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Work Smarter, Not Harder

By Lou Adler, September 6, 2007

I'm in Australia this week working with a number of different recruiting organizations. In Australia the talent supply is far short of demand, so getting assignments is relatively easy, while finding and closing strong candidates takes exceptional sourcing and recruiting skills. Candidates always have multiple offers and counter-offers are standard. To meet this challenge head on, the recruiting teams I'm working with wanted to figure out how to double their monthly production within six months.

Read more articles by this author.

Related Topics:

Interviewing, Negotiating, Newsletter, Recruiter Training, Recruiting, Sourcing

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This required a significant investment on their part in additional training. Despite the challenge, here are some of the ideas we came up with:

1. Make higher level placements. It doesn't take any more work to place VPs and directors than it does to place managers and senior staff. So if you want to make more money, start handling higher level positions. For some recruiters gaining credibility with more senior level executives is the challenge here. One of the Australian recruiting firms solved this problem by teaching their recruiters specifically how to deal with senior executives. They invited senior executives and senior HR leaders from their client companies to meet with recruiters during their formal one-week training program just to gain the confidence of dealing with senior level clients. Equally impressive, all of their recruiters were required to attend the recruiter training course before they were permitted to meet with clients or work with candidates. When I talk directly with senior level executives, they believe that most of the recruiters they deal with lack the fundamental business knowledge to place more senior level people, so this type of training is quite important. Preparing performance profiles when taking the assignment will help bridge this gap.
2. Increase fees. If you're not getting a full fee you're under-pricing your services. A full retained fee is 30-35% of the first year's total annual compensation, and a full contingency fee is 25-30%. Charging a full fee can increase your gross revenue by 30-40% if you're now charging only 20%. Even better, it's all profit since there's no increase in costs. Companies will pay a third-party recruiter a full fee if you consistently bring them "A" players. They won't pay you much more than a transactional fee of 15% if you're just running ads and presenting above average candidates. To obtain a full fee you'll need to demonstrate that you deserve it. Offering a six month or one year full replacement guarantee is one way. Charging no fee for anything other than an "A" candidate is another. Do both, and you'll get your full fee. Then prove that you deserve it by presenting three great candidates within two weeks.
3. Stop posting ads for individual jobs. You might want to try this if you're using advertising to find candidates: instead of running a specific ad for one position, like for a financial analyst, run a group ad covering all related positions, including financial analysts, senior analysts, and financial planning managers. As long as the ad is well-written, it will draw more high quality prospects than running an equivalent number of individual ads. The reason: it will more likely be found by more people since it covers more searchable topics, more people will apply since it covers a broader range of skills, and better people will apply since they'll be shooting for bigger jobs. Candidates and clients alike will appreciate the chance to explore different opportunities and options.
4. Increase your voice mail return rate. To get more voice mails returned from passive candidates you must increase your credibility. The best way to do this is to mention the person who referred you in your message. Next best is to mention something relevant in your message that indicates you're a person worth knowing. Some recruiters are experts in their market and can mention names and titles of people they've recently placed, others can mention a conference where they led a panel discussion, some can refer to an important article they just read, or maybe one they wrote. State that you're handling multiple searches in a certain field to increase credibility. For example, leaving a voice mail saying that you're leading the search for a number of mid- and senior-management marketing positions provides a powerful incentive for the prospect to call you back. Whatever you do, don't accept a 20% callback rate from passive candidates. Anything below 50% is a waste of time.
5. Get more high quality referrals. If you want to really max out your efficiency only make calls to people who have been referred to you by a credible person and who are highly qualified. By only calling referred and prequalified people you'll eliminate the two major inefficiency problems associated with passive candidate recruiting-not getting calls returned and not knowing if the people you call are good candidates. It's hard enough to get people to return your calls, so getting a return call from a dud is a real downer. Here are some articles on networking you should read if you want to learn how to get more referrals of highly qualified candidates. If you get good at this, doubling your placement rate will seem easy.
6. Prevent early opt-outs. You're best candidates are those that your client didn't hire. These are the people who said no to your initial offer, those who didn't respond to your ad, those who didn't want to go on the interview, those who didn't call you back, those who didn't fill in your questionnaire, those who didn't like the hiring managers, and those who rejected your offer or took a counter-offer. Solving one or two of these problems can increase your high-quality applicant flow by 50-100% and double your placement rate in a few months. I wrote a book on this, but rather than reading it just prepare a process flow chart estimating your opt-out rate at each stage in the sourcing and recruiting process. Then take the two biggest problems you have and start fixing them. To get started, input the two problems in the search box on this page and discover some possible solutions.

In today's challenging environment constant improvement is required just to stay even. Getting twice as good requires major change and additional training. In Australia they know it's worth it. This could be an important lesson for the rest of us.