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LinkedIn, Jobs2Web, Monster’s CAN, Dominoes, and Newton’s Third Law of Motion

by
Lou Adler
Nov 18, 2010, 12:12 pm ET

Every action has an opposite and equal reaction — Newton’s Third Law of Motion

There is a dark side to a company’s ability to identify and recruit high-potential fully-employed passive candidates. The problem: the fully employed people they’re identifying, recruiting, and hiring now work for your company.

So as LinkedIn’s “auto-connect your employees with every job posting” feature becomes more pervasive, and Doug Berg at Jobs2Web figures out how to get everyone in the world into your talent community, and Monster makes sure your employees see that your competitor’s opportunities are better than what they’re doing now, expect some ugly consequences.

Here’s what I consider the domino effect of what on the surface appears to be a good thing — identifying great people and offering them what appears to be better career opportunities:

Short-term and Narrow Domino Effect

  1. Increased employee turnover at the professional level.
  2. Increasing use of counteroffers to retain key employees.
  3. Across the board salary increases to minimize the “grass is greener” mentality.
  4. Hire more recruiters to assist filling the open positions.
  5. Increase salaries and signing bonuses to attract key people.
  6. Develop aggressive retention programs.
  7. Turnover rates at all companies increase as employees proactively seek greener pastures.
  8. Aggressively negotiate offers to compete for people who have multiple offers.
  9. The use of outside recruiters increases and fees escalate dramatically.
  10. Ask for increases in your recruiting budget for 2011, now.

Long-term and Broader Impact

  1. Wage inflation at the company and national level accelerates sharply.
  2. Succession planning is thrown for a loop as key employees depart.
  3. Turnover trends worsen as companies hire people for 2-3 year stints. This becomes the new normal for tenure.
  4. Lack of experienced and capable leaders causes shortages at the mid-management level within 4-6 years, with comparable shortages within 5-10 years at the executive level.
  5. The U.S. world competitive position deteriorates further.

Some might call this the good old days. But whatever it’s called, external recruiters are having a field day.

Some of these deleterious effects can be mitigated by implementing the Larry Clifton (CACI’s VP of Talent) counter-measure, aka his unspoken seventh law of motion: react first and faster before the other side knows what you’re doing, or be proactively proactive.  I call this the “Clifton Rule.”

Geoffrey Moore offers some critical strategic advice on how you should implement the Clifton Rule in his classic marketing book Crossing the Chasm. While the book is geared toward developing marketing strategies for high-technology products, his definition of customer behavior is useful as you increase your level of proactivity. Moore categorizes buyers of technology into these five groups:

  1. Innovators who try stuff out the moment it’s available. Have you seen the iPad with camera and GPS yet?
  2. Early-adopters who wait until the beta proves out. They create the buzz. These are the people who bought their iPads earlier this year.
  3. The Early Majority who recognize a good thing when they hear the buzz. These are the people buying iPads now.
  4. The Late Majority who wait until the buzz is so loud they’re embarrassed into proceeding. They’ll be buying their iPads for Christmas 2011.
  5. The Laggards who never hear the buzz, or they’re convinced it’s a passing fad. They’re thinking about getting a cell phone with SMS and maybe email.

With this in mind, and for all of those talent managers and leaders out there, here’s how I’d go about becoming proactively proactive.

Become an innovator and early adopter for every new idea that comes up. Be part of the beta program. If you haven’t yet bought into LinkedIn’s talent suite of products or Jobs2Web’s talent community programs, you’re already too late. These products are changing the face of recruiting today and you need to be using them. At best you’re still in the Early Majority, if you act today. (For the sake of disclosure, I work closely with both of these companies, primarily because they’re leading edge.)

Implement PERPEmployee referral programs (ERP) need to be expanded to take advantage of LinkedIn’s auto-matching capability. Get your employees to proactively connect with the best people they’ve worked with in the past, so they’re identified with your open jobs as soon as they’re posted. This is PERP. But remember, other companies are now starting to connect with your best employees, so act yesterday. I’m sure LinkedIn has a heat map that demonstrates your vulnerability, or if not, will soon have one.

