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MORE, FASTER, CHEAPER
Responding to the impossible demands of your clients.
RETENTION IDEAS AT WORK
A summary of the feedback to our December Issue of the Month.
EMPLOYEE REFERRAL AWARDS
See what companies are doing with employee referral programs in today's hot
market.
RIGHT-SIZING
Will we ever get it right?
COLLEGE RECRUITING GETTING HOTTER
A There will be much higher demand for college grads in 1998.
For most recruiters, it seems many of our clients (hiring managers) are oblivious
to the effects of high employment and high demand. Their mantra continues to be,
- -Give me more, faster and cheaper. Some of us find their demands unrealistic and
virtually impossible to satisfy. They need to realize that they cannot have it all.
One, or maybe two, but not all three.
More is clearly the hardest to satisfy. If they want more candidates from
which to choose, they are likely to loose a qualified and potentially
interested candidate to the competition while they are taking the time to
look for another better-qualified candidate. We have to inform our client
managers that job-seekers know they are highly marketable and have a list of
their own demands - - More ($), Quickly, and Better (job, company, and/or
location).
If the managers are asking for more hires, perhaps we can find ways to
satisfy them. However, we will no doubt have to invest more time and
resources in the effort, or spend more money. In the high tech arena,
good recruiters are only able to land about 8 to 10 hires per month.
That is about 20 hours of recruiter labor per hire. To increase the
number of hires, the options seem to be: hire (or contract) additional
recruiters; pay a third-party (agency) to fill the additional positions;
or, outsource the work to a contract staffing firm with readily available
resources. You may get more, and it may be faster, but it will definitely
not be cheaper.
Faster is achievable, but does not come easily for most companies. Despite
the acquisition of the latest employment information systems and the attempts
to reengineer processes to eliminate the bottlenecks, the average time to
fill has remained essentially unchanged over the last two decades. The national
average is still about calendar 45 days from approved requisition to offer
acceptance. Unfortunately, the people asked to implement the new technologies
and process changes are usually the ones whose jobs are at risk if these changes
succeed, and therefore are reluctant to embrace these efforts. To quote Pogo,
I have met the enemy, and the enemy is us.
Cheaper is not unattainable, but it, too, comes with a price. To avoid paying
so much for advertisements, agency fees, and job fairs, recruiters need more time
to source, identify, qualify and attract candidates from among the gainfully employed,
or passive applicant pool. Money can be saved on a per hire basis but almost always
it comes at the expense of both speed and volume. Another old adage applies -
- You get what you pay for.
The best practices in recruitment usually include: effective needs forecasting;
an appropriate number of recruiting/sourcing specialists; utilization of applicant
information systems and web technology; applicant-focused processes; and,
well-trained interviewers.
Last month, we asked our readers to share some of the ideas they have found
to have a favorable effect upon retention. While there were not many who
chose to respond, there was a clear and common message - - give the employees
what they want, not what you think they need.
Here are some of the ideas we heard (in order of frequency):
-employee development (includes education assistance and on-site training)
-stock options (giving employees ownership)
-work/life programs (meet the varying needs employees through telecommuting,
flextime, job sharing, etc.)
-targeted awards and recognition (send a message to key contributors that says
- -you're valued- -)
-more personal attention (vs. semi-annual or annual performance reviews)
-hire for fit (identify the competencies that lead to success and select only
those who possess them)
These are but a few of the ideas, both old and new, being put into action
to try to stem the tide of increasing turnover in a very hot job market.
We will revisit this subject often to see how effective these efforts have been.
At every gathering of two or more recruiters, you are certain to here
someone ask, How much do you pay for employee referrals? Virtually
every company with significant hiring needs has instituted some kind of
employee referral program in an attempt to generate more applicant flow
in a tight labor market.
The range of cash awards offered by Washington area employers runs from $250 to
$2,500. The average for technical professional referrals seems to be around $1,500.
Some people pay a third or half of the award within 30 days of the candidates
start date, then the remainder 60, 90 or 180 days later, to be sure the candidate
works out. Hilton Augustine, Jr., CEO of GMSI in Bethesda, immediately awards
$2000 for technical referrals and $1000 for non technical ones . -It is not the
employees fault if the referral does not work out - - he says.- - That is managements
responsibility.
An emerging trend in the area is the cash award made to anyone, including
non-employees, who refers a candidate who ultimately is hired. In most cases,
these awards are usually about $500, but have the additional benefit of creating
a broader network of contacts than just the employee base.
Not all employee referral programs give cash as the award. Some companies give
gift certificates, electronic gadgetry, or weekends for two at a posh hotel.
Others offer referring employees a chance at a drawing for a bigger prize, such
as a cruise, a big screen TV, or even a car. The key to success with these
programs is high visibility and communication to gain as much input and involvement
from the employee population as possible.
Companies with well-established, well-communicated employee referral programs
generally report 20 to 40% of their hiring activity results from these efforts.
And again, the size of the award has little effect upon the results. It is the
quality and frequency of communication that counts.
With the economy booming along for the last several years, one would think
that we would have seen the end of the massive layoffs of the merger-mania years.
Not so. In addition to the continuing efforts by the Federal government to
downsize various of its agencies, here are a few of the companies that have
recently announced significant reductions:
> Eastman Kodak 10,000 10.0%
> Woolworth 9,200 9.8%
> Citicorp 9,000 10.0%
> International Paper 9,000 12.9%
> Fruit of the Loom 7,700 24.7%
> Montgomery Ward 7,700 12.2%
> Levi Strauss 6,400 17.6%
> Whirlpool 4,700 11.9%
> Stanley Works 4,500 23.7%
> Apple Computer 4,100 31.0%
> Data: Challenger, Gray & Christmas
As business needs change at an ever-accelerating pace, finding the right mix
of people with the skills needed to meet our business objectives seems to be
as elusive as the proverbial butterfly. For those of us in the recruiting profession,
this clearly means employment security.
The National Association of Colleges and Employers (NACE) has just released its
survey findings from 421 employers across the country. The demand for new college
graduates in 1998 is expected to increase by 19.1%. This marks the third
consecutive year of significantly higher demand for college graduates.
Nearly 70 percent of the employers responding to this survey say they intend to
hire more graduates in 1998 than they did in 1997. For high tech employers, this
may be just a dream. Most of the 1997 technical graduates in hot fields such as
computer science, computer engineering, electrical engineering, etc. had four or
more offers! Surely, not every company whose offers were rejected were successful
in finding acceptable and available alternative candidates.
The NACE survey also included a forecast of salaries for 1998 graduates. Computer
science grads (BSCS) will reportedly average $38,475 to start, while computer
engineering graduates can expect an average starting salary of $39,593. Overall,
starting salaries are expected to rise by 4.6% from last year. Of course, in high
demand/high cost of living markets, such as Washington, DC, these averages will be
higher.