In late January, despite opposition from the Society of Human Resource Management, President Obama & Congress eliminated the 180-day statute of limitations for filing an equal pay lawsuit regarding pay discrimination. “This is a game-changer,” said Gerry Crispin, recruiting industry icon, at a recent conference, referring to this new legislation. “Companies need to pay attention to this.”

Crispin is right. Just last week the Wall Street Journal reported that a former Anheuser-Busch executive sued the beer giant for discrimination, saying she was paid less than male executives. Francine Katz, a former Anheuser-Busch vice president of communications and consumer affairs, filed a lawsuit last in a state court in St. Louis, “accusing the brewer of maintaining a corporate culture that ‘adversely impacts women,’ resulting in lower salaries and bonuses and fewer opportunities.”

This well-publicized lawsuit is the first of many more such suits to come. As a result of this legislation, companies are now required to meticulously document pay decisions and retain detailed employment records to ward off lawsuits like Anheuser-Busch is facing. This legislation is forcing you as a recruiter to more closely consider factors beyond what it takes a candidate to accept an offer. In light of this legislation, as a recruiting professional you need to advise your client on compensation best practices beyond closing the deal. Before constructing any offer for a candidate you should:

• Analyze comparables. Run the numbers on all your employees’ compensation packages, including starting pay, merit raises, cost of living increases, and benefits. Individuals who perform the same jobs and have the same qualifications should be paid similar rates. If your candidate requires a significantly larger package, you must ask whether this one deal is worth the risk. If you do not have access to this type of data — you probably should.
• Analyze market data. There are many tools available to research what professionals are earning in any given area. Consult Towers Watson & Co or other leading compensation market research data. Any offer you prepare should be close to what market data suggests is appropriate.
• What is your candidate earning now? Any significant pay increase beyond their existing package often triggers additional scrutiny. Be ready to defend this type of decision with detailed documentation.
• Ensure there are demonstrable business reasons for any disparities in compensation with an offer you are preparing.
• Keep everything. Because there is no longer a statute of limitations, you need to indefinitely retain records relating to compensation. Remember, there is no longer a 180-day statute of limitations, an employee can go back years. This type of data gathering is protecting your organization in the future.
• Most important: have your compensation director on speed dial. When’s the last time you paid him/her a visit? Schedule an appointment and partner with that organization to ensure best business practices.

Now go find that perfect candidate and close the deal.

It’s hard to argue against the statement that social networking (i.e., Facebook, Twitter, YouTube) is an extremely hot topic in business. But I have yet to find a single CFO or senior executive willing to fully fund a comprehensive social network recruiting strategy based merely on the fact that it’s a hot concept.

Even when budget is made available, most organizations need to develop measures to help direct spending into the right efforts that will provide them with the highest recruiting impact and ROI. There is no escaping it: making a compelling business case must become a priority for social network recruiting champions.

In this article, I’ll provide an outline of the four basic business case steps covering how to secure funding during these tight economic times.

Business Case Step #1: Identify the Potential Benefits of Social Network Recruiting

Provide targeted executives with a list of potential benefits and then simply have them select the ones that (if proven) would be compelling enough to positively influence their decision. Have them eliminate benefits that, whether true or not, wouldn’t influence their decision.

With that guidance in hand, design a process that focuses on proving only those benefits that were selected as highly compelling.

The following is a list of 20 potential benefits and business impacts that can result from effective social network recruiting. They are grouped based on their general level of impact on cynical executives:

Highly Compelling Benefits

• Hire quality — the program may result in hires who perform better on the job and have higher retention rates.
• Candidate quality — those who frequently use social networks may be the highly desirable early adopter; this source may identify higher-quality candidates who can then be presented to hiring managers (including those who are more technically savvy and more innovative). Note: even the simple act of listing the primary source (that generated the resume) on the top corner of every resume will, over time, educate hiring managers and eventually lead them to demand that recruiting shift their emphasis toward the sources that appear most frequently on top of the resumes that end up on a hiring manager’s short list.
• ROI — the dollar value of the program’s benefits may far exceed its cost, and the resulting ROI may be significantly higher than other recruiting programs.
• Vacancy days — because of the high usage rates and the short response times on some social network communications channels, revenue-generating, and key positions may be filled faster, resulting in fewer costly vacancy days in key positions.
• Higher offer acceptance rates — using social networks to attract and communicate with candidates may result in higher offer acceptance rates among finalists.
• Hidden candidates — it may identify qualified candidates who cannot be found or successfully messaged using other sources.

Often compelling benefits

• Employer brand — using social networks may increase your visibility and may significantly improve your “we get it” leading-edge employer brand image among targeted prospects (even if the image-building it doesn’t result in immediate applications).
• College impact — because of the high social network usage rates among college students, it may directly impact the number and the quality of college hire and entry-level candidates.
• Communications responsiveness — because there is less spam and in most cases you must be invited before you can send a message, using social networks to communicate may result in higher response rates and/or in more immediate responses when you send messages to prospects and candidates.
• Message impact — messages sent over social media channels may be perceived by the receiver as being more authentic or have a higher level of credibility and believability than traditional corporate mechanisms. The relatively low cost of sending messages over social networks may also allow your firm to increase the number of messages that it can afford to send. Together, these two factors may result in more effective messages that directly increase applications.
• Job visibility — using social networking sources may ensure that your job openings will be seen and read by a larger number of qualified candidates.
• Candidate diversity — it may provide your firm with a higher percentage of qualified diverse candidates in managerial and professional jobs.
• Global candidates — it may provide your firm with a high number of qualified candidates who reside outside of your headquarter’s country.
• Cross-fertilization — the methods, tools, and approaches that are developed using social networks for recruiting may be directly transferred to other business functions like marketing, customer service, product development, etc. So these functions may find that their social networking results will be directly and measurably improved as a result of the collaboration.

Occasionally compelling benefits

• Candidate volume — social networking sources may provide your firm with a high volume of qualified candidates.
• Lower dropout rates — you must build relationships with your “friends” in order to maintain them as part of your social network. Fortunately, social networks make it easy to build relationships quickly. Once built, it’s not surprising that this relationship may result in more applications, but it may also lower the candidate dropout rate throughout the hiring process.
• Competitive advantage — using social networks may provide your firm with a significant competitive advantage over other talent competitors. The net result may be that you can win more head-to-head battles with competitors over top talent.
• Benchmarking and learning — the time that your employees spend building relationships that may lead to recruiting successful candidates may also help gather benchmark information and improve employee learning.
• Increase sales — because using social networks directly improves your visibility and your firm’s “we get it” image, it may also influence the sales of your consumer products among those that equate product quality and being a desirable employer.
• Cost per hire — the recruiting-related transactional costs may be lower compared to other sources.

Business Case Step # 2: Identify And Counter Additional Resistance Issues

Merely convincing decision-makers that the program has significant benefits isn’t enough on its own to get funding. Unfortunately, almost all executives have some often-powerful preconceived issues that must be successfully countered. In the case of using social networks, these roadblocks almost always include issues related to:

• Employees “wasting” numerous work hours on social networks.
• Protecting the release of company information and secrets.
• Maintaining a single corporate message when you can’t control what your employees say on the Internet.
• Privacy-related issues.

At the very least, demonstrate to the COO, CFO, CIO, PR, and the corporate counsel that their potential concerns are overblown.

Start by showing that other benchmark firms that are allowing their employees and recruiters to use social networks are realizing benefits far greater than the potential costs. Next, present external research data that shows how employees use social networks for professional purposes. While studies that determine what percentage of social network traffic is professionally versus personally relevant are rare, informal studies among organizations piloting looser controls on social network activity found between 40%-65% of activity posted during work hours was professional in nature; the majority either requesting or sharing information from/with peers.

Additionally, show skeptical managers that you have developed a formal process for identifying, countering, and burying undesirable information on the Internet. Educate them that, in a connected world, they have already lost complete control of what is said about their firm, and that strategies that involve doing nothing are tantamount to giving up entirely.

Show the naysayers examples of what’s already out there. Show them how having numerous active employees on social network sites, talking positively, will directly counter the existing negative information and actually increase the number of positive messages that people can easily access.

Business Case Step # 3: Use Logical Arguments to Gain Agreement on Some of the Remaining Benefits

After narrowing the list of potential benefits to the most impactful ones, make every attempt to get executives to accept the likelihood of some of the benefits based exclusively on logical arguments. Whether you write a report or provide a PowerPoint presentation, minimize the number of benefits you have to prove with hard data.

With social network recruiting, executives might accept your professional judgment on benefits like its effectiveness on college recruiting; the value of cross-fertilization; the availability of global candidates; and the employer branding impacts.

Business Case Step # 4 – Prove the Remaining Benefits with Data

Out of the 20 possible benefits that you started with, you are likely to have to prove the actual impact of at least five of them with data. I will outline each of the five data collection methods in the remaining bullet points. Please note that the methods are listed from the least convincing to the most convincing data collection method.

Using existing data

• Provide benchmark data — in some cases, executives will agree that a program will likely provide the level of expected benefits based on external research data. The data might come from consulting firms or industry associations. However, the most convincing research data generally comes from either direct competitors or from firms that your executives admire. The goal is to convince executives that if, for example, using social networks at IBM reduced time to fill by 38%, a similar result could be expected at your firm.
• Look for existing internal efforts — on occasion, especially in large firms, you will find that some group, facility, or region has already tried your new approach without corporate approval or knowledge. In the case of social networks, you would attempt to identify and then use the results produced by any “rogue” group as an indication of the benefits or results that a company-wide effort might obtain. Because the data is internal, it is more likely to be accepted than external benchmarking data.

Limited data collection required

• Use your own employees as a baseline — assume you are trying to prove that social networks provide the capability of identifying “hidden candidates” who could be found in other sources. Start with a list of your own top performers in a particular job and then search traditional sources like job boards, attendees at professional conferences, and Google searchers to see what percentage can be located. You then do a search of their names on social network sites. By comparing the two results, you can find out whether your best employees who are “hidden” or not available on traditional sources can in fact be found on social network sites. You can use a similar approach to identify whether social networks contain more diverse candidates. You can use a third-party to see if messages to your own employees have a better response rate if they are sent via social network channels (compared to traditional voice or email).

Providing new data

• Run a small pilot sample — in order to gather performance data to prove that a program produces certain benefits or results, it’s sometimes necessary to run a small pilot project. Pilot projects are widely used in other business areas and they have a high rate of credibility. In the case of social networks, you could suddenly allow a single recruiter to begin using social network tools and you would then attempt to identify any improvement in their performance (comparing their baseline performance to their performance after using social networking tools). You can also run a pilot on a single job to see if the baseline performance on key metrics improves. If you have the resources, you can run a pilot in a complete business unit or facility and then compare the before and after results. Unfortunately running pilot projects may require some level of approval and it will cost some money (but much less than a full-scale rollout).
• Use a split sample — the most convincing form of proof that doesn’t require a companywide implementation is to use a split sample. It’s the same approach that is used by drug companies to convince regulators that their product is effective. For example, say you wanted to prove that social network recruiting produced higher-performing hires than traditional recruiting methods. You could start by identifying a team of recruiters who recruited exclusively for a single job family. You would randomly separate this small team of recruiters into two groups. Nothing would change for the control group, while the second group from the team would be trained how to use social network recruiting tools. They would be required to use social network recruiting as a major segment of their recruiting for all of their jobs over a six-month period. The initial on-the-job performance of their new hires after three and six months would be compared to the performance of the new hires from the recruiters in the control group. If the performance of the social network recruiter group was significantly better, you could say with a high level of credibility that using social networks improves the quality of hire. Continuing to measure the performance differential over time would provide additional data to support the program’s ability to improve the quality of hire.

Final Thoughts

Managers of recruiting functions seem to struggle continuously to obtain more budget and resources.

Most, unfortunately, rely too heavily on building relationships in order to maintain or increase their funding levels. If you’re tired of the up-and-down funding cycle, maybe it’s time to master the science of building an effective business case. It’s sad that recruiting is still struggling to prove what we already intuitively know (i.e., that recruiting top talent into key jobs has a huge dollar impact).

