Human Resources

I am preemptively posting this here since somewhere critical comments tend to disappear or not get posted on Recruiter.com.  I have no idea if this is on purpose or just a glitch in their Disqus implementation, or if authors control their own comments and differ in what they allow, but I’ll always double post from now on because I hate typing these things out and then losing them.  This weekend I plan on writing a more detailed response to the Good Corporate Citizenship article from a while back.  The below is a response to this more recent article on how passive candidates should behave.

The difference is, the passive candidate has a lot more leverage than the active candidate, as it is clear that an employer needs to lure the passive candidate away from a job they are already comfortable with.

This is actually incorrect. All positions have a budget, and usually a salary cap associated with them, and this is not an official budget or cap, but that which is dictated by the capital return based on the company’s ability to utilize a person. A passive candidate has a little more negotiating power than an active candidate, or so it’s assumed, but at the end of the day there will be opportunity cost for every extra dollar invested in any particular hire’s salary, and pulling a super star passive candidate doesn’t necessarily benefit your business when you have to pay significantly more for them. This squeezes the ROI for the position, and that’s assuming you can actually utilize them to their full potential. Most companies can’t, because most companies are managed in an average to poor manner. In essence it’s like buying a Lamborgini for your daily commute over winding roads through stop and go traffic. You’ll pay more initiall, and use a ton more gas, and while the Lambo is great for open road driving, its gearbox sucks in actual traffic. Its performance is hindered due to the circumstances under which it is being used. The same goes for superstar candidates.

Another analogy would be to look at your company as a production line, and to consider where the rate limitation is. If the up-line is only producing 10 widgets an hour, and has no real hope of exceeding that, then you’re wasting money on any down-line equipment with a much greater capacity. Now, there may be plans to upgrade the line, but in terms of a workforce that’s a long haul, and most companies are not making that investment these days, at least that I’ve observed. All told, the supposed higher productivity of a ‘passive’ candidate is only of use to you if you can utilize them to their full potential, and every dollar you spend to get them above and beyond what you would have paid for an active candidate squeezes your ROI and demands that you utilize them at a higher potential to get the return you need. Earning 10% on a 60K candidate means 6K profit. Earning 5% on a 100K candidate means 5K, and half the actual margin. Spending more doesn’t mean you get more when it comes to investment. Most companies aren’t Lamborgini companies, as such, they should probably get the Honda model. The margin is actually better, and the profit higher, on a more appropriately utilized employee than one with massive potential thrown into a mediocre situation.

I would also pose these questions, regarding Katherine’s hypothetical experience. If her current company really does value her, why are they not offering a comparable salary? Why did they not proactively raise her rate to what she could get from a competitor in an proactive bid to keep her? Would her company show her as much loyalty should she come into health problems and go on FMLA, or require off time? Or, more to the point, would they should such loyalty should their bottom line start to indicate her salary should be cut, or her entire position scrapped, not due to her performance but to the company’s own lack lust performance, more appropriately laid at the feet of her managers? While Katherine’s hypothetical current employer seems wonderful and may in fact demonstrate loyalty, most real world companies will ditch you in a second if keeping you meant sacrificing a fraction of a percent to their bottom line. A job is a mutua exchange, that’s all. The employer gets a work product they want more than the salary they pay, the employee gets a salary worth more to them that what they produced or the time it takes to produce it. Neither one owes the other anything, and in the real world the only people who do usually show loyalty are the employees, not the employers, whose loyalty is first and foremost to their profit above and beyond their employees by such a wide margin it may as well not exist.

Companies are not guided by ethics, but by profit. So should employees be guided. Keith Halperin is right, and employees should act like CEOs, and companies should stop bitching and moaning about loyalty which they never reciprocate on, and start treating and paying people well from the get go if they want to retain them, instead of only addressing the issue when they’re already leaving. The sad truth is that companies that act like Katherine’s hypothetical employer are so rare they may as well not exist. As a practical reality employees should not strain themselves to do the right or ethical thing by employers who will never spare a thought for doing the same by them. Employers have enough of an edge in the market without employees giving them even more based on one-sided assumptions of loyalty and ethics which they will never see returned to them.

