Surveys of economists had predicted the numbers would be closer to 150,000 to 175,000 lost jobs and an unemployment rate of 9.9 percent. The spike pushed the unemployment rate to its highest point since April 1983 and the job loss was the 22nd consecutive month of declines.

The largest losses were in construction, manufacturing, and retail trade. The three sectors and finance are responsible for the biggest share of job losses since the recession officially began in December 2007. Construction alone has lost 1.6 million jobs. Manufacturing has lost 2.1 million.

The rate of job losses is well off its highs from earlier this year, some of it due to government stimulus efforts. But the numbers still portend a slow recovery for the labor market.

With the latest numbers, the government says 15.7 million are unemployed. An additional 11.7 million people are working part time because they can’t find full-time jobs or had given up searching for at least the four weeks before the survey period.

Unemployment, however, is not evenly spread across the labor force. It’s worst for teenagers who are part of the labor force, at 27.6 percent, and lowest — 4.7 percent — for those 25 and older with at least a four-year college degree.

Click to enlarge

Other indices, including the Monster Employment Index, showed little movement. Consumer Confidence, which had improved in the last few months, declined, as did the number of new jobs posted online.

In Canada, the jobless rate hit 8.6 percent as employers there cut 43,000, surprising labor market forecasters who were expecting a gain of 10,000 jobs.

Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Bloomberg.com, that the report was a “big disappointment.” “Our economy seems to be struggling out of the recession and the weak employment just fits into that trend.”

Another economist, speaking about the U.S. job outlook, but who could just as well have been talking about Canada, too, told BusinessWeek: “This recovery is shaping up to be a jobless one, just like the last two.”

Added Paul Ashworth, an economist with Capital Economics in Ontario, “Our concern is that, unlike the last recovery, with credit still tight, households aren’t going to be able to smooth their consumption using credit until the labor market eventually strengthens.”

Along with the homebuyer credit, the package contains another $10 billion tax break that allows companies that suffered during the last two years to use recent losses to reclaim taxes paid in the previous five years, when times were good.

This is huge news and good news for recruiters too.

Your candidates who have been on the fence because of a depressed housing market can now sell their homes (if they’ve owned them for more than five years) to buy another one and reap a $6,500 tax credit. A tax credit is a big deal. It’s money you don’t pay in the form of taxes, so it’s like earning three times that amount and paying no tax on it (if you’re in a 35% tax bracket).

The pre-existing $8,000 tax credit for first-time homebuyers extension is good, too because, believe it or not, the general public is slow on the uptake and people are only now beginning to realize what a big deal that is. It has another several months to become a steady part of realtor marketing plans (it has only really been circulating even on their part for the last two months or so; how many “$8,000 Tax Credit” signs have you seen riding atop their “For Sale” signs in your neighborhood?).

If you haven’t been touting that as one of the “benefits” to your new job offering, now is the time to make it a part of your campaign too.

There’s $10 billion in tax breaks in that package that are big too. It’s supposed to be for small businesses that have shown losses in 2008 and 2009 to be able to recoup some of the taxes they paid in the previous five years. Will your recruiting company be counted in this bunch? I wouldn’t doubt if many of our small businesses qualify for this. 2008 seems kind of early for this, to me, so I’m going to be watching for an expansion/extension of this to include later years — maybe 2010, 2011, and 2012! Wouldn’t that be something?

Now, on a sobering note, and it’s a question I know some of you are thinking:

Where’s this money going to come from?

Read more here.

Aw, come on. Of course you’ve looked yourself up on the Internet. Almost half of all Internet users did in 2007. The latest survey puts the number at 59 percent.

And if you really, really haven’t then you may want to retake recruiting 101.

Just as companies no longer are masters of their own brand, neither are you. There are sites to rate teachers, cops, doctors, even parts of your anatomy. Then there are the pictures and comments well-meaning friends have posted about you.

Google yourself and you may find those bleery-eyed conference party photos of you rank higher than than does the whitepaper you authored. Or, you may discover you rank lower than the death notices of others with like names.

To help remedy that there’s PlaceYourName.com. It’s a personal marketing service that promises to help users “manage and control what is seen about them when their names are searched online.”

For $50 and a few minutes of your time you get a press release (which you write, they edit) sent to an online newsservice and PlaceYourName submits your name and some bio info and your photo to what it says are four “high ranking websites, blogs, and news portals, viewable in search engine results.”

For $100, you get double the distribution plus a vanity website of your own.

There’s nothing PlaceYourName will do that you can’t do yourself. But the truth is most people don’t. Sarah Welstead, a Toronto recruiting marketing professional, a few months ago wrote about the importance of building a personal brand. Yesterday, ERE offered a webinar on this topic: “Creating a Personal Brand: Increasing Your Online Presence.” Presented by Toby Nathan of RecruitaStar is the nuts and bolts of how you build a personal brand and it’s archived here.

There’s also a valuable personal branding blog started by Dan Schawbel, a guru of personal branding.

While a service like PlaceYourName.com can get you started — and you may want to consider it and other branding tools like Personavita or VisualCV if you lack the discipline — in order to sustain the effort, you need endurance, and something to offer.

Watch it here!

In late January, despite opposition from the Society of Human Resource Management, President Obama & Congress eliminated the 180-day statute of limitations for filing an equal pay lawsuit regarding pay discrimination. “This is a game-changer,” said Gerry Crispin, recruiting industry icon, at a recent conference, referring to this new legislation. “Companies need to pay attention to this.”

Crispin is right. Just last week the Wall Street Journal reported that a former Anheuser-Busch executive sued the beer giant for discrimination, saying she was paid less than male executives. Francine Katz, a former Anheuser-Busch vice president of communications and consumer affairs, filed a lawsuit last in a state court in St. Louis, “accusing the brewer of maintaining a corporate culture that ‘adversely impacts women,’ resulting in lower salaries and bonuses and fewer opportunities.”

This well-publicized lawsuit is the first of many more such suits to come. As a result of this legislation, companies are now required to meticulously document pay decisions and retain detailed employment records to ward off lawsuits like Anheuser-Busch is facing. This legislation is forcing you as a recruiter to more closely consider factors beyond what it takes a candidate to accept an offer. In light of this legislation, as a recruiting professional you need to advise your client on compensation best practices beyond closing the deal. Before constructing any offer for a candidate you should:

• Analyze comparables. Run the numbers on all your employees’ compensation packages, including starting pay, merit raises, cost of living increases, and benefits. Individuals who perform the same jobs and have the same qualifications should be paid similar rates. If your candidate requires a significantly larger package, you must ask whether this one deal is worth the risk. If you do not have access to this type of data — you probably should.
• Analyze market data. There are many tools available to research what professionals are earning in any given area. Consult Towers Watson & Co or other leading compensation market research data. Any offer you prepare should be close to what market data suggests is appropriate.
• What is your candidate earning now? Any significant pay increase beyond their existing package often triggers additional scrutiny. Be ready to defend this type of decision with detailed documentation.
• Ensure there are demonstrable business reasons for any disparities in compensation with an offer you are preparing.
• Keep everything. Because there is no longer a statute of limitations, you need to indefinitely retain records relating to compensation. Remember, there is no longer a 180-day statute of limitations, an employee can go back years. This type of data gathering is protecting your organization in the future.
• Most important: have your compensation director on speed dial. When’s the last time you paid him/her a visit? Schedule an appointment and partner with that organization to ensure best business practices.