We have one of the largest impacts and ROIs of any function in the corporation, but we fail miserably at presenting it in such a way that a CFO would find it believable.

In my opinion, we’ve downplayed what it really takes to be successful in our profession — recruiting, counseling, and closing top people who have multiple opportunities, and making sure our hiring manager clients don’t blow it.

To start refocusing on the right stuff, I’d like to nominate quality of hire as the metric to assess recruiting department performance, and relegate cost per hire to the second page.

I believe cost per hire is a misguided means to judge recruiting department performance. For one, it rewards the wrong things and ignores quality of candidate and quality of hire. For another, it’s far too tactical and narrowly focused. Worse, improving costs could degrade quality.

This is a strategic mistake of huge proportions that too many HR and recruiting managers miss entirely.

These problems go away if the focus is on measuring quality of hire first and quality of candidate as a subset. Even if recruiting is reluctant to take on the responsibility of maximizing quality of hire, it must be responsible for setting up a system to measure it. While important, measuring quality of hire is not straightforward.

Here are some ideas on how to get started on thinking about how to do it:

Yves Lermusi, the CEO of Checkster, believes good reference checking before (external) and after the hire (internal 360°) might be the best way to measure, monitor, and improve quality. He might be right, but from what I’ve seen, if the measure of candidate quality pre-hire is different than after the hire, you’re not measuring the same thing. Regardless, Yves’ point of measuring candidate quality post hire and monitoring are absolutely essential. So you should check out Checkster as a means to do this.

Here’s another perspective. I was speaking with a senior recruiting manager with a Fortune 100 company the other day. She told me her company conducted exhaustive post-hire performance reviews at the 90-day, 6-month, and 9-month time periods for new hires. These reviews were based on comparing the new hire’s performance against the performance objectives of the job. If the person fell short here, the review was expanded to include an in-depth competency evaluation. This approach seemed spot on to me. However, the recruiting manager told me under-performance was generally attributed to lack of understanding of real job needs before accepting the offer and problems with culture, especially with the working relationship with the hiring manager, once on the job. This strengthens the argument of measuring pre- and post-hire quality on the same performance standard.

However, some differ on this view. For example, after a recent ERE article I wrote on a related quality of hire article, someone sent me a detailed LinkedIn message describing his company’s approach to measuring the quality of their candidates by sourcing channel. It consisted of a detailed scorecard examining a set of criteria that mapped to the traditional job description. This included things like quality of the academic background, quality of the experience, depth of industry knowledge, and the like. This is probably not too bad, but I suspect that this was not the focus of the interview. But none of this gets at the issues involved in a post-hire quality assessment. For example, the person could be a fine person with all of the experience and academic requirements noted, but someone who was no longer motivated to do the type of work required, or someone whose style was not compatible with the hiring manager’s.

From a pre-hire standpoint, some might argue that the traditional competency or behavioral-based interview is a great way to measure pre-hire quality. My 30-year concern with this is that it still ignores job performance and managerial fit. Being competent to do the work doesn’t mean being motivated to do the work. Nor does competency or behavior measure a person’s ability to prioritize the work, handle too much work, work under pressure, work with different resources, work with comparable teams in similar situations, or work with a weak manager.

For me, it’s pretty easy to conclude that if you want quality of hire to become a useful measurement tool, you must start by measuring pre- and post-hire on the same basis. Further, the measurement standard you should use must be made on some comparison to real job needs. (Send me an email if you’d like a copy of a performance-based talent scorecard from my book, Hire With Your Head (Wiley, 2007).) This means candidates need to be measured before they’re hired on their ability and motivation to perform the actual work required, including fit with the hiring manager.

If pre- and post-hire quality measures are different (up or down) it means that the assessment process is flawed. So it’s important to use feedback from the post-hire quality assessment to change how candidates are assessed. I suspect that few companies do this; regardless, that’s a major reason and benefit for measuring post-hire quality. Then once pre- and post-hire quality assessment are the same and you have a good system for tracking quality of candidate and quality of hire, you can then move on to the more strategic quest of maximizing quality of hire. This includes improving your recruiting and sourcing skills in tandem, and tracking quality by sourcing channels, recruiters, and even hiring managers.

The whole point of this article is to suggest that quality of hire is a much more important measure than cost per hire in measuring recruiting department performance. While cost is important to track, it shouldn’t come at the expense of quality.

Focusing on the internal budget of the recruiting department is insignificant in comparison to the impact the thousands of people the recruiting department hires has on their company. What’s more exciting is that the tools are now available to actually measure and maximize hires, rather than just talk about it.

For a minute, assume the role of a senior executive who has just been handed a business scorecard containing performance numbers in five critical business areas. After looking at the numbers below, would the data make you cringe?

• 70% of users are dissatisfied with the process.
• 50% of customers regret their buying decision.
• 46% turnover among new buyers.
• 46% failure rate of process output selections.
• A mere 19% are unequivocal successes (less than 1:5).

It’s Time to Face the Numbers and Facts…

Almost any senior executive would be alarmed upon learning that users were dissatisfied, failure rates approached 50%, and a significant percentage of your customers regretted their decisions.

Obviously, if the numbers listed above came from an important profit-impact function (supply chain, finance, customer satisfaction), everyone would be screaming for a complete rethinking of the entire process.

Unfortunately, the above metrics represent failure in the recruiting and retention elements of the talent management function. I have encountered no other business function that more completely avoids defining and measuring process failure than talent management.

Selection decisions are often about as accurate as a coin flip.

–The Recruiting Roundtable

Talent Management Failure Metrics Are In*

Here are more details on the five numbers provided above.

This data can be taken together as a clear indicator that we might have numerous failures in talent management:

• 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
• 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
• 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
• 46% failure rate — 46% of U.S. new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
• Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).

Some additional data points to consider include:

• 66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
• 50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
• Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).
• Less than 50% are qualified — a majority of managers surveyed (59%) believe that less than half of all candidates they interviewed were qualified (Source: eBullpen, LLC).
• 65% lie on resumes — the key data source that we rely on to source and narrow down applicants contains untrue information more than half the time (Source: The Risk Advisory Group )
• Resume-sorting failures — Of all the “perfect resumes” sent out by mystery shopper candidates, only 12% were actually scheduled for interviews (Source: Hodes’ Healthcare).
• Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).

* Note: I have purposely chosen publicly available sources that cite these research results. To find the material, you may use a simple Google search, but please don’t contact me for detailed references.

The samples in each case varied, but what if they were an indication of how poorly your organization’s talent-management function was performing?

Only 30% of organizations measure quality of hire, and only a handful specifically define and measure recruiting process failure. It’s time to adopt a business process management approach; start to measure successes and failures in the same way that other business processes already do.

Plan B, of course, is to ignore this warning and to continue to assume that existing processes are either error-free or on par with the Six Sigma standards of production, quality control, and customer service.

My Goal Is to Get You to Pay Attention

You can conjure up arguments about the validity of the research done by outside consulting firms, but that’s not the point. The key learning is to take a moment and ask yourself these key questions:

1. Have you clearly defined what “hiring failure” is? What failure rate is acceptable?
2. Can a process be properly designed so that so many that are involved in it do not have remorse or regrets about their decisions?
3. Is it ever acceptable to have a process where the dissatisfaction rates exceed 25%?
4. Has the time finally come where you bite the bullet and calculate the quality of hire, failure rates, and the ROI of your function?
5. Is it time to move beyond simply calculating output metrics (i.e., 22% are dissatisfied) and in addition to begin to use metrics to identify why your failures occur?

After viewing these research numbers, I hope you’ll agree it is time to rethink most talent management processes and metrics.

Do not concern yourself with the accuracy of any particular external study; their primary value is simply to stimulate you to do your own research within your own firm to find out if these problems and failures identified by others are currently occurring.

Action Steps to Consider

There are a handful of firms (DaVita quickly comes to mind) that have adopted a business process approach to their recruiting function where they clearly define and target failure.

If you’re interested in adopting this approach, here are some action steps to consider.

• Clearly define failure — include top candidates you failed to identify or attract; top candidates who dropped out early; the quality of candidates you didn’t hire; offer turndowns; good hires but bad initial placements; poor-performing new hires; legal costs; delayed time to initial productivity; dissatisfied or disillusioned candidates; frustrated hiring managers; and early turnover among new hires.
• Adopt a business process management approach — work with experts in supply chain, CRM, Six Sigma, etc., to learn about business process improvement tools and approaches.
• Shift to data-based decision-making — shift away from the approach where you assume that things are working; instead, rely on hard data to meet decisions and to continually improve every key process.
• Mystery shoppers — use mystery shoppers to identify process problems.
• Change your assessment approach — a significant portion of recruiting process errors occur because of an over-reliance on subjective tools like interviewing. A superior approach is to increase the use of validated skill assessment tools and to ask candidates to solve real problems.
• Conduct failure analysis — whenever you have a major process failure, use a failure analysis/root-cause identification approach to move beyond symptoms and to identify the real underlying causes of the failure.
• Assume failure — even when the process is made more objective, there will still be significant number of failures. Accept that fact and develop a process that allows you to identify those failures early and to minimize your losses.
• Calculate the cost of each error — work with the CFO’s office to calculate the costs and the business impacts of all major errors.
• Assume that all sub- processes are suspect — assume that bad hiring decisions are a result of poor design features in a multitude of sub-processes including job descriptions, resume sorting, interviews, reference checking, hiring manager monitoring, and onboarding.

Final Thoughts

Throughout my career, whenever I have had the opportunity, I ask recruiting and talent management leaders a simple, straightforward question:

If you hired 100 people, what percentage would turn out to be failures?

Not surprisingly, 99% of the time all I get in return is a blank look. In direct contrast, if I ask the same question on failure rates to those who lead other business functions like supply chain, production, sales, customer service center, etc., I get an immediate numerical response coupled with the costs associated with each increased percentage point of errors. It is my hope that the data referenced in this article will cause you to increase your focus on identifying failures and failure rates in each of your major sub-processes.

Rethinking how we source is not easy. But the unrefined tools such as search engines, job boards, advertisements, and even referrals are slowly giving way to far more powerful social networks of candidates. These networks can be shaped for specific types of candidates and for specific skills and competencies. They can be the only source of candidates you have so that your focus can be on your brand and building awareness of your organization and the kinds of work you offer.

Does this sound a little pie-in-the-sky? Maybe given today’s level of understand and technology, it is a stretch to give up all other forms of sourcing, but I predict these networks will replace 90% of other sourcing techniques with in decade.

What Is a Social Network?

For those of us in recruiting, a social network may be better thought of as a pool of potential candidates or as a community of talent. This is not the same as a static database of candidates. It is an ever-changing, expanding network of people who have chosen to associate with one another virtually. I often make an analogy to a network being like a series of circles rippling out from a center. Those people at the center of the circles are your most valuable and most likely candidates. Each successive ring of candidates gets further from you, is less known, and therefore less valuable. LinkedIn denotes this by giving priority to those people you know and who know you and then giving lower priority to people who you know through others.

Why Create Your Own Social Network?

Most of us rely on the established networks for sourcing candidates. These include LinkedIn, Facebook, MySpace, and many others depending on your geography and specialty. These will always have some place in recruiting, but by creating your own network you can have much more impact and get better results.

The purpose of creating a social network is to bring the best people into your innermost circle. By building a relationship through frequent communication via whatever means make sense (telephone, email, Twitter, SMS, or IM), you get to know more about each other. Potential candidates can make decisions about whether they like you, the organization you represent, and the positions that are available. You get to screen candidates and select people who closely match your needs.

Creating the infrastructure for a social network can be demanding, but free ones such as Ning are available and provide some level of customization. Others are built from scratch or by using open source tools and modules. ERE.net’s community of users (you and me) is a good example of a social network of practitioners. We have common interests and any of us can find other recruiters who we might like to recruit or help to find a new position. This is an example of an open network, but it could just as easily be available only to people who answer some questions or pass through a filter of some sort qualifying them for membership.

