Finding top talent to give your company a competitive edge has never been more important to business leaders. But, what’s the best way to do this? Word of mouth, job boards, state agencies, headhunters, newspapers, social media. All of the above? None of the above?
While we’re at it, shouldn’t we be thinking about both quantity of and quality of candidates?
What was once a simple answer to a simple question (you asked the people you knew and you placed a help wanted advertisement in your local newspaper) has become quite complex.
Along came the internet, displacing your local newspaper. Choices proliferated. You still ask people you know, but then there was Hotjobs, Monster, CareerBuilder, and LinkedIn. Each took its turn as the leader in delivering the most job seekers and candidates. Buy an advertisement on Monster or CareerBuilder for hundreds of dollars and wait to see who applies. Each faded as job seekers moved on to the “next big thing.” (See our chart below for a 5-year trend of top job boards)
Today the recruitment advertising industry is moving beyond the flat-fee, high-cost “job ad” that employers purchase and then “hope” candidates apply. One ad may yield one candidate or 100. Regardless of the size of the applicant pool, you paid a flat fee.
Indeed’s cost-per-click model drives the most job-candidate traffic in the industry. Employers pay only when a potential employee clicks on a job title online. Whether the person who clicked chooses to apply for the job is a different story: some do apply and many do not. Indeed’s conversion rate is low, meaning that about 7% of viewers who click through to learn about a job actually apply for the job. This means there’s still a lot of waste in the process. Employers are paying for the 93% of job seekers who click to view, but don’t apply.
Now comes the next big thing: Cost-per-candidate. Employers will pay only when a candidate applies. When a position has lots of candidates available, your cost-per-candidate will be low, perhaps less than $1 each. Free job postings may well be sufficient. For instance, if you want to hire a receptionist in downtown New York City, your cost of acquiring candidates may well be $0.
However, scarce candidate pools (think mid-career engineers, accountants, or nurses) will have more expensive costs per candidate. How expensive? It’s likely to have a wide spread and could cost in excess of $100 per candidate for some jobs.
This new method for finding job candidates comes with remarkable changes in the recruiting market. Remember the idea of “passive” versus “active” candidates. A passive candidate has been defined as someone who is NOT looking for a job. Active candidates, judged by many to be less desirable, are searching for new opportunities and responding to advertisements.
In the new world of candidate acquisition, email marketing and social messaging drive candidate interest. What should we call a person who has a job at an excellent engineering services firm who opens an email and considers the offer of another position at the competition? Active or passive? It doesn’t matter. Perhaps there was a time when it took a phone call from a headhunter to make a candidate aware of an open position. That time has passed.
With all these changes, companies need to adapt their talent acquisition methods. For easier to fill jobs, spend less time and money on getting candidates and more time and money on assessing the pool to ensure you hire the right person. For harder to fill jobs, expect to spend more time and money to get fewer more qualified candidates.
Here are a few steps to help you navigate this new world of recruiting:
Understand the attributes of your target candidate. Think of the work behaviors, motivations, skills and experience that define a “quality” candidate.
Understand why your target candidate would want to change what they are doing to work for you. We call it the “Employee Value Proposition.” Ask yourself how your target candidate will have the opportunity to learn more, earn more, and do more with you.
Given the answers to 1 and 2 above, what’s it worth to the organization to have the right person doing the job. This will help determine how much money you are willing to spend.
Your options for spending money range from $0 for free ads on free job boards to 30% of first year’s salary for a traditional recruiter. That’s a big range. Gathering the necessary information to make informed choices will be well worth it.
As the president of NewHire, Chuck Smith provides the candidates, the hiring tools and the coaching to help small and mid-sized business hire better. He helps companies through every step of the hiring process -- starting with writing job descriptions all the way to conducting background checks on top candidates. He specializes in recruitment process optimization, outsourced recruiting, applicant tracking software, and recruitment consultation.