Thursday, March 31, 2011

Creating a Candidate Talent Universe & Should You Use an Ad?

I've taken a lot of heat from some friends over this ad. Mostly they make fun of my picture. But some have questioned what the point of the ad is or even whether a recruiting firm should be endorsing employment ads.

The point of the ad is just as the caption says, the Indianapolis Business Journals' employment ads do work. Why do they work?

The quote of mine in the ad refers to feedback that I provided to IBJ & Indiana Lawyer classified salesperson, Matt Houston. I had run an ad for a CEO position with an Indianapolis headquartered company. It was an expensive ad ($1,200) that ran for three non-consecutive IBJ issues.

My friendly critics are somewhat correct in that the majority of Career Solutions' research comes from passive candidates, targeted by our search plan to construct a custom candidate talent universe. We don't need an ad to find these people. We employ our in-house Researcher and an external research company based upon the project specs. Ideally, we want 1/3 of our competitive talent universe for a project coming from public, active candidate information, 1/3 from existing tracked candidates, and 1/3 from custom new research of passive candidates (people that may not have any public profile or information out there).

But for an Indianapolis area CEO search, an IBJ ad actually is a perfect compliment to our research plan. The IBJ's demographic information indicates that 55% of readers are 'top management' and 20% 'middle management', the median annual income of readers is $113,300 and average is $225,600, 86% of readers have a Bachelors degree with 35% having an advanced degree, and the average reader spends 45 minutes reading each issue. To me, this sounds like a CEO-type demographic. And, that's what we found in our ad's response.

Typically an employment ad has very low quality returns. From college communications classes, I recall that a 3-5% quality response rate is what you should expect from an ad. But, when you target a niche that percentage goes up - significantly. Generally, I tell people that an employment ad, newspaper or internet, will yield 5-10% respondents that are worth reviewing. This IBJ CEO employment ad had a much higher yield of quality respondents - something like 40% were worth interviewing. There were some that came from targeted source companies, saving us some labor in reaching out to them, and a few from companies we had not thought to target.

So this ad fit the needs of this particular search very well because it was a CEO directed ad, placed in a CEO demographic publication with the majority of readers in the geographic location we wanted. If you understand why the ad was effective for Career Solutions' CEO search process, then you also now see that every time this ad runs in the IBJ the "CEO demographic" (potential customers of Career Solutions) are seeing the ad. Each time it runs I always shoot Matt Houston an email and let him know who I know that's commented about it. It's a true win/win.

Talent Arbitrage - Wall Street strategies applied to talent selection and management

How did one of the worst teams in professional baseball from a small market with a small budget turn themselves into one of the top teams?

It wasn't by hiring super stars.

It wasn't by focusing on results and outcomes.

Focus on a disciplined talent selection strategy allowed the Tampa Bay Devil Rays to use a Wall Street approach to building a "talent portfolio" of a team. The budget conscious management team focused on identifying affordable professional players with specific skills needed to complete the team.

In this Harvard Business Review HBR IdeaCast, Sarah Green interviews stock market and sports author, Jonah Keri, author of The Extra 2%: How Wall Street Strategies Took a Major League Baseball Team from Worst to First.

From Amazon:
What happens when three financial industry whiz kids and certified baseball nuts take over an ailing major league franchise and implement the same strategies that fueled their success on Wall Street? In the case of the 2008 Tampa Bay Rays, an American League championship happens—the culmination of one of the greatest turnarounds in baseball history.

In The Extra 2%, financial journalist and sportswriter Jonah Keri chronicles the remarkable story of one team’s Cinderella journey from divisional doormat to World Series contender. When former Goldman Sachs colleagues Stuart Sternberg and Matthew Silverman assumed control of the Tampa Bay Devil Rays in 2005, it looked as if they were buying the baseball equivalent of a penny stock. But the incoming regime came armed with a master plan: to leverage their skill at trading, valuation, and management to build a model twenty-first-century franchise that could compete with their bigger, stronger, richer rivals—and prevail.

Together with “boy genius” general manager Andrew Friedman, the new Rays owners jettisoned the old ways of doing things, substituting their own innovative ideas about employee development, marketing and public relations, and personnel management. They exorcized the “devil” from the team’s nickname, developed metrics that let them take advantage of undervalued aspects of the game, like defense, and hired a forward-thinking field manager as dedicated to unconventional strategy as they were. By quantifying the game’s intangibles—that extra 2% that separates a winning organization from a losing one—they were able to deliver to Tampa Bay something that Billy Beane’s “Moneyball” had never brought to Oakland: an American League pennant.

By focusing on a talent selection process the Devil Ray's management team took the franchise from a $60 million valuation cellar dwelling performance to a $300 million valuation and two ALCS titles!