The “Internet Era” in Recruiting – Is It Good for Our Industry?
In recent years, using the Internet to source candidates has become quite popular, and for some in recruiting or staffing, it’s the only method they use, or perhaps are even familiar with, for identifying and recruiting candidates. This is particularly true among the newer generations in recruiting, many of whom know no other way to communicate and to do research.
Candidates found on the Internet are for the most part what are termed “active” candidates (i.e., those individuals actively involved in seeking a new position, who post their résumés on the Internet and answer job ads or postings). Many recruiters perceive some benefits in pursuing “active” candidates, perhaps the most important being that they are rather easy and inexpensive to find in many instances. Just about anyone who has a computer can find some. But there is a strong case to be made, and it will be made here, that Internet recruiting of “active” candidates, a practice used increasingly by so many recruiters today, has significantly reduced the quality of candidates being presented to and hired by employers. “Active” candidates from the Internet represent quantity, but rarely top quality, and are almost always significantly inferior in their attractiveness and qualifications to the other primary type of candidate – “passive” candidates.
The Better Approach: Sourcing “Passive Candidates over the Telephone
“Passive” candidates, for those not familiar with the term, are those individuals who are not actively seeking new employment, usually because they are the best-qualified, most attractive candidates, who are already well situated within top companies, on a fast track in their careers, well compensated, and essentially quite happy just where they are. They don’t need to seek new jobs, and thus do not join the ranks of the average to mediocre-quality individuals who become “active” candidates and post résumés on the Internet and answer job ads.
However, “passive” candidates are the exceptional caliber of people that employers pay those of us in recruiting and staffing to find, for the critical positions that will determine a company’s future growth and profitability. Thus, they must be found and recruited by us if we are to earn our keep and do our job as well as we should.
As alluded to earlier, many in the newer generations in recruiting and staffing are unaware of or only vaguely aware of the “passive” type of candidate and the superior quality of such individuals, and are unfamiliar with the process whereby “passive” candidates are cost-effectively identified and pursued. Thus, one purpose of this article is to provide a basic overview of the nature of the “passive” candidate and to compare the significant differences between “passive” candidates and the “active/Internet” candidates so commonly sourced by recruiters these days.
A second goal is to correct a common misperception in the staffing and recruiting community – that generating a good selection of top-quality “passive” candidates is very expensive. In fact, by using the services of a “passive” candidate ID and sourcing firm, the retained third-party recruiter or the employer’s internal corporate recruiting function can identify and source (recruit) a good array of “passive” candidates from the best companies in an industry at a surprisingly affordable cost (for the employer, perhaps 50% lower than the cost of using full-service traditional retained search firms).
What Exactly Is “Passive” Candidate Recruiting, and How Does It Actually Work?
Because “passive” candidates are the “hidden” candidates, and cannot be found via the Internet-based sourcing process used by so many in recruiting today, the only way to find and recruit them is by using the special skills and tools of the “passive” candidate ID and sourcing process. The basic process consists of two phases of activity.
First, the use of original, telephone-based search research, in which skilled and experienced researchers “penetrate” target companies by telephone and identify the key players (prospective “passive” candidates) in the job function of interest.
It is true that some names of possible “passive” candidates can be identified through Internet-based name-generation research, and many independent researchers and firms promote and provide that type of service at this time. But unless those firms are literally able to “hack into” the online internal employee telephone directory of an employer, which is obviously illegal, they are in no way able to come close to the completeness in name-generation that a telephone research project can. The “onesies” and “twosies” of prospect names per company that can be identified through time-consuming Internet research fall far short of the complete, or nearly complete, list of relevant prospects at each given target company that telephone-based research can often obtain, quickly, within one to several days of work.
The second phase of the “passive” candidate recruitment process is the use of high-caliber “candidate sourcers” (often ex-corporate management professionals with the experience and image to be credible with prospective candidates) to make proactive “cold” telephone contact with each “passive” prospect identified in the research work. Such experienced, senior-level sourcers use their corporate management experience and familiarity with corporate culture and job functions to skillfully “market” the opportunity to prospects and persuade them to consider it.
“Passive” candidates have been the “gold standard” in retained-type recruiting for generations. The high quality of those candidates and the unique skills and knowledge required to find and recruit them have been the basis for the esteemed reputation of the top retained search firms as well as the justification for the fees that they charge.