Now go find that perfect candidate and close the deal.

Details are sketchy, but Dave Mendoza did post an email about the hire to his site Six Degrees From Dave. The email is from a recruiter for Nelson Staffing and says the firm got a contract from “A Major (and pretty exciting) employer in the South Bay here in N. CA.” The email doesn’t name the employer, but it says Nelson needs to find “200 upbeat and enthusiastic recruiters and sourcers for them — by next week.”

While California’s Bay Area — home to Silicon Valley — is crowded with tech employers, few are big enough to support a need for 200 recruiters. Google is. The company laid off about 100 contract recruiters at the beginning of this year, which was 25 percent of its recruiting force. The fact that the company is now hiring 200 suggests that it expects to grow in 2010.

Some 70 percent of the new positions are at company headquarters. The rest are in other parts of the U.S. and in other parts of the world. All the positions are onsite; “no work from home.”

I’m guessing that the positions on the Nelson job board for recruiter and sourcer in Mountain View (Google’s HQ) are the same ones referred to in the email. If so, the pay scale appears to be in the $40-$45 per hour range for sourcers and $60-$70 for recruiters.

Incidentally, Mendoza’s post doesn’t mention Google by name. Nor would he confirm that the online search and advertising company is behind the hiring. Other sources, however, did confirm that it is Google.

Mendoza’s blog post has all the details — they are also in the online job postings — but briefly, here’s what Nelson Staffing says it wants:

• Experienced Recruiter (minimum 5 years total in both corporate and/or agency recruiting) – Technical,  sales, product marketing. Recruiting experience on resume in ’09;
• Recruiters (minimum 4 years recent exp) – Candidate sourcing;
• Sourcers (minimum 3 years solid recent exp) – Ability to reach passive candidates – exceptionally internet savvy;
• Recruiting Coordinators (minimum 2 years in an HR support or recruiting support role) – heavy scheduling, process management.

The economy grew 3.5% in the last quarter, signaling a definite end to the recession and the start of a recovery. That’s great news, but look closer and it doesn’t seem that there’s much to celebrate yet. Six-tenths of a percent came from spending by the federal government and another 2.2% from residential construction and auto purchases. The latter number is directly linked to the cash-for-clunkers and the housing credit. That leaves only 0.7% from private industry. This is why we’re not seeing any growth in jobs. The economy is growing because it’s being propped up by taxpayers (and the Central Bank of China) instead of by real growth in GDP. In some places this is known as a ponzi scheme.

The government claimed this past week that the stimulus package has added 650,000 jobs so far. Well, to be precise, “created or saved” that many jobs.

Jobs have been added, but just how many have been “saved” is another matter. There’s no doubt that spending on jobs has a multiplier effect; the money earned by a nurse at a hospital funded by the stimulus may go to saving the job of the mechanic at the auto repair shop where she has her car worked on. But that connection is impossible to make with any degree of precision. When it comes to estimating the number of jobs saved, the White House’s estimate is as good as yours or mine. And it’s likely that any estimate of jobs saved — since there’s no way to dispute it — is an optimistic reading of the numbers. If you’re going to make things up, then why hold back?

The fact remains that the economy has shed an average of 400,000 jobs per month since the beginning of the year. That rate of decline has slowed, and shows signs of continuing to slow even more, but it’s still a net loss. Economists predict that unemployment will start to drop in February, reaching 9.4% by the end of 2010.

Light at the End of the Tunnel

Despite all the bad news, there are signs that the situation will genuinely get better on the jobs front. Numbers from the U.S. Commerce Department show that exports and investment in equipment are both growing aggressively. That will continue since the dollar remains weak and the economies of India and China are showing significant growth. Construction and related industries will also continue to grow, with or without further tax credits, as the inventory of housing is at its lowest point in 30 years.

2010 is an election year, and nothing focuses the mind of the political class as the prospect of an election that may not go well. So programs like a tax credit for hiring are very likely to pass soon. Unfortunately, having politicians determined to do something can often mean a lot of very bad ideas being implemented. There are already rumblings about a second (or third) stimulus, which will only distort long-term growth prospects further. Recent earnings reports from companies show that plenty of them are back in the black and in a position to make new hires. Lighting a fire under them with a tax credit for new hires is one thing; piling on costs and subsidies for new projects that will undoubtedly result in new taxes on them is another.

Some things are almost always a lie: the check is in the mail; I’ll respect you in the morning; and I’m with the government and I’m here to help. Let’s hope we don’t get reminded of that yet again.

The Conference Board’s monthly Help-Wanted OnLine Data Series reported that online job postings dropped by 83,000 in October. The number of newly posted jobs dropped by 24,000.

“The September and October numbers are a further indication that, thus far, the recovery is weak,” says Gad Levanon, senior economist at The Conference Board. “Labor demand is a leading indicator of employment, and the numbers indicate that employment is not likely to rise for the rest of this year.”

That’s bad news for the nation’s 15 million unemployed workers, whose numbers are only expected to swell when the official government report for October is released Friday. One survey of labor economists predicts the U.S. Bureau of Labor Statistics will report that 175,000 jobs disappeared during the month. Another survey predicts the number will be closer to 150,000. Either way, the unemployment rate, 9.8 percent in September, is also expected to rise.

Only a few days old and the beginning of the seasonal hiring slowdown anyway, November is starting off with news of a layoff of 8,000 workers by Johnson & Johnson. The pharmaceutical company said its layoff of between 6 and 7 percent of its global workforce will save it $800-$900 million.

Despite some positive manufacturing and economic news in the last several days, workers are still struggling to find work.

A report from job board operator Beyond.com says 47 percent of the job seekers to its 15,000+ websites reported being recently laid off. Another 22 percent said they are looking because they are unsatisfied or insecure in their current job.

Of the job seekers responding to the quarterly survey on the Beyond.com network, 7.7 percent said they have been looking for a year or more. That’s a 20 percent increase from the previous quarter (April-June 2009) when 6.43 percent reported their job search was taking longer than a year.

