What Recruiters Can Expect From an Economic Slowdown

Over the past 6 months we’ve been hearing about the dot-com shakeout and the perfunctory approach to many of the layoffs. More recently, we’ve heard about more established companies like Lucent Technologies, Motorola, Dell, Xerox and Nortel laying off hundreds of employees. The general reaction seems to be a ripple of fear. My perspective is somewhat different. First, historically over 70% of all new businesses fail. So why should this phenomenon be any different in the Internet economy? What we are currently experiencing is truly what is to be expected. Second, the results of the “unexpected” failure of the dot-coms and subsequent market impact, particularly on the technology stocks, has forced larger companies to become more focused, tighten their belts, and streamline what seemed to be a “free for all” in the 1990s. This by no means is the beginning of a severe recession. This is just good business. When stocks were artificially inflated, companies spent money more freely, starting new, speculative projects staffed by additional permanent and contract employees. Now that the market is correcting and stocks are, in my mind (and my pocketbook), somewhat undervalued, companies are scrambling for ways to make up for the loss. Guess what? Even in the new economy, the knee-jerk reaction is the same ? cut headcount and advertising budgets. These are still the two fasted ways to make an immediate impact on the bottom line (and appease the analysts)! So as a recruiter how does this affect you? It doesn’t make your job any easier. It simply increases the workload. For those of you whose business is focused on technological innovation and development, you will continue to thrive. Technology is not going to stop moving forward and you are not going to stop needing to recruit top technical talent. The shortage of computer engineers, scientists and other technologically savvy individuals still remains. The top corporations, even with layoffs, are not going to let their brightest minds go to the competition through a RIF. For every position you post, the number of responses is likely to double or even triple. However, the increase in qualified responses will be only nominal. You will most likely still have to recruit for the same number of profiles, except now instead of having 50 open requisitions for a given profile, you’ll have only 35. If you think it is time consuming now to sort through all the responses to find the few gems, just wait until responses multiply. Your challenge will be to figure out a way to efficiently and effectively filter the responses. Don’t wait until you are inundated with resumes and overwhelmed by the review process. Plan ahead. Here are a few ideas to consider. Depending on your budget and the size of your organization any or all of these might fit your needs:

  1. Use a candidate management system (CMS) that offers a filtering/pre-screening feature. There are several programs on the market that offer unique features that encourage candidates to profile their skills and accomplishments during the online credentials submission process. A few of these include: I-job, Recruitsoft, PureCarbon, and Hire.com. (There are many, many more on the market so I apologize to anyone whose favorite system I’ve left out.) The features vary by supplier but when used effectively the short-run benefits are the same: they allow you to immediately create a “short-list” of “seemingly” qualified candidates. I say seemingly because you never truly know if candidates are qualified until you’ve had several conversations with them. Undoubtedly, the effective use of these systems will save you significant time and money in your recruiting. The broader benefits of systems like this are farther reaching in terms of your ability to source your own database for right fit candidates, affect succession planning, manage metrics, spend advertising dollars more effectively, etc. The key to success with any CMS is using its features wisely. Recruiters who have experience with the challenges of managing large recruiting campaigns typically developed these systems. The profiling and pre-screening systems are designed to streamline some of the steps in your recruiting process, not simply to store more candidate data. Spend the time upfront to implement them on every position. You’ll be happy that you did. One caveat: there is no one system that is perfect. Recruiting is a combination of art and science. The CMS systems assist with the science piece ? the art is up to you, and ? great art is not formulaic.
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  3. Reorganize your internal structure to create a ?screening? position within the recruiting team. Currently most recruiting departments are structured such that recruiters are responsible for sourcing, screening, interviewing, issuing offers and negotiating. More and more we are seeing companies build their own sourcing centers. However, many of these centers are responsible for sourcing the passive candidate and are not responsible for reviewing posting responses. Consider building a recruiting team that breaks down the steps of the process. The sourcing team will be responsible for searching resume databases and using advanced mining techniques to uncover the passive job seekers. They can also attempt to make the first contact with the passive candidates to introduce them to the opportunity. Once a level of interest is established, the recruiter can take over. The screening team will be responsible for reviewing all of the responses to the job postings. They will then forward all of the qualified responses to the recruiter to conduct a telephone interview. Depending on the response flow, the screening team can also assist in contacting the candidates from the qualified posting responses and also in contacting the passive candidates uncovered by the sourcing team. The key point here is that division of labor has a significant impact on time-to-hire. In this recruiting team model things happen simultaneously. The pre-screener can be sorting through the ad responses at the same time that the recruiter is interviewing the most qualified candidates. The recruiter is more focused and less overwhelmed, high potential candidates will be contacted faster so they will be less likely to lose interest, and you’ll save money because the process will be more efficient. For companies that simply do not have enough internal recruiting resources to set up the recruiting teams described above, consider partnering with an outsourcing firm to assist you. There are a growing number of firms that are specifically skilled at both the sourcing and screening of candidates. Let them act as an extension of your recruiting department so that you, the primary recruiter, can stay focused on working with your internal clients (the hiring managers) and interviewing only the most qualified candidates.
  4. Rethink your posting strategy. With the anticipated increase in response rate from job postings, one way to help minimize the influx of non-qualified responses is to adjust your posting strategy such that you are only posting to those sites that provide the highest quality response. While this seems logical regardless of the economic situation, most companies do not plan their strategies that way. The tendency is to post to the most popular sites and the sites that generate the highest response rates. If you have kept any metrics on the number of responses per site, the number of qualified responses per site, and percent of qualified responses, the streamlining process should be relatively easy. If the ratio of qualified vs. unqualified responses from a given site is low now, imagine what it will be like once the number of responses doubles or triples. Do you really want to spend time reviewing the resume of a person who developed their family website from “Homepage In A Box” and now feels they can develop your sophisticated e-commerce application? As the response rate from all sites increases, consider shifting away from the high volume sites and more towards the targeted sites. Chances are the more qualified candidates will be searching those sites and the quality of responses will increase proportionately to the increase in overall response. Note: If the high volume sites are producing a high quality response then continue to use them.

Conclusion Plan ahead! Review your options now. If in fact the economy does “correct itself further” you will be glad you took the appropriate steps to prepare your recruiting function. If the economy continues to boom you are still ahead because you’ve spent the time necessary to streamline your recruiting function for maximum effectiveness. <*SPONSORMESSAGE*>

Karen Osofsky (karen.o@tiburongroup.com) is a co-founder of TiburonGroup.com, an e-recruiting consulting firm that provides outsourced recruiting solutions to rapidly growing companies and new ventures. The firm provides a broad range of recruiting consulting, sourcing, screening, and strategy development services to help companies manage the front-end recruiting process. Tiburon Group is a Certified AIRS Solutions Partner.