As big a number as that it is, it represents only a 1.39 percent decline.

Monster Worldwide, however, took a 25 percent beating from its closing stock price on Thursday. Today, Monster is improving more than the market as a whole. The stock was up 3.76 percent at midday to $16.55.

Part of the reason was Monster’s financial results for the last quarter of 2010. The company reported that it earned a profit in line with analysts’ estimates. But its revenue came in lower than estimates and both revenue and the dollar value of contracts signed during the quarter were at the low end of what the company had predicted a few months ago.

Meanwhile, LinkedIn filed for an IPO Thursday, its registration statement confirming that it was building its business on recruitment advertising.

It was almost a perfect storm, with the financial results and the IPO announcement coming amidst the growing social media buzz. From the Wall Street Journal to CNBC, and even among bloggers outside the U.S., the talk is that job boards are on the same slope that newspapers were in the 1990s. Newspaper recruitment advertising peaked in 2000, dropping from $8.7 billion then to $786 million in 2009.

Social media, say many analysts, and, frankly, many recruiting leaders, too, is already causing some companies to reallocate dollars from job boards to social sites like LinkedIn, Twitter, and Facebook.

The CNBC video has an on-screen headline that bluntly asks: “Will social networking sites be Monster Worldwide’s downfall?”

The site did a follow-up to the initial report in which Monster CEO Sal Iannuzzi says, “Networking has always been a useful means of connecting people. And it should continue to be.” In the blog post, Iannuzzi told CNBC many of the same things he said during the Thursday analyst call.

And in an email Q&A, sent before Monster’s Thursday financial reports were out, Iannuzzi told me that the issue is really how to help employers source and hire the best candidates:

“The media loves to pit ‘social’ against ‘job boards’ as if it’s a Roman gladiator event. ‘Are job boards dead?’ This discussion is actually a waste of energy; it’s not focused on the right questions. The question is not, what’s our social strategy? What matters most is: ‘How can employers most efficiently source, reach, and attract the most relevant talent from across multiple sources?’ And doing it repeatedly, with increasing scale as the economy improves and the war for talent heats up again.”

Iannuzzi even more strongly defended the commercial career site industry during the quarterly conference call with analysts Thursday. “False statements are made,” he said, referring to unnamed media reports.

Sal Iannuzzi

In his Q&A with me, Iannuzzi was equally direct in answering a question about whether LinkedIn represented a new model for the traditional job board industry.

“Some media sources are citing increased use of LinkedIn by major employers and then claiming that this tactic is at our expense. ‘Social,’ or LinkedIn specifically, and Monster is not a zero sum game,” he said in his written response.

The world’s other biggest job board, CareerBuilder, hasn’t said much itself about the potential of impact of social media. But it is clearly keeping an eye on the trends.

At a 2009 presentation to a conference of analysts and others, CareerBuilder CEO Matt Ferguson called social media the “biggest threat and the biggest opportunity.” LinkedIn, then aggressively pursuing recruiting business, may present the most direct challenge, he said, but “social media in aggregate” was a worry.

If he has said anything since, I haven’t seen it. However, CareerBuilder’s recruitment communications consulting arm, Personified, has an active practice that includes social media.

Monster hasn’t gone in that direction. And in his responses, Iannuzzi seems to be saying the company will hold the course. “We’ll continue to find the best ways to match the right candidate to the right job, on Monster, off Monster and with tools and technology not available anywhere else,” Iannuzzi wrote in response to question about the LinkedIn business model.

The opportunity to pose a few questions to the CEO was extended on Tuesday. They were sent the same day. The responses came back Friday morning, the day after the financial reports. My six questions covered several areas, including the company’s 6Sense search technology, its plans for the huge newspaper network it got from the HotJobs acquisition, and the impact of social media. Monster, at my invitation, added a question of its own about the highlights of its business plan.

Here are the questions and answers as I got them:

Q1: (company question.) Monster reported strong Q4 earnings. Anyone that has followed Monster over the past year is aware that you are moving fast on all fronts. Can you share some of the highlights from your business plan?

A: Our innovation strategy and global expansion plans are paying off. We made a commitment to innovation three years ago and didn’t waver during the recession. Now, as the recovery is starting to occur, we are in an excellent position to help employers win the war for talent. What was needed that no one was addressing was a better way to reach and identify the right talent, faster and more easily. Now we are reaping the benefits of that promise to innovate. Our 6Sense products have proven that better search will transform recruiting, and in the course of a few months that technology alone accounts for over 50 percent of our search product sales. We’ve extended our reach through the acquisition of Yahoo! HotJobs. Our global footprint has been a significant driver of our growth and a competitive differentiator for large enterprise customers looking for a global talent management plan. Whether it is leadership in markets like Germany (where the economy is very healthy) or China, or even our recent entry into Brazil (one of the world’s fastest growing economies), we are poised to take advantage of a vibrant global economy. Our success in 2010 will fuel our momentum in 2011 and we’ll continue to innovate and invest in this winning strategy.

Q2. We hear a lot about how social media recruiting has been the buzz among recruiters for the last few years. It gains new participants every day. What role do you see Monster playing in social media? How do you see Monster leveraging social media principles to help recruiters find better candidates?

A: The media loves to pit “social” against “job boards” as if it’s a Roman gladiator event. “Are job boards dead?” This discussion is actually a waste of energy; it’s not focused on the right questions. The question is not, what’s our social strategy? What matters most is: “How can employers most efficiently source, reach and attract the most relevant talent from across multiple sources?” And doing it repeatedly, with increasing scale as the economy improves and the war for talent heats up again.

We’ve invested in innovation that addresses these questions and has taken us far beyond our roots as a “job board.” Two notable examples are our 6Sense-powered semantic search products that can precisely filter and present the best matches from any source, and our Career Ad Network that reaches passive seekers with your opportunities all across the Internet. There’s a place for “social” in recruiting, and for networking, just as there always has been. Seekers will ask their friends for advice and recruiters will mine their contact lists and ask their colleagues for leads. But we’re focused on the part of the recruiting equation that customers have been clamoring for — finding the right candidate for the right job, with efficiency and precision.

Q3. Do you see LinkedIn becoming the model for what future career sites will look like? It began as purely a business networking site, but as it adds more job seeker features and more recruiter services, LinkedIn clearly is beginning to look like a sort of job board/social media hybrid. Where do you see this leading and how will Monster respond?

A: LinkedIn is an online platform that’s part virtual Rolodex, part office water cooler, and part personal branding tool. Networking, including via a new model such as LinkedIn, has always been a component of a job search and candidate lead generation approach. And it should continue to be. We operate completely different businesses. Some media sources are citing increased use of LinkedIn by major employers and then claiming that this tactic is at our expense. “Social,” or LinkedIn specifically, and Monster is not a zero sum game. In fact, while client confidentiality prevents me from being more specific, what I can say is that our business with all three of the companies mentioned in a story as recently as yesterday is up over 2009; in two cases, up 85% and 167%, on multimillion-dollar contracts. As for the fascination with the so-called “passive” candidates on LinkedIn: it is well understood that recruiters are actively contacting people on LinkedIn, so guess what? People actively looking for jobs are posting profiles, increasing their visibility. They are, by definition, active. If you really want to reach passive candidates, the best way to do so is when they aren’t on career sites at all  That’s why we’ve built our Career Ad Network to reach people all over the Internet based on their habits and interests. This network reaches a third of all Internet users when they’re not even thinking about jobs. So will we model our business after LinkedIn?  No. We’ll continue to find the best ways to match the right candidate to the right job, on Monster, off Monster and with tools and technology not available anywhere else.

Q4. 6Sense Search for talent matching has gotten excellent reviews. Using the technology, Monster has been improving search results for both job seekers and recruiters. In many ways, Monster and Google (and other search engines) are in hot pursuit of the same end: quality search results that intuit what the user wants even when the queries are imperfectly formed. What’s next for 6Sense? What products or refinements do you have in the pipeline?

A: We developed 6Sense search technology initially to help employers find the most precise talent matches among the most possibilities from the millions of resumes on Monster or within folders of applicants to a company’s job posting. Now, we’re working with a group of enterprise customers to develop a cloud-based application of the technology so they can search their own talent databases, including their own employee talent. This will provide unprecedented ability to see patterns, anticipate needs, and inform talent strategy. Semantic search will continue to be the cornerstone in our broader strategy to bring increased efficiency, transform the recruiting process and grow our business. We will be rolling this new product out this year and are confident that this can radically alter the talent acquisition and management business.

Q5. With the acquisition of HotJobs Monster now has the largest newspaper network of any online careers site. What are you going to do with it? What role do you see the newspapers playing in Monster’s future?

A: The newspaper consortium we gained through our HotJobs acquisition is a huge asset for our customers. No need to write an obituary for newspapers, which have innovated into digital sources in their local markets. Monster now has a network of over 1,000 daily and weekly newspaper co-branded relationships which enables us to offer localized access and relevance to employers and job seekers alike. Each relationship brings together a trusted local media source with the online recruitment advertising market leader. Our newspaper relationships are a key component of our larger recruitment offering.

Q6. The new Dot Jobs Universe launched a few weeks ago with a promise of hitting 100,000 sites by the end of the year. Where do you see this leading? Do you expect jobseekers will find their way to sites on the .jobs domain? How will this impact Monster?