With your own network, you can build in tests, require certain information, or in many ways decide if someone is the right person for your organization. By doing this you eliminate hundreds of unqualified people and reduce the time your recruiters spend screening out the unwanted.

A social network, or talent community, is always growing and changing. People can become a member of a talent community in several ways, but each requires them to learn more about the organization and provides the recruiter with more information about them. For example, if someone comes to the recruiting website and indicates an interest in a particular job, software can quickly assess a variety of things including aptitude for the job, interest, and skill level. People who answer questions in a certain way or who achieve certain scores can be referred to the most suitable positions, turned away completely, or forwarded directly to a recruiter for immediate followup. No one is asked to just “dump” their unevaluated resume into a hopper and wait for a follow up call — which usually never comes.

What Do Candidates Think?

Given these economic times, candidates are stressed and unhappy, as I have written in past articles. They are keen to find organizations that are responsive, friendly, and where they can showcase their own unique qualities. A social network allows this, and the candidates I speak with respond very positively to the immediate knowledge of how well they meet requirements. They are pleased to be invited to be part of a community they have an interest in and they are also glad to know right away that they are not a good fit and won’t be considered. No news is not good news to a candidate who is trying hard to refine his or her knowledge of different organizations and different positions, and who wants to maximize her time.

I am surprised that the hype about social networks revolves almost entirely around the public networks rather than on building your own. If you are in the planning stages for next year, set aside some of your budget to explore creating your own branded social network. You might be surprised at how well it works and at how it creates a far more efficient and candidate friendly environment than you probably have today.

Despite many successes, it’s time to admit that a major employer branding principle is no longer true: that corporations can own or control their employer brand image.

The premise was that corporations could proactively put together a plan to win awards as excellent places to work, secure mention in news pieces and editorials, participate in case studies, and be talked about at industry events. Because corporations were coordinating nearly all of the information that made them visible, it was possible to heavily influence how they were perceived.

It was a practice that made firms like Google, Starbucks, GE, IBM, Microsoft, and HP famous as great places to work. However, that was then and this is now.

While it is still possible to heavily influence perception with well-managed efforts, significant growth in social media, peer-to-peer content publishing, and online rating services have shifted a majority of the power away from the corporate employer brand manager to the masses. The shift in power renders all but the most strategic and well-executed efforts virtually ineffective.

To those who actively engage and publish their story, their perception is reality, even if the experiences that led them to their perception are not common. Their points of view are often emotionally charged, personal, and therefore, significantly more trusted as fact by those you need to influence than corporate, generic dribble.

Odds are, the people most influencing your employer brand are people you have never met.

Other People Now Own Your Employer Brand Image

Control provides comfort to senior talent management executives, and for years, they have been comfortable. No matter how much the employee experience differed from the overly positive perspective they sold to candidates and organizational stakeholders, they could get away with pushing out their message.

While many product brand marketers learned long ago that if the experience with the product didn’t match the brand positioning, consumers would revolt, few in HR were paying attention. Many HR leaders may ignore or discount the facts, but the truth is that a fundamental shift has occurred, and like it or not, the years of putting forward a brand identity not tied to reality are over. Some organizations have been successful in silencing organizational critics through threat of legal action, but the majority of attempts backfire, ultimately making the criticisms even more visible.

The New Owners of Employer Brands

The new owners are a complicated mix of individuals who use a variety of communication channels to influence your brand without your knowledge, consent, or guidance. The array of contributors grows more complex daily, and the most prominent groups of brand influencers include:

• Bloggers – blogs have been around for quite some time, and while it used to hold true that only 1:100 people active online were contributing original content, a vast array of new online services has significantly reduced that ratio. Today, thousands of independent-minded individuals are posting comments about their day at work, their boss from hell, the idiot that just got hired, the stupidity of HR actions, the lunacy of senior leadership, and all those little liability secrets corporate security would like to keep buried. They communicate without fear and without purpose. Psychological studies have shown that we are nearly three times more likely to consume negative information than positive information (there is a reason the nightly news focuses on the negative), which means that we are significantly more likely to share the bad stories versus the good ones. We are also prone to exaggeration and sensationalizing, but rarely does that fact get considered when folks are reading peer-produced commentary about life at XYZ Corp.
• Social media users – Social media isn’t a regional thing, it isn’t an economic thing, and it isn’t a political thing. It is, however, a technology concept that is enabling a fundamental shift in how people learn and communicate. From sites like Facebook and MySpace in the United States to QZone in China or Hyves in the Netherlands, millions of people are sharing the details of their daily lives with friends, family, coworkers, and virtual strangers. In minutes, users can spread facts, rumors, pictures, or innuendos to thousands and thousands of individuals around the world. Negative videos like “Comcast sucks” that would have in the past been seen by only a handful of close friends are now seen by millions. Social media users can exert phenomenal pressure by using the grapevine to highlight stories many organizations would rather people not hear about.
• People active on Twitter – Twitter deserves special attention among the social media outlets because it is so instantaneous. Just as political events in Iran were instantly Tweeted about, so are the negative experiences of your employees, and even your customers. Individuals being laid off can now provide a “blow-by-blow” account of the badly handled termination process and share their pain instantly with thousands.
• Texters on mobile phones – these individuals utilize this omnipresent 24/7 channel to both receive and send news about your firm, its employees, and your practices.
• Commercial websites – there are numerous “what your employees are saying” sites like Vault, the forums at Indeed, or glassdoor.com, that specialize in sharing messages about what it’s like to work at a firm with individuals considering employment. While most make some attempt to validate that the comment contributors have worked or currently work for the organizations in questions, not all do. Prominent firms like Coca Cola, Best Buy, and Starbucks have been targeted by unfriendly “anti-firm” websites that exist merely to spread a combination of real, half-truths, and untruths about the firms.
• Industry and profession-specific forums – current employees, former employees, investors, and individuals who have merely read about your firm can post questions about what it’s like to work at your firm (or answer them) on numerous and quite active professional association website forums or independent listservers.
• Internet groups – Google, Yahoo!, Facebook, Twitter, and LinkedIn allow individuals with similar interests to form groups that can help to connect individuals who share common interests and likes/dislikes about your firm.
• Internet show hosts – there are numerous Internet voice and video casts (some associated with traditional media outlets and others that are just independent). These shows frequently include interviews with individuals who, without your knowledge or permission, say both good and bad things about what it’s like to work at your firm. Videoblogger and avid social network user Philip DeFranco demonstrated the power of the approach to take on even the most powerful litigation-bound employer, Wal-Mart, in response to fine print in Wal-Mart’s self-funded insurance plan that allows the employer to cease damage awards received by plan participants.
• Social bookmarking service users – individuals who tag a story with a “Digg” or related online bookmark can proactively increase the visibility of any negative story, whether you like it or not.
• Search engine managers – these individuals differ in that they probably don’t have a particular bias toward or against business or any particular firm; however, the design of search algorithms influence what type of messages about your firm that others can readily see.

Individuals who are likely to be the most active in shaping your employer brand on these communications channels include:

• Current employees – hundreds or even thousands of your employees who sometimes innocently and sometimes purposely post Tweets or wall postings provide insight into what it’s like to work at your firm. Even something as innocuous as a LinkedIn profile might lead some to make assumptions about your firm as an employer.
• Former employees – you may have thought they liked you, but what they say after they leave is more likely the reality. From disgruntled alumni to employees recently laid off, the information collective is alive with former employees recounting their experience.
• Vendors – those current and former vendors who have had both a positive and negative business relationship with your firm can now easily spread their perceptions and experiences over the Internet to anyone that will listen.
• Anti-business types – individuals who are looking for opportunities to blame corporations for a variety of economic and environmental problems are quite active on the Internet. Some are actually quite effective in not just spreading Internet messages but also in creating mass letter-writing campaigns and even actual face-to-face meetings or protests.

Peer-Produced Content Is More Credible

If you were to fact-check most blogs, Tweets, or YouTube videos, most would be considered fallacious. Yet survey after survey shows that most individuals in general (and net-generation individuals in particular) believe peer-produced content over traditional news or print media content.

You can bemoan this fact all you want, but statements on your corporate website, in your employment ads, or in press releases will almost always be viewed as less credible than a comment from a blogger who is passing along an innuendo that might have no basis in fact.

Messages from Others Are Extremely Hard to Counter

As Internet users become more prolific, the ability of corporations to monitor and respond to every channel is significantly diminished. If several hundred people outside the organization are producing content, like it or not, there is little your small team can do to match that scale (short of building a brand army of employees inside the organization to push positive commentary).

Responding to negative commentary online isn’t a good idea, as your response makes the original content both more visible and more charged.

Final Thoughts

Given the bleak picture and the almost daily erosion of control over your brand image, you might consider just giving up, but I urge you not to make that mistake.

While you no longer control your employer brand, you can become more aware of your actual brand — especially the negative comments being posted about your firm. Learn to use tools like search engine alerts, blog search sites, and Twitter archive searches. Use search engine optimization techniques to ensure the content you want to be most visible becomes most visible, and work to hide negative comments.

Smart brand managers can use employees who are active on the Internet to increase the number of positive brand messengers. Develop plans to influence key opinion leaders by making more authentic and candid (read: less perfect) stories and examples available to them. I’ll cover the approaches you can use to proactively influence your brand in coming articles.

If you have corporate experience operating an employment branding function, I solicit your additions on this loss of brand control topic. Also, if you have questions you would like answered on corporate employer branding, you are encouraged to post them in response to this article.

If not HR/recruiting, then who?

Most HR/recruiting execs would suggest hiring managers themselves as the likely assignee. Others would contend that HR/recruiting is responsible for the quality of the candidates, but managers are responsible for the quality of hire. Others would suggest there are too many variables to assign it to anyone.

Further confusing the issue is determining when quality of hire should be measured. If you do it before the person starts, you’re measuring the sourcing and selection process. After the hire, you’re measuring the hiring manager’s management and leadership abilities as much as you are the candidate’s ability to perform the job needs. Compounding the time variable is the measurement standard. If you use a different measurement technique for before and after, then you’re left with a comparison between oranges and cell phones, or more likely, experience and qualifications vs. performance.

It’s because of these complex issues that I believe that HR/recruiting must take responsibility for quality of hire. If not HR/recruiting, then who?

Here’s my rationale behind the nomination.

1. Maximizing quality of hire is the most important strategic role HR/recruiting can play. Other than maximizing on-the-job performance and retention, there is no more important role for the HR/recruiting department. Not wanting responsibility for this seems odd to an old recruiter like me. All the executives I’ve placed thrive on this type of challenge. Why would HR/recruiting be reluctant to take on — even demand — this responsibility?
2. The CFO is responsible for the capital acquisition process, so why shouldn’t HR/recruiting be responsible for the talent acquisition process? While the financial department doesn’t select, install, and run the capital equipment it approves, it still manages the approval process and strongly influences the ultimate decision. This parallels the role HR/recruiting should play in the talent acquisition process.
3. Having responsibility means the process is adhered to, not the decision itself. Developing and monitoring the hiring/selection process is the role of HR/recruiting. This means developing and implementing processes that ensure that the best candidates are seen and hired. There should be an audit process as part of this to ensure that the best decision has been made, and that if it has not been, the process is modified.
4. There is a huge tactical and strategic cost to making mistakes. HR/recruiting needs to deal with all the mistakes, including finding replacements and dealing with the legal and employee relations issues. The opportunity costs of bad hires alone provides the rationale for some type of vigorous and auditable selection process. Who else could possibly lead this type of cross-functional effort?
5. If not HR/recruiting, then who? Hiring managers should police themselves on quality of hire. Some do it, most don’t, and even those that do, don’t do it well. Regardless, there should be one standardized process that works and is used company-wide. This is the primary reason why hiring managers can only be held responsible for the successful performance of the person hired, not the process used. If some managers want to use their own process, they need to be held 100% responsible for mistakes, including the costs associated with this. This is one way to convince them they should use the approved process.

