The Problem

With unemployment rates being at a record low, wages rising, and fewer candidates looking for jobs, the competition for great talent has never been more fierce. The average number of applicants per open requisition has been steadily declining in recent years, going from 59 applicants in 2015 to 36 in 2017, according to Jobvite’s Recruiting Bench Mark Report.. In addition, only 12% of applicants move forward to the interview stage. That means companies are getting less applicants, and out of the applicants they are getting, fewer hires.

At the same time, the percentage of hires driven by referrals and recruiters has increased, accounting for almost 27% of all hires. This is nearly 8% higher than job boards.

As we see the need for great talent increasing beyond the supply, the existing talent pools are no longer sufficient. The solution to the changing trends in recruitment is to shift focus to passive candidate strategies.

Attracting high-talent can lead to a 33% increase in company revenue, which is why today’s senior leaders are starting to invest in more evolved recruitment strategies. It is these strategies that aid you in implementing new systems and tools, and in building relationships with outside resources that can help you create a recruitment strategy that works.

What Is Passive vs Active?

Passive candidates, sometimes referred to as ‘in-market’ talent, are candidates that are already employed in their field. Active candidates, sometimes referred to as ‘on-the market’ talent, are candidates that are actively looking for employment. Historically, corporate recruitment strategies have been primarily aimed at ‘active or in-market’ talent. 

For many hiring managers passive talent has always been preferable but costly to find. Passive candidates already have a proven track record in their space, have established value as a competitor, and the value that they can bring to your team. Most importantly, passive job seekers make up 70% of all candidates. 

Hiring passive candidates often removes pressure from the hiring manager as these candidates are lower risk hires that are pre-vetted simply by being employed in a similar role. As a result,  these candidates don’t have any motivations to embellish their experience, and will never accept a role out of desperation.

However, it’s important to keep in mind that of active candidates, are actually employed. These candidates may simply be looking for their next big career move, which may be at your company. Presently employed or not, active candidates take the time to research and apply to a company, and are more likely to apply to, and accept an offer from, employers who don’t have strong employment brands. They are also less likely to negotiate hard for salaries or perks outside the local market norms.

There are some deeply held opinions that candidates who are out of work are ‘lesser’ and that only ‘bad’ employees find themselves actively looking because of a termination or lay-off. Our experience is that each situation is very unique. Bad managers exist within all industries, and often can create extreme working conditions that drive otherwise good employees away. In fact, 75% of the reasons why employees choose to exit a company are due to poor management or a company aspect that is in the direct control of upper management. This just goes to show how common it is for a top performing employee to actively make the decision to leave a company that isn’t meeting their career needs. One employer’s bad hire, can be another employer’s best hire. 

Adapting To Recent Market Trends

The major market trends point towards focusing on passive talent strategies. Passive talent requires a proactive plan, including a more personalized approach in how you market roles and engage with the talent community. For many organizations, this could mean taking a big step away from past recruitment strategies.

When recently polled, 52% of hiring managers worldwide stated they don’t believe that their current passive talent strategies are working for them. Yet, over 70% of all job seekers are passive. That means more than half of all hiring managers don’t believe their recruitment teams can properly engage with the largest existing candidate pool.

If Recruiters don’t start to adapt their ability to recruit passive candidates successfully, their teams will suffer. But what does adapting even mean and how do you start?

Below, TalentLab has some professional tips to help jumpstart your team into the new generation of recruitment.

Build Your Culture

When attracting passive talent your corporate culture and employment brand will be huge factors in your success. Did you know that 75% of passive candidates have said they would refuse a role with a company that has a ‘bad reputation’? So, building a solid culture throughout your organization should be a top priority.

Unfortunately, culture is something that is hard to control because it’s most authentic when grown over time.This can be an issue for recruitment teams looking to build culture quickly.

As a first step, define the culture you are trying build. Culture is how you demonstrate or live your corporate values. Without values, you cannot have culture.

It’s common to think that value development should remain in the hands of senior management. However, employees from all levels of the company should be included in the discussion. Culture can’t be forced from the top down. So, including everyone in value development will be more impactful and your employees will be more likely to adopt your new company culture.