Just to be clear at an early point in this article, the pursuit of “passive” candidates is generally not a feasible or justified approach for contingency-type recruiting, given the economics and compensation mode for that form of recruitment. So all comments here supporting the use of the “passive” candidate ID and sourcing process are being made in reference to retained-type searches, either those being done by a third-party (retained) recruiting firm, or those being handled by an employer internally, using its own on-staff recruiters.
In the latter instance, the employer has two choices as to how it might use the special expertise of an outside “passive” candidate ID and sourcing firm.
First, if the employer prefers to use its own internal recruiters for the sourcing work (i.e., making telephone recruiting contact with pre-identified “passive” candidates generated through a telephone search research project), the “passive” candidate ID firm can limit its role to providing only “name-generation” research service to the employer, and the list of “passive” prospects identified in such a research study can be turned over to the corporate internal recruiters, for them to do the sourcing (telephone contact) phase and attempt to recruit those individuals.
Second, in instances wherein the employer’s staffing or workload levels do not allow its internal recruiters time to make the telephone sourcing contacts themselves, the outside candidate ID/sourcing firm can also perform that telephone sourcing function for the employer. This phase is carried out using only senior-level candidate sourcers to make the telephone contact with each “passive” candidate identified in the previous research (these sourcers go through a thorough briefing by the employer on its company and the employment opportunity before starting their phone contacts). The sourcers will skillfully and professionally present the opportunity to prospects, perform a basic screening of qualifications, determine their current compensation package, check for willingness to relocate if necessary, obtain the résumé of each qualified and interested prospect, and turn that and other background information over to the employer’s corporate staffing function, for their follow-up and completion of the remaining steps in the recruitment process (personal interviews, reference-checking, negotiation of the job offer).
Why Is “Passive” Candidate Recruiting a Superior Method?
Our company, a “passive” candidate ID and sourcing firm, has been retained for the past 12 years to use telephone-based “passive” candidate recruiting methods to identify and assist in the recruitment of numerous middle, senior, and top management candidates for our clients. Those clients would range from retained search firms, to well-known, often Fortune 500 employers in many industries, to dynamic smaller employers and even start-up ventures. Many top-quality hires have resulted from these efforts.
In our work, we have had a unique and interesting opportunity to compare the quality of “passive” versus “active/Internet” candidates generated for the same search, during the same time period. Also, to factually compare the yield or productivity of these methods (e.g., number of high-quality, on-target candidates generated overall and per hour expended), their relative cost-effectiveness, and the time frame required to generate on-target candidates with each of these two very different approaches to recruiting.
We were fortunate enough to gain this opportunity for direct comparison of “passive” versus “active/Internet” recruiting methods because of a certain amount of trepidation on the part of a limited number of our clients (usually first-time or newer clients, who were still oriented to the “active” candidate approach, and had not yet really seen firsthand the results of “passive” candidate recruiting). These clients asked us to supplement our usual “passive” candidate ID and sourcing approach with an overlay of “active/Internet”-based recruiting measures, such as Internet résumé searches and posting of job ads on the Internet and in print media. Thus, both recruiting methods were used, and in effect, “tested” side by side, for the same searches, during the same time period. The results of those side-by-side “tests” have been, without exception, that targeted, telephone-based “passive” candidate recruiting methods have proven to be the most effective, productive, timely, and cost-efficient approach to generating the largest quantities, by far, of top-quality candidates, and achieving outstanding hires.
In a nutshell, the reasons for the superiority of the telephone-based “passive” candidate recruiting approach are the following:
– Telephone-based “passive” candidate ID and recruiting can be focused and targeted to the optimum prospective candidates currently employed by the most desirable employers. Thus, it is the most efficient and productive use of recruiting man-hours (you pursue only top candidates from a preselected list of target companies that would be the most attractive sources for your hires, and you don’t waste expensive man-hours randomly “surfing the Internet” and poring over a random assortment of hundreds of posted résumés of “active” candidates, in the hope of finding that rare two or three per hundred that are even borderline “on-target” individuals for your search).
– The “passive” candidate ID and recruiting process is the only way recruiters can effectively find and pursue “passive” candidates – those top candidates who are not actively seeking new positions and do not post themselves on the Internet or answer job ads (because they don’t have to – they are already well paid and on a fast track at the top companies that currently employ them, and thus not actively seeking new positions).
Because top-tier retained search firms must find and recruit these prime “passive” prospects for their demanding employer clients, they have always used, and continue to use, the telephone-based “passive” candidate ID and recruiting approach as the only effective and cost-efficient method to find such candidates.
Why Isn’t Telephone-Based “Passive” Candidate Recruiting More Familiar to and More in Use by Today’s Recruiters?