Employees should get as much money and perks as they can, and then ditch their employers in a heart beat when they’ve made a prudent judgement they can get more, because their employers will do exactly that to them. Tit for tat, employees treating employers as badly as employers have historically treated employees is the only way the labor market will ever balance itself. As long as employers see their employees as disposable, employees should reciprocate.

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Recruiter.com Reply

Since Recruiter.com keeps deleting my reply to Art on this article, I figured I’d post it here.  Just got back from a Caribbean trip and catching up with work, missing the blue water.

Reply to Art:

I think you missed the point, Art. The title of the article is, “Is Passive Talent Better Than Active Job Seekers?,” and is not asking whether or not a passive strategy is a good, and sometimes necessary thing, which it is. However, the incessant harping on passive! talent by many recruiting ‘thought leaders’ leads to just that problem: people think ‘passive’ means ‘better.’ It doesn’t. It just means the person in question wasn’t actively looking for a job when they were contacted.

The best qualified person is the one who performs better, it doesn’t depend on how they were sourced. The correct approach is to always employ both active and passive strategies to varying degrees, depending on the needs of the particular position as in the situations you mention, and pick the best person from the pool of people you get regardless of how they were sourced.

The problem at base is that thanks to the incessant harping on this issue it has been reframed in the minds of many people outside the industry as passive = inherently better, when in reality it’s just a marketing distinction to delineate strategies for reaching as wide a candidate pool as possible. It is not a determinant of job performance. But, that’s how many see it. That’s the problem, because people then pass over ‘active’ candidates who could very well be superstars because, well hell, they’re not passive!, so how good could they really be? Hell, they’re looking for a new job.

After all, we wouldn’t want to employ anyone who actually wants to work for or with us, would we?

Article on Downsizing

From Recruiter.com.  Worth a read, my comment at the bottom makes a point I’ve always thought needed to be addressed.  Human capital is managed to a lesser extent than any other on the market.  I know of no company, literally none, that even knows what revenue is contributed on average on a position level, much less an individual employee level.  Not only do they not really know who to cut and retain in hard times, they don’t know who they should concentrate on retaining in good times, and who is more or less replaceable.

Myths That Need to be Busted

If there were two myths in hiring I’d say absolutely need to be busted, I’d say it’s these two:

1) Employees are a Cost.  This is utter bullshit.  In any exchange, it happens because of a reverse valuation; which means each person wants what the other has more than what they’re giving them in exchange for it.  If you value two things equally, there’s no need to exchange because it doesn’t matter.  In the context of employment, the employee wants the salary more than the time spent on the job, and the employer wants the work product more than the salary paid for it.  As such, employees are an addition to a company’s revenue stream.  When any individual trades something they have for something they want more than that thing, they have made a return, or a profit.  Same goes for employers.  So companies need to stop acting as if employees are a cost and see them for what they are: additions to their revenue stream.  They need to start realizing vacancies have a cost, both in lost revenue from that position, but also lost revenue for everyone who has to pick up the slack and so potentially not performing their primary duties to the best of their ability.  Over staffing is certainly possible, but as long as employees are seen as a cost, all companies are always over staffed, because at least on an accounting level, they would be better off without everyone.  Of course, if that happened then the company is gone too.

Newsflash for employers: you’re not doing anyone a favor by employing them.  It’s a mutual exchange that benefits both parties.  Pull your heads out of your asses and start treating your employees as what they are: revenue generators.