If you are part of a larger organization, we recommend asking for one or two representatives from each team to participate in the culture discussions. This will allow the various teams to provide their opinions and feel heard.

Once you have all of your stakeholders for the creation of your values, it’s important to create a safe place for these discussions. Employees need to feel empowered to speak frankly and honestly about their experiences. By doing this, you will get to the root of what is important to them and ensure that the decided values are inline with that they want in their work environment.

At this point, you have nailed down what your values and culture goals are. Now you should start nurturing a few current employees so they become your in-house culture builders.

Consider supporting current employees to speak at conferences, hosting development meetups in your offices or sending teams to exciting community events. These are great ways to nurture your current team into culture builders. The secret sauce here is to allow your employees to be the drivers by trusting them to be ambassadors in way they are comfortable with. This involves them having some real choice in the events they attend and trying to incorporate their areas of interest. They should have the freedom to speak frankly (so don’t make their slide decks for them!), and participating should always be voluntary. Culture builders can equally become a destructive force if pushed into situations that they are not comfortable with.

As for hiring new employees to become culture builders, it’s about quantifying the traits you are looking for. It’s important to select new hires that naturally demonstrate your values. If collaboration is an important culture point you might want to look for candidates that have participated in hackathons or other group coding activities that show an interest in working as part of a group.

On the other hand, if your culture is more about independent work, then you might want to look for candidates that have created their own app, or have been active on GitHub providing help to other users but with less direct contact.

The key is to find people that will be at their very best in your natural culture, and who will appeal to other like-minded individuals.

Build a Talent Community

Talent communities are crucial to your overall recruitment strategy. It is a system that employers use to build up their pipeline of prospective candidates that they can use for recruitment in the future. It’s essentially a sales pipeline, but for candidates. You wouldn’t let your sales pipeline go dry or unnurtured would you?

With a talent community comes the need for organized documentation. Everything from tactical benefits of building a proactive candidate pipeline to strategic brand promotion. Supporting the community around your organization will be vital to your success with passive candidates. Yet, we often see internal recruitment teams struggle to master the art of the community.

It’s actually very easy to get it right and it’s really just one mantra: Don’t wait until you need a talent community to care about it. The real secret to success is that your investment must be authentic and without obvious self-interest.

If you know you will be hiring in the fall, then use the slow summer to host a few events proactively. If you fill a position and you have several very strong candidates left over, make sure that your team keeps a running list that will be useful to you as the organization grows. Stay in touch with those candidates through an email list to give them regular hiring updates. You can even have candidates sign up to be a part of your community using most Application Tracking Systems (ATS) on the market. If you traditionally hire out of a certain program, make sure you nurture those relationships through the year, not just at graduation time when you need them.

The focus here should be to become known as a champion of the community itself, not just for self-interested reasons a few times a year. A real-world example of this was Shopify’s Build Things, Show Ottawa event in 2018. They invited students to create an app over several weeks and then showcase it to the local tech community.

Similar events are hosted every day by companies across the world, but in this case, Shopify invited several local companies, angel investors and even select head-hunters to the final presentations, and by doing so made participating that much more valuable for the students. Not only did they have a chance to impress the Shopify team, but several companies in the same local market. The key is that event didn’t just help Shopify but the community as a whole.

Eventually events like this become ‘must dos’ for top young talent, therefore bringing in higher quality talent year after year. It’s about making the candidates feel valued and investing back into a community that you will likely rely on to staff positions for the foreseeable future.

When choosing what events to participate in or support, consider choosing smaller niche events that are not related to HR, and ditch the outdated ‘career fair’ mentality. You’re in passive country now. Instead of setting up a booth, allow your team the freedom to wander through the event casually making personal connections. Instead of asking for resumes or discussing open roles, focus on learning more about the community and the trends that are affecting it.  

Hackathons, game-jams, conferences, university competitions are all great options, but remember to follow up after the event to build deeper connections with the community.

Create an Employee Referral Program

Some of the best and quickest hires come from referrals. In fact, research has shown that 46% of referral hires stay over 1 year, 45% over 2 years and 47% over 3 years. Professionals are not comfortable suggesting someone for a role unless they believe they will add value. Your internal team also understands your culture and the scope of work, so if they are suggesting someone it’s generally worth taking a look at the candidate.

