The Competition for Talent
The national job market is poised for a dramatic change in the next few years. Baby Boomers are starting to retire, smaller replacement generations are entering the workforce and the available pool of qualified talent is shrinking. This situation is made more dire given the findings from a recent CareerBuilder.com survey1 stating that one-in-ten hiring managers expect to hire more than 100 new employees in the next year. In general, job openings are projected to increase by 13% or nearly 19 million jobs through the year 2014.
So the recruitment market is faced with economists what have been dealing with for eons, supply vs. demand. The supply of adults in the workforce, not to mention highly qualified talent, is shrinking yet the demand of organizations looking fill thousands of job openings continues to increase. This will become even more apparent should there be an upturn in the nation’s economic strength and companies begin expanding even further and hiring from a stagnant, if not shrinking pool of candidates.
Currently, 38% of hiring managers surveyed by CareerBuilder stated that they are facing difficulties finding qualified talent. It is evident that the competition for top-notch talent is heating up and will continue to intensify within the foreseeable future. In order to minimize the impact felt by this “perfect storm” in the recruitment market, companies must take a proactive stance to their hiring process to ensure they retain top performers and attract the new qualified talent they need, quickly and efficiently.
The Ever-present Active Candidate
“The most persistent responders to job ads and internet postings are active candidates –
often these candidates are either unemployed or disgruntled job seekers who are desperate for ANY job with ANY company”2
According to the U.S. Bureau of Labor Statistics, active job seekers make up 16% of the American workforce. Active candidates are widely considered the “low-hanging fruit” of the labor market. They are probably the most obvious recruitment audience because they are the easiest to target and the most likely to respond immediately to job openings. They are “in-market”, currently pursuing a new job, constantly posting and updating their resumes on job boards, surfing recruitment websites, blogs and networking sites.
Candidate Market
84%
16%
1 Careerbuilder.com, Small Business Advisor: Hiring Tips, “Will Passive Job Seekers Apply to Your Job?”
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2 HTC Research Newsletter Jan 2003, “The Value of the Passive Candidate”
Active candidates are replying to multiple openings and may have more than one opportunity in process at once. They are potentially taking the first thing that comes along regardless of fit, skills or career path. On the other hand, a passive candidate has plenty of time to truly examine how the new job opportunity will benefit his or her goals, career growth and personal life.
Debbie Goodman, Managing Director of Jack Hammer Executive Headhunters, states that “only 20% of employees in any designated market sector are actively looking for jobs and those are the ones that will respond to job advertisements. Of the remaining 80% approximately, 75% are passive job seekers who are open to hearing about alternative career opportunities…”3 Yet companies continue to rely on the smaller pool of active candidates for their staffing needs. In a recent Unicru survey4, 100 staffing managers for Fortune 1000-size companies indicated that 75% of their time and effort were focused solely on active candidate recruitment.
Active candidates are on the full–time job hunt and constantly visible in the candidate market, therefore the competition is intense even for these “low-hanging fruit”. Many smart companies have recognized this competition and have increased their recruitment efforts in targeting the elusive passive candidate.
The Elusive Passive Candidate
Dr. Michael Boyd, Human Resourcing Strategies Research for IDC refers to passive candidates as the “Holy Grail” for recruiters, “They’re among the most highly valued prospects, and yet by virtue of fact that they typically aren’t going to employment sites or speaking with recruiters, they’re the hardest to find. A job site that also functions as a regular destination… puts career opportunities right in front of candidates who might not otherwise learn about them. It’s like a win-win for the prospective employee and employer alike.”5
Passive candidates are highly skilled, happily employed individuals who are not actively seeking new job opportunities. And because most are happily employed, these candidates are also considered more loyal and more stable (on average passive job seekers stay with a company three years and seven months, compared to only 15 months for active job seekers6), therefore more valuable, than active job seekers. They have a job in which they have already demonstrated ability to make a contribution, potentially translating into a higher chance of success within your organization. As a result, they are extremely hard to target. 1543ActivePassiveAvg. Months Employed
3 Bizcommunity.com, “Best Job Candidates Slipping Through the Net”, April 11, 2005
4 Electronic Recruiting Exchange; How to Attract and Hire Passive Candidates, Part 5; Lou Adler; 3/11/2005
5 TechTarget.com Press Release, March 2001
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6 Hospitalityjobsonline.com; FAQ’s
These “Hidden Gems” are not found through an active recruitment marketing campaign on job boards, networking sites, online databases or in help wanted ads. They do not want to jeopardize their current employment by being exposed on a job board or resume database, etc. Passive candidates are busy performing quality work at their current job not actively looking for another one, however, they are proactively or passively thinking about their career path and are willing to entertain new opportunities should circumstances change.