Of course, if HR/recruiting is given the responsibility for maximizing and measuring quality of hire, there comes some programs that need to be implemented to pull it off. Here are some quick recommendations:

1. Stop using job descriptions to source and select candidates. If you describe the work that needs to be done and assess candidates on this, before and after the hire, you’ll solve the dual measurement problem and reduce turnover dramatically. The primary reasons new hires underperform and/or leave is lack of understanding of real job needs and a poor fit with their hiring manager.
2. Develop sourcing programs that target high-quality candidates, rather than eliminating the worst to see who’s left. This is not insignificant. It means you must stop asking knockout questions and stop posting boring ads. The only reason companies ask knockout questions is to eliminate weak candidates who apply. If you change the sourcing paradigm to target great candidates, rather than hoping great candidates fall through the cracks, you eliminate the “eliminate the weak candidates” problem at the strategic level.
3. Use a performance-based talent scorecard and evidence-based assessment system to measure pre-hire quality. Competency models and behavioral interviews are too generic and do not measure a candidate’s ability and motivation to perform the actual tasks required for success. Instead, candidates should be evaluated across all real jobs, including their ability to work effectively with the hiring manager. Quantifiable evidence of consistent and comparable past performance needs to be the basis of the yes/no decision.

With this type of process in place, HR/recruiting’s role then becomes one of ensuring that the process for maximizing quality of hire is being followed — not making the hiring decision. This is comparable to the authority given, or taken, by the CFO, in ensuring that capital expenditures are justified in some reasonable fashion. Maximizing the quality of every single hiring decision is the primary strategic role of the HR/recruiting department. If HR/recruiting wants a seat at the strategic table it should demand this responsibility.

1. You walk in to a car dealership that doesn’t have any salespeople on staff. No one is available to answer your questions. No one will describe the features and benefits of the cars. The only person there is a 17-year-old kid working at a cash register. Test driving is prohibited. If you want the car, you simply buy it … like a pack of gum.
2. You are interested in buying a certain house and there is no real estate agent or home owner available. You are told that the process involves first making an offer without the opportunity to see the interior or take a tour. After you make an offer, then you can enter the home.

The reason why these scenarios seem funny is because when making a big decision, information gathering is critical. In these situations people need information, reassurance, and probably even some hand-holding to feel comfortable.

And, for big decisions, it’s helpful to gather information from another human being (i.e.: car salesperson or real estate agent, etc). We want that personal connection to help guide us and answer our questions.

For most people, finding a new job is another big life decision.

If the human connection is so important, then why do many companies take the cash register approach regarding their talent acquisition strategy?

These companies:

• Require that candidates submit their resume online as the first point of contact.
• Offer no personal contact for a potential candidate to ask questions.
• Will not allow for a site visit until a candidate is already at a final interview stage.
• Never respond to candidates emails or phone calls
• Do not list a contact person on job postings

All of this builds to our questions of the day:

1. How can a candidate be genuinely interested in an open position without having an opportunity to fully research your organization?
2. How can you possibly attract top talent if you don’t offer a real person to serve as a recruitment contact?

Don’t treat your recruitment process like that car dealership with a cash register. Rather, incorporate your recruitment staff in the front end of your process to fill your funnel with enthusiastic candidates.

I caught up with her on the phone to go over a few of those questions. Mary Kay Mauren, senior attorney advisor, was also on the call.

Peter Zollman, for example, wrote in his informative Classified Intelligence Report that he understood from Miaskoff’s presentation that:

If you find a job-seeker’s blog that shows him to be a racist, you cannot consider that information as you consider him for the position.

Zollman, I told Miaskoff, must have misunderstood. I asked her: “Since racists aren’t a protected class, you’re plenty able to reject them just for being racists, aren’t you?”

She agreed.

Video OK but Slippery

I’ve also been talking both on the phone and via email with Joyce Lain Kennedy, the careers columnist. Following the Miaskoff talk, Kennedy wanted to know if the EEOC expects “more official EEOC discrimination complaints in the future that are based on the growth of visual media showing ‘old, fat, ugly’ in the initial stages of the recruitment process?”

“Not necessarily at all,” says Miaskoff. “We see nothing to indicate that there will be a spike in complaints … (but) it also strikes us — a personal observation on my part — the video nature of it, the fact that you can sort of watch someone when you don’t have the social controls face-to-face where you have to keep your opinions to yourself, is sort of a slippery slope for people doing screening.”

In other words, she says, face to face, you’re more likely to keep your reactions and opinions (verbal or non-verbal) to yourself out of politeness or other social norms. With a video, Miaskoff says it’s a lot like watching TV, where you feel more detached.

Again, she says, the EEOC is not “battening down the hatches” for an increase in complaints about video resumes. But “if video resumes are part of the electronic trail in a case, we’ll follow it. It’s part of the record.”

Kennedy is concerned that bias will creep into companies that lack the budgets and staff to add in the checks and balances necessary to prevent discrimination that occurs after seeing a video. She gives the example of Stephen Hawking. What would happen if he had been screened via video?

Miaskoff says two things. One, there “needn’t be the Cadillac of controls.” Just some sort of policy or practice in place for personnel procedures, whether its hiring, promotion, demotion, and so on.

“You’re certainly better off if you have a policy and you give it to people and you train people and make sure they read it (and sign indicating they have), and repeat that process a few times a year — you’re certainly in a better place than if you don’t.”

The second thing Miaskoff says about video resumes is that it’s not like having a big staff and budget with HR pros and attorneys has ended discrimination anyhow. “People are not infallible,” she says.

Blogs, Assessments

My coworker Elaine Rigoli says: “One question that was posed to me after her presentation focused more on legal issues surrounding existing staff (not those you want to hire off the street). For example, what to do when you discover that an otherwise great employee has a blog of some type that bashes the company/product/colleagues. Probation? Fire? Allow it?”

“That’s not an EEO issue,” Miaskoff says. “Unless the employer (for example) only discriminates against women who have nasty blogs about the employer, and doesn’t discriminate against men.”

John Zappe asks how the New Haven firefighters decision affected the determination of when something had an adverse impact on a protected class that rises to the level of a possible Title VII violation. What advice is the EEOC now offering to employers about determining adverse impact?

“We obviously have to comply with the Supreme Court,” Miaskoff says. “That’s the bottom line.”

I got the sense from that answer, and from Miaskoff’s tone, that the ruling made life more confusing for the EEOC.

Miaskoff says employers “need to go through the validation process for all of their tests. They need to do it carefully. They need to have their documents in place (showing) that they’ve done it. Once they move forward if a test is validated which it means it’s predictive of success in a particular job they’re hiring for, even if it has a disparate impact on minorities, it will be legal. People assume that if it has a disparate impact it will be illegal.”

If the test has a negative impact on minorities, she says, “the employer is in the spotlight and has to prove it’s truly predictive of success. Qualifications trump race.”

She says the general wisdom as she understands it, from talking to I/O psychologists, is that “written tests almost always have an impact on minorities, so you have to be careful. You have to make sure you’re using the least discriminatory alternative.” Some really big corporations, she says, are moving away from written tests and toward more functional tests.

Here’s the video of Miaskoff speaking at the ERE conference last month in Hollywood, Florida.

Let’s begin with the assertion that having the right job skills is at the top of the food chain.

There is nothing more dangerous to the bottom line than employees not being able to perform a job. In fact, without the mental horsepower, organization skills, and interpersonal skills to perform a specific job, an employee is a potential train-wreck (although a happy one, if that counts for anything) … and, yes, managers are considered employees.

The Manager

Research shows the greatest source of job satisfaction or dissatisfaction is a person’s manager. I’d like to pretend I had no troubles with managers, but in my own career, I have gone overnight from being a valued employee to receiving a one-way train-ticket out of Dodge: same person, same skills, same organization, but different manager. I have also moved in the opposite direction. The minute my manager changed, my train ticket was canceled and I was welcomed back into the club. Again: same person, same skills, same organization, but different manager.

I have also worked in and with different corporate cultures characterized by innovation and continuous improvement; where loyalty was valued more than ability; that resembled an institution for the emotionally dysfunctional; where time stood still; and, where feelings of support people were valued more than the product of the professionals. Yes, manager fit and cultural fit are alive and well affecting human performance everywhere.

One Man’s Paradise is Another’s Hell

Ben Schneider, chair of the I/O program at the University of Maryland, has written extensively about what happens when personal culture clashes with organizational culture. He calls it ASA — an acronym for attraction, selection, and attrition.

It sounds more complicated than it is. Applicants are attracted (A) to organizations based on their cultural reputation; organizations select (S) employees who seem to “fit” their culture; and, employees who don’t fit leave through either voluntary or involuntary attrition (A). ASA forces are like a corporate iceberg. It has enormous inertia to resist any change.

There are a variety of recognizable cultures. For example, innovative vs. traditional; interdependent team vs. individual; cooperative vs. competitive; arrogant vs. self-effacing; autonomous vs. controlling; and, trusting vs. defensive, just to name a few. Of course, these cultures also come in all combinations and permutations.

Making ASA Work for You

As I mentioned earlier, culture is a powerful force that is slow to change. Sometimes a change in executive management will have an effect; otherwise, changing culture is often like putting a frog in a pan: too hot for comfort and the frog immediately jumps out; but, slowly raise the temperature, and the frog adapts. (No actual frogs were harmed in this example.)

So, how do we match employees to a culture?

First, we have to recognize the three major forces at work in organizational culture: 1) direct manager, 2) job-related, and, 3) organizational. Because ASA works in occupations as well as organizations, we can generally assume job-specific managers and current job-specific employees already fit the culture or they would have left through attrition (of course there are always a few exceptions). This means the first step is making sure applicant first fits the motivational (aka cultural) requirements of his or her job.

After we know the motivational expectations of the job, we have to “overlay” the culture of the organization. For the most part, this means identifying factors that touch all positions. Most commonly, these include a preference for innovation, working in teams, being competitive, and not being narcissistic. You might think of the first three factors as being bright-side (observable, positive) and the last as dark-side (hidden, dysfunctional).

What do I mean when I say dark side? Bob Hogan, a preeminent researcher in the personality/motivation field (and also a subject-matter expert on my long-ago dissertation committee), has shown that bright side factors lead to upward career mobility, but dark side factors tend to emerge when employees gain position-power in the organization. Dark-side narcissists are usually extremely charismatic; however, inside they harbor deep-seated feelings of superiority and entitlement. One only needs to think of the many public and political figures making the news by shamelessly taking advantage of other people to further their own egotistical objectives.

The Process

Starting with a known performance framework, a professional test developer interviews people from the organization using that information to build a survey that includes both occupationally specific and organizational-specific factors. The developer gives the survey to a few hundred people. Their answers allow the developer to determine things like inter-item reliability and construct validity (this data enables the developer to make deletions and edits to ensure a robust test). If all things go as planned, the next step includes either a concurrent or predictive validity study.

Validity studies confirm the test actually measures what it was designed to measure. They involve one group of people taking the survey and another group of people rating them. A concurrent study uses employees already on the job. It is quicker, but since employees are generally alike (i.e., survived the ASA thingy), it is harder to find differences between them. A predictive study gives better results because new employees are more diverse than seasoned ones; but, it takes more time.

Conclusion

The fit between organization, manager, and employee is more complicated than most people imagine. Broad-scope, one-size-fits-all surveys tend to ignore critical job-fit factors. Good fit involves understanding the momentum and inertia of attraction, selection, and attrition and separating them into factors that affect both the employee and the organization. Done right, this kind of survey ensures getting the right people into jobs they will enjoy. Caution should be taken, however, to remember that culture usually tells us very little about job skills. Maximum performance requires measuring both.

However, while many will work as advertised, getting budget for them is a different matter entirely. In the past, the only way to get any significant new expenditures past the CFO was with some type of rigorous cost-savings analysis. However, this approach ignored any improvements in candidate quality as possible justification due to its “intangible” nature.

But as Dr. John Sullivan has been ably pointing out for these past 10 years, improvements in candidate quality dwarf potential cost savings. In fact, one could easily justify a cost increase if quality of hire could be proven.