Most organizations have some version of a referral program, but they tend to be ad-hoc and not well organized. Often there is not a lot of transparency in the process, so at times employees can be hesitant to refer someone or even become discouraged by the program and end up exiting the company.

Ensuring your employee referrals are done effectively is a huge cost savings compared to many of the recruitment tools or even vendor fees you might incur to solve protracted hiring issues.

If you don’t currently have a referral process in place then it can be intimidating to navigate through the options. The easiest path is to consider purchasing software to manage it for you.

Role Point is a great example of the types of tools available. Role Point and similar products have some big selling features for overloaded recruitment teams, including very intuitive interfaces for your employees to easily refer anyone, even without a resume. Current employees can track the interview progress of a referral and your HR department can easily track performance of referrals for reward or bonus purposes.  

RolePoint Employee Referral Software. Find out more at Rolepoint.com.  

Another very key feature for targeting passive candidates is the ability for anyone in your organization to push out job descriptions to their personal social media accounts. Consider that employees have ten times more followers than corporate social media accounts. Providing incentives or bonuses for employees who voluntarily advertise open roles on social media can be an easy way to generate word of mouth to a larger audience, and save both time and money while not sacrificing the quality of your hires.  

It’s equally important to consider common mistakes recruitment teams make when creating a referral program. Looping in current employees into the recruitment process can be dangerous if done poorly. Often employees don’t understand why their referral was not hired and can be frustrated if they feel you have passed over a personal friend or family member unfairly. Before rolling out a referral program make sure your employees understand some of the non-negotiables for new hires and what the onboarding procedures are.

Yes, all current employees have been through your hiring process and should therefore be aware of standards, but depending on the length of time that has passed since then, they might not be as familiar as you would expect. It could be an embarrassing situation for all parties involved if a referral doesn’t meet the basic criteria.

You should consider doing some bias and selection training, as employees will often refer similar candidates, and you risk losing diversity within your organization. Consider putting in place rules to avoid employees referring candidates for roles that are too close to them within the organization, to avoid favouritism developing. It’s natural for people to want to work with people they personally know and feel comfortable with, but that shouldn’t be a criterion for why someone is chosen for a certain project or promotion.

You also need to put safeguards in place to avoid overloading your talent acquisition team with irrelevant referrals. Often employees are not aware of what skills are required for a certain role, so make sure that if or when you ask for referrals you set clear guidelines for what skills you need. Limiting the number of referrals that employees can make per year or to each job will also motivate your employees to only refer the best, and again reduce the number of random referrals that will clog the system.

If you choose to offer a monetary incentive to employees, be very clear about what they need to do in order to receive the incentive. Most companies only reward employees once their referral has successfully finished the probationary period. This is a great way to motivate employees to suggest people they believe will actually be a long-term fit with the organization, but you should make sure that employees are aware of the waiting period.

It’s also a good rule to make sure that you coordinate with your accounting/finance team to make sure the messaging about compensation is aligned, and there is a clear understanding between the two teams of how the process will work.

Create a Great Candidate Experience

At times when the market is flat, poor candidate engagement habits and underdeveloped talent strategies won’t necessarily impede recruitment. Candidates who are on the market and looking for work, are willing to compromise more often than not. When the market is tight and talent is sparse, having a strong candidate experience will make or break your ability to recruit top talent.

It’s not just about promoting the brand and targeting the right talent, it’s about treating that talent right through the process and beyond. 95% of candidates said they would reapply after not receiving an offer if their experience was positive whereas 22% said they would tell others not to apply if their experience was negative. As an organization you’ll need to develop some rules of engagement to help you stay competitive in a tight market.

Passive candidates work for great companies already, so for them, making a move is a risk and they will be vetting your organization just as thoroughly as you plan to vet them. Work with your hiring managers to develop a value proposition that answers the question: “Why would the candidate we want to hire also want to accept that position?” If you are struggling to find an answer then consider re-evaluating the profile and gearing it towards someone more junior or from a different industry. A rising star with a lot of potential will see more value in a ‘not so glitzy’ role than a candidate making a lateral move. Getting a hiring manager to understand that passive candidates expect a two-way conversation can be the biggest challenge.