Implement robust retention programs. This must be a multi-pronged strategy to prevent your best employees from leaving. As a minimum it needs to consist of these measures:

  • Determine if your compensation if competitive. If not, pull a Google and give everyone an immediate increase. This will buy you 3-6 months.
  • Increase your internal mobility efforts. Your workforce is tired so you need to do something about this. A recent survey we conducted with LinkedIn indicated that 78% of your fully employed professional workforce was either looking for another job or open to talking with a recruiter about new opportunities. Giving people different lateral positions will buy you an additional 3-6 months. If they’re stretch jobs you’ll gain a year or two. You’ll gain even more than this, if you implement some type of continuous stretching. You’re already doing this for your high-potential group, so it makes sense to broaden this to the top-third of your workforce you can’t afford to lose.
  • Sample your workforce satisfaction levels on a monthly basis. On the LinkedIn survey mentioned earlier, we measured employee satisfaction levels in comparison to job-seeking behavior. Surprisingly, those who were most active were not overtly dissatisfied, just more neutral about their future prospects. By tracking satisfaction, you’ll be able to implement corrective active programs once you observer a change from satisfied to neutral. (We’re holding a webcast with LinkedIn on Dec 7, 2010, to review these survey findings.)
  • Energize and upgrade your employee satisfaction programs. Your employees are at the starting blocks just waiting for something different to do. Don’t wait for them to leave before you implement all of the great ideas your OD people are now considering.
  • Establish a quick-response task force to address those now pursuing other jobs. Figure out who’s ripe for leaving, figure out why, and put in some aggressive programs to stem the upcoming rush to the exit doors. Have a well-thought counter-insurgency plan in place before people start turning in their resignations. Reacting with a competitive counteroffer is the worst thing you can do. By then it’s too late. It still might be appropriate, but if you don’t do all of the above in parallel, you’re just postponing the inevitable.

Stop using skills-based job descriptions to attract, screen, and hire people. I wrote a rather contentious article on ERE recently — “A Zillion Reasons to Eliminate Traditional Job Descriptions“ — that made a convincing case that job descriptions emphasizing skills and experiences are the root cause of turnover. The big point: people who accept lateral transfers, generally active candidates, based on some economic need, do so until something better comes along.

Hire people using the same criteria you’d use to retain them. Top performers tend to like the work they’re doing; there is some intrinsic long-term motivator that keeps them highly motivated; they are respected; their managers support and develop them; and they are provided with continuous growth opportunities. It makes sense to offer new hires these same opportunities. This is the primary reason why I suggest using performance profiles with strong EVPs, rather than skills-based job descriptions for sourcing, screening, and recruiting purposes. A performance profile defines the work the person will be doing defined as a series of projects and performance objectives. Candidates should be screened on this from both a competency and motivation standpoint. The EVP, or employee value proposition, describes why a top person who is fully employed and not looking would want the job. This should represent the core of all recruitment advertising efforts. This approach attracts the best and ensures they’re hired for long-term career rather than short-term economic reasons.

Emerging social media tools like LinkedIn and Jobs2Web are providing early adopters an opportunity to find and recruit everyone else’s best talent. This represents a fundamental shift in the balance of power, and more hiring turmoil can be expected over the next few years. The post-and-pray model of yesteryear is rapidly being replaced by a new version of “poach and prey.” Since everyone will soon have access to the same tools and the same people, the difference maker will be the implementers — recruiters and front-line hiring managers — and companies who have established themselves as early adopters of systems integrating their hiring, retention, and performance management system. However, until internal talent development becomes more important than hiring, our economy is in for a rocky ride.

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

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  2. Andrew Marritt

    Great article. There are a few points that I’d like to add:

    1) You can predict who is most likely to be at risk using data, much of which will already be available in various HR systems. The process starts with data-mining all the available data based on quits. This provides a list of characteristics that define increased risk to leaving. Doing so seems to increase accuracy of prediction by around 10% – not perfect but as meaningful for a large firm.

