With this in mind, I'd like to offer a few of my favorite passive candidate recruiting secrets.

Networking Secrets of an Old-time Headhunter

1. Network in 3D. While the names on LinkedIn are great to have, getting the names of their best connections is even better. As you begin your quest for great referrals, don't just consider peers. Consider those who these people have mentored, who mentored them, who they most likely worked with on cross-functional teams, and who they regularly work with outside the company, including vendors, customers, and consultants.


2. Track your effectiveness. Don't waste your time. Networking is not about dialing for dollars. Instead, track how many people call you back, how many are interested in talking about your position, how many are qualified for your opening, and how many referrals you get per call. If you're not tracking this daily, you can't get any better, since you won't know what to work on. If you do track these metrics, you'll soon discover that great referrals from well-respected people can increase your productivity 5-10X. That's why the first name found on LinkedIn is not nearly as valuable as a referral from one of these people.


3. Get three referrals on each call. The most important metric you can track is how many high-quality referrals you get on each call. You need to become adept at getting these names. Make sure you highlight the fact that you don't want to know anyone who's looking. Instead, ask the person for the best person they know who's absolutely not looking, but would be open to discussing a potential career move. Thinking in 3D helps here. For example, I've called buyers at major retailers looking for salespeople, product marketing people looking for engineers, ad agencies looking for product marketing people, and CPA partners looking for CFOs. The key is not to hang up until you have three great referrals if the person you called isn't appropriate for the job at hand.


4. Don't call people who won't call you back. Great people will call you back if you mention the name of another great person. That's why step three is so important. Track your callback rates. If you make sure that 80% of the people you call are warm, pre-qualified referrals, your call-back rate will be 75% or better. If you just make outbound cold calls, your callback rate will be closer to 25%. This is a huge difference in productivity.


5. Only call people who are worthy. While getting people to call you back is important, if they're not worth talking to, it's a waste of time. That's why it's important that you pre-qualify the referral. Just ask the person giving you the name why the person is a top-performer. As far as I'm concerned, a worthy person is someone who is either qualified for the job or knows someone who is.


6. Leave professional and career-oriented messages. Whether it's a voicemail or an email, suggest you'd like to enter into a discussion regarding what could potentially be an important career move for the person. You must include some substantive proof as part of the message, not hyperbole. For example, "You might have heard that we just merged with XYZ Resources, and are looking for a product manager to lead the first integrated development project. I'd like to chat with you to see if this could offer a significant career move for you." If you can mention the name of the person who provided you the referral you will more than double your callback rate. Hyperbole — "the greatest position in the world" — will cut it in half.


7. Create instant careers. If you've asked the person if they're open to discussing a possible career move and they answered yes, don't tell them much more about the job; instead, get them to first tell you a little about them. This is essential. As you quickly go through the highlights of the person's work history, look for gaps in the candidate's background your job fills. This could include staff size, scope of the project, impact the person can make, exposure to management, and the like. Mention these as reasons to proceed in the discussion. Of course, if the gaps are too big, or non-existent, smoothly switch your focus to getting three referrals.


8. Don't take "no" for an answer. In addition to doing everything described above, you also need to be adept at overcoming objections. These cover the range from I'm not looking, what's the comp, I'm happy where I am, to I'd don't like the industry, your company has a bad reputation, and I don't want to relocate. It's impossible to put 20 years of advice into a single paragraph, other than to say that persistence is the key here. If your position represents a true career move, you owe it to your hiring manager, yourself, and the person on the phone not to give up until the person has the information needed to compare your job to what they're doing today or whatever else they're considering. Don't give up until they do. Even if the person decides it's not a true career move, you'll still be able to get your three referrals.


9. Recruit first, network second. You'll increase your networking productivity by directly recruiting the person first, rather than calling the person on some "networking" premise. To me this later approach should only be used when calling someone who clearly is not a candidate for the job. Recruiting the person first allows you to find out about the person's background before revealing much about the job. This allows you to determine if you should recruit the person or get referrals. You also establish a different relationship once the candidate has shared some confidential information with you.


10. Become SWK (someone worth knowing). Top prospects want to stay connected with top recruiters who handle important jobs. To become SWK you must know the job, the hiring manager, your company, your industry, and your competition. You need to be seen as a reasonably objective career counselor who is only willing to proceed if the job represents a true career move. You know you're SWK if you get unsolicited referrals from top people in your area of expertise who want to work with you and give you other top referrals.

What's great about LinkedIn and its Recruiter product is it gets you in the major leagues on day one. This is an invaluable gift. Regardless, since everyone will soon have access to the same information, your ability to convert a list of names into hot prospects and great hires is the real difference-maker. In my mind, this is the essence of great recruiting.

Companies don't implement this "holding pattern" concept intentionally, but at the core level the hiring process most companies use involves matching people who have the requisite skills and are looking, with jobs they've done before. While they might get lucky and find someone who sees the job as a great career opportunity, this is more chance than likely, and certainly not an efficient way to design a process for hiring stronger people on a consistent basis.

In most cases, hiring a top performer violates "company policy" in some way, so it's avoided whenever possible. As a result, the natural resume-matching-the-job-description process dominates, offering the path of least resistance. The consequences: most positions are filled with people who are satisfied with taking a job that's a lateral transfer. This is not the best way to grow a company. After not too many years, you'll have little bench strength, and a great many dissatisfied employees just hanging in there waiting for something better to come along.

This dismal scenario is not preordained, but is does require a totally different perspective on hiring.

Idea: rather than build the core process around offering people lateral transfers, let's redesign it based on the idea of offering people career moves. To pull it off, it requires the complete elimination of skills-based job descriptions and traditional resumes as the primary means of finding jobs and matching people. Since resumes and job descriptions are the root cause of the problem, this is an essential first step.

Expect some resistance here. Going down this path will affect the design of job boards, career sites, talent communities, referral programs, aggregators, social networking tools, mobile connecting technology, ATSs, every new idea on how to find candidates and fill open jobs, and every process involved in hiring and recruiting people. So don't read any further if you're not interested in changing the world.

