Taleo Business Edition Summary Report · 2008-07-22 · granting their employees leave to receive fertility treatments.3 When asked to identify the cause of their greatest suffering,

Sourcing in a Time of ScarcityThe Evolution of Social Networking as an Aid to Hiring

Taleo Business Edition Summary Report

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© Copyright 2008 Taleo Corporation Sourcing in a Time of Scarcity PAGE 1

Sourcing in a Time of Scarcity: The Evolution of Social Networking as an Aid to Hiring

A milestone, and a wake-up callThis past October the United States’ first baby boomer, a Maryland schoolteacher, announced her retirement. Soon millions more baby boomers will follow her and take with them enough accumu-lated wisdom and managerial experience to impact the economy for years. By 2010, US corporations and small to medium-size businesses (SMBs) will be short 10 million workers.1

Countries outside the US have their own labor worries. In the European Union, a shortage of 300,000 qualified employees in the IT sector alone is forecast for 2010.2 And in Japan, prospects for skilled labor are so dim that some electron-ics manufacturers have introduced programs granting their employees leave to receive fertility treatments.3

When asked to identify the cause of their greatest suffering, 55 percent of respondents to a 2007 Newman Group survey cited sourcing.4 The skilled labor crunch is especially unfortunate for SMBs. With so many SMBs currently poised for growth, attracting enough qualified employees to realize this growth may prove a major hurdle.

Old routines are killing usHuman resources experts know that the numbers aren’t in employers’ favor and grow concerned when they see employers fail to change course. “Recruiters and hiring managers have fallen into a sourcing routine that is slowly strangling them,” says Kevin Wheeler, an author and consultant in human capital acquisition and development.5

1 US Bureau of Labor Statistics2 The EU’s Labour-Shortage ‘Time Bomb’, http://www.euractiv.com/en/socialeu-

rope/eu-labour-shortage-time-bomb/article-164261 (June 22, 2007)3 Masaki, H, Japan Stares into a Demographic Abyss, http://japanfocus.org/

products/details/1864 (May 14, 2006)4 2007 Sourcing and Recruiting Survey, developed by the Newman Group. The

survey was completed in April 2007 by nearly 600 respondents, 70 percent of whom are directly involved in corporate staffing as recruiter, sourcer, or staffing management. The remaining respondents were HR generalists (7 percent), HR executives (8 percent), consultants (6 percent), search firm recruiters (10 percent) and vendors (1 percent).

5 Wheeler, K, Rethinking Sourcing (February 22, 2006)

They do this, he says, by focusing their efforts on hiring people 30-45 years of age, members of Generation X, when they’d be better off challeng-ing their assumptions about older and entry-level workers. This makes even greater sense consider-ing that boomers and their Generation Y progeny outnumber Gen Xers by more than four to one. “A team of employees made up mostly of those over 50 and new graduates is powerful,” Wheeler says. “The older employees act as mentors to the younger ones and the younger ones tend to keep the older ones up-to-date.”

Online communities provide new hiring opportunities

Younger workers’ familiarity with technology pays off in other ways for forward-looking employers. As recruiting increasingly shifts to the Internet, these workers are more apt to forward the company’s online job postings to their friends and relatives. In fact, one of the more exciting develop-ments in job sourcing is the promise held by social networking. Websites like LinkedIn®, Facebook®, MySpace®, Ning®, Friendster®, and a handful of other social utilities offer people with common interests a place to gather and share contacts, opinions, experiences, and increasingly, job opportunities. We can credit advances in technol-ogy for making these online interactions possible – broadband is now nearly universally available and data storage is cheap – but shouldn’t overlook their similarities to the face-to-face networking that’s always occurred. As in the offline world, there are people managing these introductions and paving the way for these new relationships.

© Copyright 2008 Taleo Corporation

“I’ll be stunned if 20-50 percent of candidate referrals aren’t coming through online communi-ties in five or six years,” says Jason Blessing of Taleo™, a leading eRecruiting software company. Blessing says that while social networking has always played a major role in sourcing, through both employee referrals and professional networks, the difference today is the Internet’s broader reach. He says that instead of viewing applications like Facebook and LinkedIn with skepticism, recruiters and hiring managers should work overtime to bring them into the fold.6

Wheeler agrees. “Tomorrow will belong to recruit-ers who embrace such emerging practices as video interviewing, online assessment, social networking, and candidate relationship management. Recruiters who have a Facebook or LinkedIn profile and who experiment with building online relationships already have an advantage over the recruiter who is tied to geography and to face-to-face meetings.”7

Careers web pages a prerequisiteIn addition to creating a profile, whether on LinkedIn, Facebook, or any of the other social utilities, recruiters and hiring managers need an online careers section to link to. Typically part of the corporate website, the careers section can promote a company’s culture, priorities, and vision along with the current job openings. Prospects see what the company wants them to see and are free to respond at a time of their choosing. Additional software allows recruiters and hiring managers to keep track of applicants, acknowledge receipt of their applications and resumes, and begin building a database of potential hires.