A: We have no objection to companies building their own career sites and engaging with job seekers off Monster. In fact, we build online sites for our customers to help them attract talent, and our Career Ad Network recruitment media solution can drive people right to company career sites. At the very time job seekers need the most help finding jobs, the last thing they need is tens of thousands of additional job boards. Proliferation of untargeted job listings is just going to confuse the job seekers you are trying to reach. Having a new Internet suffix of .jobs versus .com is not a magic bullet in attracting an audience of qualified job seekers. There are already at least 10,000 job boards out there and thousands more sites on which to list jobs is the answer to the wrong question. The better question is how to precisely target, attract, and evaluate talent, quickly. Also, a singular entity’s control and operation of essentially all of the .jobs domains is a blatant violation of the rules established by the Internet Corporation for Assigned Names and Numbers, or ICANN, which is the non-profit organization that oversees how Internet names are authorized. We think it’s likely that ICANN will shut down the Dot Jobs Universe as completely outside the scope of what the original intent of the .jobs domain was.

Q7. Take a look at your crystal ball for a moment. What do you think the Monster of 2015 will be like?

A: We never stand still. On the other hand, our values and focus never change. So we’ll be expanding on the pillars we’ve been building over the past couple of years. The world will continue to flatten and borders will blur as companies think and operate globally in their search for talent and how they organize their workforce to be ever more agile and competitive. We’re already the most global player in the online recruitment industry, and we’ll continue to build our global footprint and capabilities. We’ll be a strategic human capital partner with many of our customers, as they are able to apply our 6Sense search technology to their workforce planning and talent management priorities. And in 2015 our mission will be the same as it is now: we’ll continue to help employers gain a competitive advantage by finding the right talent for the right jobs, and we’ll be inspiring job seekers to improve their lives through the world of work.

90% of performance appraisal processes are inadequate. –Salary.com survey

In conversations with HR leaders and employees, the talent management process that suffers from the most disdain around the world is the performance appraisal. It’s one of the few processes that even the owners of the process dread.

If everyone hates it, but it still gets done nearly everywhere, you might assume some asinine government regulation requires it, but in this case there is no such regulation. The only legal justification pertains to showing just cause for termination and other disciplinary action. While that is the justification used, no matter how strong their design, most performance appraisals are executed so poorly that they may actually harm a legal case. (A major labor law firm found that among a random sample of performance appraisals conducted in a retail environment, a majority would damage the employer’s case versus support it.)

Most ignore the shortcomings of performance appraisals and suffer through it, but that’s hard to do once you realize how incredibly expensive the process is. In 1996, Frederick Nickols estimated the cost at just under $2,000 per employee. My estimate, which includes a managers preparation time, employee time, HR processing time, opportunity costs, and advances in technology, still puts the process cost at over $2,500 per employee per year. If you choose to take on the challenge of revising your performance appraisal process, the first step is to fully understand the potential problems associated with it.

The Top 50 Problems with Performance Appraisal (Grouped in Six Categories)

Most Serious Performance Appraisal Problems

1. Don’t assess actual performance — most of the assessment that managers complete focuses on “the person,” including characterizations of their personal “traits” (i.e. commitment), knowledge (i.e. technical knowledge) or behaviors (i.e. attendance). While these factors may contribute to performance, they are not measures of actual output. If you want to assess the person, call it “person appraisal.” Performance is output quality, volume, dollar value, and responsiveness.

2. Infrequent feedback – if the primary goal of the process is to identify and resolve performance issues, executing the process annually is silly. A quality assessment/control program anywhere else in the business would operate in real time. At the very minimum, formal feedback needs to be given quarterly, like the GE process.

3. Non-data-based assessment — most processes rely 100% on the memory of those completing the assessment because pre-populating the forms with data to inform decisions would be too difficult (cynicism). In addition, most assessment criteria are “fuzzy” and subjective.

4. Lack of effectiveness metrics — many accept that the goals of the process are to recognize results, provide feedback to address weaknesses, determine training needs, and to identify poor performers. Unfortunately, rarely do process owners ever measure their processes’ contribution to attaining any of these goals. Instead, the most common measure relating to performance appraisal is the percentage completed.

5. Lack of accountability – managers are not measured or held accountable for providing accurate feedback. While they may be chastised for completing them late, there is no penalty for doing a half-assed job or making mistakes on them, which is incredibly common. One firm attempting to remove a troublesome employee found that the manager had rated the individual the highest within the department and awarded them employee of the year.

Process-related Problems

6. Disconnected from rewards — in too many organizations, getting a merit raise, bonus, or promotion is completely disconnected from an employee’s performance appraisal scores. When there is a weak link, employees and managers are not likely to take the process seriously.

7. No integration — the process is not fully integrated with compensation, performance management, development, or staffing (internal movement). A lack of integration and coordination leads to duplication and missed opportunity.

8. Individual scores exceed team performance — without controls, quite often the average score of team members exceeds the actual performance of the team (i.e. the team reached 80% of its goals but the average performance appraisal for its members was 95%).

9. Each year stands alone — each performance appraisal by definition covers a finite period of time. However, if the goal is to assess potential and identify patterns, an employee’s performance must be assessed over multiple years.

10. No comprehensive team assessment – although individuals on the team are assessed, there is no simultaneous overall assessment of the team. Often contingent workers on the team are not addressed at all.

11. A focus on the squeaky wheel — most performance appraisal systems focus on weak performers. There is significantly less focus on top performers and thus there is no system to capture their best practices and then to share them with others.

12. Little legal support — performance appraisals may be an executive’s worst enemy in grievances and legal proceedings. Even though the process may be flawless, poor execution by managers often results in performance appraisals that do not aid in a disciplinary action. Errors may include “unfettered discretion,” improper handwritten notes, generalizations about race, gender, or age, and appraisals that do not match the performance data. At my university, a study demonstrated that while Asians got the highest performance score, they somehow managed to get the lowest average pay raise. When the HR director was confronted, he was furious that anyone would calculate and expose the obvious discrimination.

13. No second review — even though the process may have impacts on salary, job security, and promotion, in many firms the assessment is done by a single manager. If there is a second review, it may be cursory, and therefore not ensure accuracy or fairness.

14. Not reliable or valid — most process managers do not regularly demonstrate with metrics that the process is consistently repeatable (reliable) and that it accurately assesses performance (valid).

15. Cross-comparisons are not required — one of the goals of the process is often to compare the performance of employees in the same job. Unfortunately, most appraisal processes (with the exception of forced ranking) do not require managers to do a side-by-side comparison, comparing each member of the team with one another.

16. Assessments are kept secret — although a salesperson’s performance ranking may be posted on a wall, performance appraisals are often kept secret. An overemphasis on privacy concerns might allow managers to play favorites, to discriminate, and to be extremely subjective. Keeping ratings secret allows managers to avoid open conversations about equity.

17. Process manager is not powerful — often the process is managed by lower-level HR administrators without a complete understanding of performance and productivity.

18. No process goals — the overall process operates without clear and measurable goals, and as a result there is little focus.

19. Not global — most processes and forms are “headquarters centric,” failing to address cultural, language, and legal differences.

20. Forced ranking issues — although forced ranking has some advantages, using it may result in significant morale and PR issues.

21. No ROI calculation — HR fails to do a periodic business case justifying the value added compared to the time and the cost of the process.

Instrument (Form) Problems

22. Doesn’t address diversity — all too often, the same appraisal form is applied to a large but not homogeneous group of employees (i.e. all hourly, all exempts, all managers etc.). As a result, the assessment form does not fit the job. Only management-by-objective-type approaches address individual needs.

23. The process does not flex with the business – rarely does any portion of the appraisal process flex to address changing business objectives.

24. The factors are all equal — most forms treat all assessment factors as if they are of equal importance. Instead, they should be weighted based on their relative importance in a particular job (i.e. a janitor’s customer service rating should be weighted lower than for a salesperson.

25. Inconsistent ratings on the same form — it is not uncommon for managers to put one level (high, average or low) of ratings in the Likert scale portion of the form, but another level of rating in the “overall assessment” box. The final narrative portion of the assessment may contain still another completely different level of assessment.

26. Disconnected from job descriptions – in many cases, the factors on the form are completely different from the factors on an employee’s job description, bonus criteria, or yearly goals. This can confuse employees and cause them to lose focus.

Manager/Execution Problems

27. Managers are not trained — in most organizations, managers are not trained on how to assess and give honest feedback. If the process includes a career development component, it is even more likely that managers will not know how to enhance the career path of their employees.

28. Managers are “chickens” — some managers will do almost anything to avoid tough decisions or confrontation. Some provide no differentiation and spread “peanut butter” (an even distribution) to avoid it, while others give everyone “above average” ratings. Some managers will provide feedback that is extremely vague in order not to offend anyone. Rarely if ever is anyone immediately terminated as a result of the process.

29. Gaming the system — often managers artificially rate individual employees to save money or to keep employees from becoming visible for promotion. Some selfishly give a score just below that required for a pay increase, while others give scores just above the point where they would be required to take disciplinary action.

30. Recency errors — managers, especially those who don’t consult employee files and data, have a tendency to evaluate based primarily on events that occurred during the last few months (rather than over the entire year).

31. Corporate culture issues — subjective appraisals can restrict cultural change in organizations. In some organizations, there are cultural norms and values that influence performance appraisals. For example, in one organization new hires were automatically given an average rating for their first year, regardless of their actual performance. One top performing hire I knew abruptly quit after receiving this cultural gift.

32. Inconsistency across managers — some managers are naturally “easy raters” while others are not. As a result, employees working under easy managers have a better chance of promotion due to their higher scores. In firms that rely heavily on the narrative portion of the assessment, having a manager with poor writing skills may hamper an employee’s career. Without “benchmark” numbers to set as a standard, inconsistency is guaranteed in large organizations.

33. Managers don’t know the employee — managers of large and global organizations, as well as newly hired and “transferred in” managers may be forced to do appraisals on employees they barely know. Recently promoted managers may be forced to assess their former friends and colleagues. Following a merger, managers are likely to be confused about whether to focus on the whole year or just “post-merger” work.