With this world-changing vision as a backdrop, I want to lay out the product requirements documents for a new job attracting and matching vehicle, aka the job portal of the future: Careersnotlateraltransfers.com. (Warning: this is still in the concept phase, so you'll only find ideas here.)

Product Requirements for Careersnotlateraltransfers.com

Design Objective: start with a blank sheet of paper with the goal of developing a prototypical job-matching portal designed to put people into the best career opportunity possible.

1. Only career position postings will be allowed. Posting traditional job descriptions is forbidden. Each career opportunity must be creative, attention-getting, and describe why the position represents a career move. Those who mislead or violate this rule will have to pay a massive fine. (This is the business model for the site.)


2. Admin info of any type (req numbers, hours, etc.) is not permitted in the career description. There will no space to put any of this information.


3. Any requirements listed must be minimal and mentioned in the context of what the person will be doing with the skills. For example, "you'll be using your media design skills to develop high-impact 30-second video soundbites." A template will be provided showing users what's permitted and what's not. Anything that includes absolute levels of experience required, academics, years of skills, or industry background is strictly forbidden. Anyone caught violating this rule will be permanently barred from using the site or pay another massive fine.


4. Career planning tools will be provided. Prospects will be able to determine what the next best career move for them is, and how to maximize their growth opportunities. Decision tools will be included that allow candidates to compare different career opportunities based on a balance of strategic (long-term growth and opportunity) and tactical (compensation, location) criteria. As part of this, compensation, the employer brand, and relocation will be shown to be less important from a career growth and personal satisfaction standpoint.


5. Career opportunities will be pushed to potential prospects based on their personal career plan. Based on the person's personalized career plan job, opportunities will be available for instant review, with guidance provided on which ones offer the best upside opportunity.


6. Prospects are not allowed to apply. There will be no capability to formally apply. Since a career is unique to a person based on his or her abilities, interests, life situation, experiences, and career objectives, the matching process must also be unique. Instead a new two-step process will be created that allows a candidate to submit a statement of interest followed by some type of informal two-way discussion.


7. Managers must talk with qualified prospects before the person can formally state an interest in moving to the next step. Getting hiring managers involved early in the process is a critical design feature of this career portal. Part of this would be a two-minute video featuring the manager describing what the job is all about and why it could represent a career move for the right person. This is an important part of the hiring process, since the best people consider the quality of the hiring manager as part of their decision. Hiring managers will be required to conduct exploratory meetings with prospects who have been vetted, with the idea of presenting their positions as career moves, but also tasked with the goal of qualify that the person as a high achiever and convincing them to formally apply. Managers who don't agree will not be permitted to post their career opportunities on the site.


8. A new application process will be created that focuses on what the candidate has accomplished. This whole idea of this site is based around performance. Companies must define what performance is required for job success, and candidates must define what they've actually accomplished in each of their past jobs. The performance needs of the job will be compared to the performance achieved by the candidate to determine initial fit. If there's a match at this level, a determination will be made if the opportunity offers a real career move or just a glorified lateral transfer.


9. A formal process will be used for candidates to compare jobs from a career perspective. Unless overriding personal circumstance exist, candidates will not be allowed to take positions that are not career moves. Frequently, candidates in their haste to leave something less desirable make short-term decisions for the sake of long-term growth. This multi-factor decision tool will force candidates to think through their decisions carefully, allowing collaboration with family, friends, and personal advisors.


10. Companies that use this career matching portal will have to agree to change their assessment process. As a minimum this means making sure everyone who interviews the candidate knows the performance requirements of the positions, and must share factual evidence in a formal debriefing session using an evidence-based scorecard. Anybody found adding up Yes/No votes will be permanently excluded from the site and reported to the authorities for malpractice.

There are a number of other cool features in the works, but we can't reveal them at this time, since they'll mess up many more business models currently in use and those on the planning board. Regardless, if you want to raise your company's overall talent level you need to start using careersnotlateraltransfers.com, or something equivalent. Anything less will just maintain the status quo.

Note: while this is not a working site yet, many of these features described above are currently available. Email me if you'd like to discuss how you can create your own career matching hiring process.

For example, while most companies want to focus on hiring more passive candidates, they continue to use processes that are based on how active candidates look for new jobs and how they decide to accept one over another. As technology improves (LinkedIn, ZoomInfo, Proactive Employee Referral Programs) it's becoming much easier to identify passive candidates, but identifying names is not the same as attracting them, and much much different than hiring them. With the goal of hiring top performing passive candidates, here are some process changes you might want to consider implementing.

12 Things You Need to Do to Recruit and Hire More High Quality Passive Candidates

1. Don't take "no" for an answer. True passive candidates don't want to talk to you. They'll do anything they can to get rid of you. Don't take it personally. Persist. You're job is to get the candidate to see your job as a potential great career move.


2. Be SWK (someone worth knowing). Top quality passive candidates will not talk to a recruiter who is not handling important jobs, isn't well connected, and isn't working closely with the hiring manager.


3. Be an SME (subject matter expert). The best passive candidates expect the recruiter to know the job, the company, the industry, the competition, the market, and the compensation issues.


4. Quickly determine the quality of candidate. Not all passive candidates are high quality people. There are plenty of not-so-great people who are not looking. Recruiters need to separate the best from those who aren't, within 5-10 minutes.


5. Find out the person's job-hunting status. A passive candidate is someone who isn't looking for a job, so ask right away to find out. If the person is looking, ask for how long and if they are getting serious about anything.


6. Create an instant career. You must obtain some background info from the candidate before you describe your opening. This is a critical step and missed by most recruiters. During this five-minute period look for areas where your job offers growth and stretch. This is how you excite a person to get interested in what you have to offer.


7. Ask for permission. Start your conversation by asking if the person is open to discuss a potential career opportunity. Be vague about the job and get some background about the person before you tell too much about your job. Present the "instant career" and ask the candidate if he/she would like to proceed and learn more.


8. Eliminate the apply button, sell the discussion, not the job. Recruiters have a tendency to move too fast. This will turn off those who aren't looking. That's why it's important to sell the next step in the process — an opportunity to learn more about the job — rather than then the end game (a job, with a specific title, in a specific location, at a specific comp range). As part of this, add a discussion about the job as the first step in your formal process to ensure you automatically detour the apply button.