    2) I understand the point you were making in ‘hire like you’d retain’ but there are differences to the two due to an effect that economists call ‘asymmetric information’. Some of the great approaches we see using social media to provide greater transparency to those on the outside by real employees go some way to reducing the asymmetry.

    3) I’m not quite as pessimistic as you on the implications – I think the trends you note will happen but suggest that changes will be of the single digit percentage level. What I would suggest is that the most foolhardy approach would be not to monitor it. There are external economic indicators that can predict (often with about .8 correlation) turnover levels across the industry. There are opportunities to implement ‘sensors’ internally that can help monitor trends. Putting your head in the sand is not an advisable approach to avoid disaster.

    4) My dearest hope is that the changes you describe will start to get HR to think about purely competing on financial levels. In any area, sustainable competitive advantage is realized by having benefits that are hard to copy. Salary levels are about the easiest characteristic to copy and therefore offer no ability to provide long-term advantage.

  3. Tim Stanton

    As always a great article by Lou! Great follow up Andrew, but this needs to move past HR into the corner offices of companies.

    Executive leadership needs to bring HR/Recruiting to the table with a “full share”. These leaders need to be on the same plane as the other executives in the suite (COO, CFO, etc.) with direct access to the CEO/Chairman.

    Companies can’t compete without qualified employees doing the work. You can’t build a strategic plan without knowing the what is happening with your current employees, and the challenges facing your recruiting team. If you build your plan with “hope” that you have the skills on the team you are bound for failure.

  4. Robert Ruff

    People that think high wages are a bad thing make me really sad.

  5. Neil Costa

    Lou – this is great stuff. I certainly believe in Larry’s Law or The Clifton Rule. Employer’s need to learn how to experiment with new digital marketing channels and still measure their ROI to find points of leverage. It is more critical for CEOs and HR Execs to be conscious of employer branding than ever. Today, online recruitment marketing is well beyond the cut and paste of a job description into a job board.

  6. K.C. Donovan

    Amen Lou!

    EVP’s are the very best way to attract people who are making solid contributions in their current job – BUT if a role with more compelling challenges is presented (EVP) – they might kick the tires to check it out…

    On the other hand…the present you are painting pertaining to Community based workforce development – may be abit premature…our firm is solely focused on Community based employment programs, and from where we sit, at present we’re still hoping to reel in the early-adopter. Hiring Managers are easily seeing the value – but those that are managing the process are hanging on to what has brung them to the party…(and our programs are non-disruptive and fully complement current employment processes!).

    From the trenches its still an uphill climb (particularly for the 100-500 employee sized company). We do hope that you continue to champion what LI and J2W are doing – as one of the “others” – it helps tremendously!

    Thanks Lou!

  7. Darryl Clements

    Great article, Lou. Here are some ideas I’ve presented to business and hr execs that they just don’t seem to grasp:

    1) Adjust the way you count service to accommodate breaks. Continuous tenure is becoming rare, but so few companies actually allow employees to link periods of service. Want top talent to be more attracted to your company? Make it possible for them to leave and return without losing benefits and time in service perks.

    2) Stop buying into the “passive candidate” myth. Everyone’s active whether the company or even that person knows it or not. The social connectivity of today has changed everything. I know of someone who I never thought would leave his organization, and neither did he. He wasn’t looking or networking. But someone else knew about him and made him an offer at 2.5 times his pay with the ability to work remotely and travel more at his control and with time off and other perks that his former company’s “policy” wouldn’t allow.

    3) Adjust company policies and procedures to fit individual employee’s need. I’ve managed in places with something as simple as a perfect attendance policy. That meant be where your supposed to and make sure your boss and co-workers can rely on you. Under that policy, there were rarely problems with attendance and time off. The same can be done for most company policies. Conventional people will say “you have to do the same thing for everyone”, and I agree. It just doesn’t have to be exactly the same – it has to be the same in practicality. Ask yourself, why not allow a lot more remote working than is currently available? If you’re in the NY/NJ/CT market, it’s a lot easier to not have annoyed employees because they have the added stress of driving in on bad commute days.

