What’s Working and Why - Human Capital Institute

B y A l l a n S c h w e y e r

O c t o b e r 2 0 0 9

Photo by Adrian Boliston

$100K+ High Level Recruiting What’s Working and Why

$100K+ High Level Recruiting: What’s Working and WhyCopyright © 2009 Human Capital Institute and The Ladders. All rights reserved.

i

About the Research ............................................ 1

Executive Summary ............................................ 1

Part One: The Current State of High Level Recruiting ......................................... 3

Sidebar: More and More Workers Joining the Ranks of the Highly Paid ................................. 5

Part Two: Methods & Challenges ...................... 9

1. External Recruiters .................................... 10

2. Large, Public Job Boards .......................... 12

3. Specialized, $100k+ Recruiting Sites/Services .......................... 14

4. Social Networks ........................................ 16

Sidebar: Survey Respondents on the Use of Social Networks for $100k+ Recruiting .... 17

Part Three: $100k+ Recruiting Tools— User Satisfaction ............................................... 18

Part Four: A Combined Recruitment Strategy .19

Insights & Recommendations: What’s Working & Why? ................................... 20

Appendix A: Respondent Demographics ........ 22

Appendix B: About the Author ........................ 25

Contents


1

The study on which this paper is based involved extensive secondary research, interviews with a dozen industry leaders and senior recruiting

professionals, and a comprehensive survey com-pleted by 249 members of the Human Capital Institute (see Appendix One).

High level recruiting is changing. It is becoming a much more frequent event for both recruiters and talent. As our advanced economy requires more and more knowledge workers and skilled professionals, more people are earning six-figure salaries. While $100,000+ compensation is still mostly reserved for executives, managers, senior professionals and high-performing salespeople, many skilled workers are also joining the ranks. Moreover, there are greater numbers of high level skilled workers, managers, professionals and executives than ever before.

The growth in six-figure income earners can be attributed in greater part to the evolving economy than to real wage growth, which since 2000 has been stagnant for all except the highest earners.1 An increasing amount of the work done in the United States today is knowledge work, which requires a large supply of skilled workers, leaders and professionals. Thus, the $100k-$300k pay bands increasingly will include senior professionals, middle-managers, skilled technicians and top salespeople. As such, this category appears ripe for attention as recruiting organizations seek to improve efficiencies and quality of hire while reducing costs.

To improve efficiencies, most organizations will find it necessary to re-consider their strategies in recruiting high level talent. In this study, we found that current practices are either ineffective or will become unscalable as hiring in this category grows. An evolved approach is necessary if organizations are to optimally manage future high level hiring.

Our research suggests that $100k+ hiring is becoming a category that recruiters need to consider separately. Traditionally, recruiting has been segmented into roughly three or four main segments. Large organizations assign recruiters to entry-level or college recruiting and others to experienced-level recruiting, often with specialty recruiters for professional groups (IT, for example). Much of another major category, executive recruiting, is outsourced to external executive recruitment agencies. In some companies, an additional team may be assigned to contract and contingent workforce acquisition.

Today, organizations use a range of tools to recruit high level, $100k+ talent. According to our research, however, most organizations have not yet optimized their $100k+ recruitment strategies—neither for today’s conditions, nor for the conditions likely to prevail in coming years. The trends raise a number of questions. Can organizations continue to use external recruiters for as much of their $100k+ hiring as they have in the past? If only a small percentage of positions (mainly executive) fell into that range a decade ago, and two or three times as many are in that category today, can organizations afford to use external recruiters to the extent they do today? If not, can the less expensive options such as large, public job boards or specialized job sites fill the gap? Will social networking sites emerge as a viable choice for high level hiring? Are internal recruiters skilled enough or in sufficient numbers to manage all of the demand for $100k+ hires?

About the Research

Executive Summary

1 According to the Economic Policy Institute (USA), while productivity was up nearly 20% between 2000-2007, the real median hourly wage went up only 3% overall and 1% for men. None of this growth occurred after 2003. Conversely, at the top of the wage scale—at the 95th percentile—real wages went up 9%. Since the onset of the recession in 2008, real wage growth has increased modestly for those with jobs, but due to reduction in hours worked, those gains have been significantly offset.


2

Our key findings from this study include the following:

n Despite the recession, the single most problematic issue in high level recruiting is access to quality candidates. More than half of our respondents cited “quality of candidates” and/or “availability of candidates” as their greatest challenges.

n A majority of our respondents moderately or strongly agree with this statement: “External recruitment agencies do NOT represent a scalable solution for my $100-$300k hiring due to high fees.” As such, with hiring in this category set to expand significantly, a new approach is needed.

n Among our respondents, almost half don’t use external agencies at all, or they use them very rarely because they are too expensive.

n The trend that emerged most clearly in our survey and in our interviews with experts was a move away from over-reliance on external recruiters, toward the development of an internal recruiting organization that is capable of high level and executive recruiting.