The Beyond.com report doesn’t provide numbers or a more detailed breakdown, so it’s not possible to say how many of those are unemployed. However, the BLS September report said that among the unemployed, 35.6 percent were out of work more than 27 weeks, about the time when unemployment benefits begin to run out.

On the Beyond.com network, two-thirds of the job seekers posting resumes had five or more years of experience. The biggest percentage jump in candidates from the second to the third quarters has been among those with 21 years or more experience, suggesting older workers are having a tougher time getting reemployed. No surprise, at least on the Beyond network, where 76 percent of the job postings were for positions requiring less than a year experience. That’s up from the 55 percent recorded in the previous quarter.

Tomorrow, Monster releases its monthly employment index. It’s been stagnant since the beginning of the year, rising a little, then falling back. In September the index was at 119. In September of 2008 it was at 160.

To add to the doldrums, the Consumer Confidence Index released last week by The Conference Board for October was 47.7, down from September’s revised 53.4.

The Emperor’s New Clothes

In today’s age, the fable is a metaphor for those in HR who are unwilling to state an obvious truth to a higher up out of fear of appearing stupid, sacrilegious, or politically “incorrect.” They would sooner let a company’s reputation stick out buck naked than tell the truth about the company culture and reputation. This is co-dependency with a superior who wants Yes-men, not accountable partners.

I arrived at this observation because I am always struck by the stark difference between what companies think their employees think about them and what they tell me when I interview them. I also am always shocked about what those employees will say on Twitter, Vault, and any other number of “pink slip” sites about these top-rated employers. I wonder if anyone in competitive intelligence, PR, marketing, or HR ever reads about the fallout of bad managers making bad decisions, including furloughs, reduced hours, wearing double hats, etc. When did having a bad reputation not count?

I’ll give you an example of something that happened to me at Wal-Mart. I haven’t recruited for Wal-Mart. Last week I watched a show on the Discovery Channel about Wal-Mart’s Super Store operations. They have onboarding sessions and songs that everyone sings that promote team spirit at Wal-Mart. They showed the droves of people who drove for miles to work there. Right after I watched the show, my iPod had to be replaced. Since I was too lazy to go to the Apple store, and I wanted it right now, I went to Wal-Mart. While I was standing at the counter trying to get this chick to hand me the iPod, she turns her back to me and starts complaining about her hours being reduced to another guy who is complaining about his benefits. I finally interrupted them and asked her to please hand me the iPod and take my money. I got home, got down to my iTunes work, and opened up my gmail account, and there was an email about boycotting Wal-Mart on account of some hideous thing that it did to bust a union. In the course of one week, I had some serious employment brand material in my consciousness.

What is interesting about the TV show, the store experience, the e-mail, and the press about Wal-Mart is that there is a level of chatter about its brand that is beyond their control. Wal-Mart feels it is well on the way to rehabilitating its image through a new logo and green Super Stores; yet, that doesn’t match my personal experience in that week. What can it do about Twitter, e-mail chains, at the store, in the news, and across the Thanksgiving dinner table, especially if one incident adds fuel to the fire?

I chose Wal-Mart because well, that happened to me last week, and that is a fairly large target. I won’t be the first one to raise this reputation issue about them. Frankly, it probably doesn’t matter what people think about its “employee” brand because they employ groups of people who have limited choices and who presumably grow in faster and larger numbers than let’s say, semiconductor design engineers with PhDs. What is interesting is when all of those things collide and affect more vulnerable brands.

The war for top talent is going to get fought and influenced by Twitter, Vault, users groups, and former employees. And in a country like the U.S. where services and design are the only real place where job growth is, people know each other. Maybe some companies should consider cutting down spend on money for logos and Superbowl ads, and treat people better.

Purello’s departure marks the third change in the CEO office since Mullarkey left the job in 2006. His successor, Deepak Gupta, was gone less than a year later, succeeded by in February 2008 by Purello, who held general manager positions with Workstream subsidiary 6FigureJobs and the career networks business. Purello had been with the company since 2003.

The company has also gone through two CFOs and had a complete change in every C-level position. This morning’s announcement said Andrew Hinchliff was rejoining the company as senior vice president of North American sales. He previously held the job from 2001-2003.

Workstream hasn’t made a profit at least since it began reporting its numbers publicly in 1999. For the most recent quarter, it lost $360,000 on sales of $4.2 million. That compares to a $2.1 million loss on sales of $5.6 million for the same period in 2008.

(The company’s fiscal year runs from June 1 through May 31, so the most recent quarter is the company’s first for the 2010 fiscal year.)

In its last fiscal year, Workstream lost $4.9 million compared to the $52.6 million loss for the 2008 fiscal year. That loss included a $28 million hit for a writedown of goodwill.

An expected merger with human capital management and outsource payroll company Empagio fell apart in mid-June 2008.

The financial turmoil has taken a toll on Workstream’s stock price, which sank to an all-time low of  2 cents a share last December. Though it recovered and rose to a year high of 48 cents in May, today’s price is 28 cents a share, down a penny on the day.

The stock trades on the Over-the-Counter Bulletin Board, an exchange typically for very low-priced stocks,  following its delisting by NASDAQ in the spring for failing to meet exchange requirements.

Despite all that, Workstream’s products have won praise from HR analysts. TalentCenter 7.0, released in fall 2007, was called a “truly integrated” HR platform and “not just a bunch of disparate applications” by Leighanne Levensaler, principal analyst with Bersin & Associates.

Job board 6FigureJobs won a place on Peter Weddle’s User’s Choice popularity list this year. It was also named a top 100 job site by Weddle.

And its Workstream Compensation won HRarchitect’s “Beauty Pageant” in April for compensation management systems.

In assuming the CEO position, Mullarkey said in a prepared statement that, “It is my firm belief that this company, now 10 years of age, has significant opportunities for substantial growth. The Board of Directors has asked me to return as our leader in order to accelerate the timelines for this growth, and for a return to long-term profitability, which our shareholders so rightfully expect.”

It’s hard to argue against the statement that social networking (i.e., Facebook, Twitter, YouTube) is an extremely hot topic in business. But I have yet to find a single CFO or senior executive willing to fully fund a comprehensive social network recruiting strategy based merely on the fact that it’s a hot concept.

Even when budget is made available, most organizations need to develop measures to help direct spending into the right efforts that will provide them with the highest recruiting impact and ROI. There is no escaping it: making a compelling business case must become a priority for social network recruiting champions.

In this article, I’ll provide an outline of the four basic business case steps covering how to secure funding during these tight economic times.