Make the process easy, and as quick as possible. This is an absolute must in a tight market. Avoid asking passive candidates to complete assessments or tests before they meet with the hiring manager. Again, these people are employed, already doing similar work and suggesting they should invest hours without even having a discussion about the role sends the wrong message.

Review each step of your interview process to make sure it’s as tight as it can be. If there are any steps that you feel are not absolutely necessary to make a confident hire, then cut them.

A great candidate experience isn’t just about the interviews, but also how you choose to end the process, especially if your team decides to make an offer.  Many companies still operate on outdated salary info and mindset. Salary discussions should never be based on the hiring manager’s personal opinions, instead the recruitment team must provide real time market data to help inform salary discussions. By removing these outdated salary processes, you can streamline your offer stage and in turn continue to deliver a quick and positive candidate experience.

If you really want to create a solid candidate experience then hold all stakeholders accountable to the timeline and milestones originally agreed upon. Even the executive hiring managers. Before starting a search, make sure everyone involved has a clear understanding of what their responsible for and what the expectations are. It’s easy for senior leaders to blame the recruitment team for lack of success, but in reality, recruiters are the GPS and the hiring managers are the drivers. We don’t go anywhere unless the hiring manager decides to hit the gas.

Partner with a Headhunter

Sometimes you have tried everything to get the right passive candidate, and you still haven’t found the one. Or, maybe you’re just not sure if you will be able to sort through all that top talent to find that one that’s best suited for your specific needs.  

This is the point you will start discussing the option of hiring external help. Depending on the agency they can be great passive candidate partners for difficult talent searches. However, the industry is not standardized, and not all agencies are created equally. Choosing a partner can be a painstaking process, and sometimes there is little success for the effort.

Imagine you are fisherman, and you need to catch a certain type of fish. Corporate recruitment teams cast a large net into a large body of water, and then spend most of the man hours involved sorting through their net to find the specific fish they need.

Head-hunters on the other hand, are rare fish specialists who use spears instead of nets. They spend the bulk of their man hours researching the waterways, the fish migration patterns, what makes these fish tick and then with a little effort catch the one fish they need. Again, not all head-hunters are created equally, and similar to any profession there are some great and equally bad ones out there.

There are some golden rules that will help you better select partners. You should know your needs before you engage with any external recruitment vendors. Then vet the agency and make sure their model is well suited to your needs. If you need 50-200 temp workers for an urgent project, then a generalist global agency will be best positioned to help. They will likely have the manpower, and processes in place to supply a large amount of temp talent quickly. If you need 1-2 nuanced technical or skilled workers you should be seeking out an agency that specializes in the desired subject matter.

The best solution is to build relationships with 3-4 agencies that specialize in different areas and styles of recruitment. This is particularly true if you have technical or engineering business units, as any roles that come up in those teams will absolutely require recruiters that have subject matter knowledge in those areas.

If you currently are working with only larger global agencies, consider re-evaluating and introducing a smaller niche vendor in to augment the current vendor list.

As much as a headhunter or an agency can help give you additional candidate options you won’t find elsewhere, they are only as successful as you allow them to be. If you aren’t honest about your needs and limitations then the chances for success are very limited. You should listen to their advice, and allow them to pass along valuable market knowledge and candidate info that will impact your success. You also need to give them clear feedback, and updates regularly.

Snag Those Passive Candidates

Attracting top talent isn’t just about knowing where to find them, it’s about having effective systems and processes in place to show them that making an unforeseen – and frankly, surprising – career move is in their best interest.

It’s a combination of establishing your talent funnel, nurturing those relationships – just like you would with a sales funnel – long-term, ensuring you have a strong candidate experience in place, and follow through with that positive experience after their hire.

Treating these passive candidates like you would a prospective customer is what is going to set you apart from the other companies – your competition – who are simply tossing out wide nets and hoping to catch top talent. Remaining strategic and focused with your talent acquisition efforts is what is going to get you the talent your company needs to grow, scale, and outmaneuver your competition.