n Today, the primary complaint among recruiters and hiring managers who use large, public job boards for high level hiring is not the boards’ cost, nor their difficulty of use, but the inundation of resumes they receive when they post a position and the ensuing cost and challenge of sifting appropriate candidates from the “pile” of applications received. For senior level recruiting, our respondents also cite the lack of qualified candidates they receive from large, public job boards.

n Specialized job sites and services, especially those that cater mainly or specifically to $100k+ jobs, are more effective than large, public boards in this category of hire, especially to the degree that they ensure their candidates are screened. Our survey respondents and interviewees report that specialized job sites and services save them time by delivering targeted, senior candidates who are either actively or semi-actively seeking new positions. The best of these services carefully screen so that only senior level and skilled workers, professionals and executives have access to the $100k+ positions advertised.

n A majority of our respondents are using social networking sites in recruitment. More than half report that social networking sites can be effective in providing quality senior level prospects, despite the time it generally takes to sift through candidates.

n It is apparent that, when looking at the pros and cons of each of the main recruiting tools, it is always the right, strategic combination of these tools that builds the most effective talent acquisition program rather than mastery and use of one or two alone. It is on this premise that we derive insights on and recommend solutions for scalable $100k+ recruiting in the concluding section of this paper.

Today, as more non-executive, high level, experienced hires are falling into the $100k-$300k salary range, the time has come for organizations to deploy a new kind of recruiter—one who can reduce costs and even improve quality of hire in this segment by gaining expertise and using the right combinations of tools at his or her disposal.

The findings from our research are sure to validate much of the implicit knowledge experienced recruiters already possess about the market, but they are also likely to surprise, intrigue and provoke thought—even among the veterans of the industry.


3

Part One: The Current State of High Level RecruitingExecutive, managerial and skilled professional roles at the $100k+ salary level are no longer rare. Many Fortune 1000 companies hire hundreds annually, even in recessionary times, and especially in knowledge-intensive industries. As of 2005, 7% of the U.S. workforce fell into the $100k+ category2; today, despite the recession, that percentage is certainly higher. Within the next three years, it is likely to reach 10% or more.

Nonetheless, the recession of 2008-2009 has taken its toll. According to the Association of Executive Search Consultants (AESC), “worldwide executive searches fell thirty-five per cent in the first quarter of 2009 against the same period a year previously, with average net revenues down thirty-eight per cent for the same period.”3

The AESC estimates that prior to the recession, in 2008, the senior executive recruiting industry was worth a record $11 billion after five years of consecutive growth. Today, in the midst of the worst recession in decades, the majority of organizations we surveyed are recruiting less than 20 six-figure positions per year (see Figure 1). According to survey respondents and interviewees for this research, $100k+ hiring has decreased drastically in response to the current recession.

Even so, for firms of more than 10,000 employees, half recruit more than 50 six-figure positions per year and one-third hire more than 100. Among organizations of fewer than 10,000 employees, on the other hand, 47% currently hire 10 or fewer per year and only 19% hire more than 50.

Figure 1: In a typical year, approximately how many $100k+ positions do you fill in your organization (including base salary and bonus)?

1 U.S. Census Bureau, 2005 (www.census.gov)2 Q1 2009 AESC State of the Executive Search Industry report—May, 2009 (see www.aesc.org)

2%

17%

16%

18%

15%

14%

7%

5%

3%

3%More than 1000

501-1000

201-500

101-200

51-100

21-50

11-20

6-10

1-5

None

N=249 0% 5% 10% 15% 20% 25%


4

There was little difference in our survey data between small, mid-size and large firms in the amount of budget allocated to senior positions paying greater than $100,000 (Figure 2). If anything, larger firms of greater than 10,000 employees devote a smaller percentage of their overall recruiting budget to $100k+ talent.

Figure 2: What percentage of your discretionary recruiting budget (i.e., not fixed salaries, etc.) is dedicated to senior ($100k+) talent?“Last year, we hired

around 100 people at the $100k level and above; this has peeled off over

the latter part of 2008 until now. Previous to

that, we’d do about 450 positions per year of

that nature.”

—Senior Manager Global Recruiting

Global Mining Corp.

17%

17%

16%

14%

14%

4%

4%

5%

2%

2%

71-80%

61-70%

51-60%

41-50%

31-40%

21-30%

11-20%

6-10%

1-5%

0%

0% 5% 10% 15% 20% 25%

2%

3%91-100%

81-90%

N=249


5

More and More Workers Joining the Ranks of the Highly PaidNo longer does a worker have to climb the executive ladder or earn a professional qualification to attract a six-figure pay package. Per the chart below, representing U.S. Census data from 2006, the number of workers being paid $100,000 or more per year is approaching 1 in 10. Many senior skilled workers, including high level tradespersons, truck drivers, IT specialists, air traffic controllers, firefighters, police detectives, technical writers and court reporters, earn $100k or more—some with overtime, some in base pay alone.