2) There’s a labor shortage.  Pure bullshit.  There’s a documented labor surplus, and I and other recruiters have routinely seen multiple instances of tens, hundreds, and sometimes even thousands of applicants for an open position where the hiring manager claims none are qualified.  It’s not the candidates, it’s not a labor shortage, it’s not the recruiters.  The problem is no accountability for hiring with the managers.  There’s plenty of qualified people out there, your hiring managers are not accountable, nor do you have an honest, realistic assessment of what you offer as an employer.  Every employer thinks they deserve the Fabulous 5%, the top performers in any industry.  Horseshit.  You’re an average company with average salaries and average managers, you’re going to get average people.  Fucking deal with it.  You’re not Google, you have no benefits, you offer mediocre to no time off, who the fuck do you think is going to want to work for you?  You had better do an honest assessment of where you stand.  Think of yourself as a manufacturer of employment opportunities.  And then realize that, if it were any other product, that if your market strategy was to bitch and moan about how inept your customers were for not being willing to buy your clearly superior product for the ridiculously high price you charge, you’d be out of business in a heart beat.  In this case the high price you’re charging is the ridiculous discount to the mean salary offered in the area that you expect people to take for the ‘privilege’ of working at your company.

It’s time for employers to pull their heads out of their asses and start taking ownership of the hiring process.  If employment at your company isn’t attractive that’s your fault, and you need to correct it.  Control bad managers, up your salaries to something more reasonable, and start holding people accountable for getting positions filled.  And for those places with screaming, abusive owners, have the balls to be the one who explains to them how pathetic that behavior is and how horrible it is for their own business.

And if you aren’t willing to do those things, then don’t blame everyone else for your problems.  You aren’t serving your customers right, and that’s your fault, not theirs.

The Real Recruiting Revolution Has Nothing To Do With Recruiting

I modified a comment I made on Ere.net slightly to make it a post here. I feel it’s right on the money, other opinions vary of course.

It’s not a revolution in recruiting that’s needed. There’s plenty of people out there, it’s getting easier and easier to connect with them via old and new school methods. What’s needed is a revolution in the interview/hiring process. It’s there and then that the process is most likely to go off the rails with multiple, sometime endless interviews, tests, and endless requests to, “see more people,” well above and beyond what should be necessary to fill one position. We need to start pushing back against poor managers, bad decisions, and out of control processes as much as possible. As long as our role is to facilitate the bad practices and decisions of others, we won’t be taken seriously as a profession. So, as a profession, we need to take a stand and start pushing for a quality process as much as possible. My suggestions would be these:

1) Any vetting method with no clear evidence supporting its effectiveness should be dropped, period. Credit checks and drug testing come to mind immediately, with the latter allowing exceptions for sobriety testing in safety critical situations. Nor should this step be limited to such ancillary processes; if interviewing itself is found to be ineffective, then drop it or change it so it becomes effective. I only recently looked, but I’ve yet to see evidence that interviewing itself does much if anything to ensure a good hire and subsequent good performance.

2) Push for standard, open salary requirements. Throwing money at people doesn’t solve problems, but lack of money does create them. Honesty and openness in the realm of salary from both companies and candidates is necessary and the topic should lose its taboo status. “Competitive compensation and benefits,” is a phrase that’s on par with, “cozy,” in real estate; the latter means small space to house/apartment hunters, the former means low pay in the world of the job hunters.

3) Develop evidence and research based standards for a more regular hiring process. We need hard research demonstrating what techniques work and where diminishing returns kick in. Otherwise the hiring process will continue to be an out of control monster with 1 step in some companies and 40 in others, one or two interviews here, ten to twelve there. And real research based on effectiveness is what’s needed, not LinkedIn surveys for God’s sake.

4) Treat recruiting and employment as steps in the same life cycle process for all employees. Accountability needs to be on the managers for engaging in the hiring process, accountability beyond the date of hire needs to fall on recruiters too for quality purposes. There should always be a presumed DSLA in place, and there should be hard research done into when and where in the process accountability for retention shifts from the recruiter finding a good person to the manager/company being able to keep them.