34. Secret codes — I did some work with an army unit where by custom literally everyone got a perfect numerical score. So assessments by higher-ups were made as a result of interpreting “code words” in the small written narrative portion of the assessment. Unfortunately, if your commander didn’t know the code words, your army career was limited.

35. Mirror assessments — most people, and managers are no exception, have a tendency to rate people like themselves more positively. This can result in discrimination issues.

36. Managers are not rewarded — managers that go out of their way to provide honest feedback and actually improve the performance of their workers are not rewarded or recognized.

37. Managers don’t own it — managers often feel they don’t own the process, so they invest little in it and proceed to blame HR for everything. Managers would embrace it instead of grumbling if they were presented with a positive correlation proving that managers who did excellent performance appraisals were among the highest performers with regards to business result and bonus awards.

Employee/Subject Problems

38. High anxiety — because the process is so subjective and no benchmark performance numbers are set in advance, uncertainty can cause many employees high levels of anxiety weeks before the process. Managers may also be anxious because of the uncertainty related to the an employee’s reaction. I know one employee who sincerely thought she was going to be fired prior to her assessment but ended up being the highest rated employee on the team. Employees should have an accurate idea of their assessment long before any meeting is scheduled.

39. One-way communication — some managers simply give the employee the form to quickly sign and they don’t even solicit feedback. Many employees are intimidated by managers and the process, and as a result, they say nothing during or after the appraisal.

40. Self-assessment is not possible — if an ambitious employee wanted to self-assess their performance midstream (in order to improve), most processes do not provide access to the instrument. Providing each employee with a virtual assessment scoreboard and performance management process would be an ideal solution.

41. No alerts — most processes do not allow an employee to be notified midstream should their performance change to the point where it was suddenly dramatically below standards.

42. No choice of reviewers — although there are a few exceptions (Sun), in most cases, unlike with 360 reviews, employees are not allowed input into who does their assessment.

43. One-way process — in most cases, employees also have no input into the factors that they are assessed on, how often they are assessed, and what type of feedback they can receive. It is unfortunately even rare for a process manager to routinely survey their users for suggestions on how to improve it.

44. No appeal process — employees who disagree with her appraisal are seldom given the opportunity to challenge the results with a neutral party.

45. Retention issues — the ultimate cost of an “unfair” assessment may be that it actually drives your top employees away because, for example, there was no differential in recognition and rewards for their superior performance.

46. Many possible emotional consequences — if performance appraisal is blotched, you can expect a decrease in employee engagement, trust, employer brand strength, teamwork, and innovation contribution. Employee referrals from disgruntled employees will probably also drop.

Timing Issues

47. A time-consuming process — most of the forms are incredibly long and time-consuming. As a result, some managers routinely recycle “last year’s” evaluations. If HR is required to sit in on the sessions, the amount of wasted time increases significantly.

48. It is historical — the process is focused on capturing feedback about last year rather than on discussing necessary changes to job and skill requirements that must necessitated by the business strategy.

49. Not coordinated with business cycles – some appraisal dates do not coincide with the end of major business periods or seasons when all other business results are tabulated and reported.

50. Not simultaneous — if appraisals are done on the employee’s anniversary date, the entire team will not be assessed at the same time.

Do these people seriously sit around all day and tweet and retweet everyone else’s information and call themselves experts? It’s no wonder why there is such confusion and negativity in the workplace when the topic of social media arises. While there is no doubt that the world is in the midst of a social media revolution, the reality is that social media is a basic, simplistic concept — but you have to, like anything else, have a plan for it. If your organization has already made the plunge or if you are thinking about joining the vast and crazy world called the social media universe — it’s of utmost importance that you have a detailed strategy in place.

Currently, I am helping put together the pieces of multiple social media experiments gone bad. Companies come to me on a regular basis with problems such as having built a fancy Facebook page with no game plan or jumping head first into Twitter not knowing what to tweet, only with the intention that it will be cool and that everyone else is doing it. The problem: they built it and no one came.

Not only did no one come, no one in these companies has said anything on their respective pages: not a tweet, not a “like,” not even an update. The pages simply sit there occupying space.

Solution: Have a well-thought-out and detailed plan to encompass what types of social media the organization will use, how you will build your strategy, who will use the platforms, what you will say, who will be allowed to say it, and how you’ll know its working. We recommend four steps to help organizations analyze and understand social media, make a plan to leverage it, implement the plan, and monitor it to ensure it’s working:

Step 1 — Analyze and Understand the Social Media Space

Social media discussions shouldn’t start off with “we need to be on social media.” Understand “why” you want to be on social media to ensure you’re making a strategic move and not a trendy one. There are multiple platforms all with different categories of users and uses.

Step 2 — How/where to build your strategy

Know what you are trying to accomplish and which platforms will work best for your strategy and goals: LinkedIn, Twitter, Facebook, blogging, etc. Also, have a social media strategy in place. Instead of banning social media in the workplace, encourage and help your organization create a social media policy. When you are setting up your social media policy, give employees ideas of what to do vs. what not to do.

Step 3 — Engage

Once you have your plan in place, start moving forward. Involve top employees as brand ambassadors and have them influence what is being said. Be authentic and transparent about what is said and very important — make social networking a lifestyle rather than a distraction.

Step 4 — Monitor and continuously update your strategy

Develop a team to monitor and control the platform. Ensure your sites are updated on a daily basis with relevant content and interaction with followers to engage them.

There is an abundance of social media success stories out there from recruiting, to sales, to business-building. You name it and someone or some organization has found the value in social media and benefited from it. You can be successful as well, but you will just need to have a defined roadmap first in order to achieve the end results that you desire.

Though Monster finished 2010 meeting Wall Street’s profit expectations of 6 cents a share, its revenue of $258.3 million was below the $262.5 million analysts estimated. For the year, Monster reported $919 million in revenue and a 7 cent a share loss.

In after-hours trading, Monster’s stock was down about 3.7 percent and selling at $20.60 a share.

While the numbers represent a”a significant improvement over last year,” CEO Sal Iannuzzi told the analysts and others on a conference call this afternoon that massive weather disruptions in Europe and the Northeast during the last weeks of December kept the revenue contract bookings at the low end of estimates.

He also said an unfavorable exchange rate cost the company $5 million on its overseas revenue.

Bookings, the contracts large employers sign for bulk job postings and resume searching, came in at $330 million for the fourth quarter. That’s 28 percent above those in the fourth quarter of 2009, certainly a strong indication of job growth expectations by the world’s employers. However, Monster had estimated bookings would grew by as much as 32 percent.

Iannuzzi also said budget issues at the federal level, while a much smaller share of the overall business, also hurt revenue in December, which is typically its busiest month for contract closings.

Still, he said that he expects improvement in revenue to continue and bookings to further strengthen. For the current quarter of 2011, Monster is estimating bookings to come in between $259 and $269 million, an 18-23 percent growth rate over 2010. Overall revenue is expected to see a similar percentage growth with Monster projecting a per share profit of one to four cents a share.

The weather continues to heavily impact a good part of the country. Several inches of snow fell across the Northeast in the last few days, preventing thousands of workers from getting to the office. That’s what happened the last weeks of December when the weather kept executives away from work and companies from signing new contracts and, to a lesser extent, from posting jobs.

Iannuzzi quipped about the current winter conditions there, as he discussed the impact of December’s snows on the company.

However, he pointedly and bluntly pronounced as false, news reports that social media recruiting is causing a drop in job board revenues. That Monster’s revenue and bookings came in at the bottom end of company projections, Iannuzzi said, was “not caused by any fundamental changes in our business.”

He later followed up that reference with a double-barreled blast at the “noise out there about companies using different technologies and not using Monster.”

Although a company spokesman told me in an email that the CEO “was refering to general media coverage hyping social media,” the Wall Street Journal ran a story most recently declaring “Many (companies) plan to scale back their use of online job boards” in favor of sourcing candidates themselves.

Clearly agitated about the direction of recent coverage, Iannuzzi hinted at an undeclared agenda behind some of the stories, which, he said, included comments from uninformed individuals.

One article — he didn’t mention any names or specifics — contained a claim that certain named companies had reduced their job board spend, presumably with Monster. Iannuzzi said the truth is that one of the companies actually increased its spending by 85 percent. He refuted another statement that claimed yet another reduction by another company. It, too, Iannuzzi said, had increased its job board spending.

“False statements are made,” he insisted, reopening the closed question and answer period to the Wall Street analysts. A move I’ve never seen before. There weren’t any on that issue.

However, in the next few days, I expect to be posting a series of Q &As with Iannuzzi. He extended an offer to answer a few questions. One of them was on the subject of the social media buzz and how it is affecting Monster.

CareerBuilder, a private company, says it will report its North American revenue next week. Dice reports its 4th quarter and 2010 numbers on Tuesday before the market opens.

The privately held company filed a registration statement with the Securities and Exchange Commission saying it intended to list on either the NASDAQ or the New York Stock Exchange. No initial offering price was listed, nor was the intended number of shares to be sold.

That LinkedIn was preparing for an initial public offering has long been rumored. Earlier this month Reuters said the company had been meeting with financial institutions and would begin offering shares this year.

The company has multiple shareholders, including founder Reid Hoffman and his wife who own 21.4 percent of the private stock, and three venture capital companies.

In its SEC filing LinkedIn reported it has been growing revenue rapidly. For the first nine months of 2010, the company had $161.4 million in revenue, twice the revenue for the first nine months of 2009. It also posted a $10.1 million profit through the end of September versus a loss of $3.4 million for the first nine months of 2009.

The numbers in the registration statement show LinkedIn’s revenue trajectory is clearly up. In 2007, LinkedIn had $32.5 million in revenue. A year later it more than doubled that to $78.8 million. And for all of 2009, the company had $120.1 million.