9. Quality of company. It's much easier to recruit top quality passive candidates if the company is also top quality. If not, you'd better be able to quickly make the case that your company is well-poised to do something special and your opening is a critical aspect of this.


10. Quickly determine quality of candidate's current job. If you don't have a great company brand, you'll need to quickly establish that your opening in comparison to what the candidate is currently doing is why your job is worth considering. This is part of Step 5: create an instant career in the first five minutes of the discussion.


11. Hiring manager involvement is essential. Top people want to work for other top people. If your hiring managers are not willing to be 100% committed and involved, your company has no chance of hiring any passive candidates, even average ones.


12. Get referrals of other top quality passive candidates. Calling passive candidates who haven't been referred to you is very time-consuming. For one thing, you don't know if the person is any good and the person is less likely to call you back. Getting referrals from other top passive candidates is the real secret to passive candidate recruiting. Not only will they call you back, but you already know they're worth calling.

Hiring high quality passive candidates makes great business sense. However, getting their names is the easy part. If you're serious about hiring the best passive candidates, you'll need to change the measures of success from speed to hire to quality of hire. That's the only way you can afford to implement what's described here. If you don't want to make this shift from speed to quality, you're better off spending your time in the active candidate market and hope for good luck. (Email me if you'd like to discuss a new approach to search based on leveraging your existing process to optimize passive candidate recruiting. This is part of a beta project using LinkedIn's Talent Advantage suite of services.)

Before you rank yourself, you should assign your target candidates into one of the following six buckets based on their level of business impact, personal growth rate, job satisfaction, and job-hunting status. This will allow you to quickly separate the strong from the meek, and from this, determine the appropriate recruiting and sourcing strategy to use.

Super Passives: these are the top people who are making a big impact, totally satisfied, and not the least bit interested in looking. This group represents about 25-30% of the candidate pool. (We are now working with LinkedIn on a big survey to validate the percentages, but this is a good estimate.)

The Explorers: these are the top people, who are fully employed, but whose personal growth has slowed a bit. While they're not looking, they are open to "explore" a new opportunity if contacted by a recruiter. This group represents about 40-45% of the total candidate pool.

Tiptoers: These people represent the hidden active candidate market. These are the top people who have decided to enter the job hunt, but only tell their close friends and former associates. Strong networking skills will uncover these people quickly. They represent about 10% of the total candidate pool.

The three groups above represent 75-80% of the total applicant pool, but require extra effort to find and recruit. The three groups below represent about 20% of the pool, and would be considered "active" candidates. There is a lot of overlap among these three groups, but from a time perspective they become more active as they become more desperate.

Searchers: I used to call this group "Googlers" but the folks at Bing suggested a more generic term. Regardless of what you call these folks, they use search engines and job aggregators to find their next job. This is where SEO, SEM, and talent communities reign as prime sourcing methodologies. The idea is to capture people as soon as they publicly enter the job market and nurture them along until something great comes along.

Networkers: Let's get physical. This group differs from Tiptoers in their degree of activity. Tiptoers only tell their close associates about their desire to switch; physical Networkers tell everyone. They join groups, contact everyone they've ever met, and send emails to third-degree contacts in the hope of a 20-minute "just coffee." Don't ignore these folks, since some are top-notch and very discriminating, but you can't build a sourcing strategy around this group.

Hunters and Posters: When things get truly desperate, top people will hunt and peck through career sites and job boards, post their resumes anywhere they can, and use agents to apply to anything with the word "job" in it. Again, while there are some good folks in this group, the effort to separate the good from the bad is not worth it.

A secondary sourcing strategy emerges from a primary strategy of sourcing active candidates. Collecting resumes of strong people who go off-market can be extremely important. Once these active candidates find a new job, they move into one of the passive categories. So as long as you stay connected, a year or two later, the best of these people are relatively easy to re-recruit.

It's pretty obvious that if you want to increase your talent quality, you'll need to spend more time targeting Explorers and Tiptoers. Although there are top people in each group, the best of them get picked up early in their search process. That's why I call a strategy based on sourcing active candidates a Leftover approach, and suggest an Early-bird strategy as part of any talent program designed to increase quality of hire.

While technology is helping automate this process, it takes strong recruiting skills and involved hiring managers to be consistently successful hiring Explorers and Tiptoers. The 10-factor recruiter scorecard, summarized below, highlights the skills required to recruit these passive candidates.

From a scoring standpoint, you need to get at least 35 points out of 50 if you expect to be successful recruiting Explorers and Tiptoers. Recruiting active candidates is much easier. In this case, a score of 25-30 would suffice. However, regardless of your score, you also the time to do it right.

Rank yourself on the 10 factors below on a 1-5 scale. A five means you're one of the best — in the top 5 percent of your team. A 2.5 is average. This is a non-linear scoring system. To get a three on any factor you need to rank in the top 20-25%, with a four putting you in the top 10-15%. A two would put you just below average, and a one in the bottom-third. Once you complete your score, have some team members validate it for you.

10-Factor Corporate Sourcer to Recruiter to Headhunter Scorecard

1. Deliver consistent results. To get a full five on this factor you need to have measureable objectives, consistently meet them in terms of candidate quality (at least B+ or better), and be in the top 5 percent of your group in terms of results.


2. Be an SME and SWK. An SME is a subject matter expert with respect to the job, the company, and the industry. SWK means you're Someone Worth Knowing regarding networking and representing important jobs. You need to be both to recruit the best Explorers and Tiptoers. Neither is necessary if you're only targeting active candidates who want to work at your company.


3. Partner with hiring manager. If you don't personally know and aren't completely trusted by your hiring manager client, you don't stand a chance recruiting the best Explorers and Tiptoers. You score a five on this factor if everyone you recommend is interviewed by your hiring managers without even having to review the resume.


4. Understand the real job and how it represents a career opportunity. The best prospects expect the recruiter to fully understand real job requirements, know the hiring manager's leadership abilities, and be able to quickly demonstrate how your opening represents a career opportunity for the candidate. To score a five on this factor you have to be able to demo all three after a 5-10 minute conversation with the candidate.