In this article, I’m going to introduce a means to calculate the ROI of any new recruiting program on a quality-of-hire basis. Further, I’m going to suggest that once you have a means to measure quality of hire, you’ll shift your focus toward improving it, and consider cost per hire a secondary priority.

While cost per hire is not unimportant, it’s far less important than quality of hire. In the HR field, ROI has traditionally been calculated based on the cost savings a new process generates in comparison to the investment. These savings traditionally involve recruiter productivity opportunities, the use of lower-cost advertising techniques, or the elimination of outside services like search agencies.

ROIs calculated on this basis only have value if the quality of the candidates seen and hired are the same. If quality declines, the associated cost savings are meaningless.

To get some perspective here, let’s look from a slightly different angle at the financial decisions of hiring — the amount of money your company will be spending on direct compensation for new hires in 2010. For example, if your company will be hiring 1,000 additional people next year at an average compensation of $60,000, you’ll be spending $60 million in additional annual compensation.

While this is a huge amount, most companies don’t look at the financial implications of each of these individual 1,000 hiring decisions from a quality standpoint, relying instead on the transaction costs involved in bringing these people on board. By incorporating quality of hire into the ROI analysis, the strategic consequences of this huge expenditure is more appropriately considered.

Measuring quality of hire starts with having some basic tools: first, a talent scorecard to measure incoming candidate quality and, second, a means to convert this into financial impact. With these tools, calculating quality of hire ROI is relatively straightforward. This is demonstrated graphically in the accompanying figure.

The graph represents the current mix of recent hires, assuming some type of normal distribution across all talent levels from A to F. As the economy recovers, there will be a natural tendency to push this mix to the right, reducing the quality. This can be offset by new programs which will improve the mix, pushing the curve to the left. In this case, the average is somewhere between a B and C level, typical of most companies.

An impact multiplier needs to be assigned for each quality group in order to assess the financial contribution each level makes. In this case, it has been assumed that an A-level person makes a positive business contribution that’s equivalent to four times the person’s total compensation. The impact multiplier for a B-level is two times compensation; a C-level is considered break-even; hiring a D-level person results in a loss equivalent to their compensation; and the F-level cost is five times the compensation.

Developing the impact multipliers is the big assumption in this quality-of-hire ROI calculation, but for staff-level positions, the ones shown in the table are quite reasonable. (Click here for more background on this, including some charts, graphs, and a webinar podcast.) Theses multipliers increase dramatically for senior management, and are a bit lower for hourly and entry-level positions, but probably not much.

While you could use short-term performance reviews to determine quality levels post-hire, some type of talent scorecard needs to be used to evaluate candidates on a pre-hire basis. Logically, from a validation standpoint, it’s best to use the same evaluation process pre- and post-hire. Not having linkage pre- and post-hire has been one of the big problems in using quality of hire for developing ROIs for recruiting initiative.

More important, since most hiring mistakes are associated with hiring a good person for the wrong job, these “grades” must be based on performance, not generic quality descriptions. For example, a brilliant person who needs to be pushed to do the work is at best a C-level. Problems associated with these classic mismatches prevent companies from improving quality of hire, regardless of any great sourcing and employer branding programs. This is why I suggest measuring pre- and post-hire quality based on real job needs using a tool like the performance profile instead of a job description in combination with a multi-factor talent scorecard to measure end-to-end quality of hire.

Using these tools, calculating hire-quality ROI involves a number of steps:

First, calculate the average talent mix for your current hiring processes. To do this, take a sample of your recent hires, assigning each person a realistic quality grade. Then using some weighted average approach, determine your average talent mix. It’s probably somewhat below a B level, with a corresponding multiplier of 1.5X to 1.75X. (Email me if you’d like to participate in a quick SWAG assessment.)

Next, determine the financial contribution of this current talent mix. Multiply your current talent mix multiplier by the total compensation for the group to determine the financial contribution they collectively make to your company. In the example of 1,000 hires at $60 million at a B- mix and a 1.5X multiplier, this would be $90 million, for a net contribution of $30 million.

Now the fun begins. Now you need to determine how a new recruiting initiative improves your current talent mix. Any proposed recruiting initiative should be assessed on how well it improves the overall talent mix, not just how much it reduces costs. Graphically, this means moving the normal curve shown earlier to the left, meaning more As and Bs and less Cs, Ds, and Fs. To obtain a 10% quality of hire improvement, you’d need to hire 10% fewer below-average candidates, replacing them all with above-average candidates. Due to the weighting, a 10% quality shift like this increases the multiplier more than 10%. In the example above, this shift increases the multiplier from 1.5X to 1.75X. (Email me if you’d like to see the model and the math.)

Finally, calculate the quality-of-hire ROI by comparing the improvement in contribution to the cost of the initiative. As shown above, a 10% improvement in talent mix increases the multiplier from 1.5X total compensation to 1.75X. In the example, this means the net contribution of the 1,000 new hires increases from $90 million to $105 million, for a net increase of $15 million. This is an enormous impact, and indicates why quality of hire should be a far more important driver than cost per hire when evaluating new recruiting initiatives. Consider the ROI implications. If you spend $500,000 to obtain this quality improvement, you’d have a first-year quality-of-hire ROI of 2,900% ($15mm- $.5mm/$.5mm)!

Now for the good/bad news. Once the economy recovers, improving quality of hire will be more difficult, as the demand for talent exceeds the supply. As shown in the figure, these economic forces will have a tendency to worsen the talent mix as your best people are aggressively sought by the more aggressive recruiters, or they leave on their own for greener pastures.

Under improving economic conditions, preserving your current talent mix will become more challenging. In this case, preventing the impact of a reduction in talent mix should be used to calculate your quality-of-hire ROI.

Recruiting departments should be measured on how well they improve quality of hire, rather than a single-minded focus on cost/hire. The discussion should start by figuring out who’s responsible for it: recruiting, hiring managers, or both. Regardless, the impact of a minor improvement in quality of hire has such an enormous business impact that it’s irresponsible not to directly consider it in every hiring decision.

I say this because I have recently talked to a dozen or more people who I know personally and have worked with over the years. I can vouch for their skill, professional abilities, and reputation. While they may not be a good fit for the particular job they were seeking, they were worthy of respect and of receiving a consistent and predictable response.

One particular friend of mine recently decided to switch jobs. He was not laid off and was not unhappy. He just felt the longer-term opportunity was better in a different place. Being a educated candidate, and with some advice from me and others, he laid out a plan. He started by asking friends about opportunities and also by choosing a few specific firms he might like to work at and finding LinkedIn friends who worked in those firms. The net result was referrals to a possible four or five potential jobs.

He then decided to check out the corporate websites of these few companies to see if the positions were listed. His first shock was at the poor quality of these sites. Most of them lacked good general information and offered nothing specific about the kind of work he was interested in. Only one of the sites listed the position he knew was open, offered little information about the position except the usual boilerplate, and then asked him to go through a tedious process of uploading a resume. None of them really learned anything about him or his referral. No questions, no interactivity, nothing. He didn’t know what they really wanted to know about him, and they certainly weren’t providing him much that was useful.

At this point he was already a frustrated potential candidate. While in no hurry to change jobs, he was the borderline passive candidate: sort of looking, interested, easy to recruit to the right situation, and totally unknown. He is also very competent and talented.

He had also given his resume to his friends to submit to the recruiting function and had even helped a friend upload his data into an employee referral site. Yet, after several weeks he had heard nothing at all of meaning. No email, no phone call. He tried to call several times only to receive a voice mail saying they would call back, but no one ever did. He kept checking with his friends and all the positions are still open more than six weeks later.

What is going on?

Here are my thoughts:

Possibility #1: The position is not really open and the recruiting department is just collecting resumes to find out who is out there.

This has a high likelihood of being the case, but is borderline unethical and certainly does nothing to build the brand or create goodwill among people that you might someday really want to hire.

There are much better ways of finding these people.

Possibility #2: My friend does not have the qualifications that the hiring manager is looking for.

Even if this is the case, he should get the courtesy of an email or phone call letting him know that. On the other hand, if the job description is even close to accurate, he meets and exceeds most of the criteria. He is also referred by a current employee and that should, according to all that we write about on ERE, make him a higher quality candidate than an un-referred one. This also makes not getting back to him worse, and it embarrasses the employee.

Possibility #3: The position has been filed and just not taken off the website.

Highly unlikely as he has checked with his internal friends who have told him it is still open and that the hiring manager is frustrated with the lack of good candidates.

Possibility #4: The recruiting department is inefficient and lacks good processes and discipline in dealing with candidate flow.

This is the most likely one in my mind and needs to be addressed quickly and firmly. Once this recession has ended (and for high-end jobs it was never really that bad), these poorly treated potential candidates will be hesitant to try you again.

There is really no excuse for not dealing with candidates in a systematic manner. No matter how many apply, your systems should be capable of dealing with the volume or you should remove the job posting until you can handle it. By letting more people apply than you can review and answer, you are creating an irreversible degradation in your reputation, brand, and future ability to hire the best people.

Needless to say as a foundation your department needs a set of protocols and procedures that every recruiter follows. These should lay out enforceable requirements for response time to candidates, how referral candidates are treated, what is communicated, and how shortfalls are explained to people who are declined.

Other procedures should govern how many resumes are received for a position before no more are accepted and how these are reviewed and presented to managers.

Websites need to be clear and should be interactive, interesting, and engaging. They should answer the questions candidates are likely to have with honesty. Your rules and response protocols should be publicly displayed.

Until we respond with the kind of service candidates are accustomed to from retailers and other service providers, we should be prepared for a backlash of anger and disappointment that has only grown louder over the past year.

Let’s talk about the very interesting phenomena of communicating with potential candidates in ways that have not been there before. For years, we have been discussing whether to call first or email first. Some gurus suggest that you first send a detailed email, then leave a phone message, and then send a short email mentioning that you had called. Fine, but here are your other options today:

• Join a group on LinkedIn where the person is a member and send a message (which is free, by the way)
• Invite them to join a group on LinkedIn dedicated to their technical skills or their industry
• Look the person up on Twitter and follow him/her
• Re-tweet or reply to their tweets
• Share an article with them using the “share” button available on Ning and on many blogs
• Invite them to an interesting event posted on LinkedIn, or Ning, or elsewhere

(Note that when you invite somebody to an event or share content, you do not need to worry about the person not wanting to hear from you. All those systems have their built-in means of managing the person’s subscriptions.)

The above methods would let you reach more people, especially passive candidates. Your direct email may land in their junk folder. Your call may interrupt their day. (I can definitely say that as a former software engineer.) However, following them on Twitter or sharing news about their industry is a gentle, non-invasive way to get in touch with them. It also gives them a chance to take a look at your profile and figure out a bit about you before they respond. So, if you venture out on a particular network, make sure that your profile on whatever network that is, is professional, filled out, has your picture, and reflects your own or your company background.

Further on, built-in tools and tools built on top of social networks allow us to interact with lists of potential candidates with a touch of a button. It goes without saying that we need to figure things out about those people first, and avoid spam. But there’s nothing wrong in, say, following a list of people on Twitter whose profiles are promising, or sharing interesting content with a list of people who work in a particular industry. The “share” buttons available in many places, such as Ning networks, allow you to share an article with a list of email addresses. The (slightly buggy) tool twitterator.org allows us to bulk-follow a number of people on Twitter. You shouldn’t overdo this, of course; plus, Twitter has its (very reasonable) limitations and wouldn’t let you go too far in this direction. But these tools do increase our productivity.

Today most recruiters are on LinkedIn, many are on Facebook, and about 25% are on Twitter. This is based on some statistics that I have seen online, and is also true about my sourcing webinar attendees. There are endless online discussions on which network is the best, and whether some, such as Twitter, are “a waste of time.” Well, for one thing, Twitter and LinkedIn can hardly be compared. The functionality, the pace of communicating, the length and the nature of relationships are all very different, so your expectations also need to be different. And then, it makes most sense to me to use both LinkedIn and Twitter in conjunction, plus use other networks as well. If you have a targeted list of candidates, you can interact with them in different places simultaneously. You can look up information about them; they may be more present in one online place than the other. Perhaps they have a blog and would welcome your comments. You can invite the same person to a group on LinkedIn and follow them on Twitter, and so on.