Business Case Step #1: Identify the Potential Benefits of Social Network Recruiting

Provide targeted executives with a list of potential benefits and then simply have them select the ones that (if proven) would be compelling enough to positively influence their decision. Have them eliminate benefits that, whether true or not, wouldn’t influence their decision.

With that guidance in hand, design a process that focuses on proving only those benefits that were selected as highly compelling.

The following is a list of 20 potential benefits and business impacts that can result from effective social network recruiting. They are grouped based on their general level of impact on cynical executives:

Highly Compelling Benefits

• Hire quality — the program may result in hires who perform better on the job and have higher retention rates.
• Candidate quality — those who frequently use social networks may be the highly desirable early adopter; this source may identify higher-quality candidates who can then be presented to hiring managers (including those who are more technically savvy and more innovative). Note: even the simple act of listing the primary source (that generated the resume) on the top corner of every resume will, over time, educate hiring managers and eventually lead them to demand that recruiting shift their emphasis toward the sources that appear most frequently on top of the resumes that end up on a hiring manager’s short list.
• ROI — the dollar value of the program’s benefits may far exceed its cost, and the resulting ROI may be significantly higher than other recruiting programs.
• Vacancy days — because of the high usage rates and the short response times on some social network communications channels, revenue-generating, and key positions may be filled faster, resulting in fewer costly vacancy days in key positions.
• Higher offer acceptance rates — using social networks to attract and communicate with candidates may result in higher offer acceptance rates among finalists.
• Hidden candidates — it may identify qualified candidates who cannot be found or successfully messaged using other sources.

Often compelling benefits

• Employer brand — using social networks may increase your visibility and may significantly improve your “we get it” leading-edge employer brand image among targeted prospects (even if the image-building it doesn’t result in immediate applications).
• College impact — because of the high social network usage rates among college students, it may directly impact the number and the quality of college hire and entry-level candidates.
• Communications responsiveness — because there is less spam and in most cases you must be invited before you can send a message, using social networks to communicate may result in higher response rates and/or in more immediate responses when you send messages to prospects and candidates.
• Message impact — messages sent over social media channels may be perceived by the receiver as being more authentic or have a higher level of credibility and believability than traditional corporate mechanisms. The relatively low cost of sending messages over social networks may also allow your firm to increase the number of messages that it can afford to send. Together, these two factors may result in more effective messages that directly increase applications.
• Job visibility — using social networking sources may ensure that your job openings will be seen and read by a larger number of qualified candidates.
• Candidate diversity — it may provide your firm with a higher percentage of qualified diverse candidates in managerial and professional jobs.
• Global candidates — it may provide your firm with a high number of qualified candidates who reside outside of your headquarter’s country.
• Cross-fertilization — the methods, tools, and approaches that are developed using social networks for recruiting may be directly transferred to other business functions like marketing, customer service, product development, etc. So these functions may find that their social networking results will be directly and measurably improved as a result of the collaboration.

Occasionally compelling benefits

• Candidate volume — social networking sources may provide your firm with a high volume of qualified candidates.
• Lower dropout rates — you must build relationships with your “friends” in order to maintain them as part of your social network. Fortunately, social networks make it easy to build relationships quickly. Once built, it’s not surprising that this relationship may result in more applications, but it may also lower the candidate dropout rate throughout the hiring process.
• Competitive advantage — using social networks may provide your firm with a significant competitive advantage over other talent competitors. The net result may be that you can win more head-to-head battles with competitors over top talent.
• Benchmarking and learning — the time that your employees spend building relationships that may lead to recruiting successful candidates may also help gather benchmark information and improve employee learning.
• Increase sales — because using social networks directly improves your visibility and your firm’s “we get it” image, it may also influence the sales of your consumer products among those that equate product quality and being a desirable employer.
• Cost per hire — the recruiting-related transactional costs may be lower compared to other sources.

Business Case Step # 2: Identify And Counter Additional Resistance Issues

Merely convincing decision-makers that the program has significant benefits isn’t enough on its own to get funding. Unfortunately, almost all executives have some often-powerful preconceived issues that must be successfully countered. In the case of using social networks, these roadblocks almost always include issues related to:

• Employees “wasting” numerous work hours on social networks.
• Protecting the release of company information and secrets.
• Maintaining a single corporate message when you can’t control what your employees say on the Internet.
• Privacy-related issues.

At the very least, demonstrate to the COO, CFO, CIO, PR, and the corporate counsel that their potential concerns are overblown.

Start by showing that other benchmark firms that are allowing their employees and recruiters to use social networks are realizing benefits far greater than the potential costs. Next, present external research data that shows how employees use social networks for professional purposes. While studies that determine what percentage of social network traffic is professionally versus personally relevant are rare, informal studies among organizations piloting looser controls on social network activity found between 40%-65% of activity posted during work hours was professional in nature; the majority either requesting or sharing information from/with peers.

Additionally, show skeptical managers that you have developed a formal process for identifying, countering, and burying undesirable information on the Internet. Educate them that, in a connected world, they have already lost complete control of what is said about their firm, and that strategies that involve doing nothing are tantamount to giving up entirely.

Show the naysayers examples of what’s already out there. Show them how having numerous active employees on social network sites, talking positively, will directly counter the existing negative information and actually increase the number of positive messages that people can easily access.

Business Case Step # 3: Use Logical Arguments to Gain Agreement on Some of the Remaining Benefits

After narrowing the list of potential benefits to the most impactful ones, make every attempt to get executives to accept the likelihood of some of the benefits based exclusively on logical arguments. Whether you write a report or provide a PowerPoint presentation, minimize the number of benefits you have to prove with hard data.

With social network recruiting, executives might accept your professional judgment on benefits like its effectiveness on college recruiting; the value of cross-fertilization; the availability of global candidates; and the employer branding impacts.

Business Case Step # 4 – Prove the Remaining Benefits with Data

Out of the 20 possible benefits that you started with, you are likely to have to prove the actual impact of at least five of them with data. I will outline each of the five data collection methods in the remaining bullet points. Please note that the methods are listed from the least convincing to the most convincing data collection method.

Using existing data

• Provide benchmark data — in some cases, executives will agree that a program will likely provide the level of expected benefits based on external research data. The data might come from consulting firms or industry associations. However, the most convincing research data generally comes from either direct competitors or from firms that your executives admire. The goal is to convince executives that if, for example, using social networks at IBM reduced time to fill by 38%, a similar result could be expected at your firm.
• Look for existing internal efforts — on occasion, especially in large firms, you will find that some group, facility, or region has already tried your new approach without corporate approval or knowledge. In the case of social networks, you would attempt to identify and then use the results produced by any “rogue” group as an indication of the benefits or results that a company-wide effort might obtain. Because the data is internal, it is more likely to be accepted than external benchmarking data.