5) Push for better treatment of workers in the US. Recruiters and HR leaders need to stop being Yes men and women for the whims of whoever happens to be in charge and develop professional standards based on evidence for how much time off, hours worked, etc., should be offered. As the workforce increasingly globalizes people in the US are inevitably going to notice that their European counterparts get twice the time off and then some, and yet, through some miracle, the companies they work for don’t collapse into dust when they take a week off and don’t answer their cell phone and check email every ten minutes. In the US we are burning out our workforce with lower and lower pay, fewer and fewer benefits, and more and more hours worked. When people are dealing with capital equipment they know the machine’s limits and tolerances and maintenance schedule, and respect it if they want the equipment to last. But people are considered to have no limits, no need for real down time, no maintenance, and are just terminally pushed for more and more and more with no regard to burn out. We treat our machines better than our workers, that has to change.

Recruiting feeds people into a machine that is largely beyond our control. There is no talent shortage, there is no lack of willing and able people. There is a severe problem with hiring; it’s a meandering, standardless maze of conflicting and redundant and often useless processes that people get thrown into and it grinds them down. That’s where the revolution is needed.

Recruiting Revolution?

Nice essay here, but is there any evidence that, “[t]he recruitment industry has gotten lazy and a revolution is upon us?” Revolution usually means a shake up of some sorts – advancement, new technology or processes, etc., – whereas here, revolution seems to mean acting like we’re still in the seventies. There are a couple problems with that, I see.

‘Lazy’ recruiting is effective as far as many corporations are concerned. If you took two batches of resumes, one into which you poured your heart and soul, and the other which you sourced real quick with minimal work via a mass email campaign, they’re likely to get the same consideration from the client, or the hiring manager for those already on the corporate side. Put another way, the ability to jump on the phones and cold call is not the rate-limiting step in the recruiting process.

I don’t know of anyone who removed their resume from a database because they were worried about being seen as “active.” In fact, few outside the recruiting industry even know what the jargon of “active” and “passive” means. Resume databases lost their effectiveness because they lost their newness, the initial crowds of people who went there because they were active are now passive, but still in the database. The postings which were once new are now ubiquitous, and buried among thousands of others that look much the same.

There has been no revolution in recruiting, all I see is more of the same. Job boards are just hopped up versions of the white pages and corporate directories. LinkedIn is more of the same. Social media outlets are a slightly different version of the same thing. These are all just means of contacting people, and many of these people won’t pick up the phone when called, so these means of finding and contacting people compliment cold calling, they don’t replace it. If communication is key, then one form of communication doesn’t trump all others. The one that’s the most effective for a given situation is what should be used. Calling ten people from warm leads gotten via an email campaign and then cold calling some of the desirable candidates I wanted but who didn’t respond is way more effective than cold calling 70+ people a day from scratch, in my experience.

Here’s what a genuine revolution in recruiting would be: Honesty with candidates and clients.

To start, explain to everyone that salary matters and it can’t be ignored. This is not a statement on low salaries, but one about the inherent taboo in even discussing the topic. I can’t count the amount of times people have nearly had heart attacks when I’ve discussed salary ranges openly and honestly with candidates and clients at the start, or near to it, of a conversation. “Why would you do that?!” I recall one person asking me. Apparently you’re supposed to speak to people for an hour and get their life story, and then find out they’re making 10-20K more than your client is willing to pay. Also, you’re apparently also supposed to take any job at any price and not even mention to your client that since they’re targetting a salary that’s 30%+ below market rate, it might take a while and/or they might need to sacrifice quality. When this BS ends and both candidates and companies honestly face their own worth on the market, that will be a revolution in recruiting.

Further, being able to have a greater effect on, and potentially fix dysfunctional hiring processes would be revolutionary. Having had to do this myself for two companies now, I know how difficult it is, and being back on the agency side I’ve felt the effects of ones I couldn’t change. As long as the majority of hiring processes are dysfunctional, that will be the rate limiting step in recruiting. An unwillingness to get on the phone is not necessarily the problem with recruiters today. I’ve seen the best firms put the best candidates into the meat grinder of a dysfunctional hiring process, and that is the rate limiting factor in recruiting.