For the white-collar inclined, non-executive six-figure salaries are available to financial advisors, mining managers and sales managers, all of whom average over $120,000 per year. All federal public service positions in the Senior Executive Service (SES) and many at several pay grades below earn well over $100k per year (some even into retirement). City government managers and executives in large municipalities often earn more than $100,000 per year. Recently, a New Jersey newspaper reported that 16.5 percent of all New York and New Jersey Port Authority workers earn at least $100k per year.

Sources: Forbes.com, PressDemocrat.com, DBAFYIcenter.com, Boston Globe, NJ.com, Bureau of Labor Statistics, U.S. Census

0% 10% 20% 30% 40% 50%

U.S. Census 2006 Economic Survey, income data

$75k–$100k

$25k–$50k

$50k–$75k

$25k or less

$100k+

Households

Persons

17%

7%

11%

6%

18%

16%

23%

36%

28%

35%


6

There is no norm across organizations when it comes to the composition of the workforce that earns $100k or more. Most fall within the broad range of 4% to 20% of the workforce (Figure 3). However, smaller firms, those of 1,000 or fewer employees, are twice as likely (20%) to employ half or more of their workforce at a salary of $100,000 or greater.

Figure 3. Approximately what percentage of your workforce earns $100k or more in base salary plus benefits?

14%

12%

13%

13%

4%

5%

8%

9%

10%

10%

41-50%

31-40%

26-30%

21-25%

16-20%

11-15%

7-10%

4-6%

1-3%

0%

0%N=249 5% 10% 15% 20% 25%

2%

More than 50%


7

Not surprisingly, executives (89%), senior managers (93%) and senior professionals (67%) are the groups most likely to earn six-figure wages (Figure 4). This is true in organizations of all sizes. Large companies of 10,000 or more employees, however, are more likely to pay middle managers $100,000 or more (56%) versus companies of between 1,000 and 10,000 employees (48%) or fewer than 1,000 employees (35%). Regardless of size, one-third or more of organizations compensate outside sales representatives at $100,000 or more per year (Figure 4).

Figure 4. What types of positions typically fall into the $100k+ range in your organization?

5%

19%

36%

42%

48%

27%

67%

93%

89%

18%

8%

7%

Inside Sales Reps

Some Contractors

Other

0%N=249 (multiple responses allowed) 20% 40% 60% 80% 100%

Senior Managers

Middle Managers

Project Managers

Senior Professionals (non-managerial)

Mid-Level Professionals (non-managerial)

Senior Practitioners (non-managerial)

Mid-Level Practitioners (non-managerial)

Outside Sales Reps

Executives


8

Figure 5: Top Earners

While high level hiring is down today from its apex in 2008, the reversal is recession-related and almost certainly temporary. $100k+ hiring appears certain to rebound quickly and pass the heights experienced from 2003-2008. As such, organizations should re-examine their recruiting methods to answer the trend toward a defined category of non-executive, six-figure hires. For many organizations, this group will fall into the $100k to $300k range. Above that, most hires will involve senior executives for which a more traditional approach may still be necessary. Within the $100k-$300k band, however, more senior professionals, middle-managers, skilled technicians and top salespeople will join. This category appears ripe for attention as recruiting organizations seek to improve efficiencies and quality of hire while reducing costs.

0%N=243

Who Earns $100K or More?(By organization size—number of employees)

20% 40% 60% 80% 100%

Senior Managers

Middle Managers

Senior Professionals

Outside Sales Reps

Executives

10,000+

1,000-10,000

Under 1,000


9

Part Two: Methods & Challenges Despite the recession, the single most problematic issue in high level recruiting is access to quality candidates. More than half of our respondents cited either “quality of candidates” (30%) and/or “availability of candidates” (21%) as their greatest challenge(s) (Figure 6). This bodes ominously for the future. As more and more highly skilled, professional and managerial positions fall into the six-figure category, demand for high level workers can only increase. With the recovery already on the horizon, the availability and quality of $100k+ talent is sure to come under increasing pressure and competition.

Figure 6: What is the single biggest issue you currently face in sourcing and acquiring $100k+ talent?

While the current economic climate has brought more available talent to the marketplace, finding quality candidates continues to be a challenge for our survey respondents and interviewees. In response, the methods to recruit senior level talent are changing and expanding constantly, as is recruiters’ willingness to experiment. According to our survey respondents and interviewees, the tried-and-true method of using external recruiters (headhunters) is still common in executive and high level recruiting. However, organizations are placing more emphasis on building internal capacity for high level recruiting and are increasingly turning to modern internet methods that go beyond traditional job boards to include the use of social networking sites and mixed or hybrid approaches, including mixed media and a combination of tools.

In our survey and interviews, we asked hundreds of recruiters (corporate and contract) about four specific methods used today in high level recruiting: external (contract) recruiters; large, public job boards; specialized job sites for $100k+ hiring; and the use of social networks and social media. The results are summarized in the next four sections.