Although LinkedIn lost money in 2007-2009, the size of the loss has been decreasing annually. When the company reports its full year numbers for 2010, it will undoubtedly show a profit.

The company’s recruitment products account for 41 percent of revenue, a percentage that has has been growing over the last three years. It 2007, the “Hiring Solutions” product line generated $7.5 million, which was 23 percent of the company’s revenue. For the first three quarters of 2010, recruitment accounted for 41 percent of revenue or $65.9 million.

Site traffic, page views, and its customer base have all grown dramatically. At the end of 2008, there were 32 million registered users. At the end of last month, there were 90 million registrations. Monthly unique visitors, which averaged 36 million at the end of 2009, averaged 65 million at the end of last year. Customers now number about 3,900. A mere two years ago there were 900.

All of these metrics reflect the rise of social media generally, and LinkedIn’s increasingly important role in career networking and passive candidate hunting by recruiters. As the numbers in its registration statement show, LinkedIn has been pushing ever more strongly into the recruitment advertising and services arena.

In the fourth quarter alone, LinkedIn introduced  Jobs For You,  Referral Engine, and Career Explorer, and hosted its first user conference specifically for recruiters, Talent Connect.

Although a LinkedIn marketing official declared the company a professional business network, recruiters have begun to worry that it is taking on the trappings of a job board.

Nearly two dozen comments were posted to a late December ERE article entitled “Is LinkedIn Becoming a 21st Century Job Board?” Typical of many of them was this one, from Jeff Dickey-Chasins, the Job Board Doctor:

“It’s really quite simple. The more that LinkedIn adds new features that are primarily tied to finding a job, the more the users (who are not stupid) will see that it is a job board. A different type of job board, yes, but a job board.”

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

That’s what Monster’s updated CAN ads can do. For the first time in any of the job ad networks, and certainly rare among all behavioral advertising, online users can refine their job preferences or opt-out of the program all together.

Tom Chevalier, Monster’s product manager who lead the development team, explained that giving users more control over the advertising they see is at the leading edge of an industry trend. With more users savvy to behaviorally targeted ads, research shows they prefer them to scatter-shot ads. But there’s also an interest in controlling their preferences.

“Users haven’t yet formed opinions on behavioral targeting,” says Chevalier. But Monster’s own survey of job seekers discovered that up to 83 percent of them want relevant job ads, targeted to them based on their behavior.

So that’s what they are getting.

A bit confused by what this means? Here’s a primer:

Besides classic job postings, Monster also offers employers off-site advertising through its Career Advertising Network. It’s a collection of thousands of sites including newspaperd, Citysearch, MSN, and many more. Every visitor to those sites is “analyzed” and a relevant job is presented.

The first time a visitor encounters a CAN ad, the analysis is rudimentary; the ads they see are based on their geographic location. If they click on an ad, the type of job is now incorporated into their cookie. Over time, as they click on more and more jobs, Monster refines the targeting.

Now, those ads have an extra link: “Interest Based Ad.” Click it and the user goes to a Monster page where they can refine their preferences themselves. Or opt-out of the behavioral targeting all together, in which case they see a generic job ad.

To be sure, the wording is obscure. I don’t know that I would understand it to mean there is a way for me to control my ad preferences. On the other hand, there isn’t room in the ad for a detailed explanation. Perhaps curiosity alone will prompt visitors to click into it.

Those who do, and choose to manage their preferences, will be rewarded by getting more precise jobs. Besides indicating geographies and occupations, users can indicate career and education level.

I asked Chevalier if Monster had considered offering even more choices. “High levels of granularity,” he said, “tend not to give (job seekers) much more value.” Filtering too narrowly risks missing desirable opportunities, while a broad selection gets too many choices.

It’s a tough balancing act to get it, as Goldilocks might say, “just right.”

If you haven’t read Part 1, I recommend you read it before this article. I explore the idea of the Social Gap –the gap that is created as a result of social media. This is primarily a gap of expectations … because most corporate recruiting practices are currently incongruent with supporting the social graph.

I originally thought this would be a 2-part series, but after continued reflection and writing this latest portion of the article, the topic is best served by a 3-part series.

Now, contrary to some, the goal of this series was not to be sensationalist, but rather to point out something that I’ve not heard others discuss: that with all of the benefits provided by social media, there also exist some substantial adverse effects. Smart recruiting departments can (and should) respond to mitigate those negative consequences. So it is in that spirit that I offer two other issues (and some solutions) that social media creates for recruiting departments:

• The Social Proof Problem
• The Backdoor Problem

The first problem, the Social Proof Problem, is related to a fundamental shift in how people (this includes candidates) view the efficacy of online information, and also how they use social media for validation. This is closely tied to the concept of Radical Transparency and Social Proof. There’s a great book by Cialdini that discussed in depth the dynamics of Social Proof.

There are three primary macro-level trends that have happened over the past 10 years to fuel The Social Proof problem. It’s easy to forget that Internet usage has doubled in the last decade, and that in 2000 fewer than half of Americans had Internet access. Similarly, broadband access increased from less than 10% market penetration to 60% in the same time frame. This access to the web then combined with the phenomenon of blogging, which we now also take for granted. But remember, until the advent of mass-market blogging circa 2002-2003, the relative volume of online information was low and widely dispersed. It is interesting to look back and review the famous Technorati State of the Blogosphere reports to remind us of the huge shift that has happened. Now we have social media which is pouring gas on the fire of this huge information availability shift.

The impact of these trends on recruiting departments is that people and candidates now seek more easily accessed Social Proof to validate and codify the information they believe to be true. Social Proof has widely been studied in the field of social psychology, and is tied to the human condition that results in the Fundamental Attribution Error. In short, given limited time and motivation, people will often evaluate people, products, companies, jobs (and most other things) based on how surrounding people behave toward them.

The application of Social Proof has been used widely for years, but is rarely talked about. The classic examples are using good-looking celebrities to sell products. The underlying marketing message is that the product must be worth purchasing if a good-looking celebrity is making the endorsement. Or the laugh tracks that play on sitcoms: our brain is wired to think the show is funnier if we hear others (even canned pre-recorded tracks) laughing along with us.

Social Media accelerates the Social Proof dynamic of the human condition. This is why Facebook will prove to be so powerful as a marketing channel and why websites like Honestly.com exist. The impact on recruiting departments is related to the shifts I described earlier: it used to be that company employment brands were shaped primarily by company-generated points of view. For example, getting on the Fortune 100 Best Places to Work would shape candidate perceptions. Or employment brand statements, images, and related collateral would mold candidate perceptions of the value proposition offered. Indeed, this has not changed. But what has changed is that now candidates seek to validate the claims by seeking Social Proof: “who do I know in my network that can substantiate these claims?” As humans, we overweight the efficacy of information received through people we know as being truer than other sources. It makes us feel safer to do so.

The impact on recruiting organizations is that this reputation economy places far more pressure on organizations to create marketing impressions that are true. These marketing impressions include every touch point with candidates through the steps in the recruiting process, as well as those impressions that are made outside of the recruiting chain of events. As a company, the claims made related to employment will be scrutinized and validated in ways we have not seen before.

It is no longer sufficient to make claims about employment at your company, even if you believe them to be true. Instead, they have to be true. Reflect on that statement for a moment. I see many organizations with tremendous incongruence between the true value proposition offered compared to their beliefs about the value proposition. What they think they offer isn’t really what they offer.

Smart organizations are already changing their game in response to these trends. You can, and should, too. Here are some ideas to get you started:

• The first step is to Get Real: If your beliefs about your value proposition as an employer aren’t steeped in data, you need to start measuring more effectively. Conduct a survey of employees, but recognize that you also need to obtain outside data. So survey people outside of your organization to gauge perceptions about the employment value proposition, and marry the two findings into a comprehensive model. Recognize that Social Proof and the fundamental attribution error shape your perceptions also: “my company must be a great place to work because I work here and all these great people work here …”
• Evaluate all candidate marketing impressions (and test them for truth): Systematically review the marketing impressions you make on potential applicants, and evaluate whether they are true. It is sometimes useful to have a colleague or other person or consulting company do a ‘secret shopper’ evaluation of the recruiting process. Send a few unbiased observers through your recruiting process and have them take notes on all of the marketing impressions that are made. See what you learn, and then make adjustments, either by changing the impressions for candidates, or making changes within your organization to further substantiate the claim. For example, if part of your marketed value proposition is that you support families and the idea of work/life balance, substantiate that claim by asking your employees if they feel it’s true. If it isn’t highly substantiated by truth, either make changes to policies and your approach, or stop making the impressions on candidates. Importantly, it’s incumbent on you to get to the truth; a great litmus test for truth is whether you are able to provide valid data that substantiates the claim; if you can’t, all you have likely formed is an opinion. At worst, do this for your most important jobs — the ones that if left unfilled will most negatively impact company performance.
• Recognize Realistic Job Previews are happening and respond correctly: RJPs have been widely studied, and the general consensus is that effective job previews improve job survival ratings by 3-10%. New hires who realistically understand the truth about the highs and lows of a job at a company have a better probability of remaining engaged and productive in their new jobs. Social Media is now giving people an impression of what it’s really like to work at your company. Since candidates are asking your employees to provide them with an RJP already, smart companies are taking the time to more deeply understand the components of a realistic RJP, validating with employees, and then producing collateral that can be shared with employees for reinforcement, but also equipping employees with the collateral to share across their social graph. Of course those same tools are used in the recruiting department.

There are many more tactics that can be deployed to respond to the Social Proof problem that social media has created for recruiting departments. As usual, sound off in the comments and join the discussion.

The Backdoor Problem is also substantial and tied to the first two problems we discussed. We will explore it in detail in Part III of this series.