The real revolution in recruiting will be taking as much of the ‘art’ – BS in other words – out of the process as possible by outlining standards and best practices for hiring that are based on evidence, and not merely plausible sounding rhetoric or the pontifications of people like Steve Jobs, and then having honest conversations with those who come up short, both companies whose processes are deficient and candidates who think they should be hired with no vetting whatsoever.

One of the first moves toward that end of evidence based hiring is for someone to actually present evidence that so called ‘passive’ candidates are better. Evidence would be direct evidence of better performance and longer tenure than so called ‘active’ candidates. Unless that’s presented then it’s a marketing distinction for targeting different audiences, not one that’s linked to actual candidate quality or subsequent performance.

A further revolutionary step would be stop looking at Employers of Choice uncritically, assuming all their methods should or even could be adopted by companies without the brand pull they have. Most companies operate with far less brand recognition and far tighter budgets and human resources. Truly revolutionary methods will work to improve hiring regardless of the company that uses them.

I’ve used the term rate limiting in this post a couple of times. In chemistry and biology a rate limiting step is basically the slowest step in a process that determines the speed of the rest of the process. If you’re talking mechanical systems, you could say be dealing with a pump that pushes 10 gallons of water per minute. If you want more per minute then it won’t matter how much water you add to reservoir, it will still only pump 10 gallons a minute to the destination. The pump is what needs to be changed. In recruiting the rate limiting step in most companies is the hiring process. And we as recruiters are constantly trying to put more water (candidates) in the client’s reservoir in the hope that more will end up hired, but it doesn’t work that way. The pump is too slow, and in many cases is broken. What’s more, a good number of companies engage in such poor hiring and management practices that they actively work against their own ability to hire quality people by destroying their reputation as employers.

To finish, we also live in a highly managed market, and it’s mostly special interests, those with money and thus political pull, who manage this market. Companies, from small to large, all have more pull politically at the local, state, and federal levels, than individual workers. That’s why politicians never raise the minimum wage until the currency has devalued to such a point that raising it is essentially a meaningless act. That’s why industries often write the legislation that gets passed. And, whether actively or simply as a byproduct of pursuing their own interests in the political process, businesses have essentially managed the labor market into a permanent surplus of labor. And as long as there is this perceived plenty of labor, and businesses think there’s always someone new ready to replace anyone they don’t like, they won’t put any serious resources into getting good people or keeping the ones they already have. They will continue to run people ragged and then replace them when they burn out. They will continue to demand loyalty from their workers while they show none. They will cut labor in seconds if the bottom line dictates it, but if an employee makes the same decision based on a better offer they are black listed.

This imbalance of power in the employer-employee relationship dictates the quality of the process in the end. This imbalance is the result of economic reality, because employees are disposable and easily replaced in many cases – but also critically the result of social mores. The ‘entrepreneur’ is deified even though no such thing exists, while the laborer is considered a loser of sorts. The entrepreneurial function is an economic concept that just differentiates the profit of risk taking from the capital return of funding a production process, minus the uncertainty and risk, for pedagogical purposes. In reality all people serve all economic functions to varying extents. Those who tend more toward the entrepreneurial function take on more risk, but they are also usually a mix of private entrepreneur, one who makes money by taking risks and satisfying customers, and political entrepreneur, which is one who makes money by using the government to turn the arm of his potential customers by limiting competition. There is no pure, Ayn Randian ‘producer’ or ‘entrepreneur’ in reality. But, thanks to rhetoric from both the right and left wing, and well meaning but somewhat theoretical economists of various stripes, we are taught to deify the entrepreneur a no one else. The owner/CEO of a business and his cohorts get a pass on poor, immoral, and unethical behavior, while everyone else gets held to a higher standard.

Once that stops, maybe then a revolution is recruiting is possible. Until then, it isn’t, because the peasants have no power.

Principles of Hiring Good Employees – Salaries

Employees are not a cost, they are an addition to your revenue stream. You hire people to do something productive that you need. You pay them because what they produce is more valuable to you than the salary you give them. Therefore, they add to the value of your company.