Limited data collection required

• Use your own employees as a baseline — assume you are trying to prove that social networks provide the capability of identifying “hidden candidates” who could be found in other sources. Start with a list of your own top performers in a particular job and then search traditional sources like job boards, attendees at professional conferences, and Google searchers to see what percentage can be located. You then do a search of their names on social network sites. By comparing the two results, you can find out whether your best employees who are “hidden” or not available on traditional sources can in fact be found on social network sites. You can use a similar approach to identify whether social networks contain more diverse candidates. You can use a third-party to see if messages to your own employees have a better response rate if they are sent via social network channels (compared to traditional voice or email).

Providing new data

• Run a small pilot sample — in order to gather performance data to prove that a program produces certain benefits or results, it’s sometimes necessary to run a small pilot project. Pilot projects are widely used in other business areas and they have a high rate of credibility. In the case of social networks, you could suddenly allow a single recruiter to begin using social network tools and you would then attempt to identify any improvement in their performance (comparing their baseline performance to their performance after using social networking tools). You can also run a pilot on a single job to see if the baseline performance on key metrics improves. If you have the resources, you can run a pilot in a complete business unit or facility and then compare the before and after results. Unfortunately running pilot projects may require some level of approval and it will cost some money (but much less than a full-scale rollout).
• Use a split sample — the most convincing form of proof that doesn’t require a companywide implementation is to use a split sample. It’s the same approach that is used by drug companies to convince regulators that their product is effective. For example, say you wanted to prove that social network recruiting produced higher-performing hires than traditional recruiting methods. You could start by identifying a team of recruiters who recruited exclusively for a single job family. You would randomly separate this small team of recruiters into two groups. Nothing would change for the control group, while the second group from the team would be trained how to use social network recruiting tools. They would be required to use social network recruiting as a major segment of their recruiting for all of their jobs over a six-month period. The initial on-the-job performance of their new hires after three and six months would be compared to the performance of the new hires from the recruiters in the control group. If the performance of the social network recruiter group was significantly better, you could say with a high level of credibility that using social networks improves the quality of hire. Continuing to measure the performance differential over time would provide additional data to support the program’s ability to improve the quality of hire.

Final Thoughts

Managers of recruiting functions seem to struggle continuously to obtain more budget and resources.

Most, unfortunately, rely too heavily on building relationships in order to maintain or increase their funding levels. If you’re tired of the up-and-down funding cycle, maybe it’s time to master the science of building an effective business case. It’s sad that recruiting is still struggling to prove what we already intuitively know (i.e., that recruiting top talent into key jobs has a huge dollar impact).

We have one of the largest impacts and ROIs of any function in the corporation, but we fail miserably at presenting it in such a way that a CFO would find it believable.

In my opinion, we’ve downplayed what it really takes to be successful in our profession — recruiting, counseling, and closing top people who have multiple opportunities, and making sure our hiring manager clients don’t blow it.

To start refocusing on the right stuff, I’d like to nominate quality of hire as the metric to assess recruiting department performance, and relegate cost per hire to the second page.

I believe cost per hire is a misguided means to judge recruiting department performance. For one, it rewards the wrong things and ignores quality of candidate and quality of hire. For another, it’s far too tactical and narrowly focused. Worse, improving costs could degrade quality.

This is a strategic mistake of huge proportions that too many HR and recruiting managers miss entirely.

These problems go away if the focus is on measuring quality of hire first and quality of candidate as a subset. Even if recruiting is reluctant to take on the responsibility of maximizing quality of hire, it must be responsible for setting up a system to measure it. While important, measuring quality of hire is not straightforward.

Here are some ideas on how to get started on thinking about how to do it:

Yves Lermusi, the CEO of Checkster, believes good reference checking before (external) and after the hire (internal 360°) might be the best way to measure, monitor, and improve quality. He might be right, but from what I’ve seen, if the measure of candidate quality pre-hire is different than after the hire, you’re not measuring the same thing. Regardless, Yves’ point of measuring candidate quality post hire and monitoring are absolutely essential. So you should check out Checkster as a means to do this.

Here’s another perspective. I was speaking with a senior recruiting manager with a Fortune 100 company the other day. She told me her company conducted exhaustive post-hire performance reviews at the 90-day, 6-month, and 9-month time periods for new hires. These reviews were based on comparing the new hire’s performance against the performance objectives of the job. If the person fell short here, the review was expanded to include an in-depth competency evaluation. This approach seemed spot on to me. However, the recruiting manager told me under-performance was generally attributed to lack of understanding of real job needs before accepting the offer and problems with culture, especially with the working relationship with the hiring manager, once on the job. This strengthens the argument of measuring pre- and post-hire quality on the same performance standard.

However, some differ on this view. For example, after a recent ERE article I wrote on a related quality of hire article, someone sent me a detailed LinkedIn message describing his company’s approach to measuring the quality of their candidates by sourcing channel. It consisted of a detailed scorecard examining a set of criteria that mapped to the traditional job description. This included things like quality of the academic background, quality of the experience, depth of industry knowledge, and the like. This is probably not too bad, but I suspect that this was not the focus of the interview. But none of this gets at the issues involved in a post-hire quality assessment. For example, the person could be a fine person with all of the experience and academic requirements noted, but someone who was no longer motivated to do the type of work required, or someone whose style was not compatible with the hiring manager’s.

From a pre-hire standpoint, some might argue that the traditional competency or behavioral-based interview is a great way to measure pre-hire quality. My 30-year concern with this is that it still ignores job performance and managerial fit. Being competent to do the work doesn’t mean being motivated to do the work. Nor does competency or behavior measure a person’s ability to prioritize the work, handle too much work, work under pressure, work with different resources, work with comparable teams in similar situations, or work with a weak manager.

For me, it’s pretty easy to conclude that if you want quality of hire to become a useful measurement tool, you must start by measuring pre- and post-hire on the same basis. Further, the measurement standard you should use must be made on some comparison to real job needs. (Send me an email if you’d like a copy of a performance-based talent scorecard from my book, Hire With Your Head (Wiley, 2007).) This means candidates need to be measured before they’re hired on their ability and motivation to perform the actual work required, including fit with the hiring manager.

If pre- and post-hire quality measures are different (up or down) it means that the assessment process is flawed. So it’s important to use feedback from the post-hire quality assessment to change how candidates are assessed. I suspect that few companies do this; regardless, that’s a major reason and benefit for measuring post-hire quality. Then once pre- and post-hire quality assessment are the same and you have a good system for tracking quality of candidate and quality of hire, you can then move on to the more strategic quest of maximizing quality of hire. This includes improving your recruiting and sourcing skills in tandem, and tracking quality by sourcing channels, recruiters, and even hiring managers.

