The Hub and Spoke Model for Passive Candidate Sourcing

Jul 24, 2009

Over the past few months I’ve been making some not-so-bold predictions about the demise of job boards and the rise of the “hub and spoke” sourcing model for finding a better class of active candidates. Rather than repeat the prognostication here, I’d suggest that despite the shift to this new and improved sourcing model, in the long run it might not really matter.

Here’s why: from a practical standpoint, only 20 to 25% of candidates are actively looking at any one time. This is a high-end estimate, with 15 to 20% more likely, and in normal economic times probably around 15%. This means that 80% of most candidates aren’t looking.

So despite my current fondness for Jobs2Web, and the possibility that TalentSeekr and First Advantage’s HireEngine will become powerful talent hubs, I’m concerned that too many recruiting managers are aiming at the wrong target. It doesn’t take a lot of brain power to prove the case that there are more top-10-15% performers among those people who aren’t looking than those who are. So why are we spending so much effort to find candidates we don’t want to hire, even if we’re doing it more efficiently?

The quick counter to this is that even if you don’t hire the precious few good ones you find, you’ll be able to pipeline these prospects into a talent pool and keep them warm for future positions. As long as there are sufficient numbers of A-level candidates in the active pool, this makes good sense, but this has yet to be proven for companies that don’t have a great employer brand. The other counter to this active/passive argument is that corporate recruiters have too many reqs to handle, and the hub and spoke model is the only way to productively deal with filling positions. This is a valid point, since the hub will be seen by far more people than an individual req, especially if you drive traffic here through dynamic spokes, like Twitter, niche sites, and Facebook pages.

Yet while valid, it’s a bit shortsighted to rely on one basket to put your talent eggs in. An ROI case can easily be made that B+ or A-level candidates outperform their less-competent counterparts by at least two to five times, so that any additional cost to acquire these people is insignificant.

While many corporate recruiters are successfully using LinkedIn, ZoomInfo, and Broadlook to identify passive candidates, their productivity metrics are far below their external agency counterparts. The “too much work to do” excuse is part of the problem here, and this is a valid point. It does take more time to contact, persuade, and recruit passive candidates into the fold. However, from what I’ve seen, even with enough time, most corporate recruiters would still fall short. In my opinion, this is totally due to the use of unsophisticated recruiting techniques. This is where the use of the hub and spoke model for passive candidate sourcing can have a significant impact on both productivity and quality.

First, let’s put the metrics of passive candidate recruiting on the table. As a minimum, you need to track outbound return call rates, the percent of prospects agreeing to talk about the job, the percent of these calls resulting in qualified applicants to send out for interviews, and the number of high quality referrals per call. (Here’s a link to a recorded webinar I prepared for LinkedIn with these metrics described.) It turns out that if you don’t get at least 50 percent of your outbound calls returned, the end results are pretty dismal. For example, if you get 50 return calls out of 100 people randomly contacted based on their titles, it’s unlikely that more than six to eight would be interested in your job, fully qualified (considering location, comp, ability, and availability), and ready to go out for an interview. While pretty good, this number would drop to two to three people if the initial callback rate is around 20%, which is a number we’ve found to be about average for most corporate recruiters. This is not so good.

In my mind, these kind of results are no better than any “dial for dollars” process and are what’s preventing corporate recruiters from competing effectively with their external agency counterparts. A hub and spoke approach to sourcing passive candidates changes the underlying rules here by leveling the playing field.

As pointed out in the LinkedIn webinar, if you consider the names of passive candidates not as prospects but as hubs in a network with dozens or hundreds of spokes of other possible contacts, you’ll be able to reap untold rewards. The secret of passive candidate recruiting, known by all the best third-party recruiters on the planet, is getting these initial contacts to give you the names of better contacts. The reason they’re better is that they’re dead-on hits for your job, they’ll call you back 80 to 90% of the time, and everyone will agree to consider your job opportunity. This means if you contact, recruit, and network properly with this hub and spoke mindset, you’ll get 20 to 30 sendouts for every 50 names called!

Too good to be true?

Not really, but there is a lot of technique and skill required to pull it off. For one, you need to leave very compelling voicemails to get the initial group of people to call you back. For another, you have to be someone worth knowing. This is the only way people you don’t know will give you two to three great referrals every time. My favorite technique here is to recruit them first, get them to give you a 10-minute overview of their background before telling them much about the job, and during this screening process build a 360° network of their connections. Then if the person is not qualified, I go back and ask about some of the people in this extended network. As part of this, you must be persistent and not hang up until you get at least 2-3 great names. This is obviously the critical step in the process, but if you’re worth knowing, these first level prospects will go out their way to help you. (Here’s an article with a detailed example of how to do this.)

While not easy, learning these passive candidate recruiting and networking techniques are much more productive than calling 100 people at random and hoping one becomes a candidate. This is equivalent to writing boring job descriptions and posting them on a big board where no one talented will find it.

Third-party recruiters practice this stuff and constantly hone their techniques on getting better referrals. Since 80% of the market is not looking, getting to these people first is the difference in being a good recruiter and a great one. It also represents the difference between hiring good people and great people. Companies are investing a great deal in becoming more efficient finding these good people. Surprisingly, few companies consider investing similar resources to find the best.