Authored by Rick Devine - Follow Rick on Talentsky
The recruiting industry in the United States spends nearly $100 billion a year. That averages to $1 million per 1,000 employees. Nearly one-third of that is spent finding candidates or sourcing – which comes to $30 billion a year! Of that amount, about $10 billion is used to purchase job ads, and the rest is the cost of systems needed to send emails to unsuspecting people and the labor costs associated with this approach. But does this still work?
Today, recruiting has become a direct marketing exercise with A/B testing (also known as split testing) of ads and acceptable response rates of 1% percent, or less. How did we get here? Let me take you back to the future.
Before the age of the internet, recruiters did not focus on pitching jobs. Rather, recruiters focused on building relationships with people. For example, as a young recruiter in the early 80’s, I would drive over an hour just to have a coffee with a good salesperson so I could get to know them, establish trust, understand their goals and what they were doing at their current employer. These people were not job seekers, but they cared about their future and knew they needed support to navigate appropriate opportunities. Back then, to recruit new talent employers would place a job ad in the newspaper and get a lot of resumes – in fact, too many. Over time, these employers would give up and engage a person like me who knew the talent and could connect their opportunity to the right people, even though the company had to pay me a fee when I made a successful match.
Armed with the insight of what the employer needed and what people cared about, I could be an effective matchmaker, and everyone won. The employer met qualified and motivated talent and didn’t have to deal with the collateral damage that came with running ads. The value of a recruiter was the ability to act as an (analog) network of insights between the needs of an employer and the experience and ambitions of talent.
This system worked well for many years, but then came the success of the internet. Recruiters were able to target ads to people with what they considered relevant resumes – a title that matched the job description. For example, a company that needed a product manager could do a search and find thousands of people with that title, then filter that list by location, specific employers etc. Once the list was refined, the recruiter would send emails and see who responded. This approach was very effective for many years, and transformed relationship-based recruiting into email campaign management. Gone were the boutique recruiters like the young Rick Devine – everyone was now in-house and armed with direct marketing tools. Over the years, this approach became noisier and nosier, and people started to brace against the onslaught of recruiters pitching jobs they did not care about. Could you imagine walking into a store wanting to buy a new wallet only to be confronted by salespeople pitching watches, belts or shoes? You would say, “none of that is important to me and you’re being annoying”. Well, that’s what it is like to get emails from recruiters for jobs you do not care about, it’s annoying.
Today, the current state of recruiting has many challenges. Good, qualified people are being missed because they don’t have the appropriate resume, yet they have great skills. There’s just no easy way for people who are not looking for a job to understand careers, what’s possible for them. It is estimated that 80% of people are not looking for a job, so what do they do? Then, consider the other 20% who are looking, but are stuck within a system that is overly focused only on resume titles; how do they showcase their work achievements and career goals, how do they get discovered?
It is time for employers to shift their mindset from one focused only on pitching jobs, and prioritizing quantity over quality, towards a mindset focused on helping people discover and connect with careers of interest. If a person has career interests and relevant skills, that’s a great insight for recruiting now, or down the road. When you help people achieve their career ambition, you build a culture of development and will never lose good people. In my own career, I have recruited everyone from technical salespeople, engineers, and product managers, to corporate executives including Tim Cook for Steve Jobs. Everyone wants the same thing: a trusted counselor who can help them achieve their goals. Years ago, I saw a need for a new network to help people better connect to careers based upon skills. This system would represent the digital version of what I knew worked so well in the analog world, a trusted counselor that leads with helping, not pitching.