Unfortunately, our profession, particularly the younger generations, has increasingly been “seduced by technology” into depending on the Internet and other “active” candidate recruiting techniques as the only tools in their tool bag. This is true whether or not such tools are actually the most effective and productive and economical methods to successfully conclude a search.
Either because of lack of training in “passive” candidate recruiting methods, or simply “putting blinders on” to close their minds to options they perceive of and disdain as “low-tech,” many in our recruiting/staffing profession today are simply unaware or only dimly aware of the telephone-based “passive” candidate approach – the one procedure for recruiting that, in fact, is the most effective method of identifying and pursuing large quantities of prime candidates for any retained-type search.
Unfortunately, for many individuals, particularly those who have come into the business world in an era when virtually all communication is done by email, it is much more comfortable to “hide behind” a screen and keyboard and use the impersonal distance of the Internet to try to source candidates, rather than facing “live” human beings that they must handle effectively, in “real time,” over the telephone.
Thus, as long as the recruiters in our newer generations do not take the initiative to learn, and to develop skill in telephone-based “passive” candidate ID and recruiting – or at least to find effective and reasonably priced outside resources that can handle some or all of that process for them – they will not be providing their employers or employer-clients with the best candidates available for given positions.
Perhaps even more important, as long as employer general management and staffing management do not recognize that their companies are being short-changed by accepting the mediocre quantity and quality of candidates generated through “active” candidate/Internet-based recruiting methods, they will be sentencing their companies to significant shortfalls in performance, growth, and profitability. Candidates who are just “good enough” will not provide the excellence and creativity needed to win out over the competition and sustain a company’s long-term edge in growth and market share.
“The Real Point” in Comparing “Passive” vs. “Active/Internet” Recruiting Methods
Now to the “real point” in considering and contrasting telephone-based “passive” candidate recruiting vs. Internet-based “active” candidate recruiting as methods to fill positions with top candidates on a timely and cost-effective basis.
The advantages cited for telephone-based “passive” candidate recruiting earlier in this discussion are in themselves reasons enough for an employer and a recruiter or staffer to use this method as the predominant approach to retained-type recruiting. But there is a further point, perhaps the most attractive and significant one of all, as to why this method of recruiting proves itself superior to Internet and other “active” candidate recruiting methods. That “real point” has to do with a basic premise many of us learned in business school – that good management of any venture means finding that particular approach that is most efficient, timely, and cost-effective at generating the highest-quality result or deliverable. If you achieve that formula, you are most likely to have a successful and profitable business.
Whether managing a recruiting or staffing organization, a fleet of cargo ships, or a candy factory, the more efficient one is, and the less time and/or other resources one has to invest to achieve a quality result, the more profitable one’s venture will be, and the more successful it will be in maintaining and expanding its customer base and long-term viability. And, with the exception of humanitarian organizations, profit is the reason we are all in business, and the determinant of whether we prosper personally.
Perhaps it is my personal bias as a former Fortune 100 VP-Marketing, but I am convinced that recruiting is essentially an exercise in Marketing 101. We have a product (an employer and a position to be filled) that must be “sold” in the most effective way to a market (those individuals out there in the world who would be best qualified to fill that position, and most interested in “buying” it), by means and “media” that will produce the best results with the best-possible cost-efficiency and timeliness.
In recruiting, the most effective “marketing formula” for any search leads to an excellent hire, rather quickly, at the lowest possible cost in line with achieving that quality of result. Doing that leads to success and profit for our organizations, and rewards for us personally, whether we work for a search firm, and thus maximize the hires we create per man-hour expended, or in a corporate staffing function, where we fill positions faster and at less expense, and thus greatly increase the productivity of our annual staffing budget.
So “the real point,” and the most important criterion in comparing telephone-based “passive” candidate recruiting versus Internet-based “active” candidate recruiting, is the following: that the telephone-based “passive” candidate approach, because it is highly targeted and highly efficient in finding and recruiting the exact types of prospects needed, from the optimum list of employers for a given search, and because it focuses the time and efforts of the recruiter only on such prime prospects, is the most productive, cost-effective, and profitable approach for retained searches. It is the approach that generates, by far, the largest numbers of prime, “on-target” candidates in the shortest period of time, and the one most likely to produce a successful hire, versus methods that generate “active” candidates through the Internet and through job ads posted in other media.