16%

11%

11%

21%

4%

30%

Cost

Quality of Hire

Time to Hire

Quality of Candidates

Availability of Candidates

Lack of Tools/Technologies to Assist

Onboarding

Lack of Internal Expertise

Other

0%N=246 5% 10% 15% 20% 30%25%

2%

2%

3%


10

1. External RecruitersFew of our survey respondents or interviewees dispute the ability of good external recruiting firms to provide quality, high level candidates. Organizations value recruiting agencies for their ability to present a small but high-quality group of candidates for consideration. Not surprisingly, the chief complaint about the use of external recruiters is their cost. The great majority (67%) of our survey respondents reported that they are under pressure to reduce agency fees (Figure 7).

Figure 7: Are you under pressure to reduce agency fees?

According to our research and findings from other recent studies, organizations have reduced search assignments to outside recruiters significantly in response to the recession. Many are restricting external agencies to only the most senior hires. Among our respondents, almost half (42% overall and 48% among the full-time recruiters in our survey) don’t use external agencies at all (22%) or they use them very rarely because they are too expensive (17%) or ineffective (3%). Among the remaining 58%, half have restricted external recruiters to positions paying $150,000 or more (Figure 8). Indeed, a majority (55%) of our respondents moderately or strongly agree with the statement, “External recruitment agencies do NOT represent a scalable solution for my $100-$300k hiring due to high fees.” (Figure 9).

Figure 8: If you use external recruiters/agencies for $100k+ hires, at what level does it make the most sense for you (financially) to use them?

26%

67%

8%

Yes

No

Unsure

0%N=248 20% 40% 60% 80% 100%

11%

17%

22%

24%

4%

5%

5%

7%

Any position from $100K+







We almost never use agenciesbecause they are too expensive

We almost never use agencies becausewe are unhappy with the results

0%N=244 5% 10% 15% 20% 30%25%

N/A

3%

3%


11

Figure 9: Scalability of Agency Recruiting

The trend that emerged most clearly in our survey and in our interviews with experts was a move away from over-reliance on external recruiters and toward the development of an internal recruiting organization that is capable of high level and executive recruiting. Many of our respondents pointed out that the modern tools available to recruiters help level the playing field, which once favored external recruiters with their extensive networks and talent pools from which to draw. Many organizations today are building the same capacity in-house—at least for positions up to about $300,000—through a combination of better training for internal recruiters and access to modern, web-based recruiting tools.

3.44 25 30 48 64 58 18

Strongly

Disagre

e

Modera

tely

Disagre

e

Neutral

Modera

tely

Agree

Strongly

Agree

Unable to

Rat

e

raw m

ean sc

ore

To what degree do you agree or disagree with this statement: "External recruitment agencies do NOT represent a scalable solution for my $100-$300k hiring due to high fees"

N = 242

"We use external recruitment agencies on occasion. The in-house executive recruiting team still manages the entire search process so that it is a positive experience for both the hiring manager and the search firm. Our process begins with identifying the best search firm that has the necessary industry expertise, strong candidate assessment skills and will represent Eaton in a positive manner. Using this method has allowed for very favorable results for Eaton.”

—Zachary Simon, Director, Executive Talent Acquisition Team, Eaton

“External recruiters are not providing any more value than internal recruiters. They follow the same process. We’ve been buying into the notion that third-party agencies have some pool of candidates that internal recruiters can’t reach and it costs companies a lot of money.”

—Survey Respondent

“We don’t do too much with contract recruiters. We will bring them in-house, train them and use them for a period of time. For headhunters, we have a preferred list and use the same ones and find that successful for filling technical roles. However, our use of headhunters in the past year has declined to nothing. Even before the economic decline we found we needed them less and less. We have structured our internal structure so that it is so strong we don’t need them.”

— Senior Manager, Global Recruiting, Global Mining Corporation


12

2. Large, Public Job BoardsSince coming on the stage in the mid-1990s, use of Internet job boards has surpassed every other recruiting method in existence. In their July 2009 report on Internet usage, the Pew Internet & American Life Project found that “41% of all Americans have searched online for jobs, up from 17% … in March 2000. On any given day, 9% of internet users [are] looking for information about a job.”4 There are hundreds of millions of resumes online and millions of job postings at any given time. Last year, just one recruitment solutions provider (out of hundreds) announced it had surpassed the 100 million applications mark through use of its online solutions.5

Job boards have evolved tremendously from their introduction 15 years ago. There are not only more broad, public job boards—there are thousands of specialized sites (see below) that focus on specific hiring by industry or even profession, diversity, geography, pay levels and more. Many, particularly the large public sites like Monster, Career Builder and Yahoo!, are facing challenges due to the sheer scale of their success. Nonetheless, most organizations continue to use them in recruiting. For senior-level positions paying $100,000 or more, however, fewer than half of our respondents are satisfied with the results they get from large boards (Figure 10).

Figure 10: If you use large public job boards (e.g., Monster, HotJobs, CareerBuilder) for $100k+ hiring, do you get relevant, targeted candidates? If not, where is the cutoff for hiring through the large job boards? (Please choose the answer that describes your situation best.)