    4) Most importantly, change the way employees are managed and succession is addressed. Employees need coaching and development (if they don’t know how to do a job), but people managers need to be far more connected to what the employee wants to do and what’s going on with them. I’ve seen employees quit just to end the commute of a job only to see that same position go unfilled or turn into a high-turnover position because the role was uniquely suited to the original former employee’s abilities. How ridiculous is it to lose top talent over commutes?

    Finally, I just want to point out that a lot of the upcoming turnover won’t be due to “better opportunities” so much as slightly better but with a better lifestyle compatibility and because people no longer have allegiance to team or manager. That loyalty has been engineered out of most companies, and now we’re going to see companies trying to unscramble the egg – which we all know isn’t going to happen.

  8. Keith Halperin

    Hi Lou,

    As usual, lots of interesting stuff here. I’ll address some of it:

    Lou:
    Short-term and Narrow Domino Effect
    1. Increased employee turnover at the professional level.
    2. Increasing use of counteroffers to retain key employees.
    3. Across the board salary increases to minimize the “grass is greener” mentality.
    4. Hire more recruiters to assist filling the open positions.
    5. Increase salaries and signing bonuses to attract key people.
    6. Develop aggressive retention programs.
    7. Turnover rates at all companies increase as employees proactively seek greener pastures.
    8. Aggressively negotiate offers to compete for people who have multiple offers.
    9. The use of outside recruiters increases and fees escalate dramatically.
    10. Ask for increases in your recruiting budget for 2011, now.

    Long-term and Broader Impact
    1. Wage inflation at the company and national level accelerates sharply.
    2. Succession planning is thrown for a loop as key employees depart.
    3. Turnover trends worsen as companies hire people for 2-3 year stints. This becomes the new normal for tenure.
    4. Lack of experienced and capable leaders causes shortages at the mid-management level within 4-6 years, with comparable shortages within 5-10 years at the executive level.
    5. The U.S. world competitive position deteriorates further.

    Keith:
    8.3-9.7% Unemployment through the end of next year….
    Economic Forecasts
    http://web.rollins.edu/~wseyfried/forecast.htm

    IMHO, until the ordinary person can quit with reasonable certainty of avoiding extended unemployment, it’s going to be much less churn than usual, and maybe not even then- A long period of high unemployment may create a risk-averse generation.
    ……………………………………………………….

    Lou:
    Become an innovator and early adopter for every new idea that comes up.

    Keith:
    I believe that PT Barnum antedated Geoffrey Moore re: early adopters:
    “There’s one born every minute.”
    If you do this, you’ll help with the organizational churn, as you’ll probably be out pounding the pavement. By and large, it is better in a corporate setting to figure out what is going to work/who’s going to win, and then take credit for your decision while appearing to have been a strong/loyal supporter all along.
    ………………………………………………………………………………………………………

    Lou:
    Implement robust retention programs. This must be a multi-pronged strategy to prevent your best employees from leaving. As a minimum it needs to consist of these measures:
    • Determine if your compensation if competitive. If not, pull a Google and give everyone an immediate increase. This will buy you 3-6 months.
    • Increase your internal mobility efforts. Your workforce is tired so you need to do something about this. A recent survey we conducted with LinkedIn indicated that 78% of your fully employed professional workforce was either looking for another job or open to talking with a recruiter about new opportunities. Giving people different lateral positions will buy you an additional 3-6 months. If they’re stretch jobs you’ll gain a year or two. You’ll gain even more than this, if you implement some type of continuous stretching. You’re already doing this for your high-potential group, so it makes sense to broaden this to the top-third of your workforce you can’t afford to lose.
    • Sample your workforce satisfaction levels on a monthly basis. On the LinkedIn survey mentioned earlier, we measured employee satisfaction levels in comparison to job-seeking behavior. Surprisingly, those who were most active were not overtly dissatisfied, just more neutral about their future prospects. By tracking satisfaction, you’ll be able to implement corrective active programs once you observer a change from satisfied to neutral. (We’re holding a webcast with LinkedIn on Dec 7, 2010, to review these survey findings.)
    • Energize and upgrade your employee satisfaction programs. Your employees are at the starting blocks just waiting for something different to do. Don’t wait for them to leave before you implement all of the great ideas your OD people are now considering.
    • Establish a quick-response task force to address those now pursuing other jobs. Figure out who’s ripe for leaving, figure out why, and put in some aggressive programs to stem the upcoming rush to the exit doors. Have a well-thought counter-insurgency plan in place before people start turning in their resignations. Reacting with a competitive counteroffer is the worst thing you can do. By then it’s too late. It still might be appropriate, but if you don’t do all of the above in parallel, you’re just postponing the inevitable.