An up-to-date, online RolodexProvided a careers section exists and the social networking profile has been created, recruiters are ready to begin sourcing. LinkedIn is like an online Rolodex®, where users post their resumes and web-site addresses, invite colleagues to be a connection, and through them connect to a vast network of

6 Jason Blessing interview, December 20, 20077 Wheeler, K, The Four Bad Habits of Recruiters, http://www.glresources.

com/345.html (December 13, 2007)

business professionals. Chances for interaction are fewer than they are on a site like Facebook, though job openings can be posted and seen by thousands of users. LinkedIn claims 17 million users around the world in 150 industries. The basic membership is free, with more features available at a cost.

Plaxo®, Jigsaw®, and ZoomInfo® are several other business-oriented social utilities, similar to LinkedIn with their focus on maintaining up-to-date contact information. Connections are made between people sharing the same contacts, expand-ing each user’s network. Opportunities for sharing opinions, preferences, and personalities are limited. Nevertheless, it’s hard to argue with their reach: ZoomInfo claims to have profiles on more than 37 million people and over 3 million companies.

“Passive doesn’t mean uninterested”The personal aspect is what draws many human resources professionals to sites like Friendster and Facebook. Of Facebook, Blessing says, “It’s much more about sharing preferences and experiences and building a community of friends. All of the applications that have sprung up on Facebook really perpetuate that culture.”

He says this makes Facebook and some of the other social utilities such great places for employers to source candidates, and why his company makes software that helps Facebook users share job open-ings with their friends. Often the friend noticing the job posting isn’t actively looking to change jobs, but can be enticed by the right opportunity and by the knowledge that it’s their friend who is making the recommendation. Blessing says it is these passive candidates that employers have to tap into, especially during a tight labor market where everyone is chasing a finite number of candidates. “Passive doesn’t mean uninterested,” he points out.

Sourcing in a Time of ScarcityPAGE 2

© Copyright 2008 Taleo Corporation

Online filters can ensure complianceIn many instances a recruiter may spot something in a profile that looks promising and informally sound out the person on their professional inter-ests. This personal touch can counterbalance the transactional nature of so much online sourcing. People are often flattered to hear from recruiters impressed by their profile. The amount of informa-tion online acts as a pre-qualifier and gives both participants a framework to begin establishing a relationship. Filters can be activated to prevent potentially discriminatory data – a photo, say, or a person’s age or race – from being transmitted to the recruiter, shielding the recruiter from any compli-ance issues.

Other sites worth exploring include Tickle®, Vault®, and, with the largest user base of all, MySpace. MySpace skews younger than many of the other social utilities mentioned here, but has a large pres-ence in the advertising and media worlds. Whereas some social utilities reflect a bias toward certain shared interests or professions, others are tied to geography. Many countries have one or more local, homegrown favorite. For instance, Mixi® is popular only in Japan.

Choose from among many, or create your ownIf you can’t find a social utility that meets your criteria, you’re probably not looking hard enough. Conversely, you can always create one. Ning is a website that offers tools to start your own social network. Founded by Netscape pioneer Marc Andreessen, Ning lets you create and begin sharing your social network in minutes.

“The most innovative websites and process improvements are emerging from recruiting leaders who have no training as recruiters and who have recently entered the field,” says Kevin Wheeler. “They never knew the old ways, so they are doing things afresh. Many experienced recruit-ers who are not able to learn from this competition will end up being displaced and replaced.”

Promoting diversity a valuable by-productEnhancing all of the various websites’ appeal are the opportunities they provide to promote diversity. Facebook, for example, was initially created only for Harvard students but soon spread to other colleges. Today its youthful demographic represents a wide range of races, cultures, and languages.

Sourcing for diversity makes even more sense during a time of global competition and acute labor shortages. “It’s always been an issue of fairness, but it’s also bad business not to pursue policies that attract the widest segment of the population,” says Justin Heet, an associate fellow at Sagamore Institute and author of Workforce 2020.8

Adds Blessing, “Facebook and some of these other sites have a very attractive demographic. These are exactly the kind of people companies should be targeting.”

8 Grossman, R, The Truth About the Coming Labor Shortage, HR Magazine (March 2005)

Sourcing in a Time of Scarcity PAGE 3

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