There are ways to find the same people across networks. It’s, of course, easier if the person has a unique name and distinct keywords, such as technology skills, in the profile. However, if you get hold of an email address or a Twitter ID, this can sometimes get you pretty far in the sourcing process. In the recent SourceCon challenge I used the site pipl.com to look up people based on their username across networks. Pipl.com also allows you to look up people based on an email address.

An amazing, not explored by many, part of this communication with prospects is that the person may have very little info in their profile on one site vs. another, but based on what you have learned about them you might try to connect on either or both. Searching for candidates on one network and contacting them on another expands our sourcing capabilities.

Successful recruiting using social media requires new personal qualities. To conquer the social media world, we need to be fearless and open-minded. We also need either to be somewhat technical or to have coworkers who are. It’s not terribly hard to navigate different sites, but working with someone who is used to browsing and searching on the web helps. Then, there’s less structure out there now, so if you are creative, this is a useful quality; compare the well-defined ways of using a job board with the open-ended interactions on social networks. We need to get used to questioning our assumptions as we go. Facebook does not work like LinkedIn, so expect to see something different there. Assumptions do not work at all if you are used to searching in one or two places. Search syntax is different on Google, LinkedIn, Twitter, and Monster; though all these sites support Boolean logic, you can’t reuse the same searches around the social media.

Measuring our success is tricky. Since we still want to hire the best candidates and there are still traditional interviews and offer negotiation processes, perhaps checking how your social media activities affect your submission, interviewing, and hiring statistics makes a lot of sense. That said, we need to be spending a few hours here and there checking out what others do and what new tools show up.

It’s pretty exciting to be here, right?

Some look at the social networking trend and say that it’s all a bunch of hype. Some look at it and feel the need to, and will try to, be everywhere. Some will consciously decide to be nowhere — we have the phone and that works very well, thank you. Many are feeling overwhelmed by what’s happening, the pace of change, and the fears about transparency. In most cases you don’t need to be and shouldn’t be everywhere. And, you may decide to be nowhere, but make sure that’s a conscious decision and not just resistance to inevitable change.

As for fear of social networking, the pace of change and transparency, think of it this way — whether you engage your brand in the discussion or not, the conversation moves on — nothing stands still, except that eventually people may just not care about your brand at all, and, well, at that point you won’t need to recruit anyways. If you want to influence the conversation about your brand and if you want to engage people in your brand story, then social networking has a lot to offer. The complete article featured in the Journal of Corporate Recruiting Leadership October issue, will delve further into that, but here are my more brief thoughts for the time being.

Social Media and Social Networking: Strategy or Tactics

The underlying premise of this article is that social networking is not a passing fad and that it deserves significant positioning in your talent attraction and management strategy.

Let me begin my differentiating, for the purposes of this article, the difference between social media and social networking. The terms are often used interchangeably, but I see an important distinction, especially for recruiting. Social networking is the application of social media, which provides the tools to share content and information, engage in conversations, and build networks. The key difference is what you choose to do after sharing your information. Social networking is pursued with the underlying intention of dialogue, engagement, and interest. It also results in a more sustainable talent strategy that differentiates your brand and brings forward many other business benefits. If you are simply pushing jobs out to Twitter, Facebook, or LinkedIn, you are socializing job postings by using social media, but not necessarily engaging in social networking. If you’re engaging prospective talent in discussions and building active communities, you are pursuing a social networking strategy.

There’s also a significant difference between the two that influences how you design an effective strategy and how you define your desired outcome. Social media is in part strategic but mostly tactical and is really saying: “Hey, these are new channels through which we can reach people and we should broadcast our jobs.”

That may be fine, but it limits the value and doesn’t fully realize the potential or move you toward a sustainable solution. Also, and most importantly, when you use social media there is an expectation for networking! If you push a job out on Twitter and someone reaches out to you, they expect a response. When you don’t respond, the brand can be viewed unfavorably and over time this type of behavior will dilute the brand reputation and value.

This is similar to what job seekers expected with the introduction of corporate recruitment websites. They wanted a way to reach and connect with someone in a company they were interested in joining. Remember all the discussions about the “black hole of recruiting”? Well, in a social world, the expectations and consequences are higher. And, while today’s job market may be in favor of the employer, the cycle will turn again and the strategy that you develop and implement today will absolutely impact future talent attraction effectiveness — positively or negatively. If you want to develop a sustainable talent acquisition strategy and actively invest in the longevity of your brand, then it’s time to engage.

They Really Are Interested in You — Really!

The evolution of technology, social tools, and ease of access are driving rapid advancements in communication. People like to play, create, share, and comment about your company and brand. The fear you may be feeling about letting people “in” to your brand, so to speak, can be looked at one of two ways. You can either be fearful of what they may do to your brand, which “they” will do anyways, or, you can celebrate that people are interested in your brand, products, and services. Listen to what they have to say. You may learn something. Engage them in your business challenges; they may solve them for you. Yes, they want to hang out with you — if, that is, you have something interesting to say! A UK student who found his job through Twitter shared this with me:

Personally, the companies that I’ve been most interested in have been the ones that are blogging and therefore appear to be knowledgeable industry leaders … also, some companies have begun posting jobs on blogs, which I think is better than on a recruitment website or in a newspaper, because the candidates applying have read the blog and are interested in the company.

Now, that’s something to think about. Does silence imply your company has nothing interesting to say? That you’re not knowledgeable about your industry? Pursuing a social strategy isn’t just a way to attract and engage talent. It can also be a way to expand the innovative capacity of your organization — perhaps something we should consider as the talent function evolves.

Clearly the impact of “social” is still emerging and the potential is just beginning to be understood — although it’s already profound. We are still at the edge of what the social media wave will bring. The potential for sweeping change is enormous. We will certainly see the future impacted and unfolding before our eyes.

Look for the complete article in the October edition of the ERE Journal of Corporate Recruiting Leadership. Visit me online at TalentSynchronicity.com and follow me on Twitter @TalentSynch.

The world of employment advertising is no exception. Attractive logos, extensive benefits packages, flexible schedules: all these can be used to make an impact on job candidates and affect how many people read and reply to your postings. When considering how to initially attract readers to your employment ads, the key opportunity may lie in your job title and/or headline statement. These prominent statements give advertisers the chance to attract the attention and readership of job seekers, and motivate them to respond.

According to marketing legend David Ogilvy, five times as many people read a headline as do the entire ad. Therefore, without a strong headline statement, your ad may be skipped entirely. Another source (copyblog.com) says that while 8 out of 10 people will read a headline statement, only 2 in 10 read the entire ad. By designing a strong, compelling lead-in, you’ll increase the number of candidates who do go on to read your ad, and apply to your job, while your competitors’ ads get skipped over.

Creating Job Titles or Headline Statements

What makes a good title/headline?

You’ll most clearly know you have a good headline statement when candidates you interview tell you so. Your message will get candidates thinking, wanting to know more, and ultimately, responding to your ad. Headline statements are about positioning and most tout the strengths of the position, opportunity, situation, and/or company. When done well, the statement will differentiate one job or company from another.

How can you create a great headline statement?

A good headline depends on identifying what all the strengths of the opportunity are, choosing the strongest of those, and then communicating that in a well-crafted phrase. To start the process, ask and answer the following questions:

• What are the key positives prospective candidates must know about your company and/or job opening?

• What makes you (or the position) different and/or notable?

• What do your current employees like about working at your organization?

• What tone in a headline statement best fits your image/culture? (Cleverness, Humor, Formal, etc)

• What are your competitors saying in their ads?

• After compiling the above, what single key advantage do you have that should be front and center?

Key Areas

There are a number of key areas around which headline statements can be built. These include, but are not limited to:

• Awards won/recognition given
• Strength of the company – stability/longevity/culture
• Strength of the product
• Needs/wants of the candidate
• Dollars and cents
• Quality of location/atmosphere
• Culture/mission of the organization
• Quote from employee(s)
• Play on words

Here are two examples of headlines positioning the advertiser as an “Award-wining” employer:

Want to join a company that was awarded more Media and Methods portfolio awards than any other company last year?

Join a company recognized by Fortune magazine as one of the most admired food companies!

Stability and longevity of your organization can be very attractive to job seekers. If it works in your favor, consider using it:

Since the opening of its first franchise in 1940, International Dairy Queen, Inc has established itself as one of the world’s best-loved brands of food and dairy treats

Or, a more concise example:

Customer Service Rep – 110 year-old company and stronger than ever!

(Note: this ad received 73% more views and more than twice as many applies as competing ads simply titled Customer Service Representative.)

Just as Saturn pioneered the no-haggle pricing that customers enjoy, they position this as a benefit to their salespeople. This tackles several areas (strength of the position & culture, wants of the candidate – i.e. not having to haggle as a primary duty) with one headline:

Auto Sales – “No haggle” sales philosophy!

Another car dealer stands out by promoting the strength of the product:

Sales Career – fastest growing product in the U.S.!

Case in Point

One advertiser was receiving a low response to a posted ad and sought assistance. The job title? Inside Sales. We didn’t need to probe much further for the reason for their low response – the title generates no interest or differentiation.

After a few questions about the organization, the title was revised to highlight their company culture:

Inside Sales – Family-owned, great work/life balance!

The results? During the two-week period prior to the title change, the ad received 132 views. During the two-week period after the change, 290 people viewed it. That’s an increase of 220%! Clearly, job titles matter.

What Do Your Employees Say About You?

In business-to-business dealings we often use testimonials because often what your peers say carries more weight than what a Sales Representative says to you. The testimonial not only speaks to your product or service, but also to the belief the person giving the quote has in you. It’s no different with prospective employees — they want to know what their prospective peers say about the organization. Using employee quotes can have a powerful affect on candidates.

The culture at Eide Bailly has directly influenced my ability to succeed. I’m trusted in my work and have the freedom to make decisions. — Shannon (with the Firm 12 years)

Eide Bailly, a Top 25 CPA firm, uses quotes like this in its recruitment advertising. So, does it work?

I used to think (using the quote) was a little hokey… until I tried it in an ad. I received more comments regarding the employee quote we used. One person even wanted to meet the person who was quoted. The comments I received ranged from ‘the reason I applied was because of the quote from your employee’ to ‘that quote made me want to find out more about your company’. With that in mind, I would say that using quotes can really add an element of personalization and differentiation to your ad, as long as your company is depicted accurately by the quote. –Lauri Dahlberg, PHR, HR Manager

Using a quote from an employee can be a terrific way to pique interest and get more candidates in your pool. By using this or some of the other techniques pointed to above, you will increase your chances of attracting talent that otherwise might have overlooked your opportunity.

Tone

In addition to the key areas to build your title around, you will want to consider the tone of your headline as it relates to your image and/or culture. The tone can be:

• Serious

• Fun, playful

• Inquisitive (ask questions)

• Creative/outside the box

You might think a legal publishing firm would project a staid, stuffy image. To combat that, one advertiser has used the fun, play-on-words headline: Do Your Career Justice. Now they don’t sound so stuffy after all — right?

Which large bank do you think uses the headline: Success Comes in Stages (hint: stagecoach)? Another case of a play-on-words, which in this case, ties into a company symbol and shows a sense of humor that others in banking do not.

Getting Non-conventional

Some advertisers use a traditional approach and embellish it such as: Auto Sales – Capitalize on the hot new Saturn products! Others scrap the conventional angle all together. A district manager at one of the country’s largest financial and insurance services companies, says, “I try to consider the basic facts about the opportunity, and then highlight a selected part which the reader might find especially intriguing.”

For example, while his competitors use traditional (i.e. boring) titles, the district manager mentioned above uses the headline: Take Charge of Your Career Selling Products Everyone Needs! While his competitors’ ads lead to pre-conditioned or limited ideas about insurance sales, re-framing it with a headline statement presents a positive and informative picture. This brings results.