Although job seekers become less likely to take potential risks and change jobs as they age and become more experienced, some passive candidates may become active job seekers as a result of a change in management or location that could potentially impact their quality of life or simply having a bad day during their current job. Their motivation could also come from a potential opportunity offering increased career challenge, higher salary, more attractive compensation package, a shorter commute or better work/life balance in general. A recent worker commitment study from AON, an HR consulting firm, showed that over 25% of employed workers would change jobs for a salary increase of 10% or less, 50% would change jobs for a 20% salary increase.7
Lastly, passive candidates who have reached a point in their current job which they see no career growth, expansion of skills or salary increase, are more likely to be swayed by openings that appeal to their long-term career goals. These candidates are interested in opportunities offering careers, not just jobs. A “job” normally lasts for a year where as a career offers multiple jobs with corresponding growth through many years. You do not try to convert a passive candidate into an active candidate, you make sure that they remember your company and know how to reach you when they have had a bad day. This is when they are likely to start looking at other opportunities.
Lou Adler, president of The Adler Group (a training and consulting firm focused on performance based hiring), believes that there is a 30% solution in attracting passive candidates8. These candidates look for the new job to offer 30% improvement compared to their current situation. This improvement can consist of a percentage increase in any of the following: compensation, job stretch (doing the work they enjoy and that taps into their existing skills and abilities) or long-term company/career growth.
A company’s growth prospects are an important consideration for passive candidates. The quality of the senior management and leadership teams as well as recruitment collateral and information on the website is also very important. While technically “passive”, these candidates are career focused and interested in related articles, research and stories, reading everything in the career section on your website. Therefore, it is important to maintain consistent PR and brand advertising.
7 StarTribune.com 10/21/03; We Are All “Passive Job Seekers”
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8 Electronic Recruiting Exchange, “How to Hire Passive Candidates, Part 4: The 30% Solution, March 4, 2005
The passive candidate is under no pressure to find a new job. They spend more time evaluating, the position, the company, its strategy, the hiring manager and the management team. You cannot hire these candidates quickly. Not only do they take longer to find they also take longer to decide. Therefore, you need to start looking before you need them. A strong passive recruitment marketing plan will work only if you have enough time before the position needs to be filled.
An employee’s lack of movement between jobs also directly correlates with the economy. During poor economic times, top candidates are less willing to explore different job opportunities and more likely to do so when the economy is booming. However, there is also increased demand for this talent sourcing from the same supply pool. Passive candidates are becoming recognized for their value and are more frequently targeted by recruiters, making these candidates more frustrated with these tactics. It will become harder to reach these candidates as the demand increases. That is why it is imperative that companies proactively target and recruit a mixture of active and passive candidates. This perspective will generally cost less and produce better results than relying on reactive means alone.
The Importance of Recruiting a Mixture of Active & Passive Candidates
“Consistently and regularly engaging both active and passive candidates is the best way to maintain a pool of qualified candidates. Much like a sports team, a company should maintain a “bench” of candidates who are ready to step in and do the job if one of the regular players is no longer part of the team. This requires the company to maintain a “we’re always hiring” footing to the outside world. Companies that wait until they have a vacancy before they start building their candidate pool are at a disadvantage in finding the best candidates.”9
As recruiting consultant Howard Adamsky puts it “Staffing needs can change in the blink of an eye… it is not possible for most businesses to predict what tomorrow will bring. When a call comes in to open an office in New York and staff it with 20 people by yesterday, there is no time to dally. You had better be ready to do more than look at passive candidates as a recruiting model.”10
Companies need to focus on long and short term needs to come up with a balanced active and passive recruitment campaign. According to a recent PricewaterhouseCoopers survey of Chief Executive Officers, two-thirds of corporate executives use a planning cycle of only year or less11. Peter Weddle, recruiter and HR consultant, explains, “such nearsightedness virtually guarantees that recruiting will be an ad hoc, reactive and often crisis-driven process.”12 CEOs who responded to the survey said that their greatest business risk (except economic downturn) was their ability to acquire the talent they needed to accomplish their mission.
9 www.tidemarkprofiles.com; HiringCenter; Creating a Constant Flow of High-Quality Candidates
10 Electronic Recruiting Exchange; Howard Adamsky; The Myth of the Passive Candidate; May10, 2005
11 PricewaterhouseCoopers Survey of Chief Executive Officers - 4 -
12 Weddle.com; Peter Weddle; Cutting Corners to the Best Candidates
With such a short planning cycle companies simply do not have the time to properly attract passive candidates and must rely on the quickly attainable active candidates as almost a sure-thing to fill an urgent opening. This obviously exposes the risk that a top-notch or more qualified candidate is not filling the position, simply a candidate that is available and may have some of the needed experience.