4 The Internet and the Recession, Pew Internet and American Life Project, July 2009, p. 335 Taleo Achieves 100 Million Job Applicants, www.taleo.com/news/press/taleo-achieves-100-million-job-applicants-425.html

12%

26%

40%

5%

6%

8%

Yes, we get relevant, targeted candidates for$100K+ positions on the large, public job boards

We generally stop using the large,public job boards for positions of $50K+

We generally stop using the large,public job boards for positions of 60K+





We generally avoid using the large,public job boards for any type of hiring

0%N=242 10% 20% 30% 40% 50%

2%

2%


13

Today, the primary complaint among recruiters and hiring managers who use large, public job boards for high level hiring is not their cost, nor their difficulty of use, but the inundation of resumes they receive when they post a position, and the ensuing cost and challenge of sifting appropriate candidates from the “pile” of applications received. For senior level recruiting, our respondents also cite the lack of qualified candidates they receive from large, public job boards (Figure 11).

Figure 11: If you use large public job boards (e.g., Monster, HotJobs, CareerBuilder) for senior level recruiting, what, if any, are the main drawbacks?

Large, public job boards remain an essential tool for most recruiters today. Their aggregation of tens of millions of searchable resumes, combined with their brand awareness and ability to produce “eyeballs” for job listings, make them useful for a broad range of recruiting in most organizations. Our results suggest that they lose much of their value, however, as recruiting moves from the entry and mid-levels to the higher end, where $100,000+ compensation is the norm.

26%

19%

39%

57%

5%

6%

7%

NA, I use them for senior level recruitingand there are no drawbacks

I get too many unqualified candidates

I don’t get enough qualified candidates

There is no support available

The candidates are unscreened

The costs are too high

The process takes too longfrom posting to hire

Other

0%N=242 (multiple responses allowed) 10% 20% 30% 40% 50% 60%

NA, I don’t use them for senior level recruiting

3%

2%

They are difficult to use 1%

“ Historically higher level job seekers do not post on main job boards because they usually have a network to work from; if they do post on these boards it usually ends up not being the talent we are seeking.”

“ We’re often interested in finding passive external executive candidates that are currently working. These candidates often don’t use large job boards for finding jobs or posting their resumes.”

“ We have better success and higher-quality hires by focusing on passive candidates that we contact. Such candidates do not post their resumes or search for open positions on large job boards.”

“ The main value of the big jobs boards is in their database of resumes and not their job posting features. We mainly post on the job boards to raise awareness that we are hiring and drive traffic to our corporate website. For the most part, candidates who apply to our jobs that are posted on the job boards are generally unqualified for those jobs.”

—Survey Respondents


14

3. Specialized, $100k+ Recruiting Sites/ServicesClose on the heels of the first job boards in the mid 1990s came specialized job sites focused on specific geographies, industries, diversity candidates, professions and job levels. Specialized job sites have proliferated greatly and many have become popular options for recruiters, especially as they seek specific talent. Today there are thousands of specialized sites, including several for senior level recruiting. The most popular of these are TheLadders, ExecuNet and 6FigureJobs.com (Figure 12)6. Respondents report that they are useful primarily because they provide a higher quality of candidate and fewer inappropriate applicants (Figure 13).

Figure 12: If you use specialized job sites—those that focus on $100k+ talent (i.e., The Ladders, 6FigureJobs, ExecuNet, etc.)—which do you use and for what percentage of your overall $100k+ recruiting?

Others Combined

TheLadders

Execunet

6FigureJob

0%N=242 (multipleresponses allowed)

5% 10% 15% 20% 35%25% 30%

6 TheLadders, ExecuNet and 6FigureJobs are currently the best known and most used “$100k+” job sites/services. Combined, the sites generate almost 1 million unique visitors per month with TheLadders generating about 75% of that traffic, ExecuNet about 15% and 6FigureJobs about 10% of the total (see http://siteanalytics.compete.com/Theladders.com+ExecuNet.com+6Figurejobs.com).


15

Figure 13: If you use specialized job sites—those that focus on 100k+ talent—why do you do so?

Our research shows that only a select few $100k+ job sites have a place in the range of valuable tools available to recruiters. Yet, when we probed deeper, we found several flaws (see Part Three). It is clear that high level recruiting is not a function that can be easily relegated to the job board model alone, even if that board caters exclusively to $100k+ hiring.

“ We have had success with $100k+ boards. The one we use tends to be a great resource and drives a lot of qualified traffic, whereas other boards don’t drive traffic that is quite as relevant.”

—Jonathan Chenard, GM and VP of Services, Union Hill Group

" The $100k+ site we use posts a lot more serious candidates who have bought into the process. It contains the resumes of more serious candidates and brings them directly into our hiring process."

—Julie Fleury, CAC, CSP, The PJF Group

“ I do use a $100k+ board. It’s very easy. They post the positions for me, which is nice, making it one less step for me. From there, it’s all up to me. The resumes I receive from them tend to be good. Again, I judge success by the quality I receive.”