The district manager says, “I often ask responders what caught their attention in my recruitment ad. More often than not they reply, ‘The headline, that got me thinking…’ When I hear that, I know I have a good headline.”

Another recruiter in the Financial Services field presents his job as a “Small Business Opportunity.” His title reframes the posting and turns it from a “job” into a different kind of opportunity, one that attracts entrepreneurial people.

Why Re-invent the Wheel?

In addition to brainstorming new ideas, don’t overlook past ideas that can be re-worked. It can make the job of finding new headlines easier and be as effective (or more) than dreaming up new ones. Also, you can possibly piggyback on the branding message of the company.

For example, you may have heard the Saturn tag “A Different Kind of Car Company.” Recently, one Saturn group conducted a search for a sales team — two individuals to share the role of one sales position. It’s a different approach to a traditional role. Their headline?

A Different Kind of Car Company — Again

According to Lou Adler, you have 10 seconds to capture readers’ attention. A strong headline statement that helps you stand out and strongly positions the strengths of your opportunity will help you capture that readership and deliver candidates.

The most important aspect is to understand who you are targeting. I’m not talking about recognizing the technical skills or requirements you want to see in the candidate. Temporarily, throw the job description out the window. Then conduct an early reference check. This is a performance check you can cash.

If the results confirm a prized candidate, think of him or her as a pearl. The Encarta Dictionary defines a pearl as “somebody or something highly esteemed or valued.” The gems themselves take years to develop and the art of pearl cultivation is a long and delicate process. As it relates to candidates, we all recognize the best as valuable. But we often overlook what it took for them to become who they are and therefore do not treat them accordingly. In many cases, we are talking about years of dedication and hard work to perfect their craft. Those who rise to the top of their profession are a select bunch. They are select but not scarce and are very much open to being recruited. But unlike any other, it takes a dedicated, specific plan to successfully recruit them.

Another thing to keep in mind in the initial approach is that many of the finest desire a certain amount of recognition that comes with their achievements. They take great pride in their accomplishments and want you, the recruiting or hiring entity, to pay attention to it. Still, there is a fine line between preferential treatment and the acknowledgement of greatness. The latter commands the stage without demanding that it be so. Those are the most sought after “pearls.”

However, there may be friction if the top candidates are required to follow a set of routine guidelines without explanation. A greater amount of latitude should be given when scheduling interviews, for example, as their time is of the essence. It will be difficult to control the process if a certain amount of patience and flexibility are not demonstrated.

Selling must be at the foundation of any strategy designed to capture the best. Why do so many fail to recruit top talent with any consistency? The lack of sales skills and persuasive techniques are the bane of otherwise successful organizations. Essentially, they are unable to convincingly sell the talent on the opportunity or the company. At best, they produce a half-hearted effort expecting a job description or the company bio to suffice. Or they rely on a formulaic hiring process to do the trick. This does not work. Each candidate should be individually courted. Studies suggest that there are staggering numbers of top performers who are not recruited because they are not “sold” on the recruiter or the position.

There are three important dimensions to selling as it pertains to recruiting top performers:

1. Selling one’s own credentials as a recruiter or hiring authority (Why should I listen to you?)
2. Selling the position or opportunity (Why should I be interested in the opportunity?)
3. Selling your company or the organization to which you desire to connect the candidate (Why would I want to work there?)

Think of the candidate as asking the questions in parentheses. Sometimes they are expressed aloud; other times they are not. However, the questions are typically key in their own decision-making process. You should be able to make a compelling argument as you engage the candidates. So, having a thorough understanding about what you offer from your side of the fence is a necessity; the ability to present that information in a saleable, attractive package is even more important.

For the most part, great candidates have options so they need to be sold on you and yours. I would suggest that if you or anyone on the interviewing or hiring team is uncomfortable selling, that you address it immediately. There are a good number of professionals who can be called in to assist with training and providing classes, courses, etc.

Every successful recruit should make the next one just that little bit easier to onboard. Be reminded that recruiting does not occur within a vacuum. The goal should always be to build a vital network. I’ve seen companies get so excited by a great hire that they forget that they’ll have to do it all again before too long. They shelve their recruiting hat only putting it back on when an opening needs to be filled. This is a big mistake. As can be intoned from the foregoing, recruiting the best is a major time commitment. There are few shortcuts, but the process can be made much more expedient if it is viewed as collaborative and proactive rather than a singularly reactive activity.

Call a brainstorming meeting with all the new top hires. Ask them to provide at least two names and some background on people that they know or have worked with who they consider to be outstanding contributors.

Soon you will have created a database of top prospects and be able to tap into them as needed. This will allow a quick jump into the process and save a considerable amount of time.

There can be no substitute for professional dedication to this endeavor. It takes total immersion with repetition to master the top talent recruitment process. Keep abreast of new material on the subject and customize it to your own needs. It is a continual learning journey. The combination of the appropriate education and practical application will produce some measure of success. As Julius Caesar once said, “Experience is the teacher of all things.”

However, if you view recruiting as a marketing and sales job (as I and many strategic recruiting leaders do), knowing what channels brought the prospect to the organization and what messages led to conversion (talented individual > applicant > candidate > hire) are by far the most critical bits of data the function can collect. Without this information, it’s extremely difficult to scientifically budget for sourcing or build strategic sourcing systems capable of impacting organizational performance.

Luckily, however, there is a simple approach that ensures much more accurate and helpful information that doesn’t rely on transaction-minded recruiters documenting the source of hire.

If you rely on weak sources, chances are you’ll get weak results.

Why Source of Hire Data is Almost Always Wrong

There are numerous reasons why corporate efforts to capture accurate source of hire data are almost always doomed to failure. Some of those reasons include:

• Recruiters don’t care — not all recruiters are involved in selecting the sourcing tools they will have access to or even using them in general, so coding applicants is an activity that realizes little apparent direct benefit. Even recruiters who do source or play a role in their organizations’ sourcing strategy tend to be overconfident that they already know which sources work and don’t need data to inform them. Other recruiters are just old-school and will use the same sources over and over no matter what. Unless recruiters are made aware of how identifying source of hire accurately is critical to their success, no one is going to spend a lot of time on capturing it accurately.
• Conflict of interest — while some recruiters may care about scientifically validating which sources produce which results, the truth is that capturing data that makes the recruiting function more efficient is seen by some as identifying ways to make line recruiters less necessary.
• Not asking in a systematic way — most corporate recruiting processes are relatively flexible and give the recruiter a lot of leeway in determining source of hire. It’s rare to find a process that forces recruiters to specifically ask candidates which source most influenced their decision to apply. In other cases, the way the question is posed to candidates is so inconsistent that it dooms the reliability of the answer.
• Not segmenting clouds the data — many organizations that do collect source of hire data do so in such a way that the value of the data becomes so diluted it is virtually useless. For instance, can you segment your source of hire data by manager perception of candidate quality (used to validate their assumptions) or by post-hire performance rating? Knowing how top and bottom performers approach the organization is much more valuable than knowing the most common source, or how the average employee is found. Further, knowing how sourcing effectiveness varies by job family or region is essential.
• Technology forces bad choices — many corporations use applicant tracking systems to capture the source of hire data at the time of application. Although this is a good concept in theory, studies show that asking prior to hire doesn’t always yield the accurate answer, but rather the answer the applicant thinks might result in the best result. When recruiters enter applicants who have come via internal channels or who have been direct sourced, they tend to choose the first source in the drop-down list available. Few systems send validating questions periodically to confirm applicant data downstream, so errors in the front of the process produce bad data at the end of the process.
• Forcing a single source — it is common for active candidates to use any and all sources available to apply to an organization, while passive candidates may first be exposed to an opportunity via one channel, but ultimately apply via another. Few data-gathering approaches identify how the opportunity was first encountered, what channels influenced a decision, and what channel ultimately produced the application.

Perception Isn’t Always Reality

Periodically testing assumptions or perceptions is key to being a good leader. In 2007, we surveyed more than 15,000 hiring transactions, comparing the pre-hire documented source of hire to results from a post-hire candidate experience survey. The results were shocking, even for those of us who tend to be cynical. Only 26% of the time did the post-hire result match the pre-hire entry.

Further, the variances were much higher with certain sources than others. While recruiters and recent hires generally agreed on the percentage that resulted from employee referral and events, they radically disagreed on the percentage that resulted from the corporate career site, job boards, and even third-party recruiting partners. In the 2007 study, only 12% of new hires attributed the corporate career site as their source of introduction, while the pre-hire data attributed the career site with 57% of hires.

Gathering Valid Sourcing Data the Quick, Cheap, and Easy Way

Sales and marketing professionals have for years used a simple solution to accurately identify the “real reason” why people make the decisions they do. They ask after the decision has been made.

After a product has been purchased or a job offer accepted, the prospect has no reason to lie. The answer will not influence the process. Telling a salesperson that you only came to their dealership because you are interested in a car that only they have in inventory is a fact that could impact the dealer’s willingness to negotiate.

Shifting data collection to follow completion of a transaction removes any value of manipulation.

Additional Reasons Why Asking Post-Hire Is a Superior Approach

• As new employees, new hires may respond more thoroughly to questions out of a newfound sense of obligation to help out the new employer.
• Post-hire collection instruments can be built to collect smaller fragments of data over time as part of the onboarding process, allowing for both better collection activities and validation efforts.
• You’re only capturing data from the highest-quality applicants; in other words, those you actually hired.
• The risk-adverse worried about privacy issues might be more than willing to provide this type of information post-hire once they are made aware that the information will be used exclusively to help recruit high-quality teammates for them to work with in the future.

Action Steps to Implement a Post-Hire Source Identification Process

Consider the following tips when designing and implementing a post-hire source capture process:

• Ask during onboarding — while recruiting doesn’t always own onboarding, recruiting should be permitted to use the onboarding process to collect information from new hires. Ideally, a recruiter can ask the questions and probe for more information in person, but surveys work almost as well. Work with the onboarding team to ensure that the source of hire questions are always completed. If recruiting does not own the onboarding process, using secret shoppers to occasionally test that recruiting-prescribed activities are being completed as desired is advised.
• Email a questionnaire — if an onboarding option is not available, send a questionnaire or survey invitation via email to the individual before they start (because they are new, they are likely to spend some time on it).
• Ask when the candidate accepts — because recruiters administer the selection and offer presentation phases of the recruiting lifecycle, a possible alternative is to include an acceptance criteria survey in the actual offer acceptance process. After thanking them for their acceptance, ask for their help in improving the process of identifying future top-quality candidates like them.
• Educate the new hire — the first thing you want to do is educate the new hire about the importance of the process and how capturing the right sources will result in them eventually working along-side some other great hires. Educate them about the different factors that you’re most interested in; company awareness factors (employer branding factors) and how they learned more about the company/opportunity; what specific sources made them aware there was a current job opening; and what factors triggered their decision to actually apply.
• Ask the right questions — after “when you ask” and “who you ask,” the next most critical factor in getting useful data is what you ask. The following are the minimal questions I recommend. You shouldn’t limit respondents to one answer, but rather allow them to choose all that contributed to their decision to apply. Consider providing them with a detailed list of answers to choose from, based on the sources used and past new-hire answers along with a few blanks. When multiple factors are identified, ask them to rank them in descending order of the importance.

Recommended Questions:

1. Which source made you aware of our company as a desirable place to work?
2. What factors about our company or opportunity best got your attention?
3. Which source or factor made you aware that we had a current job opening in your field?
4. What factor or source convinced you to take action and apply for a job?
5. Were there any sources that provided information that discouraged you from considering our firm or applying for a job? If yes, what were those negative factors?
6. What were the key factors that convinced you to accept this job and what aspects or factors of the hiring process had no value or discouraged you?
7. Who else is exceptional at your previous firm that we should consider hiring?

Note: other powerful recruiting questions that you should be asking can be found here.