My latest idea I’m tossing out to you to ponder could definitely make you rich if you just go for it. Sure hope you remember me when you roll in the big bucks. My idea is a really simple one. Historically my simple ideas turn out more successful than the complex ones, so that’s why I think this is a real gold mine with the potential to propel your income into seven digits.

This simple idea also keeps with my philosophy that if you want to advance your game, you need to try something different. Here’s my idea, and it focuses on how to improve recruiter results, which is important to all of us. You improve recruiter results by improving recruiter training.

Now I’m sure you have a big smirk on your face and are sarcastically saying that “Wow, that’s really profound.”

Yes it’s a no brainer. But ask yourself this: how truly effective is your recruiter training, and do you tie it directly back to your hiring results?

The four years I’ve been running recruiting, our recruiters have tried just about every recruiter training program in the universe on our journey to becoming “The Very Best,” which is our stated goal. I must confess some of the recruiter training we attended was decent, but most was very identical: more of the same, with little valued added. More importantly, none of the training had any direct correlation to our increased recruiting results.

I was looking for a breakthrough on how to take an already successful recruiter and make them even better.

Putting on my thinking cap, I started to noodle training in general and what first came to mind was that most training is conducted either online or classroom style. I then harkened back to my Air Force days where training is really big and taken seriously. The Air Force has online and classroom training, but its core training is on-the-job training, which is one-on-one training conducted by a subject matter expert using a standard training plan.

Digging deeper, I recall our aircrews (pilot, navigator, etc.) attended year-long training with a personal flight instructor before being turned loose. Once on their own, the very best aircrew members were selected for the Standardization and Evaluation, aka Stan Eval team. During an actual aircraft flight, a Stan Eval team member sat right beside or in fighter jets right behind the aircrew member to teach/coach an already proficient employee to become the very best.

So the million-dollar question that came to my mind was: Why don’t our recruiters receive one-on-one training by an expert? One-on-one training is not a new concept. Heck, all you have to do is look around these days and you’ll see real-life examples going on, such as all the folks who have a personal trainer or boot-camp instructor. Another current “in thing” no matter what your profession is having your very own private coach, and even our children have their own individual tutors to do better in school and prepare for college.

So bottom line to all this is that I think one-on-one recruiter training is the new way to go to improve recruiter results, but only time and metrics will tell. I also think if you can take my idea and develop and scale a best-class one-on-one recruiter training/coach program where a master recruiter-trainer (if you will) deploys onsite to increase recruiter results, you will become a millionaire. As far as I know, no one is performing this service, so that’s why we had to built it ourselves in-house at CACI. We believe our one-on-one recruiter training will help us improve our already successful recruiting results and achieve our goal of “Becoming the Very Best.”

Internal functions don’t have to do any of these things. They are entrenched in almost all organizations, and because their function is perceived as incidental to overall organizational performance or success, not much in the way of efficiency is really expected or, unfortunately, rewarded. This means that few recruiting leaders have any incentive to improve their function. In fact, doing so may mean a smaller budget, less headcount, and even less status.

So this leads to the headline question: Do we need an internal function at all? Does it do something that an external provider cannot do? Can it do it at least as cheap or as fast? Can it provide a higher-caliber candidate?

Some thoughts:

1. Internal recruiters who are employees should have one major advantage over any external provider. That is a deep knowledge of the corporate culture and what success criteria are, and also what individual managers are looking for in candidates. The deeper and more scientific this knowledge is, the more it can be repeated, refined, and taught to others. A really outstanding internal function would nurture and develop a core of highly knowledgeable and trained recruiters who would have this knowledge. HP, in the old days, and IBM today, have this kind of built-in DNA that is very hard to replicate. External functions will always have difficulty achieving this level of intimacy with their clients, even when co-located, primarily because their employees have less motivation to invest in gathering this information and may be interchanged frequently. This is one area where length of service and commitment to the culture can pay dividends.
2. To remain competitive with outside providers, an internal function has to be as efficient as or more efficient than an outside provider. This means constantly improving operational excellence, adding appropriate technology, providing detailed market information and coaching to hiring managers, and building a reputation for adding real value through the quality of talent it provides. I have never seen this in any client or organization I have worked in, and I think this is the area of greatest potential return. Internal functions are never very efficient, primarily because leadership is transitory: I am not sure of the average tenure of a recruiting leader, but I would guess it is less than three years. This means there is little to no continuity of planning, no oversight of process improvements, and little opportunity to choose, install, learn and refine technology. Most organizations I have worked with change processes, procedures, and technology with each leader who arrives. Plans that have taken months to create are thrown away overnight. Recruiters know that they can do what they want, for the most part, because there will be no accountability or continuity. This is the area where an external provider, with a profit motive and an efficiency goal, can beat an internal function hands down.
3. Recruiters also need to be retained, trained, and incentivized to perform. External agencies can offer commissions, bonuses, and other rewards for outstanding performance. They can fire inefficient or incapable recruiters quickly. Internal functions are usually tied to traditional reward structures that do not provide the shorter term, efficiency-based rewards that would be more effective. A recruiter can barely perform at all and survive (and even thrive) by courting a few hiring managers or by being a good bureaucrat. And employment laws and internal practices limit when and how a recruiter can be fired, and the process is lengthy. Again, it is essential that internal recruiters be selected carefully based in skills and motivation and offered whatever incentives are available to encourage short and long term performance as well as retention.
4. The emerging prominence of social media should offer internal functions hope. Social media inherently dependent on intimate knowledge about the firm, candid communication, and the ability to take advantage of the networks of current employees. All of these give internal functions an edge.

Yet I am not convinced that this will make much difference. The RPOs and agencies are rapidly adopting social media and are even offering to manage the talent communities of individual firms. Many medium or small firms are not even looking at social media as a recruiting channel, and larger firms have widely divergent opinions and practices.

Effective social media use requires time and dedicated people who can interact with candidates, generate content, provide advice, and screen candidates for individual jobs. These are all strengths that internal recruiters have if they are given the time and charter to do so. Unfortunately again, corporate policy, management’s inability to see the benefits of social media, the fear of litigation, and lack of staff depth usually means this does not happen.

Given the state of recruiting functions today there are few compelling factors to recommend retaining an internal function. I have outlined where they could gain advantage, and a handful are doing these things, but by and large they offer little that would make them indispensible. By negotiating tough performance-based outsourcing agreements and allowing outside recruiters access to hiring managers, firms could eliminate the administrative and benefits costs of retaining employee-recruiters and the function could be reduced to a few liaison folks and vendor managers.

That’s one question we at Quintiles Global Staffing are trying to figure out. It resulted in the development of a tool we talk about in an upcoming Journal of Corporate Recruiting Leadership. We plan to use this tool on an ongoing basis, and I wanted to give you a taste of it here.

First, who we are. Quintiles is the only fully integrated bio and pharmaceutical services provider offering clinical, commercial, consulting and capital solutions. We have 23,000 employees in 60 countries. Quintiles Staffing, made up of approximately 50 teammates globally, assisted with a total of 16,390 hires in the past three years. Our internal development stands as a point of pride, as approximately 20% of all hires now are internal.

Some of our tasks at the moment include the development of an early talent pipeline, metrics refinement, extending partnership models, linking with executive succession planning, an effective employee referral program, and the implementation of a world-class applicant tracking system.

What Works and What Doesn’t

Recruiting organizations continue to use many sourcing channels, often with little consideration of the overall ROI of those channels. In fact, most recruiting executives find more than 25% of their sourcing channels to be ineffective. This not only causes unnecessary expense, but also adds to the number of unqualified applications received.

To avoid this, we developed criteria to rank sourcing channels, and asked ourselves how well the sourcing channel currently performs against each criteria. We rated on a scale of 1 to 5, where 1 is Poor and 5 is Excellent.

This report (which the Corporate Leadership Council helped with by providing the original toolkit) was for informational purposes — and not direct budget allocation decisions. The staffing leaders received this data, and then decided whether they thought it was credible or not. What I’m saying is that it’s not a sole decision driving force, but part of our decision making.

As I mentioned, we get into this more in the Journal of Corporate Recruiting Leadership, but for now, let me show you the chart (click to enlarge) we ended up with for the U.S., UK, and Germany.

Over the years, I have been a salesperson, sales manager, sales trainer, and sales assessor. In other words, I have sold, managed, developed, and formally evaluated people who make a living in the strange world of selling. While filling these roles, I kept going back to grad school to learn the difference between what I was doing and what I should be doing. Along the way, I was forced to put aside many wrong-headed ideas while I learned new ways to look at the sales job.

Discovering information is key to consultative selling. Consultative salespeople acquire new business, expand existing business, and develop long-term productive relationships through learning, and people don’t learn while they are talking. So, if you are looking for the world’s best “sell ‘em while you got ‘em” sales pitch, this is not the article for you. However, if you want to hire people who can deliver long-term business relationships, read on.

Cone of Trust

Maxwell Smart (Don Adams’s character in the TV program ‘Get Smart’) used to invoke the Cone of Silence with Chief whenever he wanted to discuss secret stuff. Although Max’s Cone never worked as planned, I like the concept so well that I invented the term “Cone of Trust”; or, the special place where salesperson and prospect share a mutually productive environment. Imagine that!

Think about it. Most people like to buy things (e.g., just look at the success of capitalistic economies). But, they hate to be sold (e.g., consider the reputation of auto salespeople). The key difference between “just selling” and relationship-based selling is pitching or wooing. Pitching is battling someone into submission by overcoming objections. Wooing is building a Cone of Trust where problems and concerns are shared. Unlike pitching, wooing uses only the assumptive close technique.