The work product that a person produces should have a value to you, that is what the person should be paid for producing it for you. Attempts to bargain down the price based on past salary or other factors will only lead to turnover in the future. If a person’s work product is worth X dollars, you should pay them X dollars regardless of previous salaries above or below X. If they are earning significantly more than X, you are putting them in a situation in which their full capabilities will not be employed, they will likely leave sooner for an opportunity which allows them a higher salary and full use of their capabilities. If their previous salary is below X, they were likely undervalued and under utilized in their previous position, and if you bring them on at the same rate or with only a small raise, they will be likely to leave for a position paying closer to X once they realize their full value on the market. You are not the only employer looking for such product, other employers will bid up the price of labor to market levels. If you perpetually try to pay below market levels, you will have perpetual turnover issues, you will have trouble retaining the people you deem to be good hires, and you will have sub standard employees. Pay your employees what they are worth, treat them well, and you will retain them.

People who say salary is not a motivator, or even that it doesn’t matter, are flat out idiots, and often consultants who essentially get paid to tell corporate executives what they want to hear as opposed to the truth. No other form of compensation matters anywhere near as much, because no other form of compensation can be used to pay bills. If someone told you you can buy a Bentley for any price because there were all kinds of other reasons why you should own one, and all these other forms of payment the dealer would accept, you’d be an idiot to believe them. If you then went from dealership to dealership listing all these reasons why you should own a Continental GT, but only offering the price of a Honda Accord, you’d be laughed out of the dealership, and rightly so.

There is no magical reason your purchase of labor will or should be different. Keep that in mind the next time you low-ball a candidate on the offer.

Recruitment Process – Know It and Cut the Bullshit

It seems both candidates and recruiters don’t actually know the process of recruiting.  It’s time we admit that, and that this misunderstanding usually results from dishonesty.  Here’s why…

Articles on recruiting are usually written by ‘thought leaders,’ self proclaimed gurus who realized a while ago that with the advent of the internet, you could simply declare yourself an expert, say some plausible stuff, and people will flock to you for guidance, pay you consulting fees, and engage in war to the bloody death to defend your position as if it were their own mother.  I’m not exactly sure why this happens, but it does, and in many fields.  Diet advice is another area where self proclaimed gurus prosper and proliferate.  In some cases recruiting articles are written by real world recruiters, but these articles are rarely honest; they’re sales pitches.  They’re aimed at proving how superior the author is to his peers, and potentially selling services.  So, the unfortunately result is you often can’t trust what you read in these articles.

Candidates often don’t understand the process because they get their information from such articles, but also because they don’t want to understand.  Understanding it would require not following up every ten minutes for a decision from the client you just interviewed with the day before.  It would also require candidates face the fact that they are one face among many, and that until we as recruiters gauge interest we’re not going to know everything about you.

Here’s the reality…

Clients usually use recruiting agencies when they’ve already tried to fill the position on their own.  Even though they’re desperate, they usually take their sweet ass time with feedback on resumes.  I don’t know the specifics because they’re different in every company, however as a broad rule there is no cost to them for delaying, and generally they think people will always be available.  Now yes, a vacancy costs money, and yes, good candidates get hired, so both beliefs are wrong.  Doesn’t matter, it’s what they think and they act accordingly.  So, unfortunately, the recruiting process is always typically full of massive, unexplained delays.  This isn’t how it should be, this is how it is.

Now, when a recruiter writes an article they usually talk about building a ‘shortlist’ and calling those people.  The reality is the shortlist is built from a very, very long fucking list.  So, your first contact with a recruiter is usually based on a keyword search.  It’s likely way off target a lot of the time.  This is the way it is, get used to it or get your resume off line.  The recruiter doesn’t know who you are, your experience level, your loves, your hates, you favorite color, etc., all they know is that terms X, Y, and Z show up in your resume.  Now this is impersonal, but getting mad at it is ridiculous.  Here’s why…

Out of every candidate you contact, you’re lucky if one in ten wants or would consider a new position, and then out of that group, you’re lucky if half are interested and qualified for the position you have to fill.  The point being if we had to take forever to get to know every candidate we ever contacted in depth before even putting out a feeler, it would be too much damn work.  Now, recruiting articles will make you believe that a recruiter knows everything about you before he calls.  That’s bullshit.  It’s just not how it’s done except in the rarest of cases in the highest level head hunts.  Most positions don’t warrant that.

