By: Maureen Sharib and Steve Levy

A common theme in most recruiting communities is the need for metrics in the hiring process. In fact, many lament the lack of targeted data and information out there with respect to recruiting performance. Dr. John Sullivan remarked in his July 12, 2004 article on talent sourcing that “If you run the data in recruiting, you invariably find that among each of its elements, sourcing has the highest impact on the overall success of the hiring process. Yet many companies still struggle with creating a take-no-prisoners sourcing function from developing the strategic rationale for the group to creating the group structure – and even fewer measure the effectiveness of sourcing performance. The jaws you heard dropping were those of CFOs holding their company balance sheet in one hand while offering their best “You must be kidding!” look to the head of recruiting. In most organizations, its not a pretty sight.

This article is going to demonstrate how sourcing can dramatically impact the bottom line; follow-up articles will delve into reasons why more organizations do not fully fund a names sourcing program as well as how one can create a top performing names sourcing organization.

What’s in a Name?

As web technology has improved and thanks to Recruiters-Who-Search-the-Internet-for-Resumes, the halcyon days of flipping and x-raying into a company’s employee directory have pretty much met their match. Names sourcing, however, is remarkably effective because it produces candidates who are doing the actual work you need them to do, who may or may not be thinking about changing jobs, but are usually very flattered to be contacted with a new job opportunity. To repeat, they are usually fully engaged (productive, effective, trained) in their work, too busy to think about looking for another job. Until you come along.

Names Sourcing is a highly effective means for identifying appropriate job candidates for your hard-to-fill positions. More often than not it is a confidential search service that links recruiters with qualified candidates in a short period of time typically one week or less. Names Sourcers not to be confused with the Merlin-looking curmudgeons who turn Internet links into potential candidates – are trained sleuths who cold-locate professionals in the workplace with the job experience needed by the client. Lists of names including job titles, phone numbers and if possible, email addresses are delivered to the client to be used by recruiters to make contact and negotiate a deal.

You’re not alone if you’ve never heard of names sourcing. In a follow-up article on Name-Generation, Sullivan stated that, “75% of the corporate recruiters and 98% of the managers I have worked with have never heard of [names sourcing]. Given potentially high ROIs associated with aggressive names sourcing, we know why CFOs are beside themselves.

Even more amazing is the assertion by Kevin Wheeler in another recent article that sourcing and name generation account for a scant 10% of the average recruiter’s day. In fact, there is a paucity of data that specifically deals with names sourcing as a core function of recruiting; either it is occurring so secretively that it has yet to be measured or it is not a part of most recruiters arsenals save for a Google search or two (AKA newfangled names sourcing). But 75% and 98%? Maureen was flabbergasted when she read this and being an enthusiastic names sourcer herself, bolted upright in her chair, slammed down the phone and exclaimed, “Shut the doors Bob, we’ve got work to do! Now Bob her understanding and non-type A husband has become accustomed to her emotional names sourcing outbursts but even he agreed that a recruiter who doesn’t names source is like, well, a day without sunshine.

Running the Numbers: A Sourcing Example

If 50 Sales Engineer names people meeting a company’s job requirements – are placed into the recruiting pipeline of a tech company in today’s competitive market-place, its a sure bet one of those will be hired within the first 30 days. Its another good bet that two more will be hired during the next 90 days, and a reasonably good bet three more will be hired sometime during the next 12 months. At an average of $36 per name, that’s six hires in one year for an initial investment of $1,800. Let’s use Salary Wizard’s median salary of $81,736 for a moderately experienced (4-6 years) Sales Engineer in the San Jose, CA area. Pay can be dramatically affected by experience as well as by other compensable factors such as location, employer size, industry, and employee credentials.

At an average rate of $36 per name, the sourced “Sales Engineer” names have cost the company $1,800. We also must look at the in-house recruiter tasked with filling the positions; a recruiter in the San Jose, CA area with at least five years experience earns an average salary of $85,849. At first glance, the recruiting efficiency ratio (RER) for one of these Recruiters hiring six Sales Engineers is 17.51% (the 2004 benchmarking report by Staffing.org indicates an average RER for all respondents of 14.15%). However, remember Wheeler’s assertion about how much time the average recruiter spends on name generation – not too much. Since marginal efficiency is not incorporated into the RER, we must make an assumption that there is an added cost to poor names sourcing. If 10% of a recruiter’s time is, on average, spent on names sourcing, that amounts to $8,585 of the average San Jose’s recruiter salary if this time is spent at 100% efficiency. We’re comfortable stating that the average recruiter is only running at 75% names sourcing efficiency. So the names sourcing component of the average San Jose recruiter is actually $10,731 versus $1,800 for the average names sourcer yes, there is a cascading effect to inefficiency; this is felt down the line and impacts the RER.

Let’s now replace the recruiter’s sourcing component ($10,731) with $1,800 and re-compute the RER; it is now 15.68% or an improvement of 10.45%. Anything that improves efficiencies in the recruiting process translates into hard dollars. And your CFO is guaranteed to smile.

Aren’t Search Engines Enough?

While this is a contrived example, it demonstrates the benefits of creating a names sourcing program. In the time it takes one to conduct an Internet search for people within a targeted job category, a skilled names sourcer can produce an entire division’s staff in a specific area. Yes, there are tricks of the trade and the skills required to be an effective names sourcer take time to learn but the benefits to a recruiting organization to create a names sourcing program will be felt for balance sheets to come.

The Internet alone is insufficient to produce a pool of top talent. While Internet searching is indeed the sexy way to go, a fully developed names sourcing program can get you into the meat of your recruiting processes faster and more efficiently.

Watch for the upcoming series, Outrageous Sourcing Techniques. In it, days-in-the-lives of real Names Sourcers will be on display for you to observe the tips and techniques of the trade.

About the Authors

Maureen Sharib, Names Sourcer (www.techtrak.com) and author of the popular Plan-Prepare-Penetrate-Persevere-Prosper (The Five Ps), is now offering training programs to corporations, as well as distributorships to individuals, based on her Outrageous Sourcing Techniques and the “Magic In the Method” sourcing online learning series. This process started with her interpretation of Sun Tzu’s best-selling book The Art of War in which she applies the master strategist’s principles to the sourcing/recruiting business. Maureen can be reached by phone: (513) 899-9628 or by email at Maureen@techtrak.com

Steve Levy, is Principal with outside-the-box consulting, a firm dedicated to building high performance talent acquisition and talent leadership initiatives. A former Tau Beta Pi engineer who learned Physics the hard way using a slide rule, he is an Internet wonk dating back to the days of telnet. He also sits on the Metrics Committee of Staffing.org. While his ERE blog has yet to appear as the subject of a New York Times article, he is hopeful that someday, someone other than Rob, Maureen, Russ and Shally, will read his posts. He can be reached at (203) 216-6226 or otbc@optonline.net.

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