A Cone…Yet More than a Cone

It goes without saying that if trust is the bread of selling, then questions are the butter (I made that up, actually!). People normally don’t like being told they have a problem. It makes them all huffy and irritated. A great consultative salesperson manages the conversation so both prospect and salesperson agree about a problem at the same time. This is much different from sales programs that recommend imitating techniques borrowed from “The Art of War.” I suppose imitation (i.e., behavior modeling) is better than nothing, but I have found highly successful people don’t imitate someone else’s behavior. They modify their own to fit the situation.

Let’s look at the conscious competency model. I don’t know where people got the idea that conscious competency means operating on automatic pilot, unaware and clueless. In my world as a psychometrician, consciousness=awareness and competency=skilled. Translated: a consciously competent salesperson is someone who is both good and can explain why. On the other hand, an unconsciously competent salesperson may be good, but if asked, cannot explain it. Consciously competent salespeople who can clarify and explain the wooing process to their staff make better managers than ones who can only suggest imitation. They keep the best interest of the prospect foremost, and while they may not push for a sale today, their strong personal relationships will almost always lead to better opportunities tomorrow. Trust, and discovery you see, depends on knowing when to discover information and when to back off.

Real-Worldly

Mind-blowing movies like Inception and the Matrix trilogy grab our attention by taking us to a place where reality and imagination blur together. Pre-hire sales simulations do that for the candidate. A well-designed sales simulation is not like a practice role-play in a workshop. It is a tightly controlled experience where the candidate has to leave his or her learned experience behind and demonstrate innate talent. For example, if we were looking for a salesperson to sell chickens we would not use a barnyard simulation; instead, we would put candidates in situations where they would have to sell an unfamiliar product. In an unfamiliar world, all their prior Rhode Island Red experience would be useless. We would observe their core sales skills.

Now, what happens on the skilled role-player side?

Not everyone can be a skilled role-player (SRP). Some people just don’t get it and others insist on bringing their personal agendas to the table. Bad dog! The skilled role-player (SRP) actually becomes a controlled part of the exercise whose purpose is to provide stimuli that invite a response from the candidate. For example, an SRP acting the part of a prospect might complain about a prior experience the candidate is unprepared for. That is the stimulus. Now, we listen for the response. Did the candidate blow it off, empathize, change the subject, try to learn more, and so forth? These are all responses that indicate whether he or she has the discovery skills to be a top salesperson.

We don’t expect a candidate to close a sale in the simulation. That rarely happens in real life, either. We expect to hear key behaviors that advance the sale, build trust, search for more information, and so forth. In short, we peel-away the veneer of well-rehearsed replies and go to the heart of selling: learning about the prospect’s situation.

Learning About Learning

Before you suggest such-and-such a written test that you believe predicts sales performance, I‘d like to point out that a simulation is a test as well. Unlike written tests, simulations are almost impossible to fake well and realistically represent the kind of environment faced by a consultative salesperson. If the candidate cannot perform in the simulation, it’s unlikely he or she will do a good job in the field. The same is true for simulations measuring a manager’s coaching ability, customer-service skills, and so forth. If interpersonal skills are important to doing the job, then you better see them in action before making a hiring offer.

I once asked a group if anyone would hire a commercial pilot without asking him or her fly a simulator. A few recruiters quickly raised their hands. The operational people in the room looked at them and just rolled their eyes skyward as if waiting for a plane to fall out of the sky. If you want to know whether your candidate has the critical skills to do the job, then accurately measure them pre-hire.

The idea of having a corporate function focused on managing labor resources is one that has been around for more than two centuries (corporate functions emerged following the advent of labor unions in the late 1700s). Since then the function has gone by several names, the most commonly applied being “human resources.” Unfortunately the name “human resources” has gotten in the way of what the function was created to accomplish (bringing labor and management together in a manner that benefits both). 

In the vast majority of organizations, be they large or small, when labor solutions need to be developed, the solutions provided by the human resource function are always “people solutions” (i.e. hiring, developing, rewarding, performance management, etc.) That narrow scope was fine when 95% of the work to be done in an organization was accomplished by an employee, but that simply isn’t the case anymore. Today organizations leverage a vast array of labor types including automation, outsourced service providers, and contingent workers to get things done. Some studies now indicate that in larger organizations when outsourcing and contingent spend is added together, it exceeds what is spent on wages and benefits for regular employees.

If the HR function and those that lead it are to be truly strategic, they must acknowledge that today managers deal with a complex array of labor solutions and that maintaining a narrow scope of employee only solutions not only limits the applicability of the function, but also harms the business by fragmenting “labor procurement/management.” A truly strategic HR function would follow the lead of marketing, supply chain, and manufacturing by offering “integrated solutions” that pair the best labor resource engaged in the optimal manner for the work that needs to get done at any point in time.

Call Centers: An Ideal Example of Labor Type Choice

As little as 15 years ago, if a manager needed to operationalize a customer call center, there was really only one choice. They would work with real estate and facilities to allocate physical space, IT to install telecommunications equipment, and HR to hire, train and manage the necessary number of permanent employees to operate the center.

Today that same manager could:

1. Staff the center solely with contingent workers (as JetBlue has done)
2. Outsource the call center entirely to a service provider (domestic or offshore)
3. Implement and interactive voice recognition (IVR) solution

In a chaotic business environment, all three of these options (none of which rely on HR) would provide more flexibility and agility then using difficult to release permanent employees.

All Business Problems Have a Labor Component

If you analyze most of the business problems facing managers in this highly competitive global environment, you will find that very few of them can be classified as simple problems easily addressed by one corporate function. Instead, most are extremely complex problems that require a big picture perspective and solution options that coordinate change across multiple functions. In nearly every case, part, if not most, of the change required impacts how the organization uses labor.

Addressing business problems from a holistic perspective ensures that advances made by one function are not mitigated or rendered void by the action or inaction of another. Solutions emerging from a holistic vantage point are commonly referred to as “integrated solutions,” and nearly everyone has come to expect them. In the corporate world a product manager may turn to a marketing leader for an integrated solution to help establish awareness of a new product category. The solution could include the use of numerous disparate advertising channels (i.e. TV, radio, Internet, print, and direct mail), as well as PR and services purchased from external vendors.

The modern-day upscale supermarket is an excellent illustration of how business leaders have learned to provide integrated solutions. Years ago a consumer seeking a Thanksgiving turkey would have reached out to his/her local butcher. We all know that the turkey, while a large part of the Thanksgiving meal, is still just a part. The modern-day upscale butcher offers an integrated solution by being able to answer basic questions about bird storage and preparation, as well as about pairing the bird with wine, stuffing options, and other sides — the ingredients for which are all available under one roof. It’s also possible that while there your car could be getting washed, filled with gas, you could do your banking with the in-store bank branch and drop off your dry cleaning.

HR Is Not Exempt

HR has a long history of putting people first. In many cases, it has acted more like a jobs defender rather than a neutral party recommending the best labor solution for a particular situation. If that is to change, HR must broaden its scope and become the go to leader for pairing labor options with necessary work, providing solutions that govern:

1. Regular employees
2. Contingent workers (part-time, seasonal, contractors, or consultants)
3. Outsourced service providers (task, process, or function)
4. Strategic partner labor (work shifted to a partner organization)
5. Challenge/contest (work is executed by customer or contest participants as the subject of the challenge/contest)
6. Automation (software/hardware)

As stated earlier, in some organizations less than 35% of the spend for labor is going to employees, with 65% going to the other five options.

Technology Has Come a Long Way

Machines have been replacing human labor for nearly a century but only recently have solutions become so accurate and reliable that they could automate a great deal of business decision-making and analysis. Google or Bing for example are at least a thousand times more effective than a traditional reference librarian in finding a quote or a fact. And, just in case you have not kept up on your reading of “Robot Daily,” you should know that there are now 8.6 million robots in use around the world with application in military, police, aerospace, and medicine.

…robots will take over approximately 50% of the jobs in the U.S. economy over the course of just a decade or two –Marshall Brain

Technology has many advantages over people, including the ability to work 24/7, no demand for overtime pay, predictable maintenance (healthcare) cost, and no threat of unionization.

Action Steps for HR

Before the HR function can expand its scope to include “integrated labor solutions,” it must get past the word human in its title. Redefine the function as a productivity consulting center and focus on recommending the best labor solution for the business be it technology, outsourced service provider, contingent or other. Once HR accepts the productivity role, it must then develop a process for identifying all of the possible labor options and the advantages and disadvantages of each. It must also develop processes and approaches for improving collaboration and communication between the different functions that are involved in any integrated solution.

Final Thoughts

Anyone who fully understands sales or customer service knows that both users and customers have come to expect integrated solutions. Managers want to be able to go to a single place and get all the answers and the solutions for labor to accomplish the work they need to get done. They want to avoid bouncing between functions to acquire resources and the HR function is the logical place to go. It has been clear for a long time that having the most employees doesn’t ensure success; instead, it is the organization with the most innovation, productivity, and speed that wins. HR needs to step up, abandon the compliance hat, and start wearing the solutions hat. If the business needed another person telling them “no, you can’t do that,” they’d hire a regulator!

This subject needs more attention and debate; luckily ere.net provides a place for it. Share your thoughts and best practices about HR can “step up” and provide more inclusive solutions.

In the podcast below, he talks about his upcoming book, called “Employment Rage.”

In my opinion, the likelihood this approach will work is problematic at best, idiotic at worst.

It’s like hiring accountants to do debits and credits any way they want, or letting engineers design products any way they want, or letting salespeople sell your products any way they want, or letting taco cooks make tacos anyway they want. I selected taco cooks only to mention that at Taco Bell they use an extremely detailed checklist on how to make tacos, so they taste exactly the same everywhere. However, most companies seem okay with letting recruiters make tacos any way they want. This, by the way, is my definition of idiotic.