    Keith:
    I think http://www.despair.com put it well when they said:
    “Sometimes the best solution to morale problems is just to fire all of the unhappy people.”
    Furthermore, there’s something that doesn’t get mentioned often enough-
    Retention is bad and churn is good for recruiters.
    “Trying to fill a full glass is foolish; trying to fill a sieve is job security.”
    Consequently, in most cases those who are working to reduce retention have interests inherently and diametrically opposed to those of recruiters, which leads to….
    ……………………………………………………………………………………………

    Halperin’s Paraphrase of Clifton’s Rule:
    Clifton’s Rule”
    “React first and faster before the other side knows what you’re doing, or be proactively proactive.”
    Halperin’s Paraphrase:
    “Get them before they get you.”
    …………………………………………………………………………….
    Lou:
    Stop using skills-based job descriptions to attract, screen, and hire people. I wrote a rather contentious article on ERE recently — “A Zillion Reasons to Eliminate Traditional Job Descriptions“ — that made *a convincing case that job descriptions emphasizing skills and experiences are the root cause of turnover. The big point: people who accept lateral transfers, generally active candidates, based on some economic need, do so until something better comes along.

    Keith:
    *So THAT’s what it was! Who else but Lou thought we should toss them out? Who else didn’t think we should improve them?
    ………………………..

    Lou:
    Hire people using the same criteria you’d use to retain them. Top performers tend to like the work they’re doing; there is some intrinsic long-term motivator that keeps them highly motivated; they are respected; their managers support and develop them; and they are provided with continuous growth opportunities.

    Keith:
    Shouldn’t EVERYONE have these? Could it be many are top performers in part BECAUSE they have these?
    ………………………………..

    Lou:
    It makes sense to offer new hires these same opportunities. This is the primary reason why I suggest using performance profiles with strong EVPs, rather than skills-based job descriptions for sourcing, screening, and recruiting purposes.

    Keith:
    The first point makes sense. However, ISTM that skills–based job descriptions don’t prevent offering new hires these same opportunities. Why do you think they do?
    ………………………………………………………….

    Lou:
    Emerging social media tools like LinkedIn and Jobs2Web are providing early adopters an opportunity to find and recruit everyone else’s best talent. This represents a fundamental shift in the balance of power, and more hiring turmoil can be expected over the next few years. The post-and-pray model of yesteryear is rapidly being replaced by a new version of “poach and prey.” Since everyone will soon have access to the same tools and the same people, the difference maker will be the implementers — recruiters and front-line hiring managers — and companies who have established themselves as early adopters of systems integrating their hiring, retention, and performance management system. However, until internal talent development becomes more important than hiring, our economy is in for a rocky ride.

    Keith:
    If this were 2004 I’d agree with you, but it’s 2010. Here’s the reality as I see it: It will continue to get easier and easier (and it’s pretty darn easy now) to find whoever you want to hire. However (and paradoxically) since it’s an employer’s market out there, it will be harder and harder to get the people your clients want, unless they become more reasonable in their requirements and/or it becomes a candidate’s market again (because of increased churn). Fundamentally: it’s either pay a premium (money, time, incentives, flexibility, etc.) to get who you like, or like who you can get.

    Thanks again for your articles, Lou.

    Keith

  9. Jason Gorham

    Lou, I read a lot of what you write and I must say that this is by far your best posting yet.
    “I’m going to Become an innovator and early adopter for every new idea that comes up. Be part of the beta program.”

    We are going to launching a new resume search product that integrates our job posting url keyword extraction. Reach out to me for to be a beta user. We are only selecting a few companies for this. My preference is companies located in south florida to work face to face with them.

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