Some Challenges to My Viewpoint
Some in our profession who have written in response to my previous articles have posed some objections and challenges to my position as to the superiority of “passive” candidate recruiting for retained searches. Some of you will no doubt have similar thoughts. So, as the concluding section of this article, I think it is only fair that I air those opinions here, and provide my responses to them:
— POINT MADE: That all, or multiple, candidate ID and sourcing or recruiting methods should be used in a search . . . why limit oneself to only “passive” methods?
— MY RESPONSE: Why spend a portion of the man-hours and funds available to you on far less effective, lower-yield methods? For example, spending many hours poring through hundreds of “active” candidate résumés from the Internet or job ads, to yield two or three additional borderline-acceptable candidates, is a huge waste of time and funds. We believe in using targeted, telephone-based “passive” candidate methods because they allow us to “fish where most of the fish are,” rather than shotgunning our efforts and wasting time and money on substantially less productive venues and techniques. Basic military and management strategy for centuries has cautioned against “dividing one’s forces.”
— POINT MADE: That not all “passive” candidates are “good” candidates
— MY RESPONSE: Of course a relatively small percentage of “passive” candidates don’t turn out to be “stars,” and those individuals are usually screened out early and quickly in the initial phone-interviewing process, before being presented to the employer. However, as pointed out earlier in this discussion, our job as “managers” of a recruiting effort is to opt for whichever avenues have the highest probability of generating high-quality, on-target candidates (which makes them the most productive and thus profitable methods). When every prospect from a telephone-generated “passive” candidate contact list is someone with the right title, from one of the “right companies” (per a predetermined “target company list” specified by the employer and search firm), the odds of finding a high-quality, on-target candidate per each phone contact made from a “passive” candidate contact list are drastically higher than the odds of finding a prime candidate per each “active” candidate résumé surfaced on the Internet or from a job ad.
— POINT MADE: That there are occasionally “good” candidates who post résumés on the Internet and answer job ads
— MY RESPONSE: Once again, we are in the world of probabilities. Yes, for one reason or another, good-quality candidates do appear as “active” candidates on the Internet on relatively rare occasions. But the vast majority of prime candidates (individuals currently working for top companies, in key positions, with excellent career histories and progress) do not have a need or desire to post themselves on the Internet or to answer job ads, and thus are very unlikely to be found when recruiters use these methods as their sole approach to candidate sourcing. These prime candidates, in fact, are the very people who are proactively sought out and contacted by retained recruiters on a regular basis, and presented with the best employment opportunities to consider (i.e., the “hidden opportunities” employers choose not to post to the “general public” on the Internet or in job ads).
“Time is money,” and if we are to be effective and productive and profitable at our recruiting or staffing tasks, and good managers of our time and resources, it is simply not a good use of time and effort to use a “shotgun” approach and wade through “haystacks” of Internet and job ad résumés looking for the occasional “needle” (prime-quality candidate). It is also not a good use of time and effort and resources to feel that “a good and thorough recruiter” must use all possible candidate sourcing avenues, even those that are substantially less effective and cost-efficient, just to be able to say that he or she “left no stone unturned.”
Rather, if you are “looking for a needle” (the rare prime-quality candidate), it is much more productive, cost-efficient, and managerially competent to go directly to the “needle factory,” where all the needles are easily accessible, rather than to the haystack. The telephone-based “passive” candidate recruiting approach is designed to do just that, on a highly effective and cost-efficient basis. When working from a “passive” prospect contact list, generated via telephone research from a number of prime target companies, a recruiter is at maximum productive use of his or her time, because every phone call made by that recruiter from that list is to an individual with the highest possible probability of being a viable and attractive candidate.
Further, with the opportunity to talk on a real-time basis to the prospect (rather than email them, as is often the mode with Internet recruiting and today’s computer-dependent staffing folk), the “passive” candidate sourcer or retained recruiter has the valuable opportunity to tailor his or her oral presentation in the unique way that will be most effective in “selling” that particular opportunity to each individual prospect, based on that particular person’s mind-set, needs, goals, and circumstances.
As an undergraduate in behavioral sciences and a marketing major in the Kellogg MBA Program at Northwestern University, Mike Rabin came to the business world with a strong interest in using the psychology of human behavior to facilitate the marketing of products and services. He spent the first 15 years of his career in the corporate world in professional, management, and director/department-head roles in marketing/product management, marketing research, competitive intelligence, and strategic planning for companies such as G.E., Quaker Oats, Morton Salt, The Florsheim Shoe Co., and a major advertising agency.
Currently, he is the CEO of The Rabin Group, a recruitment-research and candidate-sourcing firm, and can be reached at (847) 394-5254 or through rabgrp@aol.com.