The lack of standardized corporate recruiting processes and practices is why hiring good recruiters is not the first thing to do when building an internal executive search team. In fact, it’s the last thing one should do. The first thing is to recognize that the primary objective for this group to even exist is to fill critical staff, manager, and executive positions with A-level talent. The secondary goal is to reduce the amount of fees paid to external search firms for filling these same positions with equally qualified people. The quality of hire objective should be more important than the cost savings one, since the first is strategic, the second tactical. If you don’t get this order right first, what you do next really won’t matter.

With quality of hire as a primary goal, you next need to consider the A-level candidates you want to hire. Most likely they’re passive, or at least not actively looking. Since they’re looking for career moves rather than lateral transfers, traditional job descriptions shouldn’t be used for messaging or screening. These people might also be outside of the typical comp range, so this needs to be addressed, too. Then consider the fact that they rarely want to work for managers who aren’t leaders or for companies that lack vision, seem unprofessional, or have superficial recruiting and interviewing processes in place. And then to top it off, they won’t talk with recruiters they don’t trust. All of this should be resolved before you begin to hire recruiters.

Now let’s get into the weeds. Part of this is designing your recruiting and assessment processes based on how A-level people who aren’t looking, or are very selective, find and accept new opportunities, rather than how people you don’t want to hire do it. Most companies get this part backwards. They build their processes around a high-volume model designed by some ATS vendor on top of a bunch of legal and comp restraints. This is not how external executive search firms find A-level candidates, so companies shouldn’t either.

It also takes strong recruiters and researchers who are subject matter experts with respect to the job, the company, and the industry. Part of this is having the complete trust of the hiring manager. Most A-level people, who don’t have a short-term economic need to pursue another job, want to engage in a brief exploratory conversation with a hiring manager before getting too serious. Recruiters need to convince managers to agree to do this based just on their recommendation, often without a resume, and the manager must be open and eager to do this. Quite frankly, if the hiring manager isn’t 100% committed to hiring A-level talent, don’t even bother trying. Hiring A-level talent, especially without a well-known employer brand, requires fully committed managers who will put in a 110% effort.

Process consistency — doing the right stuff every time — is also an essential part of the puzzle. While there are many successful approaches, here are the common basic steps that must be followed on each search assignment if you want to hire an A-level person on each assignment:

1. First, turn the job into a career move, describing the short-term objectives and long-term opportunities, including the employee value proposition. This gets the recruiter and hiring manager aligned with the A-level person they want to hire.
2. Next, develop the candidate profile, describing demographics, supply/demand constraints, connections, intrinsic motivators, and likely sourcing opportunities. This way you can customize how, what, and where you describe the career move defined in Step 1.
3. Then create a compelling career-oriented message that can be “pushed” to likely prospects either directly or through referral networks and social media sites.
4. As part of Step 3, prepare a time-phased sourcing plan that tracks and optimizes quality of hire. This is the most detailed of the steps and needs to be customized to meet the specific needs of the job and the likely candidate demographics. This includes the selection of niche job boards, the development of proactive employee referral networks, using social media, name generation, email campaigns, cold calling, and networking.
5. As you begin implementing the sourcing program, make sure your recruiters can recruit. This means engaging candidates who might not want to be engaged. As part of this, track email and cold call success rates, candidate quality, and number of high quality referrals per call.
6. Don’t forget the hiring managers. They have to “own” Step 1 and be willing to talk with everyone the recruiter recommends, even those prospects who want to have a preliminary discussion before getting too interested.
7. Use an assessment process that works. For a variety of reasons I don’t like traditional behavioral interviewing (e.g., answers can be faked, A-level candidates find it superficial), but I do like an intense performance-based interview that lets candidates know you have high standards.
8. Use a solution-selling based closing process that creates an irresistible win-win. Recruiting is sales, and all salespeople go through extensive training. Solution or SPIN selling is a process used to craft a custom solution for a buyer with complex needs that needs to be part of a recruiter’s skill set. In the case of A-level talent, it needs to be a formal decision-tree like process that compares your opportunity against all others from a best-career-move perspective.

If you want to develop an effective internal executive search team that can compete with the best outside search firms, start by creating the right culture and redesigning the underlying process as the first step. Then hire the best recruiters you can who can implement this process. Otherwise, you might just wind up with a bunch of tacos not worth the three-for-a-dollar price you paid.

SAS, the North Carolina software giant, is No. 1 for the second year in a row. The company, with onsite childcare, healthcare, employee gym, and more — lots more — is a regular. It has made the list for the last 14 years.

Wegman’s Food Markets, and Google, Net App, and Boston Consulting are all still in the top 10.  Zappos, the much-admired shoe company now owned by Amazon, and REI, the camping and outdoor recreation provisioner, are the only newcomers. Zappos is 6th and REI 9th on the 2011 list.

Edward Jones, the financial adviser, and Qualcomm, the wireless technology company, which were the two companies displaced from 2010′s top 10. Jones slipped only slightly to 12th. But San Diego-Based Qualcomm slid all the way to 33rd place.

Why? It isn’t explained in the magazine’s articles on the list and the companies who make it.

The Great Place to Work Institute is the non-profit that compiles the Fortune list. It has some of the stringiest criteria, basing its selection of its top 100 companies on multiple factors, but relying heavily on its “Trust Index.” “A great place to work^,” says the Institute, “is one in which you ‘trust the people you work for, have pride in what you do, and enjoy the people you work with’.”

It’s not easy to make the top 100 list. More than 1,000 companies submit applications each year hoping to make the Fortune list, says Amy Lyman, Director of Corporate Research and a co-founder of the Institute. More vie for a placement on lists for small and mid-sized companies.

Companies go through a fairly rigorous process that includes extensive employee and management surveys, analyses of employee engagement, and the development of the Trust Index. The Index measures what the Institute believes are the cornerstones of a great place to work: Credibility, Respect, Fairness and Pride and Camaraderie.

For a company making the list, the rewards are more than simply pride and a marketing opportunity.

Sean Broderick, VP, National Business Development for Bernard Hodes Group, says a Fortune ranking “add immediate awareness and validation. It’s 3rd party validation of your branding message.”

“For a regional employer, that’s a benefit they can’t buy. It gives you a competitive advantage in attracting top talent because an outside organization is saying you are a good place to work. So you’ll get the pick of the talent,” says Broderick.

There’s also a financial correlation. Say Lyman, “We have found that companies that have a high trust also tend to be more successful.”

Russell Investments, the financial consulting firm that developed the Russell 3000, began tracking the financial performance of the 100 Great Place companies several years ago. Over a 12-year period (1998-2009) companies on the list outperformed both the S&P 500 and Russell’s own 3000.

“Reasonable investigations of applicants and employees aid the government in ensuring the security of its facilities and in employing a competent, reliable workforce,” said the opinion written by Justice Samuel Alito. That the workers who sued the government on privacy grounds were contractors and not civil servants was a formality and all but irrelevant, Alito wrote.

The case was brought by 28 scientists and engineers at NASA’s Jet Propulsion Laboratory near Pasadena  The sprawling facility is operated by the California Institute of Technology. The plaintiffs are employees of Caltech.

All of the contractors had worked at the lab for years, participating in such projects as the Mars rover. While they had all been vetted prior to first working at the lab, they had not been subjected to the more rigorous checks undergone by government workers.

Following the 9/11 attacks, President Bush ordered security checks extended to anyone working on government funded projects. The scientists and engineers balked at questions about their relationships, drug use and drug treatment, and mental health counseling.

They sued. In addition to arguing they were not government workers and therefore not subject to the same requirements, they pointed out they did not work on sensitive security projects, and that the questions violated their right to privacy.

When the 9th Distinct Court of Appeals ruled in their favor, the government appealed to the U.S. Supreme Court.

In the decision, joined by five of the nine justices, Alito said “Like any employer, the Government is entitled to have its projects staffed by reliable, law-abiding persons who will ‘efficiently and effectively’ discharge their duties.”

Alito also discounted the potential the background information might be leaked publicly calling it a “remote possibility,” which “does not undermine the Privacy Act’s substantial protections.”

Significantly, Alito’s opinion says, “We assume, without deciding, that the Constitution protects a privacy right,” but noting, “the challenged portions of the Government’s background check do not violate this right in the present case.”

Although the wording specifically avoids flatly declaring a right to privacy, it certainly is a signal that six justices at least may be open to such a ruling. This wording is very likely to form the basis of future Supreme Court arguments, and is something for employers to consider in conducting or hiring background checks.

It was over this issue that the Court split.

Concurring in the result, Justices Antonin Scalia and Clarence Thomas wrote their own opinions. Both challenged Alito’s assumption of a right of privacy rooted in the Constitution. Scalia said in his opinion that “A federal constitutional right to ‘informational privacy’ does not exist.”

His is a pretty hot opinion, full of jibes at the majority view, and with language, which, for the Supreme Court, approaches intemperance: “The Court decides that the Government did not violate the right to informational privacy without deciding whether there is a right to informational privacy,and without even describing what hypothetical standard should be used to assess whether the hypothetical right has been violated.”

In another section he writes:

“Respondents claim that even though they are Government contractor employees, and even though they are working with highly expensive scientific equipment, and even though the Government is seeking only information about drug treatment and information from third  parties that is standard  in background checks, and  even though the  Government is liable for damages if that information is ever revealed, and even though NASA’s  Privacy Act regulations are very protective  of private information, NASA’s background checks are unconstitutional.   Ridiculous.”

Thomas concurred in Scalia’s opinion, adding a one paragraph opinion of his own saying the same thing.

Justice Elena Kagan did not participate in the decision.

