The Actual Cost of Recruiting
or Why Big Name Companies Have a Cost Advantage
I saw another list of the Top 100 Companies that somebody (maybe it was chipmunks) want to work for. I wondered aloud, "Who reads this stuff?" Does it really help anyone to know that Google has replaced Microsoft at the top of another list?
It’s like those long lists of the so-called "Best Places to Work." They’re generally not. On a recent trip to London, I noticed that all of the Kentucky Fried Chicken places were celebrating the fact that KFC was one of Britain’s best places to work. Really, the home of Animal 57 where grease inhalation is a major occupational hazard? Really?
But, here’s the real rub. Big companies with massive budgets can afford to engage in these sorts of shenanigans. In the competition for talent, large employers have a significant advantage (in cost, visibility and attractiveness as an an employer) over their smaller brethren.
Everything works better and cheaper if you’re a large employer with a relatively well known brand. In spite of its reputation, a large player like KFC has a much easier time attracting food chemists, marketers and HR managers. Why? Stability, Benefits, and, the big one, brand recognition.
Smaller operations always have to overcome the "Uh, what was your name again?" part of the conversation. The big boys use that time to overcome objections based on brand perception. In some real ways, it doesn’t matter what your reputation is, as long as it’s big.
Social media works better for the big players. Take a look at the case studies that are beginning to trickle in. They’re all from companies in the Fortune 2500. There’s a fierce competition among the emerging social recruiting giants for the right to claim well known company X as a client. If you run a chain of auto supply stores in Indianapolis and have 1500 employees, things are different.
It’s really simple. Having a big brand acts as a discount on the cost of acquiring talent. Managing that big brand takes time and energy but it doesn’t come out of the recruiting budget. And, the more jobs you post, the harder it is for the other guy to get heard.
If megacorp X is hiring 50 marketing managers in New York city and you’re only hiring one, there is an enormous amount of ground you have to cover to level the playing field. It’s a real David and Goliath problem. Here are the things you need to know to make your small company recruiting operation work.
- The fundamentals don’t change. While it costs a small company more per hire, the actual things you do are the same.
- The key to all great recruiting is knowing who you want to hire (in realistic terms). That means, getting a sense of the supply and demand questions in the market you are targeting. If there are 1200 mechanical engineers and the market needs 1250, while the unemployment rate for those engineers is 4%, you now that at any point in time the market needs 100 while 50 are available. There are effectively 2 jobs for every mechanical engineer.
- In order to use social media, email or some other digital formula, your job is to reach this group of folks who are in the market with your message and some level of excitement. Your goal is to keep them interested enough to come back and visit.
- There are another 10% or so who are predisposed to switch. In order to get them, you have to have developed a relationship with the ones you want. This means reaching out through email or social media in a way that prepares the ground for your ultimate attempt to recruit.
- For each job you are trying to fill, you need 15 to 20 relationships with people who positively recognize your brand and the work you do (in the area of their jobs)
I’ve recently published a white paper on the Basics of Facebook Recruiting. It covers the fundamental mechanics required to make social media work as a recruiting tool.