5. Super sourcer — active candidates. While there are numerous techniques to be great on this factor, the true measure of success is delivering qualified candidates to the recruiting team without fail, consistently, and quickly. This means you're probably a super Boolean expert, know how to write and position great ads, and can tap into your employee referral program to find outstanding talent.


6. Super sourcer — passive candidates. To earn a five on this factor you have to identify and qualify top Explorers and Tiptoers. This means you're great on the phone, can quickly develop a full slate of candidates in about 10 phone calls, and have superb networking skills. This is the most important job in the whole company, and your worth is priceless. If you're a five you're probably underpaid.


7. Great organizer, aka juggler extraordinaire. You need great organizing and planning skills to successfully handle all of the activity involved in being a corporate recruiter. This means you need to plan out your day and week well ahead of time, build pipelines in your spare time, reprioritize on the fly, and stay calm while putting out fires. If you're constantly falling behind, missing deadlines, and making excuses, you're in the bottom half.


8. Super techie. You need to be extremely comfortable with technology to be a successful corporate recruiter. Part of this is knowing your talent acquisition system inside out, and optimizing all of the latest sourcing tools. A four on this factor means you in total command, and a five means you're so good, you're training others.


9. Accurately interview and assess competency. You know you're a five on this factor if your hiring managers cede to your expertise. This means you're both more accurate and more consistent than your hiring managers and they're asking for your help training them on how to get better.


10. Recruit and close top candidates who are not looking or who have multiple offers. To get a five on this factor you need to be able to have high conversion rates from first contact to the final close. You know you're in the top of your game if you're assigned the toughest assignments in your company and consistently deliver A-level candidates.

As you can see, even with enough time, it's not easy to be a corporate headhunter. Third-party headhunters have it even rougher. They don't get paid if they don't deliver consistent results. However, if they do, they get paid a lot.

Here are two of the articles in this ongoing series, for those who want to catch up with the bandwagon.

Part 1: The Financial Impact of Not Hiring the Least Best

Part 2: Should the Recruiting Department Be Charged With Financial Malfeasance

The root cause of the problem seems to be the lack of a CEO-driven talent strategy, combined with some CFO-like financial rigor. Most companies have talent-related mission statements, but these rarely convert to a strategy. If they did, cost per hire would be tossed out, replaced by some quality of hire metric.

For some reason converting the "talent is #1" mission statement into a real strategy with real tactics seems all but impossible unless a big employer brand is driving it. That's why the CFO needs to get involved by looking at the financial impact of bad hiring decisions. Gallup is doing a lot of work in a related area, by directly examining the huge financial impact of worker satisfaction and engagement on earnings. Something similar should be done on the hiring front, since this is where the problem originates.

Every hiring decision has a direct financial impact. The best people save money and produce more. To calculate this profit impact at the hiring decision level all you need to do is to compare the profit contribution of a well-above average target employee to the person being hired. I suggest using the top third of your current employee base as the target, and compare all future hires to this level. The difference represents the opportunity lost in dollars. Calculating this is not hard to do.

In Part 1 of this article series, I presented a model that involved multiplying revenue per employee by some reasonable estimate of variable contribution margin. This results in average variable profit per employee, or APE. Since all employees are not created equal, it's reasonable to estimate that the top third of the people you hire generate 20% more APE than the average, and the bottom third generates 20% less. This 20% difference is D in the model. Some might argue that D is greater than 20%. Few would argue it's less. For calculating the financial impact of not hiring a top-third person, it's a reasonable floor.

For example, Amazon's APE is approximately $140,000 per employee. (Send me your stock ticker symbol if you'd like to see your company's calculation or go to my blog to see how to calculate this.) With D equal to 20%, it means that each person in the top third generates $168,000 in APE and each person in the bottom third generates $112,000. This is a difference of $56,000 per person. The simple math equation is "Lost profit=2D*APE."

For most companies the profit lost by hiring someone who winds up in the bottom third instead of the top third ranges from $50,000 to $100,000 per person. (This is valid for typical staff-level positions, with a multiplying factor on top of this depending on management level and position importance.) If you do this 100 times a year, this turns out to be a lot of money — a loss of $5 million in per tax profit using the $50,000 impact.

Now for the big picture strategy and financial impact part. Instead of multiplying the lost profit by 100, substitute one third of the people you expect to hire in the next 12 months. The reason: one third of the people you hire in the next 12 months will wind up being in the bottom third of your workforce. And for most of you, this number is a lot bigger than 100.

Of course, no one goes out of their way to hire someone who's going to wind up in the bottom third, but somehow it happens anyway. Usually this is due to weak systems, the pressure to fill positions, ineffective sourcing, weak technology, incomplete assessments, overburdened recruiters, and/or hiring managers who can't assess or attract strong people. A hiring strategy designed to measure the financial ROI of each hiring decision would have minimized the impact of these mistakes, especially if someone on the CFO team was involved in the pre-hire calculation.

This all starts by thinking about each hiring decision as part of a bigger, "raising the talent bar" hiring strategy. If you'll be hiring 1,000 people over the next 12 months it's obvious that 333 people will wind up being in the bottom-third. Shifting just 100 people into the top third will earn your company at least $5 million in additional pre-tax profit, and your average talent level will increase. If it costs you less than $500,000 per year to pull this off, it becomes a pretty big ROI, so making the business case is pretty easy.

I'll present the actual calculation to measure new hire ROI in the next article in this series, but for now I'd like to suggest there are some things you need to consider first. Here's my short list:

1. Do you have a maximize-quality-of-hire hiring strategy in place now that drives decision-making?


2. Has your average talent level improved over the past 10 years? Why, or why not?


3. Do you tend to hire the best person available at the time given budget, comp, and time restraints or the best person possible without the restrictions?


4. Is your sourcing targeting the 85% of candidates who aren't looking, or is it focused on the 15% of people who are looking? Which group has the greatest number of top people in it? Is your sourcing budget being spent as wisely as possible?


5. Are your recruiters and hiring managers able to find, assess, recruit, and hire the top third at your current comp levels? How could you improve your quality of hire without changing your comp plan? (Hint: convert jobs into career moves, rather than lateral transfers.)


