Challenges in Sourcing Six-Figure Talent - TheLadders

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financial services company noted, "With so many people out of work, hiring managers .... Director, Managed Services and
January, 2011

Challenges in Sourcing Six-Figure Talent In August and September 2010, Aberdeen Group surveyed more than 400 organizations in order to determine Best-in-Class practices in talent acquisition strategies. The study, Talent Acquisition Strategies 2010: Candidate Experience and Relationship Management Come of Age, showed that the top pressure organizations face is shortages of key skills in the talent pool cited by 47% of the sample. And as organizations recruit for higher level positions – those “six-figure” jobs – these pressures are compounded. Consequently, effective sourcing becomes critical to ensure that quality candidates are filtered though the clutter of a crowded talent pool of unknown quality. This Research Brief highlights the challenges of sourcing quality candidates for these critical high-paying positions, where making a bad hire can be costly in the short term and the long term.

Business Context There are three forces currently driving the focus on sourcing for senior level positions. First, the affect of looming retirements of the baby-boomer generation can be felt in succession plans and leadership pipelines. These are critical roles where the individuals occupying them play a significant part in the longevity of the company and continuity in its leadership ranks. Secondly, even with unemployment rates hovering around 9%, sourcing and recruiting for these positions become more of a challenge. For one, skilled individuals that can fill these roles are more likely to be employed. And secondly, whether potential candidates are employed or not, it is much harder now to identify the most appropriate candidates in a cluttered labor market where the same job opening results in substantially more applicants than they did three years go. Lastly, due to the nature of these positions senior ranking and/or higher paying - they may attract less qualified candidates with higher aspirations. Table 1: Difficulty in Sourcing for Key Roles Top External Pressures Driving Sourcing for Six-figure roles

Top Internal Challenges with Sourcing for Six-figure roles

Lack of candidates with leadership skills / succession potential

47%

Takes too much time to source

44%

Lack of experienced candidates in the talent market

44%

Constrained resources

44%

Research Brief Aberdeen’s Research Briefs provide a detailed exploration of a key finding from a primary research study, including key performance indicators, Bestin-Class insight, and vendor insight.

Definition and Sample The objective of this Research Brief is to identify the challenges of sourcing key talent. In a recent survey conducted in December 2010, Aberdeen defined "Key" talent and / or positions as high-level candidates, employees or professional job requisitions currently earning "six-figure" salaries - manager level or above. The sample includes 271 respondents, two thirds of which belong to organizations headquartered in North America. Fourteen percent (14%) of respondents came from external search agencies and third-party recruiting firms.

Source: Aberdeen Group, January 2011

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

Challenges in Sourcing Six-Figure Talent Page 2

All these factors contribute to an increased workload on HR and recruiting staff responsible for sourcing during a time where job duties have increased along with hiring manager expectations. As one recruiting manager at a financial services company noted, "With so many people out of work, hiring managers now think that we should be able to find more qualified individuals in a shorter timeframe. The fact of the matter is that now while we may not have as many requisitions open, sifting through the clutter becomes very inundating in our resource-constrained function." Furthermore, fit is crucial for these roles. If the wrong hire is made, it can be costly on many levels. First, the cost associated with acquiring this talent through search firms hovers around 25% of starting salary. For a six figure job, that equates to $25,000 to $30,000 at the low end of the scale. Secondly, during tough economic times productivity and efficiency are key to whether such conditions, especially in the near term, and a company cannot afford to have an unqualified person filling such critical roles. Moreover, from a long-term outlook, people who fill these roles can become high-potential succession candidates. And if the new hire is not a fit for the job, valuable development time would be wasted. Besides the risk of an unfit hire in these roles who more than likely have decision-making abilities. Regardless of their capacity to make decisions, bad hires can pose a liability to the employer. Lastly, Aberdeen data collected in March of 2010 showed that, on average, organizations estimate replacement costs at 0.86-times that of the annual salary. Thus turnover at these positions can be very costly. In fact, on average, organizations reported a 10% turnover rate within 12 months of hire for these key positions. To put these numbers in perspective, if an organization currently employs 50 of these six-figure earners at an average of $120,000 annual salary, replacing 5 of them within a year on the job could cost $516,000.

Passive Postings on Job Boards Are Not the Answer Aberdeen's August 2010 report on Talent Acquisition Strategies showed that "relationship management (is) a critical piece, if not the critical piece, of talent acquisition going forward." Active involvement in pulling the right candidates into the recruitment process rather than posting jobs on general job boards, online classifieds or the corporate career site pays off. Especially when the required skill sets become scarcer for these key positions and applicant sources become cluttered with "aspirational" candidates seeking higher pay scales, sourcing and producing the acceptable number and quality of candidates for hiring managers becomes more challenging. Therefore, it becomes critical that keyword searches become more relevant and resumes be scrutinized to ensure that the most qualified candidate is contacted and, consequently, admitted into the interview process. Having the human factor that effectively expands the effort to search for, find and pull the right resumes and candidates as opposed to sit and sift through hundreds of applicants becomes a necessity. Furthermore, analysis found when it comes to posting these senior-level openings on job-boards:

