The Problem
Passive candidates are the best candidates. I’ve heard myself say this countless times. But is it true? And if so, why? This question is important because, only taking the cost side of the equation, passive candidates are much more expensive to source than inbound candidates coming from your marketing efforts, social media and careers website.
Passive candidates – in marketing-speak outbound candidates, require somebody to be paid to find candidates that are not actively looking for work but might be the perfect skills and culture match for you. That means paying a third party (maybe an agency) or paying the salary of internal recruiters and/or sourcers. If you are a smaller company with only a few hires a year, paying the salary of an internal recruiter probably isn’t a top priority for your scarce resources. This leaves you with the option of having your hiring team do their own sourcing (which is unlikely to make you many friends inside or outside your engineering team) or you fall back on using external resources – a recruitment firm – to find you passive candidates.
This is an expense we all try to avoid.
Where does that leave the small company that is starting to grow? Most teams first inclination (and mine) is to try the other two key recruitment strategies first – see if the cost can be avoided:
- Use your network (and your team’s) to generate referral candidates
- Go to the job boards, advertising services, social channels and website to generate interest and applicants from jobseekers.
Referrals
Referrals are great – if you can get them. Again, when small, your networks are, by definition, more constrained – but work those networks well, with incentives for team members and you’ll not find better candidates. This has certainly been my experience.
If you are having to expand into different disciplines or technologies, you may find referral becomes harder. Most people work most often with people with similar skills and backgrounds. You can’t rely on referral for your entire growth plan.
The only downside I see to referrals is the risk of missing out on diversification objectives and homogenising your culture. But, especially when small, I see the upsides of a referral from someone you trust clearly outweighing the risk of lack of diversity.
Inbound recruitment
What about cultivating all those inbound channels? Here, my personal experience has been much more mixed. Now, I’m talking about experience in smaller companies – startups and scale ups. We have zero brand recognition. Nobody is googling the firms I’ve worked for to see what open positing we have. They have never heard of us.
So we rely on inbound marketing channels – the job boards and services – all with a fee, not usually high but a fee nonetheless. The real cost of inbound candidates though is too much quantity and too little quality. This is a well-known problem and many services have sprung up to help sift the wheat from the chaff. But these services are only trying to mitigate a problem baked into the approach.
Yes, technology can drive down the cost of sifting out poorly matched inbound candidates but it certainly feels to me like a tactical effort to overcome a structural problem. Your team is the most valuable asset you have (maybe after anchor clients). The costs of mis-hiring are huge. The costs, in team hours, of processing large candidate volumes is huge.
Creative approaches can be used to attract people to you – publish puzzles out to the developer community, run hackathons if you are working in an attractive problem space, encourage contributions to your open source repositories if you have them.
Try these by all means, especially if engineers in your team are keen to lead an initiative but don’t rely on their success. You may do well but in all likelihood you will not materially move the dial if you are small, flying under the radar, having no open source software, nor in a space that might attract voluntary excitement and engagement in your work.
The Case For Hunting Passive Candidates
So, what are the other options open to you? Seeking your own candidates can feel daunting, loaded with its own costs and uncertainties and equally vulnerable to failure. Indeed, there is no such thing as a guaranteed successful approach to recruitment. Successfully bringing talent into your team is hard. But – there are strong arguments for persevering with passive candidate sourcing.
Costs
First off, inbound candidates are of lower quality at every stage of the interview process. It is not the case that, once filtering has been done through e. g. automated tests, 3rd party certifications etc, then they are as likely to be as successful a candidate as those coming from referral or outbound sourcing. The data does not back this up. Inbound candidate rejection levels are higher at every single step in the recruitment process. Inbound candidates cost you in time and quality. The folk at Gem did some research on this, finding that an inbound candidate can be up to 10x less likely to be hired.