6. What is actually driving your company's talent strategy? Don't be surprised to discover it's some mashup of your comp plan, a cost per hire metric, your ATS, legal team, and your antiquated processes. Your answer to question 3 above provides some insight to this.


7. Without making any excuses of how hard this is to do, how are you now measuring quality of hire? (I suggest using a talent scorecard which compares all candidates against a company's top-third performance metric.)

Last question: should the recruiting department's performance be measured by some productivity and cost metrics, or by how well it helped raise the company's talent bar? Obviously, a lot of things would have to change to excel at both, but maybe that's a good place to start.

Now to make matters worse.

At the ERE 2010 Spring Expo in San Diego I contended that we were in for a near-term hiring tsunami of major proportions, forcing companies to hire the C+ in droves. As the recovery accelerates, new hiring needs, an increase in voluntary turnover, and sideliners rejoining the labor pool will start a mad scramble to fill seats with anyone who looks like C+ person, much less a B+. In the national employment report issued on May 7th two-thirds of this tsunami forecast came true. The other third will become apparent in the next few months. It will cost your company even more mega-bucks if you fall into the trap now being set.

Practically speaking, there might not be much you can do about it, since most companies have mistakenly set up their hiring process to only hire C+ level people. In fact, in doing this they've also set up their processes to prevent the B+ from even entering the building, other than through the back door. Of course, your company was not so naïve. You knew the last few years were aberrations. You knew that anyone could hire above-average talent in a below-average economy, especially when the supply of talent exceeds demand. But things are different now.

Q1, 2010 was a tipping point. The excess of supply of talent will quickly reverse course, and finding enough B+ level people to fill your new jobs will be much more difficult. Worse, replacing a B+ person who voluntarily leaves for something better with someone of equal caliber will be near impossible.

To put some foundation to this over-the-top scenario, let me offer this definition of a B+ person: technically qualified, consistently delivers high quality results, can overcome most obstacles without making excuses, will take on tough projects, can work 24/7 in spurts, can deal effectively with all types of people inside and outside the company and the department, often takes the lead when problems occur, self-motivated, and doesn't need a lot of direction. Add, if the person is a manager, a B+ managers hires only B+ or better. This is a great person. Imagine the cost of losing one, or not hiring one for each position in your company.

Now consider the criteria these B+, or better people use to compare opportunities and select which one to accept. It probably consists of these factors, but feel free to edit the list based on your company's experience and the jobs you actually fill:

Selection Criteria of Top People (B+ and Better)

1. Growth opportunities — the job offers a chance to progress rapidly, assuming successful performance.


2. Job content and satisfaction — doing work they like to do.


3. Job stretch — taking on a bigger job rather than a lateral transfer.


4. Company-related factors — financial stability, brand, image, culture, and industry.


5. Work/life balance — a career opportunity coupled with a chance to have a somewhat normal life outside of the office.


6. Compensation and benefit package — while it doesn't have to be the best, it must be competitive.


7. Hiring manager and the team — the hiring manager is a true leader who is going places and is a possible mentor. The team is professional and top notch.


8. Location — convenient if possible, but most places would be considered if the job offered a career move of singular opportunity. (Note: this must be only be discussed in the context of a very slow approach to evaluating multiple opportunities within the company).

Now, I'd like to prove my contention that most companies are not targeting these people. Instead they target the how the C+ level person looks for another job and selects one over the other. In the process this approach precludes the B+ from consideration. To gain a sense of this, just answer the following questions about your companies’ hiring and recruiting processes.

1. Do your job postings clearly define career moves or lateral transfers? If you emphasize skills and experience in your job descriptions, rather than learning and growth opportunities, you're targeting the C+ person. This is the person who's looking for a lateral transfer.


2. Do you have formal processes in place that allow the B+ person to engage with your company without having to apply? If you do, does it work? This means you identify who they are, and that you track your conversion rates.


3. Are all of your hiring managers open to conduct 30-minute "career discussions" with strong people who aren't totally excited about working at your company and who meet fewer of the requirements listed on the job description? As the economy recovers, the best people will be reluctant to apply unless they have a chance to view your opening as a clear career opportunity, without having to make any commitments.


4. Is it easy for the B+ person to obtain all of the career-oriented selection criteria defined above? This is what they'll use to compare different opportunities, and if you don't formally give it to them, you'll unnecessarily lose many of the best.


5. Do all your hiring managers, including those in the bottom half, know how to recruit and attract top performers? It's hard for any manager to consistently hire B+ level talent without working hard at it. With the rush to fill positions, formal "raising the talent bar" programs can offset some of this move toward mediocrity.


6. Do you have enough people every B+ candidate meets who are part of your B+ career track program? Most companies have a high-potential program to ensure their top 5% get managed, promoted, and rewarded effectively, but few carry this through to the top 20-25% of their workforce. If you can't prove you offer a career track, it will be difficult convincing the B+ candidates your career story is credible.


7. Do you have a top-down driven hiring strategy or bottoms-up? A bottoms-up strategy is top-candidate focused, aka customer-driven, designed to meet their needs at each step in their job hunting and decision-making process. Unfortunately, most companies have inadvertently and naively assigned this critical role to their ATS vendor and RPO in combination with their comp, legal, OD, and IT departments. For just one example, are your job postings uniformly manufactured by the ATS to meet legal needs or designed to appeal to the intrinsic motivators of a top person? To offset this poorly designed top-down process, a bunch of costly workarounds and special programs are required to minimize the disaster they cause.

While a few companies have effectively resisted the push to confirm to increased bureaucracy, most haven't. They still use some mash-up of ill-conceived hiring ideas designed by the wrong people to hire the most available person, not the best person. The business and financial cost of this misguided process is far greater than the short-term satisfaction of getting a position filled on time, but somehow this impact is hidden from view. Just sum the total compensation of the C+ people in your company to gain a sense of how much this is costing your company every years. Maybe put it on chart and track this to measure your company's overall hiring performance. So whether you want to track the cost of hiring a C+ rather than a B+, or not, it's time to grab hold of your wallet. If you don't, before you know it will be empty.