The whole point of this article is to suggest that quality of hire is a much more important measure than cost per hire in measuring recruiting department performance. While cost is important to track, it shouldn’t come at the expense of quality.

Focusing on the internal budget of the recruiting department is insignificant in comparison to the impact the thousands of people the recruiting department hires has on their company. What’s more exciting is that the tools are now available to actually measure and maximize hires, rather than just talk about it.

Revenue, however, was $215 million, $8 million below what analysts expected. Sales in North America continued their recession-fueled decline, dropping 39 percent from the same quarter a year ago, and down from the $102 million in Q2 of this year. International sales were off 41 percent from the prior year, but off only 4.4 percent from the $89 million posted in Q2. An unfavorable exchange rate took a $7.4 million bite.

Monster eked out the small profit by tightening expenses. Salary costs were off almost $24 million as compared to the same quarter last year. Marketing and promotion was down $10 million, and another $12 million came out of administrative costs.

Monster CEO Sal Iannuzzi said in the press release announcing the results, “We maintained strict financial discipline during the third quarter while preserving our financial strength.”

During the conference call with analysts, held before the market opening this morning, Iannuzzi reiterated his emphasis on controlling expenses, but warned that he expected little improvement in revenue or profit during the current quarter. Sales, he said, would be flat or slightly down. That’s typical of the October to December quarter for all recruitment advertising; employers cut back on hiring during this period to limit year-end expenses and also because of holiday distractions.

Monster’s stock price was off about 4 percent in afternoon trading, selling for just under $16 a share.

Bloomberg News blamed the sales decline for the stock drop, quoting Mark Marcon, a Milwaukee-based analyst for Robert W. Baird & Co., saying, “They are one of the few employment-related companies that reported worse-than-expected revenue.”

CareerBuilder, a privately owned company, reported its North American sales at $135 million, the same revenue the company reported for the previous quarter. CareerBuilder voluntarily reports only its North American revenue, but not international sales or any expenses.

The new sites, identical in design and structure, made their appearance earlier this month. Among them are Atlanta.jobs, Boston.jobs, Mexico.jobs, and India.jobs.

“We just started pushing them out,” says Chad Sowash, VP of business development for DirectEmployers, a non-profit HR consortium, that has recruiting as its focus. Among its services is the Job Central job board, to which members can post jobs without additional fee.

“It’s a new playing field,” Sowash adds. “What this is going to do is allow thousands more, perhaps tens of thousands more” sites where job seekers can look for jobs.

Assuming job seekers ever become aware of the existence of a domain offering only jobs and career information, then those looking for opportunities in a specific geography — Atlanta, for example — need only enter that area and the extension .jobs. Those looking for an occupation-specific opportunity enter the title and the .jobs extension.

Members of the DirectEmployers consortium can request the creation of any site name they think will be of benefit, said Sowash, suggesting an oil company might want to use  refinery.jobs for its openings.

“It won’t belong to any company, but if a company wants us to offer a name, we can. The registrar isn’t selling these domains. They still have them,” Sowash explained. “We can light up every combination someone can think of.”

Tom Embrescia, CEO of Employ Media, the administrator and manager — registrar, in Internet parlance — of the .jobs domain, said the venture with DirectEmployers is a “great way to see what the world wants.”

The domain — technically a sponsored top-level domain — was pitched to the Internet Corporation for Assigned Names and Numbers (ICANN) by Employ Media and its partner the Society for Human Resource Management. The proposal, approved in 2005, argued that a .jobs extension would make it easy for job seekers to find the career site of individual companies and would provide a modicum of protection against scam job postings.

Companies could only get a .jobs address by using the company name and by pledging to adhere to the SHRM code of ethics.

Although about 15,000 companies signed up for the .jobs address, job seekers are largely unaware of its existence. As a consequence, most .jobs addresses get little traffic.

Building sites on the “reserved” occupational and geographic addresses, says Embrescia, is a marketing experiment. “It’s a beta test,” he says, explaining later in the conversation, “We need to build consumer awareness that these (addresses) exist.”

Besides providing the technology to power the job boards, DirectEmployers’ dozens of Fortune 500 and 1000 members will be encouraged to promote them. “Now I’ve got Fortune 1000 companies working,” Embrescia beamed.

Besides members of DirectEmployers, other firms with a .jobs domain address will also be able to post their jobs to the new sites.

For member companies posting jobs to Job Central, the additional placement on geographic and occupational sites will be automatic, Sowash told me. They are also likely to get a premium posting position.

Non-members, who own a .jobs address, might have to post their jobs manually or pay a fee for automation.

Others who want to post to these sites might have to pay a posting fee, or have some other limitation.

“The rules haven’t been hammered out,” says Sowash. There’s also a 40-company advisory group providing input on site names, practices, and feedback on the design and functionality of the job boards, which, Sowash is quick to point out, don’t look like job boards. “These are not going to look like your father’s job board,” he vows.

I asked Sowash whether he and DirectEmployers expected push back or opposition to its exclusive deal with Employ Media. “Yeah,” he acknowledged, “we’ll probably hear from some people who are not too happy.” But he didn’t anticipate resistance from the job boards, most of whom are struggling in the economy and couldn’t take on a project of this magnitude.

Bob Etheridge, a co-founder of JobCircle and a former VP of another job board, GettheJob, says he suspects “job board owners are walking the fence, trying to determine are they friends or are they foes.”

There’s suspicion now that Employ Media is not only a names registrar, but “they are getting in the publisher business.”

Those quoted here and others who talked with me either for background or anonymously all supported DirectEmployers for its aggressiveness and initiative.

DirectEmployers approached Employ Media with a proposal almost a year ago, but Embrescia said he wasn’t ready then. Conversation resumed about the time Embrescia publicly floated the idea of selling off the reserved names.

“They had a good plan and when we were ready we talked with them,” Employ Media’s Embrescia said. Their facility with the technology, flexibility, and non-profit status, and their enthusiasm were convincing factors.

Still, a top executive with a leading job board who asked not to be named, said he initially was upset over the lack of openness in the process of developing the joint venture. Now, though, he doubts the new sites will do anything more than simply add to the already cluttered job board environment.

Coming at it from a different perspective, Gerry Crispin, CareerXroads co-founder and a leading recruitment consultant, complained that the latest turn means an end to “the embedded, implied promise” that all the jobs on a .jobs site would be legitimate and are those of the company whose name appeared before the extension.

“It no longer has the same aspirational goals,” laments Crispin, a member of the original SHRM advisory group that supported the .jobs creation. “It’s still milk, but there’s no guarantee it’s pasteurized.”