• Improving the accuracy of your current system — if you choose not to adopt a post-hire approach or if you decide to run tandem data capturing processes pre and post hire, it is still important to improve your current data capture process. Run a validation study that collects post-hire data for a limited time and compare the data received from the traditional approach to that collected. If both processes produce similar results, there’s no reason to change your approach. If you continue letting recruiters enter the data, spot check or use a random validation study to periodically check the accuracy rate of their entries. One recruiter throwing bad data into the system can throw off all of the results. Merely knowing that there is a chance that entries will be checked periodically will drive most recruiters to improve their accuracy. Adding a reward for accuracy will further improve results.

Leveraging Source of Hire Data

Collecting data and doing nothing with it should be a cardinal sin in a corporate setting.

Recruiting leaders need to develop a formal process at least twice a year to review sourcing data and adjust sourcing processes accordingly. Adjustments should include dropping bad sources, modifying recruiter training, shifting budget allocations, and determining the impact of sourcing changes on new-hire retention rates and job performance.

Final Thoughts

There are some in the recruiting profession who look down on sourcers and the sourcing function as something that’s necessary but not mission-critical. In contrast, there is nothing more important than great employer branding and placing the right message in the right communication channel to drive the desired action by the right people.

If you recruit basketball players for an NBA team from elementary schools, you’ll never win a single game, but if in contrast, you recruit exclusively at NBA All-Star games, no matter how bad the rest of your recruiting processes, you will have some great hires. I go by the axiom that “great sourcing is everything.” If you believe so too, you will act immediately to eliminate actions that lead to unreliable sourcing data. Using a post-hire source capturing approach is cheap, quick, and much more accurate than pre-hire source identification. It’s a slam-dunk.

As always, if you have tried this approach and want to make others aware of your success, or have questions/suggestions you would like others to focus on with regards to improving the process, please post them to the comments section following this article.

In his quest to maintain rule over his tiny kingdom, Rter needs mighty knights to fight dragons, battle anarchists, fight off industrial demons, and fully document all expenses in a timely matter.

However, there is an economic slowdown in Spamalittle, and most would-be knights were unwilling to leave their stable employment. This would make finding enough brave and bold applicants willing to fight for any cause, however noble, quite difficult. A recent survey conducted by the town crier showed clearly that while employee dissatisfaction was on the rise, few of the best, and even the worst for that matter, were willing to risk leaving for other seemingly more attractive endeavors.

Having one’s daily bread seemed to be a powerful incentive indeed.

However, the survey also seemed to indicate that tidings of a near recovery would encourage even the most satisfied to ponder alternate opportunities. In times of want, stale bread is enough; however, in more bountiful times, one’s daily bread can seem less pleasant, especially when thy neighbor is now having his with organic raisins.

Despite these down-trodden times, Rter wouldn’t even consider those who were not fully employed, nor did he even consider the potential that some of his own knights might leave for slightly greener pastures. He strongly felt that the honor of working for Spamalittle would still attract the best and brightest knights around.

To start his knight-for-hire acquisition plan, Rter met with Murlyne, his trusted magician and head of Spamalittle’s talent acquisition team. She immediately wanted to know what Rter considered his perfect knight. He then went into his standard diatribe, pulling out a long-forgotten scroll listing the qualifications for a Senior Knight Level II – Job Code IV-12X9. Murlyne protested, saying times have changed and the old knight description no longer applied. However, Rter would hear none of that, contending that it was good enough, and insisted that the qualifications listed were still required, despite changing demographics and the lack of affordable training in the kingdom.

So with a shrug, Murlyne listened as Rter read off the now familiar list of requirements. These included the required competencies of bold and brave, excellent communication skills, conversant in all known dialects, strong initiative especially in matters of dragons and confronting similar enemies, and of course 5-10 years’ experience as a noble knight, and an official certification from one of the top knight academies in the land.

Murlyn was not flustered by Rter’s apparent lack of understanding of the talent market of the day, and decided that some devious magic was required. In this case she drew upon her trademarked “spell of the clever query.” (Caution: this spell should not be attempted without professional assistance.)

This started with these three core questions:

1. Why would a fully employed knight who possessed all of the qualifications want to take this job?
2. During the trial by ordeal, what are you going to tell any aspiring knights what they’ll be doing if they get accepted to your noble cause?
3. What would a worthy knight do over the course of the next year that would earn such a knight the “best knight of the year” award?

To make a fairly long fairy tale short, here is how King Rter reluctantly responded:

To be considered a worthy, and award-winning knight, the person must accomplish the following:

1. Exceed the basic quota and seek out and banish at least 4-6 dragons and other evil-doers from the kingdom over the course of the first six months.
2. Establish a training school for all aspiring knights that is known and well-respected throughout the land.
3. Use PowerPoint and Excel to present complex industrial demon-fighting plans and strategies at the monthly offsite.
4. Lead a team of knights and procurement squires to reduce the cost of all battlefield equipment.

Rather than break the spell, Murlyne queried Rter further, asking if he’d at least consider someone who could do this work, even if the person didn’t have all of the requirements listed on the scroll of requirements. Rter responded, “Of course, as long as the person’s not a frog!”

Knowing this meeting was probably her last on this subject, she pursued the “why would someone want this job?” line of questioning. She artfully persisted along this same line a bit further, saying that the compensation package wasn’t even competitive, and worse, the kingdom’s healthcare plan did not include a battle-injury coverage provision.

Rter appeared flummoxed, and being on the defensive (this is what good spells can accomplish) sputtered out some unprintable and somewhat cynical expletives. However, Murlyne finally got Rter to agree that this was a real learning opportunity and provided the worthy person a chance to make a real impact on the kingdom’s future prosperity. Based on this, Rter agreed to see someone with lots of potential even if the person’s background was not as perfect as initially requested.

As part of the kingdom’s branding campaign, they argued over whether “Knights of the Breakfast Table” or “Knights of the Purple Squirrel” better represented their overall mission, selecting the latter, for some reason which is now long-forgotten.

A clever ad posted on every tree drew hundreds of potential knights, but few of the fully employed or highly qualified. (It’s shown below for those who have any referrals.)

Hear Ye! Hear Ye! Would-Be Knights of the Purple Squirrel

Be part of a glorious quest! King Rter is seeking a few proud and brave souls to join his team of knightly all-stars to join in the merriment. The few selected will receive the accolades of their peers, have a chance to meet with exciting leaders around the kingdom, and participate in intriguing sports. If you have a track record of performance in the fields of chivalry, dragon slaying, or knight development, send PM (pigeon message) or escroll to Murlyne@spammalittle.com. Be sure to include a short write-up of your bravest endeavor in lieu of a resume.

While many applied, one lowly frog seemed to be the best of the lot. He had slayed dragons and witches and such, in former lives, made complex presentations to advisory boards when he was a mere tadpole during his internship with a much bigger kingdom, had a track record of turning apprentice knights into top performers, and led an award-winning major cost-reduction program for a government contractor.

Alas, he was a frog, and one without the requisite minimum of five years of absolutely identical experience. Even Murlyne was puzzled by this dilemma and felt compelled to use her magic elixir of last resort. Drinking this elixir would cause Rter to be totally objective, but it only lasted 30 minutes, barely enough time for Rter to temporarily forget that the aspirant was just a frog.

After taking the elixir, Murlyne suggested that King Rter spend 10-15 minutes on getting into the details of each of the frog’s major accomplishments. Then, when the elixir’s magic effects wore off, look at the aspirant to see whether anything is different.

King Rter reluctantly complied, but as hard as he tried he could not fight off the idea that the potential knight was nothing more than a frog. However, as he began asking questions about the frog’s accomplishments, something miraculous happened. Before his very eyes he discovered that what initially was a frog disappeared, transformed into a brave and bold knight of the purple squirrel variety.

The frog was ultimately hired and given the chance to prove himself, and while still a frog, did receive the “best knight of the year” flask the very next year. Murlyne received the praise of King Rter, but still had to rely on clever spells to control King Rter and his other Knights of the Purple Squirrel. They somehow forgot most of them were also once just frogs.

Peace and prosperity soon returned to the kingdom and these knights soon became restless looking for other dragons to slay. But that is the way of top performers whatever they may be: frogs, software developers, even accountants.

And that, my friends, is how you turn frogs into purple squirrels. (Note: I have this from trusted sources that this is no fairy tale.)

You follow all the rules, keep great records, and even passed an informal EEOC inquiry a couple years ago.

But lurking in your ATS is proof you’re breaking the laws of Germany, or maybe France, or possibly Canada. Maybe all of them. You never wanted those resumes (CVs, if you prefer), wouldn’t sponsor the candidates, and had no interest in hiring anyone from outside the region, let alone the United States. But now that you have applicants from countries with tough privacy laws, you are bound to follow them.

Dr. Donald Harris

“Some companies assume that because they do not have a physical operating presence in Europe or Canada that such privacy laws do not apply to them,” says HR privacy expert Dr. Donald Harris. “This is an erroneous and risky assumption.”

President and founder of HR Privacy Solutions, Harris advises companies on complying with U.S. and international laws regarding the collection and use of employee information.

Even a company with no physical presence in a foreign country may be bound by its laws, he says, should it recruit there. As you can see from the hospital example, recruiting doesn’t have to be active in order for the rules to apply. Receiving a single resume from a foreign national is enough to trigger the application of the privacy rules of the job seeker’s country.

“We are living in a global world, so things are changing, ” Harris says, explaining that the privacy rules of the European Union and its member countries are designed to protect their citizens’ personal information. “The Europeans don’t want to see their laws ignored.”

What keeps our HR hospital executive out of the hot water is that no country is actively pursuing such minor violations as storing CVs beyond the legal limit, or not providing the individual the right to delete their resumes at will. “Enforcement is very difficult for them,” Harris conceeded. The U.S. has no treaties or reciprocal agreements with other countries on these issues, so the impact of foreign rules is muted.

But, warns Harris, “While regulators may have considerable difficulty in enforcing the laws with a foreign company, the laws do apply and international cooperation amongst privacy regulators is increasing. After all, what self-respecting government would allow the Internet to provide a free pass for circumventing its laws relating to privacy, employment, or a host of other areas?”

While the hospital in our example may never open a clinic in a foreign country, or otherwise do business there, a manufacturer might. So might other companies.

“One really has to look at where a company is going” before it decides to ignore foreign rules, Harris observes. If in the future it does decide to go global, its past transgressions could exact a cost.

“And even apart from the legal issues,” says Harris, is showing ignorance or disregard of local laws and expectations about personal information a smart way to go about recruiting someone?”

So what could our fictional hospital do to avoid breaking foreign privacy rules? Here are some simple steps:

• Use pre-application questions that includes a geographic qualifier;
• Discard applications from foreign countries upon receipt;
• Make sure your site has a privacy statement that says what you will be doing with the collected information. Harris recommends that countries that are doing business globally take a look at Boeing’s privacy statement for guidance;
• Review what the European Union says about HR data collection.

In the October issue of the Journal of Corporate Recruiting Leadership we discuss this and other international privacy concerns with Harris and offer his insights on the trends in HR privacy. The Journal is available by subscription only.

I was lucky enough to speak at the last event in June at the Googleplex where I shared a venue with thought-leaders such as Joshua Kahn, Shannon Seery Gude, and Chis Hoyt. We made the case for using social networking tools and platforms, and we discussed the growing importance of these tools in our roles as recruiters and HR professionals. Our sessions covered topics such as mobile recruiting applications, employee brand management and monitoring, Twitter, Facebook, LinkedIn, and enhanced career websites.

As the chairperson for the next #socialrecruiting summit, it is my goal to bring a community of recruiting professionals together to discuss the real-world applicability of social recruiting.

Our speakers and our audience will be encouraged to deconstruct the hype, understand how social media tools play a role in the recruiting lifestyle, and think about the possibilities as new and emerging technology comes to the forefront.

Most importantly, we will talk about what’s working and cast aside those tools and processes that fail us. We will name names, learn from the best, and leave broken and outmoded technology in the dust.

The #socialrecruiting summit on November 16th will be about exploring and expanding the idea of social recruiting. We will shoot for the stars and break new ground in thinking about technology, candidate engagement, and the future of our industry.

I hope to see you there.