The idea behind it was to get hiring managers to do the right thing, which conceptually is easy, less so in practice. With this perspective, here's the short list of how hiring managers mess up the hiring process and why they need some tough love to get it right:

1. They complain they don't have time to describe real job needs. Of course, it takes extra effort to hire a top-notch person, and no effort to fill a seat with a sub-par person. So take your choice.


2. They haven't thought through real job needs and instead rely on skills-infested job descriptions to screen candidates. Their counter to this is that they'll know the person when they see him, so this is okay. My counter to their counter is top people want to know what they'll be doing before they agree to meet, so you need to think through the job ahead of time and tell the recruiter why the job is a step-up, not lateral.


3. They knowingly let candidates accept offers without giving the candidate the true story about the job, about their management style, what the culture is actually like, and how they'll be judged. In my mind this is unconscionable. For example, being responsible for developing the material selection for an advanced product line is not the same as conducting an exhaustive evaluation of different metals 45 days after starting, with no budget, when it normally requires six months and a fully staffed research lab to do this properly.


4. They exclude good people for superficial reasons based on flawed assessment techniques, rather than their inability to consistently deliver the results required for on-the-job success. In my mind hiring top people should not a game of chance.


5. They hire underperformers for superficial reasons, like strong handshakes, strong communications, strong academics, strong first impression, affability, etc., rather than their ability to meet the results required for on-the-job success.


6. They narrowly focus on the wrong stuff. It takes more than technical brilliance, affability, strong communication skills, and a great personality to consistently deliver high-quality results. While these are often necessary, they're certainly not sufficient. Worse, even if they are necessary, you can't assess them properly in 30 minutes.

Now sometimes hiring managers don't have enough time. If not, they're in a Catch-22 of being forced to make short-term decisions just to get the spot filled. More often than not, it is lack of good managerial ability and the use of traditional job descriptions to screen and select candidates. The problem with this is that the best people, even if they have the skills, are rarely looking for lateral transfers, so they never apply. The best people with fewer of the skills listed, or a different mix of them, who might see the job as a career move, won't apply since the job spec indicates they're not qualified. Collectively, this makes no sense if a company wants to hire better people.

With this in mind here are some ideas on how to tame your hiring managers and in the process see and hire more top performers.

1. Implement a raising the talent bar committee. Don't let managers who aren't able to hire people stronger than themselves make the decision alone. Either include the manager's boss, or create a raising-the-talent-bar team, with one member involved in every hiring decision to ensure talent standards are always met.


2. Give managers quality-of-hire objectives. Make hiring top people part of the manager's performance objectives and review process. Some of the metrics as part of this must include team turnover and job satisfaction and performance reviews.


3. Use a performance management process to write job descriptions. Have your company require all managers to provide new hires their performance objectives on the day they start. Use these as the screening and selection criteria, instead of job descriptions. Most managers are weak at clarifying expectations, so this logical step eliminates this problem in the bud.


4. Create the employee value proposition before starting the search. If the person is not looking, and/or has multiple offers before starting the search, ask managers why a top person would want this job. Generic statements are not acceptable. It must describe what the person can learn, will be doing, and could become, if successful. To highlight the importance of the position, tie it to the company strategy or a major project.


5. Conduct exploratory interviews before the in-person interview. Don't let managers talk with the candidate in-person first. Ever. More mistakes are made in the first 30 minutes of the interview than any other time. An exploratory interview over the phone starts as a two-way dialogue among equals. It allows candidates to evaluate the job from a career-move perspective before deciding to be seriously considered a candidate. Adding online video minimizes the impact of first impressions, so there's a double-benefit with this type of exploratory interview. (We're now launching a beta test combining an exploratory interview with video, so email me if you'd like to consider participating. We'll be taming hiring managers in the process.)


6. Control the first 30 minutes of the in-person interview. I worry that managers will become distracted during the critical first 30 minutes when they meet the candidate in-person. To minimize the impact of first-impression-related errors, I ask the candidate to write a quick summary of two major accomplishments related to actual job needs. I then ask hiring managers to review these right after conducting a quick work history review. As part of this, I highlight things in the candidate's resume I want them to focus on. This allows me to know what goes on behind closed doors without actually being there.


7. Conduct more panel interviews. With hiring managers I'm really worried about, I lead the first interview between the candidate and the hiring manager. The way I can be sure biases are held in check and we both can focus on the candidate's ability to deliver consistent results. Interestingly, this is always a second evaluation interview for me, and frequently my assessments of the candidates changes dramatically — some getting better, some worse. As a result, I always suggest hiring managers meet with their final candidates at least two separate times alone, and once in a panel interview.


8. Formal debriefing program. Under no circumstances add up a bunch of yes/no votes to decide whom to hire. This is akin to a popularity contest. Instead, use some time of formal talent scorecard system covering a broad range of factors. Assign different interviewers different factors and make them share and justify their rankings using evidence, not feelings. (Email me if you'd like to review the scoring system I describe in Hire With Your Head.)

Hiring is too important to leave to chance, yet most companies do just that by letting unsophisticated hiring managers run wild in a scarce population of in-demand top performers. A end-to-end companywide hiring process based on the needs of top people is one way to tame your hiring managers. Not only will you increase your share of the best talent available, but you'll also turn your hiring managers into your best friends.

You can spot achievers in about 15-20 minutes by looking for clues high achievers leave in their wake. This is the forensic connection, but first, let's define an achiever. 

An achiever is a person who:

• is highly motivated to do the work required


• consistently delivers high quality results on time and on budget


• is personally driven to become better


• takes great pride in doing high quality work


• works well with a broad and diverse group of people


• will commit and deliver high-quality results despite the challenges


• doesn't make excuses; just gets it done somehow


• volunteers for tough tasks or takes them on despite personal inconvenience

Let me start the forensic interviewing approach with a bit of reminiscing. I vaguely remember a high school physics experiment where the teacher demonstrated how to determine if a primary activity was present by looking at its secondary impact on other things. I suspect this is comparable to determining if a planet that isn't visible is present by examining the gravitational shift it has on other planetary objects. Forensics is a form of this by looking at the clues left at the crime scene to determine what actually occurred (think CSI). From an interviewing standpoint it means looking for clues that an achiever pattern is present rather than looking directly for achiever-related behaviors or competencies.