© 2011 Aberdeen Group. www.aberdeen.com

“While we use job boards, I haven’t posted anything in a while. I believe there are plenty of active candidates out there that can be a good fit, but it takes a great deal of searching and screening on our side to pick them out. We’re going to use them anyway to keep all our options open, but at the same time I feel that better filtering of under-qualified candidates would help in maximizing the value that we are able to get.” ~ SVP of HR, Large US-based Bank

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Challenges in Sourcing Six-Figure Talent Page 3



70% of respondents indicated that job postings on these sites deliver too many candidates



One third of respondents indicated less than 10% of applicants through these sites actually match the qualifications defined in the job description



59% indicated that they don't have enough resources (time or personnel) to review all applications submitted through online job boards



45% don't see value in paying for job postings on these sites

Lastly, in terms of searching for candidates, 61% indicated that they spend too much time looking for the right candidates for these jobs. Not surprisingly, data validated that posting on general job boards are one of the least effective sources of candidates to fill these six-figure roles (Figure 1).

Fast Facts √ 89% of respondents indicated that online jobboards don't provide a good understanding of the employer's industry √ 82% of respondents indicated that online jobboards don't provide a good understanding of the employer's geographic region

Percent of Organizations, n = 231

Figure 1: Most Ineffective Sources of Six-Figure Talent 50%

Indicated "INEFFECTIVE" rating

44%

40%

34%

34%

Online job sites / boards (monster.com, careerbuilder.com, dice.com, indeed.com)

Online / w eb classifieds (e.g. craigslist)

31%

30% 20% 10% 0% Print classifieds

Corporate career site

* 231 respondents do not include third-party search / recruiting firms Source: Aberdeen Group, January 2010

Case in Point - NACR As the largest Avaya channel partner worldwide, NACR is a leading provider of value-added communications solutions — delivering comprehensive sales, consultative, training, and technical support, as well as managed services, maintenance, and repairs. NACR works closely with Avaya and other leading technology innovators to integrate best-in-class hardware, software, and applications into end-to-end multivendor solutions. Given the nature of their work, the company is often recruiting for high-level individuals with a wealth of engineering and technical knowledge, service delivery experience, or program management skills. continued

© 2011 Aberdeen Group. www.aberdeen.com

Telephone: 617 854 5200 Fax: 617 723 7897

Challenges in Sourcing Six-Figure Talent Page 4

Case in Point - NACR And while these efforts have consistently yielded quality talent, the process isn’t without its challenges. According to Don Copeland, Director, Managed Services and Support Center, “Without question, the best means of sourcing talent for us is networking and personal references, but we still need to rely on a number of methods in order to cast a wide net and keep our message out there. Job boards are something that we use and have had success with, but they can be difficult because each person hired generally means going through hundreds of resumes. Sometimes we just don’t have the time or the manpower to timely handle the recruiting investment required.” And given their unique hiring needs, other hurdles present themselves. For example, many recruiters are quick to point out that resumes aren’t always an accurate indicator of how well someone can be expected to perform in a job. Too often they are just a reflection of how good somebody is at writing a resume. This requires both time and proficiency on the part of HR to qualify each application that comes through. But while the opportunity cost can be high, NACR realizes that the manpower commitment is necessary as it is important for recruiters to utilize all of the tools at their disposal. And according to Copeland, some things just can’t be done by a machine. “We don’t see automated filtering of resumes as a viable solution. If you’re too specific, you can weed out potential winners. And it takes both experience and thoughtfulness to recognize the instances where someone’s resume just doesn’t do them justice.”

Pull Strategy Proves Effective On the other hand, when recruiters or other employees in the company are actively seeking out resumes and candidates, the outcomes are more successful. Whether searching for resumes and candidates or speaking with them, a pull strategy where recruiters physically review resumes or screen a candidate becomes necessary for these high-paying roles. However, as the data revealed, when recruiters are bogged down by large quantities of resumes and applicants, it becomes hard to review them all without spending a considerable amount of resources on the unqualified ones. Secondly, when all this time is spent on searching and reviewing these resumes, less time is appropriated to talk with or screen candidates before further advancing them in the interview process. At the end of the day it comes down to whether recruiters sit and wait to be bogged down in a clutter of resumes - most which are unfit or unqualified for the role - or effectively search for and review relevant resumes. Not surprisingly, going through search firms and encouraging referrals are cited as the most effective sources of candidates for these positions (Figure 2).