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

Partly this is driven by the commonly held assumption that these skilled and experienced people have been affected by the recession and are actually in the job market. Recruiters know this is not the case and that many candidates have become even more difficult to find and entice away from a secure position.

While demand for lesser-experienced, educated, and skilled candidates has slacked, it has risen for those with higher-level skills. Many firms are trying to replace the employees they had with moderate skills or who were in learning roles, with people already accomplished in their profession.

This is a poor time to be an apprentice or a mid-level worker, as the focus is on paying a bit more for people with better skills who are more capable of achieving goals with minimal help right away.

This has put a huge burden on recruiters. It has increased the number of searches needed for the hard-to-find candidates while almost eliminating the need to source for the easier-to-find positions. This, in turn, has driven recruiting leaders to take a hard look at developing specialized internal sourcing functions or finding an outside firm or individuals to do it for them.

Things to Consider

Before deciding whether to keep sourcing inside or find an external provider, a recruiting leader needs to make sure they have answered three questions carefully: (1) is there a sufficient volume of need that will last over some period of time to justify focused sourcing, (2) do you need to simply have the names and contact information of potential candidates so that a recruiter can screen and assess them, or do you also need screening and assessment or even more than that, and (3) do you have the internal staff with the capability, knowledge, and bandwidth to be effective?

If there is an ongoing need and you lack staff, looking at an outsourcing provider might be both time and cost effective. Building an internal sourcing capability can take months of training in addition to the time needed to find recruiters with the needed skills. Many firms turn to contractors for this service, and that may make sense. Contractors are often local, may be very familiar with your organization and both its culture and skill needs, and work for a reasonable fee. However, they also often increase the leader’s workload significantly.

When sourcing needs are high, timelines are short, needs varied and changing, and the skills hard to find locally, then other solutions may be better.

What Kind of Outsourcing Do You Need?

There are three types of outsourcing:

1. Generating names of potential candidates, often called research, which results in a list of names and contact information. These may turn out to be viable candidates, but many will not. All screening and assessment is made by internal recruiters and hiring managers. Results are most likely measured by how many names were generated, how quickly it was done, and how closely they met the previously-agreed-to specifications.
2. Generating names and then screening and assessing them. This usually means that only candidates who meet certain qualifications are presented. Results are measured by how many qualified candidates are presented and by the speed with which this takes place.
3. An emerging type of sourcing involves all of the above but also includes developing and managing a proprietary talent community of qualified candidates. This might include frequent communication with candidates, setting up and maintaining a Facebook page or something similar, and providing a means for internal recruiters and perhaps hiring managers to communicate with candidates.

Tips for Outsourcing Success

Clarity and Transparency: You need to have a clear strategy that outlines how sourcing fits into your overall success, where it is most needed, and be very open about why you are seeking an outside source.

Know which of the three types of outsourcing above you are primarily interested in: Obviously that choice will affect which outsource partner to use and will impact what level of relationship you need to have. Names generation can be performed by individual contractors and they can be located almost anywhere. The major choice criteria are ability to find the people you are looking for and the speed they can do it. Other sourcing arrangements are more complex; often need face-to-face contact at some point; and require a more sophisticated level of negotiation.

Choose an appropriate partner: Many times I see recruiting leaders choosing outsourcing partners without full knowledge of how deep their skills go or what their previous clients thought about them. You need to get references, spend time making sure their expertise matches your needs, and perhaps even start with a trial to see how they perform. You also need to make sure they can grow with your needs and fit your corporate culture.

Define your service level expectations: Work with your outsourcing partners to write down a set of expected performance levels, including time to find candidates, how many need to be presented, and what constitutes quality. Defining what a quality candidate is often becomes the most difficult aspect of a relationship. Take the time to be sure the definition is clear and how it will be measured is agreed to by the hiring manager, the outsourcing provider, and yourself.

Establish a vendor relationship manager: Relationships don’t just happen, and they are far more than a contract. Good communication, access to hiring managers when needed, and a willingness to negotiate through difficult issues are necessary components of any successful relationship.

Having a single person who acts as the account manager with the outsource provider is the best way to begin building a long-term-success model. When I speak with parties to failed outsourcing arrangements, lack of communication and difficulty to get issues resolved are significant factors.

Develop conflict resolution processes: Be sure to set up some informal and formal ways for conflicts, disagreements, and uncertainties to be addressed. This can be through the vendor relationship manager or through a committee or other body that is set up to deal with conflicts. The more defined this process is, the better it will be. It should answer questions such as: when is a conflict at the level of needed more formal resolution, how is a complaint raised, and whose decision is final.

Allow access to hiring managers and other key employees: Make sure you allow an appropriate level of direct interaction between the outsource team and the hiring managers. After all, the goal should be finding and placing a quality candidate, not about internal power struggles and politics.

There are many success stories, and all of them are because these basic steps were followed.

Fundamental Sales Abilities

Put on your customer hat. Do you enjoy listening to a salesperson blab? Feel like you are in a verbal contest with someone whose only objective is to get your money? Get frustrated when a salesperson does not take the time to understand your situation? These are symptoms of poor sales hiring practices.

Salespeople need four key skills to be effective: 1) trust-building skills to build and maintain customer/prospect relationships; 2) questioning skills to dig for customer problem areas; 3) presentation skills to emphasize the benefits of buying a product or service; and, 4) the motivation to face rejection again and again and again. These skills are exceptionally hard to develop. In my experience, if you don’t measure them pre-hire, you are pre-destined to live with the consequences post-hire.

In this series of articles, I’ll cover why each of these elements is key to effective selling, and why each needs to be evaluated separately.

Sales and Hiring Psychology

Thinks of a sales interview as a mixed-role mini-sales call. There is a prospect, a salesperson, and a product. The hiring manager tries to sell the company while learning as much as he or she can about the candidate. The candidate tries to sell his or her skills while learning as much as he or she can about the company. They are both motivated to hide negative information. The ultimate goal is employment. Usually, the candidate and manager openly share friendly personal experiences. They recount sales experiences and demonstrate FAB (features-advantage-benefit) by making a sales pitch. At the end of the interview, the hiring manager usually expects the applicant to ask for the job. Unfortunately, as many experienced sales managers can attest, this process is no guarantee of future success — and 80% of the salespeople continue to produce 20% of the sales.

The reasons for the 80/20 rule is many key skills are unmeasured in the sales call — ones that will later come back to haunt the hiring manager. First, the candidate and hiring manager already know why they are meeting; second, the candidate does not have to create “heat” because the manager already feels the need for more sales; third, the candidate does not have to probe and question to identify the need to hire another salesperson; and finally, a hiring offer depends primarily on whether the candidate meets the manager’s superstitious “know ‘em when you see ‘em” test.

Whether a candidate knows it or not, he or she already holds the high ground. Basic trust and need are clear when they agree to meet. All it takes for the candidate to close the loop is schmoozing the hiring manager.

Sales and Consumer Psychology

In the real world, people instinctively distrust strangers. Prospects especially distrust salespeople, products, and organizations. If prospects knew they had a problem, they would have already fixed it; if they have not fixed a problem they don’t think it’s worth fixing, can’t decide the best solution, or are afraid to make a decision. In other words, real-world prospects might just as well start the conversation with, “I don’t know you. I don’t know your company. I don’t have any problems. Why do you want to talk to me?”

Consider these statements: “I don’t know you. I don’t know your company”= I don’t trust you; “I don’t have any problems” = I don’t need anything you have to sell; “What is it you want to sell me?” = even if I had a need, I don’t see how your product or service can help. Overcoming this inherent obstacle rests on the salesperson’s ability to develop and maintain enough mutual trust to ask probing questions. If everything goes right, the questions will lead to a mutual “By golly, there is a problem here worth solving!” agreement.

Trust and Communication

Let’s look at this psychologically. Communication is a multi-level process; Level 1=casual chit-chat or party chatter; Level 2 =sharing thoughts and ideas; Level 3 = sharing feelings, fears, and concerns. If people don’t cozy-up during chit-chat, it’s not likely they will move to the next level and start to share thoughts and ideas. If they don’t feel comfortable sharing thoughts, they probably won’t move to the level where they share feelings. If a salesperson wants to get the prospect to feel the heat or sell the sizzle, he or she has to get to the level where feelings, fears and concerns are shared.

Now, here’s the rub. Suppose a prospect and salesperson get past Level 1 and are comfortable in Level 2. Suddenly, the salesperson sees an opportunity to get the prospect to “feel the heat” and decides to jump to Level 3.

How do you think a typical prospect will react when they are asked to discuss sensitive issues? Look at the communication circle: No rapport=no trust (NT); no trust=defensive prospect (DP); defensive prospect=no discovery questions (NDQ); no discovery questions = off-putting premature information syndrome (PIS-Off); off-putting premature information syndrome = no trust (NT).

Evaluating Trust

Sales applicants’ trust-building skills can be evaluated several ways: by interviewing the candidates’ past clients and customers (so-so); asking for behavioral examples (better); and, using tightly controlled one-on-one simulations that present multiple opportunities for the candidate to demonstrate these skills in real-time (highly accurate). I don’t care for–out-of-the box sales tests because I never know if passing scores are truthful or faked (i.e., salespeople are crafty little folks). Furthermore, experienced salespeople are generally more effective managing their personal image than they are building trust and discovering information with strangers.

I think an old story says it all.

A salesperson approaches his sales manager complaining the product has problems, the price is too high, the competition is too tough, and prospects keep cancelling appointments. The sales manager listens patiently until the salesperson is finished, and then says, “Let me see if I understand. You want a perfect product with the lowest price. It should be better than the competition and prospects should always roll-out the welcome mat for you?” The salesperson replies excitedly, “Yes! Yes! That’s it! You Understand!” The manager pauses, then looks the salesperson in the eye and says, “Then what would I need you for?”