Here's how this works during the phone screen. A phone screen should consist of these four core sections:

• First, the introduction and engagement.


• Second, the resume and work history review, looking for general fit and the achiever pattern.


• Third, determining if the person is a strong fit for the actual opening and if the position offers the person a career move.


• Fourth, either recruit the person for the open position, put the person in the talent pool for future positions, and/or get referrals.

During the phone screen, the work history review should last at least 15-20 minutes, and longer for senior level positions. For the uninitiated, a work history review is a comprehensive evaluation of the candidate's resume, job by job. Done properly, the achiever patter will quickly emerge. Here's how to conduct this type of forensic assessment:

1. Find out the actual dates of each major job, including months and year. Many people hide non-positive information in their resumes, so it's important to first ferret this out.


2. Get an explanation of any gaps in employment. If there are gaps, look for areas of personal development or special training the person initiated on his or her own. Achievers are constantly improving themselves, so look for this throughout the interview.


3. Determine why the person changed jobs and why each new job was selected. Achievers tend to carefully select jobs based on some major overriding career goal. I'm not fond of asking candidates first what their long-term goals are, since this is often fanciful. Instead I ask them about major career goals they've already achieved. If they have a pattern of achieving these goals, I then ask them about their long-term goals. Make sure the jobs selected logically support the major goal.


4. Determine if the job change achieved the desired result. Non-achievers tend to move from job to job based on circumstances out of their control, or convenience, with a focus on tactical issues like compensation, location, security, and basic job content. Achievers tend to focus more on the strategic aspects of the job, including the potential for learning, impact, and growth.


5. Within each company ask about major projects, accomplishments, and results achieved. Achievers demonstrate a pattern of increasing impact and consistent results. Quantify this with specific details, and look for trends and improving performance over time. Also find out how the person proactively expanded his or her role and influence. This is what achievers do, so look for it.


6. Get comparisons of performance to the person's peers. Compare the person's specific performance to others in the group by asking about rankings, standings, differences between the top and average, and what the person would need to have done to be at the top level. Achievers are competitive and self-motivated to improve.


7. Ask about any type of recognition received. Achievers receive lots of recognition, so look for this and be concerned if you don't find much. Recognition can be any number of things like raises, bonuses, awards won, promotions, patents awarded, assignments to bigger projects, presentations at industry conferences, published whitepapers, huge blog followers, commendations of any type, scholarships, honorary societies, and leadership awards. The amount of recognition received, when it when was received, and what it was for are the best confirming evidence of this achiever pattern.


8. Prepare a graphical work chart for each major position. Rather than use personality traits and personal affability to assess team skills, just track the growth of the teams the person has been assigned to over the past 5-10 years. If this has increased significantly to include expanded functional responsibility, broader cross-functional involvement, and more exposure to senior management inside and outside the company, you can be assured the person has strong team skills.

Achievers leave lots of evidence in their wakes, and if the wake is big enough, you can assured there's an achiever out in front. Of course, you then need to determine if the person is a good fit for your current job opening and if the position provides the candidate a strong career move. You need both to ensure you can recruit and close the candidate on favorable terms, and beat back the competition. In my book, Hire With Your Head, I demonstrate in detail how to do this. Once you get the person on board, don't be surprised that those with the achiever pattern also possess all of the traits described in your company's competency model. As an old high-school teacher demonstrated many years ago, you can often find something without looking for it.

I'll lay out my hand and concerns in this article. We'll address them in the upcoming debate. To get started here are a few of the big problems I have with BEI:

1. Is a structured BEI all that predictive? According to the oft-cited Schmidt and Hunter Validity and Utility of Selection Methods study, the correlation between a structured interview and on-the-job performance is .51, meaning only 25% (squaring the correlation coefficient) of the person's performance can be predicted by the interview. This means that 75% is unexplained. Wouldn't any structured interview give the same results? Also, what's the predictive value of an unstructured BEI?


2. Past performance, not past behavior, is the best predictor of future performance. The same study clearly refers to past performance, not past behavior, as the best predictor of on-the-job success. Where's the research that suggests that past behavior is superior to past performance? As a case in point, I conducted a virtual performance-based interview and assessment comparing Obama vs. McCain before the 2008 election using our 10-Factor Talent Scorecard. If you check it out, the predictions were right on the mark. Using behavior as the criteria, the predictions would have been lopsided.


3. Why is the criteria used to promote someone from within more predictive than hiring someone from the outside? It seems logical that the methodology companies used to promote those who are successful, which is based on their performance, should be applied to those hired from the outside. If so, this would mean emphasizing a track record of past performance doing comparable work in comparable situations combined with the person successfully taking on bigger roles with less experience. This seems like it would be a better predictor than using behaviors and KSAs.


4. BEI misses the forest for the trees. The big goal here is to maximize quality of hire, not conduct accurate assessments. While a professional interview and accurate assessment is part of this, more important is having a pool of highly qualified prospects who are willing to go through the assessment process and accept a fair offer of employment if given. This requires great sourcing, great recruiting skills, and strong negotiation skills, plus managers who are strong leaders who can attract top people to work on their team. I haven't seen any science that looks at hiring from this end-to-end perspective.


5. If no one is in the forest, can you hear a tree fall? This is a pretty weak analogy, but the point is if no one uses the BEI properly, how can you consider it useful? Most managers find it too clinical, candidates can practice ahead of time, and the best candidates are turned off by it. Plus lack of enforcement and uniformity weakens the pretty weak predictive value even further.


6. The guidance on making the assessment seems to be limited. What's a good answer? I've looked at dozens of BEI rating sheets and each one is relatively subjective. Statistical process control techniques would suggest that wide variances on any factor are indicative of a process that's out of control. SPC is a valid scientific technique used in six sigma, but seems to be ignored by those in the I/O psychology community.


7. Where is the scientific evidence that companies that use BEI outperform their peers? Wouldn't this be the big Kahuna? In Jim Collin's Good to Great, there is no indication that BEI was why they hired stronger people. Could it be that there is something else, other than accurate assessments, that drive quality of hire?