Watch it here!

Let’s start with retention. Take the percentage of surveyed employers (26%) who now say they are “significantly more concerned” about retention of key employees than they were before the economic crisis hit and the percentage (39%) who are “slightly more concerned” — add them together, and you find that almost two-thirds are more concerned about top-talent retention than before.

On to salaries, benefits, hours, layoffs, and hours.

Salaries: Now, 54% of the companies that have made salary freezes are planning to restore them over the next six months, according to the Watson Wyatt survey of 201 large U.S. employers. That’s a big-time improvement. In August, 33 percent said they were going to unfreeze salaries. In June, 17 percent said they would.

Meanwhile, almost half of companies plan to reverse hiring freezes in the next six months.

Benefits: According to the survey, “of those reversing reductions to 401(k) matches, 70% will restore the match to its previous level.” Many of those reversals are planned for some time over the next year. On the other hand, the benefits news for employees is bad when it comes to healthcare. Watson Wyatt says that of the companies that have increased employees’ contributions to healthcare premiums, two out of three say those increases are here to stay.

Layoffs: More than one in five companies think they’re going to do layoffs during the rest of 2009 and 2010. At least that’s better than in April, when almost 50 percent said they were planning layoffs.

Worker hours: More than 80 percent of employers that instituted a reduced workweek expect to reinstate full weeks in the next 12 months. Most of those plan to bring back the hours over the next six months.

An indignant Twitter post by one of those whose account with The Guardian jobs site was compromised says she received an email from the newspaper advising her of the illegal access and suggesting she subscribe to an identity protection service.

“got the guardian hack email – they suggest I buy identity fraud protection services. Hang on, who let people steal my information?” reads the tweet by Joelle Nebbe-Mornod, a technology consultant and former CTO now in the U.K.

The site itself gives no hint of the hack, until you scroll almost to the bottom of the home page where, under a heading of Workplace News, there is a short item headlined: Guardian jobs site – Security Breach. It links to a page of more detailed information.

There, The Guardian reports that the site is now secure and adds, “It is clear that only a minority of Guardian Jobs users are at risk. Some of the data which appears to have been stolen is up to two years old. We have emailed the approximately half a million users whose data may have been compromised. This is out of the total of 10,328,290 unique users the site has per calendar year. The USA jobs site has not been affected.”

In an FAQ, The Guardian recommends users whose accounts were compromised obtain fraud protection at their own expense.

“The Guardian, in common with our users is also a victim of this crime and we deeply regret that this breach has occurred. We believe our technology and security measures were more than compliant but regrettably the threat from criminal hackers is continually evolving. Whilst our investigation is continuing we suggest that each individual should decide whether to follow the guidance recommended by the police and meet any associated costs.”

The Guardian’s British site is powered by Madgex Job Board Software. The U.S. job site is run by Indeed.com.

The Guardian says that no personal accounts were accessed, but other, potentially sensitive, information was. “Job application data, material such as covering letters, and CVs. We have no reason to believe that any financial or bank data was compromised in this incident.”

Police are investigating the access. No technical details have been released, however some technical publications have offered possible methods.

This is the second major security breach of a British job board this year. Monster’s UK site was hacked in January and some 4.5 million records were stolen.

But Sidewiki’s potential for deconstructing a brand is enormous. Unlike all the networking sites, Twitter posts, and job board forums where the disaffected go to vent their anger, Sidewiki makes it possible to post these comments directly to your site.

Just imagine the mischief a disgruntled job seeker or employee can wreak by posting their story directly to your site. Side by side with your video of happy employees talking about the fun and interesting work they do is a post — or multiple posts — from current and former workers denouncing your message as bogus.

If Sidewiki were to catch on and gain even a percentage of the users that Twitter has, the impact is easy enough to see.

Says Mark Hornung, senior vice president, strategy, at Bernard Hodes, “What that means for corporate employment sites is that they need to be monitored much more aggressively.”

But what you do about negative posts is much more difficult. As Sullivan observed in his article, “The new owners (of your brand) are a complicated mix of individuals who use a variety of communication channels to influence your brand without your knowledge, consent, or guidance.”

It should be needless to say that Sidewiki also offers significant benefits. Users can post helpful suggestions for others consulting, say, a how-to page of a site. Or offer additional places to look for information. Employers can even benefit from positive comments and helpful feedback.

So even though this article addresses the negative side of Sidewiki, there are plenty of pluses and lots of potential value for users in the application.

Before we go further, let’s talk about what Sidewiki is. It is a type of message posting system that attaches to web addresses and can be seen by users accessing the address who also have the Sidewiki app installed on their browser.

There’s nothing really new about Sidewiki. Similar tools — Purple Bunny, iComment for instance — have been around for years. None of them have gained broad enough acceptance to have a significant impact.

Google, however, has a big advantage over the other commenting tools. It’s packaging Sidewiki with its popular Google Toolbar that has been installed by millions of users. The Internet Explorer version alone from CNET has almost 4 million downloads.

“It’s difficult, if not impossible, to predict if Sidewiki will get traction or how large it will grow,” says Hornung, who leads Hodes’ employer branding practice.

“Practically speaking the growth of Sidewiki will be dampened by several factors,” he adds, citing the relative lack of anonymity to the postings, the need to download and install the toolbar, and the likelihood that corporate IT will fence off downloads of Google Toolbar.

Still, there are plenty of ways around the issues and with Google simplifying the installation of its toolbar, even novices can manage the feat.

“Sidewiki may become interesting only to those who have it, mostly the tech ‘in crowd’ who bother to download and use it,” says Hornung. “Employers should be concerned about it today, especially if they are in a technical field.

“The techie crowd will (by definition) be the early adopters and a negative buzz from Sidewiki —- especially if it appears that the employer is unaware of what is going on (kind of like goofing off in high school while the teacher was writing on the board) —- could be trouble.”

Already comments have begun to appear here and there on websites. Monster, for instance, has two comments posted on its main page. One is a pitch for another job board and the other is a political polemic that has almost nothing to do with Monster.

Google has thrown site owners a bene in that they get to post their own message, which will always appear at the top of the wiki, even as other posts slide down when more relevant posts rise up the list. In spot checking several job boards and corporate career sites, I didn’t find any employer posts. Hornung did, providing the Raytheon screenshot accompanying this article.

Curiously, though, he doesn’t recommend that employers make a peremptory post.

“I would take a ‘wait and see’ approach,” he counsels. “If there is no activity, why provoke it?…

“As some observers have pointed out, Sidewiki really creates a ‘bifurcated’ Web experience: those with and those without Sidewiki will see Web sites differently. To those who are unaware of, or don’t care about Sidewiki, why create a commotion when there isn’t any?”