—Nicki Perchik, Executive Recruiter, The NLP Group

“ We use one $100k+ board for general hires and another for senior technology hires. Those are the only ones. The $100k+ board works because we get good, qualified candidates but less quantity. The candidates are more in line with the experience and quality for which we are looking.”

—David TenBarge, Chief Executive Officer, Blueprint

“ We use two specialized job sites for mining candidates. They work really well for the majority of specialized trades and engineering and specialist jobs. We’ve used a couple of other boards like the professional engineers job board, so it is industry-specific. We find that when we go to those types of boards that all companies post jobs there, so this is good because everybody goes there. But, it is bad for the same reason. On the other hand, it’s good because it attracts jobs in our industry.”

—Senior Manager, Global Recruiting, Global Mining Corporation

11%

They save on cost

They save on time

The quality of candidates is better

The quantity of candidates is better

The quality of hire is better

The level of service is good

I don’t get inundated withinappropriate candidates

Other

0%N=242 (multiple responses allowed) 10% 20% 30% 40% 60%50%

25%

40%

3%

16%

49%

15%

14%


16

4. Social NetworksA more recent tool for recruiters is social networking and social media. The majority of organizations appear already to be using social network sites in recruiting, despite their relatively recent introduction. Slightly more than half of our respondents report that social networking sites are effective in providing quality, senior level prospects (54%). However, prospects are typically “passive” candidates, so the question becomes, are they willing to engage in dialogue with recruiters about opportunities? Our respondents rated candidates sourced on social networks on their willingness “to engage in interviews, etc. most of the time.” 71% agreed or strongly agreed that candidates are willing (Figure 14). Most importantly, a strong majority (61%) believe that their return on investment in social networks is somewhat or very effective. Our respondents’ main criticism, however, is the “time it takes to sift through candidates” on social networking sites, with only 44% believing them to be effective in this regard (Figure 14).

Figure 14: If you use social networking sites to source and acquire $100k+ talent, please rate the following criteria (for example, if you often and easily find high quality prospects on social networks, you would choose "very effective").

While our respondents and interviewees were generally very positive about the use and promise of social networking in recruiting, the fact that those sites typically include any persons who care to join—and that those persons may not be senior nor interested in hearing from recruiters—makes them troublesome in terms of the time it takes to find and go through potential candidates. (Note that the examination of internal “corporate social networking” systems was beyond the scope of this study).

3.84 9 18 26 72 59 32

3.65 10 20 40 65 47 32

3.36 10 43 31 65 32 33

3.33 13 38 34 74 25 33

3.08 16 57 31 59 22 32

Very

Ineffecti

ve

Somewhat

Ineffe

ctive

Somewhat

Effe

ctive

Neutral

Very

Effecti

ve

Unable to

Rat

e

raw m

ean sc

ore

28. Candidates you contact on a social network are willing to engage in interviews, etc. most of the time

32. Overall results (payoff versus time invested)

30. Filtering of people on the sites—quality of prospects

31. Filtering of people on the sites— availability/"willingness" of prospects

29. Time it takes to sift through social network sites

N = 242


17

Survey Respondents on the Use of Social Networks for $100k+ Recruiting“ If you invest the time it will pay off. I have found that tapping into social networks are much more effective and many candidates are more open to this type of contact method.”

“ Total waste of time”

“ The Social Networking site I use is very effective when using the advanced search options. Also it is useful when contacting people through groups.”

“ For the volume of hires I do the social networking sites require too much engagement by the recruiter to get a prospect to be willing to consider the new opportunity.”

“ Very Effective”

“ I’ve had good experiences. It takes a while to get social sites up and running effectively. It’s an everyday, constant project that you must drive in order to maintain consistent results.”

“ The best social networking sites are the ones where individuals want to be contacted and/or are more willing to make referrals. You can see who else they are linked to and it becomes a very rich source of targeted individuals.”


18

Part Three: $100k+ Recruiting Tools—User SatisfactionOur survey respondents ranked the effectiveness of each of the tools against their potential to help source and acquire high level talent. We asked our survey respondents and interviewees for their experiences in using each across five key factors: Quality of Candidates, Quality of Hire, Cost, Time, and Ease of Use.

The results are almost too close to call. Among the top six ranked methods (excluding internal recruiters, which is a function rather than a tool), all rated very close in overall effectiveness. Employee referral receives the strongest ratings across the board; the Corporate Career Site, Specialized job Sites (both types), Social Networking and External Recruiters are separated by less than 1.5 points out of 25 in overall effectiveness. External Recruiters scored very low on cost, for example, but were rated very strong on quality. Only large, public job boards and print media stood out in the rankings as too low to be considered at least somewhat effective for $100k+ recruiting.