© 2011 Aberdeen Group. www.aberdeen.com

Telephone: 617 854 5200 Fax: 617 723 7897

Challenges in Sourcing Six-Figure Talent Page 5

Figure 2: Most Effective Sources of Six-Figure Talent Fast Facts Percent of Organizations, n = 231

Indicated "EFFECTIVE" rating 100%

93%

92%

89%

85%

External executive search or staffing company (thirdparty)

Employee referrals and netw orks

Social netw orking

Attending conferences, events, and trade show s

75% 50% 25% 0%

* 231 respondents do not include third-party search / recruiting firms Source: Aberdeen Group, December 2010

Recruitment is local. Working with an entity that understands the geography and the industry of the employer's landscape is key. Not surprisingly, partnering with a third-party provider has proven to be very effective. When compared to sourcing through job boards, organizations that enlisted third-party partnerships significantly improved new hire retention for these key positions, which leads to real savings in the form of replacement costs. In fact, 63% of organizations partnering with a solution provider that can help in the sourcing process rather than posting on job boards reported less than 10% first-year turnover for these critical roles, compared to 54% of those that rely on job-board postings without having that dedicated third party. They are also 37% more likely to indicate that their sourcing efforts are effective (92% vs. 67%). This can be attributed to the passive nature of the job board, which lacks human support that goes beyond usability to encompass dedicated resources that understand the region and the industry. In fact, when asked about the top factors that are perceived to enhance sourcing, having these resources tops the list. This further reaffirms the ineffectiveness of job-board postings as means to source for these high-earning, critical positions, where the risk of making the wrong hire can be costly (Figure 3).

© 2011 Aberdeen Group. www.aberdeen.com

Knowing the industry and the geography of the organization is imperative to success. Understanding the needs and the environment of the organization improves sourcing efforts for these key positions. When asked about the top factors that are perceived to enhance sourcing, having resources with time tops the list: √ Improved job requisition with clearer competency definitions and skill requirements - 67% √ Dedicated support from a recruitment solution that partners with us to understand our needs and then delivers quality resumes, shortening time to source - 59% √ Better quality candidates within online job boards 58%

Telephone: 617 854 5200 Fax: 617 723 7897

Challenges in Sourcing Six-Figure Talent Page 6

Figure 3: Top Factors to Enhance Sourcing

Percent of Organizations, n = 231

75%

67% 59%

58%

Dedicated support from a recruitment solution

Better quality candidates w ithin online job boards

50%

25%

0% Improved job requisitions

* 231 respondents do not include third-party search / recruiting firms Source: Aberdeen Group, January 2010

Case in Point - Leading Global Technology Provider Take the case of a world leading provider of open and integrated business software, and hardware systems, with more than 370,000 customers including all of the Fortune 100 companies. Its consulting division seeks to address client business need in order to optimize the deployments of its technology solutions. Therefore, the recruiting function seeks to fill these positions with a specific set of skills. According to a Senior Recruiter in the consulting division, “It takes four to six weeks to fill each of these positions for us. We found that the most effective channel is through referrals and networking.” Before the position is filled, 100 contacts on average are made. Of those, a maximum of 10 resumes are reviewed before these applicants enter the interview process. As these positions become senior, the team partners with a third party that sources resumes specifically for these six-figure jobs to supplement his team’s efforts. “I have found that outsourcing this part of the process saves a lot of time and effort that can be spent on other elements of the process, such a screening and selection. For us, leveraging another entity’s experience and knowledge of the industry and region has helped us meet our targets. At the end of the day, you need a resource to effectively search for and find those with best fit rather than having to navigate through thousands of resumes and applicants – a few of which actually meet our qualifications,” he concluded.

© 2011 Aberdeen Group. www.aberdeen.com

Telephone: 617 854 5200 Fax: 617 723 7897

Challenges in Sourcing Six-Figure Talent Page 7

Key Takeaways Nearly two thirds of the sample (64%) indicated that HR staff in their organization hasn't grown at all. This is a clear indication of how HR in general, and recruiting specifically, has to work more efficiently. Two main forces are pressuring the sourcing functions of an organization, especially as it pertains to six-figure jobs. First, the market is cluttered with candidates that are either out of work or are aspiring for higher paying jobs. This makes it more difficult and time-consuming to find the right people. Secondly, with a flood of job seekers in the job market, the expectations of the hiring managers are now higher in terms of qualifications and time to fill, as many of them think there must be lots of qualified people ready to jump at their job posting. With these mounting pressures, recruiters are now more challenged with finding even scarcer candidates with the skill sets needed to perform these six-figure jobs. Posting on job boards and other classifieds creates more work, expends more effort, and consumes more time compared to the value they add. Partnering with a solution provider (such as a search agency, online technology providers, etc.) to effectively source resumes of applicants that better match the geographic, industry, and skill needs of the employer has proven to be effective. Partnering with a provider that sources for these key positions shortens time to fill and frees up recruiters to better screen and qualify candidates before entering them in the interview process. Referrals and networking are also conducive vehicles for sourcing this talent. But when they aren't enough, the key is to rely on a source that can understand the job requisition, the region, the industry, and how to better search the immense supply of resumes and applicants. For more information on this or other research topics, please visit www.aberdeen.com. Related Research Talent Acquisition Strategies 2010: Candidate Experience and Relationship Management Come of Age, August 2010

Employment Screening: Mitigating Risk, Driving Down Cost, September 2010

Author: Jayson Saba, Research Analyst, Human Capital Management ([email protected]) Since 1988, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of HarteHanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (010110)

© 2011 Aberdeen Group. www.aberdeen.com

Telephone: 617 854 5200 Fax: 617 723 7897