You see, most recruiting articles are written from the perspective of getting so called purple squirrels, which is basically the perfect candidate, the perfect job, the perfect time, the perfect place.  This is roughly .00000000001% of the placements recruiters work on.  The rest are your usual mid level positions, like you’re probably working in now.  So, here’s how the process really happens…

We get an order.  We speak to the client to get a better idea of what it’s about, company culture, etc.  I do a Glassdoor search on them to confirm or refute what they tell me, because usually the order is prompted or taken by a salesman who doesn’t given a crap if it’s the worst company on the planet to work for.  I do this for my own knowledge, and I do try and let any candidates know if they’re walking into a hell hole.  Once that’s done, we usually reach out by mass email and other means, usually phone, LinkedIn, etc.  These are feelers, and while we want them to be on target some are guaranteed to be off target.  We then talk to the people who get back to us and from that group we build our short list.

Then we send them off to the client where they are usually ignored for weeks on end.  In this time period the candidates usually call us and ask what the delay is about.  We don’t have an answer, the client doesn’t give a shit is usually the reason.  Yeah, it sucks.

Now, when you respond to the initial feelers, if you truly are interested and want the recruiter to take you seriously, don’t call and say, “You emailed me…”  They didn’t email ‘you,’ they emailed you and 100-200 other people with similar profiles.  That way they get 10-20 people of interested, and maybe 4 or 5 people max who are both interested and good to send for the position.

Recruiters will not know your life story when they initially contact you, don’t expect them to.  They want you to think they will because they want you to feel special, and they want you to think they are special, and different.  Clients will take their sweet ass time responding because most companies don’t prioritize their recruiting/hiring process, and most don’t give much of a shit about their actual employees, much less potential ones who aren’t even on payroll yet.

The contact process is one of general impersonal moving to specific and in depth interviews, and then endless waiting as people decide whether or not they want to stop spinning in place trying to catch their own ass long enough to make something happen.  That is the unfortunate reality.

The Salary Barrier

The salary question is the first one I’d like to address here, or more specifically I want to address The Salary Barrier.  The Salary Barrier is that point in a conversation where you have ascertained that the person in question understands and accepts the concept of prices and pricing, but still can’t see how that applies to labor, or salaries.  We’re going to have to start with some basics on this one.

Prices.  Everything that is scarce and valued has a price.  Prices are developed on markets, they are bid up and down based on supply and demand conditions, all based on the subjective perceptions of the people doing the bidding.  I prefer the most and least competent buyers and sellers model, but I forget who first proposed it.  However, it’s enough to know it’s a process of discovery that occurs continuously.

Now, if you were to run into a Rolls Royce dealership and demand a Grey Ghost, but only offer the price of a Honda Accord, almost everyone understands you will be asked to leave, or laughed out of the place.  This concept, using various goods and services, is understood by most every human being on the Earth.  Except with regard to wages.

What’s more, HR and recruiting professionals, at least some of them, seem to make a living not doing much HR or recruiting, but writing about those things.  They tend to hive off into high minded theoretical horseshit.  One such avenue their thoughts travel is the role of compensation in motivating people.  They will often talk about allowing employees to be creative, to stimulate them, to do any number of things.  Other than pay them.

Now, CEOs and business owners read these articles, and you must understand, most of them are incompetent.  Most companies in the US are small to medium sized businesses.  They are run by amateurs who were in the right place at the right time, with the right service or product.  they are not necessarily run by people who have a clue how to manage a business, much less other people.  So, they read these articles and always come away with the idea that you offer alternative forms of compensation in lieu of actual salary, not in addition to salary.