He says his clients are just now beginning to get their arms around the notion that an old tool may be getting some new life breathed into it. “I think the hardest part is to grasp the concept that people may comment on your Web site whether you want them to or not. Some view it as online vandalism,” Hornung says.

While many corporate communications departments already subscribe to monitoring programs or otherwise track what Internet users say or write about the company, Hornung recommends that the HR department install Sidewiki to monitor the corporate career site. ” Sidewiki can go on individual pages such as benefits descriptions or diversity programs, and it is unlikely that (marketing or communications department monitors) will drill down too deeply on an HR site when they’re trying to keep up with the hobgoblins elsewhere.

“I believe HR must be more proactive in monitoring and policing it,” he says, especially since some posts may involve employment law issues that aren’t readily spotted by others. Hodes, among others, provides a brand monitoring service for employers and has added Sidewiki posts to its scrutiny.

And when a negative comment is spotted? “If you feel you have to respond, respect the opinion. Don’t be defensive,” warns Hornung, who likens online discourse to a conversation. “If something is really just venting, you can ignore it.

“The essential lesson is you have to be thick skinned. You have to accept it.”

For a minute, assume the role of a senior executive who has just been handed a business scorecard containing performance numbers in five critical business areas. After looking at the numbers below, would the data make you cringe?

• 70% of users are dissatisfied with the process.
• 50% of customers regret their buying decision.
• 46% turnover among new buyers.
• 46% failure rate of process output selections.
• A mere 19% are unequivocal successes (less than 1:5).

It’s Time to Face the Numbers and Facts…

Almost any senior executive would be alarmed upon learning that users were dissatisfied, failure rates approached 50%, and a significant percentage of your customers regretted their decisions.

Obviously, if the numbers listed above came from an important profit-impact function (supply chain, finance, customer satisfaction), everyone would be screaming for a complete rethinking of the entire process.

Unfortunately, the above metrics represent failure in the recruiting and retention elements of the talent management function. I have encountered no other business function that more completely avoids defining and measuring process failure than talent management.

Selection decisions are often about as accurate as a coin flip.

–The Recruiting Roundtable

Talent Management Failure Metrics Are In*

Here are more details on the five numbers provided above.

This data can be taken together as a clear indicator that we might have numerous failures in talent management:

• 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
• 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
• 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
• 46% failure rate — 46% of U.S. new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
• Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).

Some additional data points to consider include:

• 66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
• 50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
• Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).
• Less than 50% are qualified — a majority of managers surveyed (59%) believe that less than half of all candidates they interviewed were qualified (Source: eBullpen, LLC).
• 65% lie on resumes — the key data source that we rely on to source and narrow down applicants contains untrue information more than half the time (Source: The Risk Advisory Group )
• Resume-sorting failures — Of all the “perfect resumes” sent out by mystery shopper candidates, only 12% were actually scheduled for interviews (Source: Hodes’ Healthcare).
• Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).

* Note: I have purposely chosen publicly available sources that cite these research results. To find the material, you may use a simple Google search, but please don’t contact me for detailed references.

The samples in each case varied, but what if they were an indication of how poorly your organization’s talent-management function was performing?

Only 30% of organizations measure quality of hire, and only a handful specifically define and measure recruiting process failure. It’s time to adopt a business process management approach; start to measure successes and failures in the same way that other business processes already do.

Plan B, of course, is to ignore this warning and to continue to assume that existing processes are either error-free or on par with the Six Sigma standards of production, quality control, and customer service.

My Goal Is to Get You to Pay Attention

You can conjure up arguments about the validity of the research done by outside consulting firms, but that’s not the point. The key learning is to take a moment and ask yourself these key questions:

1. Have you clearly defined what “hiring failure” is? What failure rate is acceptable?
2. Can a process be properly designed so that so many that are involved in it do not have remorse or regrets about their decisions?
3. Is it ever acceptable to have a process where the dissatisfaction rates exceed 25%?
4. Has the time finally come where you bite the bullet and calculate the quality of hire, failure rates, and the ROI of your function?
5. Is it time to move beyond simply calculating output metrics (i.e., 22% are dissatisfied) and in addition to begin to use metrics to identify why your failures occur?

After viewing these research numbers, I hope you’ll agree it is time to rethink most talent management processes and metrics.

Do not concern yourself with the accuracy of any particular external study; their primary value is simply to stimulate you to do your own research within your own firm to find out if these problems and failures identified by others are currently occurring.

Action Steps to Consider

There are a handful of firms (DaVita quickly comes to mind) that have adopted a business process approach to their recruiting function where they clearly define and target failure.

If you’re interested in adopting this approach, here are some action steps to consider.

• Clearly define failure — include top candidates you failed to identify or attract; top candidates who dropped out early; the quality of candidates you didn’t hire; offer turndowns; good hires but bad initial placements; poor-performing new hires; legal costs; delayed time to initial productivity; dissatisfied or disillusioned candidates; frustrated hiring managers; and early turnover among new hires.
• Adopt a business process management approach — work with experts in supply chain, CRM, Six Sigma, etc., to learn about business process improvement tools and approaches.
• Shift to data-based decision-making — shift away from the approach where you assume that things are working; instead, rely on hard data to meet decisions and to continually improve every key process.
• Mystery shoppers — use mystery shoppers to identify process problems.
• Change your assessment approach — a significant portion of recruiting process errors occur because of an over-reliance on subjective tools like interviewing. A superior approach is to increase the use of validated skill assessment tools and to ask candidates to solve real problems.
• Conduct failure analysis — whenever you have a major process failure, use a failure analysis/root-cause identification approach to move beyond symptoms and to identify the real underlying causes of the failure.
• Assume failure — even when the process is made more objective, there will still be significant number of failures. Accept that fact and develop a process that allows you to identify those failures early and to minimize your losses.
• Calculate the cost of each error — work with the CFO’s office to calculate the costs and the business impacts of all major errors.
• Assume that all sub- processes are suspect — assume that bad hiring decisions are a result of poor design features in a multitude of sub-processes including job descriptions, resume sorting, interviews, reference checking, hiring manager monitoring, and onboarding.

Final Thoughts

Throughout my career, whenever I have had the opportunity, I ask recruiting and talent management leaders a simple, straightforward question:

If you hired 100 people, what percentage would turn out to be failures?

Not surprisingly, 99% of the time all I get in return is a blank look. In direct contrast, if I ask the same question on failure rates to those who lead other business functions like supply chain, production, sales, customer service center, etc., I get an immediate numerical response coupled with the costs associated with each increased percentage point of errors. It is my hope that the data referenced in this article will cause you to increase your focus on identifying failures and failure rates in each of your major sub-processes.