as part of the equation.
• You may select the wrong firm. Unfortunately, there is a wide variation in the “quality of service” delivered by search firms. If your vendor assessment process is inaccurate, you could be stuck with a weak firm. In contrast, if you build your own internal function yourself, you have more assurance that you will have an excellent team.

Next week I’ll expand on this topic with an article that focuses on developing a plan to bring executive search inside. If your organization has done this and you have lessons that you would like to share with your colleagues, please feel free to send me a note via email and I’ll make sure your learnings are incorporated.