No, it’s also important to remember that salaries fall on a normal distribution like anything else.  There’s a mean, a median, and a mode.  These are instructive as to what the going rate for a given type of labor would be, and these numbers are easily accessible these days at websites like salary.com.  This means both employers and potential employees know what they should be getting in a general sense.

Now, the kicker is that in recruiting, whether you’re corporate or agency, you’re still likely inundated with requests to fill positions at salaries that are 30-50% below where the market says they should be.  Here’s why…

No one thinks to check first.  Or, very few people do.  It’s really that simple.

So, we have a perfect storm of recruiting and HR professionals basically earning money by telling CEOs and business owners that they don’t actually have to pay their employees.  You get incompetent managers and HR departments that decide on budgets before looking at actual job requirements.  And you have agencies working mostly on spec who take the orders, with no DSLA in place and so no consequences for the originating company beyond the cost of their vacancy, and those agencies will sit on the order and work it and eventually what happens is the job doesn’t get filled, they get really lucky and find someone who is undervalued and willing to take the position at the salary proposed, or, and this is the least likely, the company caves in and pays market rate for what they actually need.

Here’s the reality…

You get what you pay for in the labor market as in every other market.  Labor has a price, you either pay it or put up with a more junior person who you can afford.

If you want to fill a position, you will figure out what the job description is and then look up the salary ranges for that type of role in your area, and aim there.  If you’re below the mean salary you will have problems filling the position.  If you’re significantly below the mean salary, you will not fill the position.  If you have alternative forms of compensation you can offer, these need to be offered to your high performers as a means of retaining them.  You can not make up for any significant shortfall in salary with other benefits except in rare instances where what you’re offering is exactly what the employee wants.

It is way past the time HR and recruiting professionals pulled their thumbs out of their asses and told companies they have to pay their employees and pay a market wage.  If they are not willing to do that, you can still find them people, however they will be more junior than where they were aiming, or of lower quality, like lacking leadership potential, etc.  You can’t simply “get people” at any price for any job.  Recruiters and HR professionals need to set better expectations and push back more on these companies run by idiots who think they can go to an electrical engineer who would be earning 90K at any random company in area and offer that person 50K and that they’ll jump at the offer for some reason.

To all business owners: you are not the only game in town.  There are other companies out there, and they’re offering jobs pretty much like the ones you offer, with pretty much the same benefits and working conditions, etc.  You need to look at your company in a totally honest fashion with no marketing or PR bullshit in the way and find out why someone would want to work there.  If you can’t answer that, or if there really is no reason, you need to look at your compensation rates because that will become the only way to differentiate your company from the competition.

And to finish up, you need to stop listening to morons who try and tell you salary is not a motivator for people.  It is the primary motivator.  People need food, shelter, and clothing.  They do not get that by having more creativity at work, or working for a company with a prestigious name.  Try and pay your rent or mortgage with either of those things, it won’t work.  You first need to compensate your employees fairly for what they are doing for you, and then target the ones you want to retain and hit them with non monetary compensation to try and keep them around longer.  Money is without fail the first question candidates ask about in any inquiry about a position.  People need to stop tip toeing around this issue and address up front and in the open: pay matters.  Deal with it and pay your employees with money, not freedom or opportunity or any other non monetary piece of bullshit.

Opening and Introduction

Welcome to the first post on this blog.  While I have another blog, I’m starting this one as a less random, more topic focused rant repository.  Here I want to address recruiting and HR issues specifically, in theory and by giving practical examples.  My experience is both on the agency and corporate side.  It’s my intent here to call out the recruiting and HR professions on their bullshit, plain and simple.  I think there’s too much in the way of soft measures, feel good nonsense, and begged questions in the recruiting/HR profession as a whole.  Here is where I intend to introduce some reality into the mix, in the hope of improving things and giving people an honest view of what goes on inside a recruiting agency and a corporate HR/recruiting department.