For the sake of clear analysis in this section, our discussion excludes internal recruiters. Every organization that has internal recruiters uses some or all of the tools we’ve examined. It is not a question of these tools replacing internal recruiters: The question centers on which of these tools, or combinations of these tools and methods, is most likely to give the internal recruiter the greatest advantage in doing his or her job more effectively.

Our results point to a few clear trends. First, and to no one’s surprise, print media job advertising, which scored last in effectiveness across every category, can no longer be considered an effective, mainstream recruiting method—particularly in the $100k+ range. Second, employee referral, as in almost every other study of this kind, is ranked as the most effective tool at the recruiter’s disposal. Third, large, public job boards, which scored next to last in every category except one, are facing a difficult future. While still useful, their effectiveness is diminishing for more senior categories of hire. Fourth, social networking, a close relative of employee referral, is already a recruiting force to be reckoned with despite there being very few social networking sites useful for recruiting at this time, according to our respondents. Fifth, specialized job sites, particularly select $100k+ services, have surpassed the large, public boards by a fair margin when it comes to usefulness in hiring senior level talent.

Finally, and most importantly, it is apparent that when looking at the pros and cons of each of the main recruiting tools organizations have at their disposal, it is the combination of these tools that is most likely to result in an effective talent acquisition program, rather than mastery and use of one or two tools alone.


19

Part Four: A Combined Recruitment Strategy Just as an organization’s workforce plan is a corollary of its corporate strategic plan, the recruitment plan must flow from and support the overall workforce plan. Recruitment organizations should examine the strategic objectives of the company as reflected in the workforce plan and determine the most effective means of acquiring the talent needed to achieve the company’s objectives.

In most cases, organizations will have a variety of positions, skill levels, experience levels and salary levels to recruit for. The strategic recruitment plan, therefore, should outline the optimal processes for acquiring talent at each level, considering cost, time and quality, as this will include the optimization of recruiting methods and tools by position.

Based on our research, recruiters report varying success with several tools for $100k+ recruiting (see Part Three). Per Figure 15 below, each tool has its particular “sweet spot” in terms of use optimization.

Figure 15: Recruiting Tool Optimization Spectrum

Overall, employee referral is the recruiter’s most effective tool. However, its value begins to taper off at the $120k-$150k+ range, as there are far fewer employees in those pools from which to gain referrals. As such, this solution is difficult to scale into the $100k-$300k category.

The large public job boards and corporate career sites tend to be most effective for entry-level and mid-level experienced hiring. As our experts and survey respondents told us, senior talent doesn’t use the big job boards and is unlikely to spend time on corporate career sites. Thus corporate career sites may suffer from the same challenges as large, public job boards at the $100k+ range, producing too many unqualified candidates.

Specialized job sites, focused by industry and profession and aimed at more experienced professionals, are less effective at the entry level, but very useful in the $50k-$100k range, where most experienced knowledge workers still reside. Some of these sites are also effective beyond the $100k range, as our results in Part Three attest.

However, for $100k+ recruiting, three tools stand out. It is still somewhat speculative to say that social networks, as a category, are of value for recruiters into the six-figure salary brackets; nonetheless, given their promise, we include them among the three. Specialized $100k+ recruiting sites are, by definition, optimal for $100k+ recruiting. However, according to our respondents, there are only a handful that are effective and only one that truly stands out (see Part Two, Section 3). Clearly, external executive search agencies remain very effective in the $100k+ ranges, but as described at various points throughout this paper, they are too expensive to be used in the volumes necessary as more of the workforce joins the ranks of $100k+ earners. The logical conclusion, therefore, is that another approach is necessary for handling the expected surge in $100k+ hiring over the next several years.

Specialized Job Sites (diversity, profession, geo, etc.)

Employee Referral

Social Networks

Exec Search

Corporate Career Site

Large Public Job Sites$100K+ Job

Sites

<$30K >$300K$30K-$50K $50K-$100K $100K-$300K


20

Insights & Recommendations: What’s Working & Why?Our findings leave recruiting organizations in something of a quandary where entry- to mid-level six-figure recruiting is concerned. This should be a concern to organizations, who agree with us that this type of recruiting will accelerate in the coming months and years. Based on our research, our insights and recommendations are listed below:

Insight #1: High-level six-figure positions paying $300k and more are rare in almost every organization. Budget for executive search agencies can be reserved for this level of hiring because there will be few placements each year, even in large organizations, and the specialized skills of a good headhunter are often very valuable.

Insight #2: As above, organizations can expect an increasing number of hires at the $100k-$300k range in the coming years. Yet there appear to be few optimal tools for that group. Executive search is not scalable because it is too expensive, large job sites contain too few candidates and result in too many inappropriate applications, social networks are currently limited and time-consuming, employee referrals taper off above $125k or so and, while $100k+ job sites are designed for this space, our respondents point to several shortcomings, especially where $100k+ recruiting sites are strictly job sites and do not combine other services.