Given that 16% of the American workforce is made up of active job seekers, “limiting an organization’s recruiting to fewer than one-out-of-every-five workers will inevitably depress its performance over the long run”. The competition for the few top performing active candidates increases rapidly, as recruitment planning timelines become shorter. Weddle refers to this as the “War for Talent”; 67% of corporate recruiters are competing for 16% of the workforce population, creating a constant demand with an artificially limited supply.
Most companies design their recruiting needs around active candidates. To keep a consistent flow of top-notch candidates you must attract a mix of active, passive and semi-active or passive candidates. You will face increased competition for prime talent from all angles of the recruitment world. You should market your organization to these candidates as if you would market your products or services to a consumer. You must go above and beyond a simple job description, duties, line of business, location, etc. Hiring the best candidates requires that your marketing mix lets the candidate know what it is in their best interest to work for your organization.
According to a WetFeet.com survey13 of more than 3,000 experienced professionals, more than a third of the respondents who were currently employed were open to accepting a new position in the next six months. 53% were not interested in accepting a new position. Concentrating your recruitment marketing campaign on the other half, a mixture of active and passive candidates, would increase efficiency and hires.
How the Total Experienced Professional Population Breaks Down
Currently "between jobs" (unemployed), seeking employment
2%
Currently employed, seeking new employment
9%
Currently employed, open to accepting a new position in the next six months
36%
Happily employed, not open to accepting a new position in the next six months
53%
Base: experienced professionals (n=3371)
Source: Recruitment Marketing Strategies: Building Employer Brands That Attract Talent © 2000 WetFeet.com
Despite the fact that passive job seekers are more plentiful, active job seekers still account for the most hires. 39% of survey respondents stated that they were extremely active when they switched jobs.
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13 Recruitment Marketing Strategies: Building Employer Brands That Attract Talent © 2000 WetFeet.com
Source: Recruitment Marketing Strategies: Building Employer Brands That Attract Talent © 2000 WetFeet.com
This demonstrates that the current hiring process is set up to recruit candidates reactively, not proactively. “It is easier to deal with applicants who come to you then try to seek out new applicants. Without doubt, that is why actives account for such a disproportionate percentage of hires.”14
Another reason for the disparity may be that top-quality candidates regularly move between the active and passive realm, even exhibiting behaviors of both candidates depending on the job market, the economy or individual needs. In the following diagram, the dashed lines illustrate the open boundaries between candidate statuses.
A successful recruitment marketing campaign must utilize a complete media mix to cover the full-range of candidates in the job market as they move throughout the boundaries. “With the right message, a strong advertising campaign will reach active candidates immediately. However, a successful branding campaign will also resonate with passive job seekers when they enter the market.”15
14 WetFeet.com; Laura Sewell; Passive Candidates: Who They Are and How to Find Them
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15 HEALTHeCAREERS.com 2/06 Newsletter; Capture Top Candidates with a Complete Media Mix
Creating a Balanced Recruitment Marketing Campaign
Transforming passive candidates into active prospects requires much more information and detail. Companies must generate awareness among passive candidates before they are ready to start actively searching. “To get these candidates the information needed to evaluate the opportunity objectively, companies must use a series of different recruiting and information-sharing approaches. The goal is to move candidates smoothly along a path of increasing knowledge and interest.”16 The point at which a candidate has enough information to realize the job is a good career move and shifts from a passive buying mode into an active selling position is referred to by Lou Adler as The Recruiting Inflection Point.
To facilitate this transition, companies must build top-of-mind awareness by utilizing various media to brand your company and educate potential employees on the benefits of your organization. Events expose candidates to your organization without the hard sell. They can meet with company representatives and get a feel for the organizational culture while recruiters can gather contact information and softly sell or evaluate candidates. News media and non-recruitment vehicles target the passive candidates while job boards or help wanted sections reach active candidates.
30% of all passive candidates in the WetFeet.com survey say they investigated employment opportunities with a company as a result of seeing their employment ad and 28% did so after seeing a general, branding or non-employment ad. 24% stated that they used news media to research employers in whom they were interested. Again, we see the significant role brand advertising plays in not only attracting clients or customers but also recruiting the quality passive candidates you need while staying ahead of the competition for talent.
Boston Globe Media can help generate a consistent pool of the qualified active and passive candidates you need through our branding and targeted recruitment marketing capabilities. We offer truly integrated multimedia marketing solutions through print, online, television, events and direct mail that cover as much or as little of the market as you need, reaching who you need, where you need them. Maintain a consistent brand presence and educate Boston’s top-notch passive candidates with the #1 news sources in the market, The Boston Globe and Boston.com, in the City region with Boston Metro and in the Western corridor with the Worcester Telegram & Gazette. And fill your openings quickly through active candidate targeting via BostonWorks print and online capabilities.
With a balanced recruitment marketing plan your company can enjoy a steady stream of quality candidates while avoiding the effects of the baby boomer retirement and increased competition for talent.