8. There are other techniques that could increase accuracy and improve quality of hire. In Hire With Your Head, I make a strong case that a mashup consisting of a list of pre-hire performance objectives, a few in-depth performance-based interviewing questions, an evidence-based ranking system, strong recruiting and sourcing skills, plus involved hiring managers is the key to maximizing quality of hire. Why don't the I/O psychologists seek out better techniques, rather than relying on outdated less-reliable methods? One way would be to model all of the managers who consistently hire great people and use this as the framework of a new and better process.


9. BEI is counterproductive by eliminating the top half from consideration. Since the BEI process assumes the person has 100% or more of the experience required, it eliminates those high-potential people who get more done with less experience from consideration. The best people are looking for a career move involving job stretch, learning, and growth. By forcing everyone through the same funnel, some of the best people voluntarily opt out early, since they find the process demeaning, clinical, and one-directional. By inadvertent default then, the only people considered are those with all of the basic qualifications and those looking for a lateral transfer — aka, the bottom-half.


10. The BEI is logically flawed. A correlation between two factors doesn't mean that one is the cause of the other. For example, just because someone has all of the qualifications and behaviors, doesn't mean the person will be a top performer, even if all top performers have the same qualifications and behaviors. This is similar to the logical "asserting the consequent" argument. Clearly we'd all agree that there is a high correlation between the number of troops required to win a big battle, but having more troops in the field doesn't mean they're going to cause the size of the battle. While having the behaviors might necessary, it's certainly not sufficient. The relationship between the manager might be a problem. The person might not be motivated to do the work, even if competent. The person might not fit with the team, or company culture, or might not want to work with less-than-current technology. These factors, among others, represents the 75% not covered by the BEI.

Now all of this might be the ramblings of an old-line recruiter who has been in the field too long. On the other hand, maybe the scientists never had to close a top performer for a troubled company with limited funding, and then guarantee the person would actually deliver top-notch performance for at least a year. Maybe they should try to do this and then modify their science accordingly. If they do, I suspect they'll come to the same conclusion that BEI doesn't improve quality of hire, and in many cases actually causes it to decline.

Automating the ERP process represents the upcoming wave of new technology. From what I've seen, fundamental changes are now underway that will soon change the way corporate recruiters find the 85% of candidates who are not now looking. This could have significant negative repercussions for external recruiters and every other current sourcing approach.

LinkedIn, Jobvite.com, and Referio.com, among others, are now offering and/or are beefing up their employee referral capabilities as we head toward an era of full ERP automation. This essentially means that your employees' LinkedIn, Facebook, and Outlook contact lists will be scrubbed for suitable candidates for your company's current and future positions. Adding the P in ERP though is where the real advantage lies, and you can get in on this action right now.

The differences between PERP and ERP are night and day. ERP is based on the idea that your employees will refer their close friends and associates who have asked to be referred to your company. This is a pretty narrow group of people, with the quality and timing hit or miss. Since your employees are reluctant to say no to a friend, quality is questionable, as well at the low chance you have an open position available at the time of referral even if the person is good. Here's how the P in PERP changes this model:

1. Instead of waiting for a referral to call in, your employees will regularly and proactively review their existing contact lists to identify people who are potential candidates for your open positions. This requires that employees are aware of these open positions, and your employees (or recruiting team) are proactively contacting these people. Getting these people interested in what you have to offer won't be to hard if your outbound messaging is compelling, but will be a wasted effort if you send a boring and skills-infested job description.


2. A P2 employee referral program adds another level of proactivity to the mix. In this case your employees continually and proactively expand their current network of associates with the best people they've ever worked with in the past. This way when you send out the compelling emails, you'll reach a broader group of top performers. If the emails are especially compelling, they'll have a viral effect, reaching even more top performers. (We've developed a pretty corny "wild 'n crazy" ad wizard that converts boring job descriptions into compelling ads. If you don't laugh too loud we’ll let you look.)


3. A P3 ERP goes even further. With this addition, your employees send regular messages to their contacts suggesting that your employees be contacted whenever their connections begin contemplating a career change. This way your company will have a chance to pursue these people before they enter into the public job-hunting market. When your employees are contacted they need some means to automatically search current and soon-to-be opened job postings for a fit. Getting hot prospects first in combination with some type of automatic matching feature will be a huge competitive advantage.


4. Adding interactive email to your CRM (candidate relationship management system) further automates the PERP process. In this case, prospects candidates who respond to your initial outbound email will receive an appropriate system-generated response based on their request. This will appear to be a personal message from a recruiter. With the appropriate decision-tree logic, candidates can be reeled-in via a series of information sharing emails. Then when the candidate indicates he or she is serious and wants to talk about a specific job, a meeting can be automatically arranged to talk to a recruiter.

While this type of full automation isn't quite here yet, don't be surprised to see partial solutions offered at the next ERE Expo. Regardless, here are some things you can do now to get started developing your own PERP right away:

1. Have your employees proactively expand their current connections. In the future, the companies with the largest number of high-quality connections to their employees will be in the driver's seat. They'll quickly lose this advantage though, if their offerings describe lateral transfers instead of career moves.


2. Have your recruiters cherry-pick your employees' existing connections. LinkedIn is great for this. Just have your recruiters review the current contact lists of their fellow employees and find out who's the best, whether they're looking or not. Then contact these people and recruit them for your open opportunities.


3. Add some type of quality requirement to those people being referred. Make sure your employees are required to justify why they're referring someone. This provides some indication that the person listed in the talent database is an all-star or a bench player. It also provides the employee a reason not to refer someone unqualified.

Getting people before they enter the job market is what early-bird sourcing is all about. This gives you the chance to decide if you're interested in pursuing a candidate, and a week or two headstart on the completion. But be cautioned. As the process gets automated, early-bird sourcing will not be an option.

Just consider the flip side to all this. Every company will soon be at risk in losing its best people if its competition is implementing a PERP and it's not. Just to stay even then, it will need to enter the fray. This will accelerate the process of job-changing as the 85% of the candidates who are not now looking are soon connected somehow with everyone else via PERP. Aside from hyperspeed sourcing, turnover will increase, loyalty will decline, compensation will increase, and the world as we know it will change.

Fasten your seatbelts.