Beyond the Dollar — the Real ROI of Internal Headhunting

May 1, 2012

The recruitment marketplace has experienced a number of seismic shifts over the course of the last 15 years or so. Fifteen years ago, email was barely being used; Twitter, Facebook, LinkedIn, and even Google didn’t exist (Mark Zuckerberg was 12 years old!), and advertising for roles was done in print, not online; CVs were still largely being faxed or posted, and the only way to get good candidates in the market was to advertise, use an agency, or through internal referrals.

Now with the Internet, social media, and applicant tracking systems, organizations are no longer entirely reliant on recruitment firms to provide candidates and market intelligence. Of course there has been a shift toward corporate internal recruiters and RPO models in the past 10 years, but internal headhunters (which I differentiate from internal “recruiters”),  and real market-mapping and cold-call headhunting is still very rare. Why? Well, mapping out competitors and building market intelligence takes time and time are of course expensive. Whereas an internal recruiter may work on upward of 100 vacancies per year (the numbers hugely fluctuate from company to company influenced by seniority of role, etc.), an internal headhunter doing the full lifecycle process may work on as few as 15 to 20 searches per year.

There’s also the issue of the skillset required to do both roles. It’s very different asking a recruiter to sift through 100 resumes received in an inbox from a job posting than it is to ask a headhunter to start with a blank sheet of paper and map out the firm’s top six competitors and cold-headhunt call everyone at those firms who may have a relevant skillset. In my time spent heading up an executive search function at J.P Morgan, I never once posted a job advertisement. My role was purely to headhunt top talent in the market.

An internal headhunter is of course a role that should be used only for particular vacancies. It may be the most senior roles, or for niche roles, where typical channels to market aren’t satisfying the requirement.

So how do you convince the budget holders to invest in an internal headhunter who costs more than a typical internal recruiter, but who works on far fewer roles? The easy answer is that it’s cheaper than an external headhunter, but that’s not where the true value lies. It all comes down to how important it is for a company to find the best candidates in the market, not just those on the market, and there is a big difference.

The real true ROI of internal headhunters though is your connection to the market … both from an information gathering point of view, but also from a rapport building long-term strategic hiring point of view. This is someone in your organization who has time to meet with people for a coffee and spread the good news about what you’re doing. When these meetings happen at the right level, good news travels fast. You’ve also got more chance of receiving referrals to good candidates from good people you’ve built up a rapport with over time.  High-volume internal recruiters simply don’t have the time to add this kind of value to your business.

In recent years too much faith has been put into the power of using social media to passively engage “new” candidate audiences like it’s the new solution to our recruiting challenges. The engagement is still too passive. Audience implies participation and while social media makes it easier for us to connect with people, recruiters aren’t really fully exploiting these new channels to the best of their ability (usually through no fault of their own — they aren’t afforded the time).

Sure, if someone is looking for work, social media channels have opened up vast new lines of direct communication to job hunters. However, those who are not looking, but who may be open to a discussion for something relevant, are blind to the passive carrots being dangled in front of them on their mobile devices.

It’s wrong to assume that pumping out ads and setting up social groups means the best candidates in the market are all of a sudden sitting in the “available for work” audience. That’s not to say these aren’t highly effective candidate attraction methods, but energy needs to be put back into the connections we made before email: calling people.

Where there isn’t an audience (having a LinkedIn or Twitter account doesn’t constitute audience) you have to make the connection, on the phone. We have to reach out to these people who aren’t actively looking or bothering to respond LinkedIn emails and talk to them. Establish over the phone the circumstances which would lead them to consider a career move and go from there. The mechanics of that call and how it works with 99.9% effectiveness will be discussed in the breakout session at the ERE conference on September 7.

One thing is clear. If an organization relies only on job board advertising including social media campaigns for all levels of hiring, they will only access the 5% to 20% of the working population who are actively considering a career move. Mapping out competitors and directly headhunting brings you as close as you can be to ensuring you have identified the best candidates in the market, and not just those on the market.

In the ERE conference session on September 7, “Beyond the dollar — the real ROI of internal headhunting” I will outline a model that graphically illustrates to the internal budget holders why they should be investing in real internal headhunters, along with a step-by-step guide to planning an internal headhunt strategy.

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