Insight #3: It is clear that some, albeit a minority, of our survey respondents and interviewees have found an effective means of hiring in the $100k-$300k range. The solution involves a combination of what executive search firms have long offered—hands-on screening of candidates—with something job boards have more recently offered—cost effective sourcing and hiring—in other words, a hybrid model that manages costs effectively while still delivering high quality candidates in a timely manner.

Insight #4: This relatively new solution for the potentially fast growing $100k-$300k group is working for organizations because it is scalable (being significantly less expensive than the executive search option) and it is less time consuming, while still capable of delivering high-quality candidates (as opposed to large job boards or even social networking). The solution combines the specialized job site approach with—depending on the seniority of the six-figure position—a degree of hands-on candidate qualification and screening. It borrows from the high-touch, hands-on features of executive search to ensure a high-quality hire and the low-cost feature of job boards. Figure 16 represents the type of hybrid solution that is working today and that can scale to meet the increased demands of organizations as $100k+ positions continue to grow.

Figure 16: Combined elements of $100k+ Job Board with Executive Search

70

30

50

50

40

6085

15

$100K+ Job Site Function Executive Search Function

$100K $300K$200K


21

“ The advantages [of a hybrid model] would be not to get inundated with applicants at that level so it would save time with the heavy lifting of sorting through those resumes. If I could say, ’here’s the list of must-haves and screen the best ones,’ that would be good. It keeps arms length between us and the applicant, so if we are not interested in them they can’t haunt us. Of course, it would depend upon the capability of the screener and whether or not the screener is familiar with our sector. If not, that might be detrimental; they might let too many people into the screening process. The other factor is scalability. If my volume drops off, then I would need flexibility on the cost in that circumstance.”

—Senior Manager, Global Recruiting, Global Mining Corporation

Recommendation #1: Organizations that have not considered the hybrid approach for $100k-$300k recruiting described above should do so. Organizations should experiment with the option, at least on a pilot basis, to determine whether it works for their particular needs.

Recommendation #2: The combined specialized job site and hands-on candidate qualification method should combine more of the latter and less of the former as the position in question moves from left to right along the $100k to $300k range. Ultimately, at the $300k range and higher, the usefulness of the job board component drops away and filling the position should be a task for an external or internal executive recruiter with his or her own talent networks and professional relationships.

Recommendation #3: It is our contention that the hybrid online service described above can be enhanced with a private social networking capability. A qualified and active $100k+ recruiting service represents a community of highly sought-after senior knowledge workers and executives. By combining the best features of job boards (without the inundation of candidates) with executive search (without the high costs) and a private social network, recruiters and top talent can interact directly and the “hybrid” model described in Figure 16 becomes all the more powerful.


22

Appendix A: Respondent DemographicsWhat is your country?

Your organization is a _____?

89%

Canada

0%N=249 20% 40% 60% 80% 100%

United State of America

3%

49%

39%

State-Owned Enterprise

Not-for-Profit Organization

Canada

0%N=249 20% 40% 60% 80% 100%

Public Company

Privately Held Company

Government Agency

0%

3%

5%

4%


23

What best describes your functional area of responsibility?

75%

12%

0%

0%

0%

0%

0%

0%

1%

1%

1%

1%

1%

2%

3%

Academic

Research

Other

0%N=249 20% 40% 60% 80% 100%

Finance/Admin

Operations

Sales

Marketing

Technology/Communications

Consulting

General Management

Other Human Resources

Leadership & Succession

Recruitment

0%Training and Development

Workforce Planning

General HR or Talent Management


24

What best describes your position within the organization?

Number of employees in your organization?

7%

21%

28%

0%

6%

6%

8%

2%

20%

Supervisor

Practitioner

Other

0%N=249 20% 40% 60% 80% 100%

Board

Principal

C-Level

Vice President

Director

Manager

12%

16%

7%

28%

10%

9%

17%

10,001-25,000 employees

25,001-50,000 employees

> 50,000 employees

0%N=249 20% 40% 60% 80% 100%

<500 employees

501-1000 employees

1001-5000 employees

5001-10,000 employees


25

Appendix B: About the AuthorAllan Schweyer, Author & Analyst Human Capital Institute

Allan Schweyer is the author of “Talent Management Systems” (Wiley & Sons, 2004) and a contributor to HCI’s “Talent Management Systems” (Human Capital Institute Press, 2009). He is a respected analyst and speaker on the topic of transformational human capital management for individuals, organizations, regions and nations. In 2009 Schweyer was recognized as among the “100 Most Influential People in HR and Talent Management.”

Schweyer’s contributions include the development of award-winning workforce management and information systems for government, international organizations and the private sector. In 2000 and 2001, he worked as a management consultant to Reed Business Information in Boston while attending graduate school at Harvard University. Allan has served as an executive director at HCI, and as a senior researcher, analyst and consultant with HR.com, servicing large private and public sector clients worldwide. Allan’s articles and white papers appear in dozens of popular media and industry-specific publications worldwide.

Human Capital Institute | 1250 Connecticut Avenue | Washington, D.C. | 866.538.1909

Documents

What’s Working and Why - Human Capital Institute