How to Find Your Next Rockstar Hire

How Many Frogs Must You Kiss?

Time and time again, in search after search, I’ve found that 150 is the magic number. The way you build that pool is by sourcing. Your head of sales needs to fill the pipeline with enough prospective customers, based on her close-rate, to ensure that she hits her number each month. So, too, you must fill your candidate pipeline with enough potentially qualified and interested candidates. It sounds obvious, but my clients often starve the pipeline and the searches drag on forever. That’s when they call me.

Locating a Rockstar is like panning for gold: You’re going to sift through some mud to find that rare shiny gem. It’s a formula that looks like this:

150 potential candidates à 20 viable candidates à 5 vetted candidates à 2 outstanding finalists à 1 Rockstar hire

What this means is that 150 résumés, LinkedIn profiles, or referrals will yield approximately twenty candidates worth talking to. That first number isn’t arrived at arbitrarily; it has proven time and again to be the optimally sized pool to produce a successful result.

As defined earlier, Rockstars are the top 5 percent of candidates who have the desired competencies and DNA, at the budgeted compensation level. It stands to reason that there’s a 1-in-20 probability that a given individual will be of that caliber. This group represents candidates with Rockstar potential. It’s still too early to identify anyone as such, so guard against falling in love with a terrific LinkedIn profile. Remember that it is just that: feeling. We have a hypothesis that this candidate has potential—but it’s nothing more. There’s a saying in professional football: “You can’t win the Super Bowl in September, but you can lose it.”

We’ll use an effective phone conversation to simultaneously court and assess the list of twenty individuals, and narrow it to five people whom you believe may fit your company in terms of competency and culture. These five will be invited to interview. Because that is a time-intensive process, I err on the side of caution. I don’t provide interviews on a whim, nor should you.

From that group of five, you’ll identify the two best fits, one of whom you’ll provide with a can’t-refuse offer.

Sourcing Strategy

So, how do you find these twenty viable candidates? I’ve tried every way imaginable and have concluded that these are the best ways in terms of cost, yield, and speed.

Personal Networking

Ideally, 20 percent of your hires should be sourced from your personal network. You likely believe that you’re already tapping out your network, but I’ll bet you can do more and it’s the single best use of your recruiting time.

Let’s be specific. The first place you should look is your own circle of contacts. This doesn’t mean hiring friends and family—I could write a separate book on the perils of that strategy. Instead, it means asking trusted people you know for referrals. These are people you already know, who want you to succeed, and who may know others that would be a good fit with your organization. These are the people in your life who would do anything for you. Now’s the time to ask for a favor.

Your personal network is more than just your friends and family. Consider approaching people you know in your industry, members of your church and professional organizations, reporters who cover the industry, your customers, your vendors, your neighbors, your attorney, your accountant, your dentist. I once hired a brilliant young sales rep—the son of one of my mom’s friends—who became a Rockstar. Wrack your brain to pinpoint the 100 to 200 people in your life who might invest a bit of time to be a talent scout for you.

The key, however, is to make it easy for them. Be concise about the person you’re looking for. Don’t ask: “Who do you know?” They know a lot of people—it’s too hard. Rather, ask: “Who’s the best software sales rep you’ve met in the past year?” or “Who’s the best product manager you’ve worked with here in Denver?”

When you ask specific questions, a handful of folks in your personal network will quickly think of several names without feeling burdened. The results will surprise you. Sometimes, they can introduce you; other times, they can’t. But even just a name is useful. It’s a lead. So, don’t rule out anyone.

Always ask if you can use their name when reaching out to the person they referred—you’re far more likely to have your email or call returned. Be sure to thank them whether you hire the person they referred or not, and always close the loop. Circle back with: “I spoke with her. Here was the outcome….” If you skip this step, don’t be surprised if it’s the last introduction they make.

I recommend focusing your outreach locally. Because the vast majority of vacancies are filled with local candidates, target your networking the same way.

Referrals from your Employees

This is the big one. Now that you’ve tapped into your own network, it’s time to ask your employees to do the same. Best-in-class companies generate 50 percent of their hires from this single source, yet most companies achieve less than half this rate.

Employee referrals are the Holy Grail of recruiting. They deliver the highest quality of candidates, the shortest duration of search time, and the lowest cost-per-hire. The reason is simple: Rockstars attract Rockstars. That’s why Rockstar cultures get stronger and stronger, just like a hurricane’s center, tightening as the storm makes its march toward land.

Soliciting and acting on referrals from current employees generates goodwill and increases morale. Alternatively, if you aren’t receiving employee referrals, you either have a culture problem or an employee referral program that’s not working correctly. Only two-thirds of companies have employee referral programs, and most don’t work as they should.

To make your employee referral program successful, keep it fresh. Make it exciting, interesting, and relevant. It should be a marketing program with a unifying theme. Tell your employees that you want their help in making this the best possible place to work: “We’re going to be successful as a company. We’re going to attract Rockstars. That’s going to help create even more career opportunities.”

Pay your employees for their successful referrals, but don’t overthink the amount. Pay what you can (it’s money well spent), whether that’s $500, $1,000, $2,000, or even $10,000. Don’t break the bank, though. If you can’t afford cash, use stock, vacation time, trips, or gift cards. Be creative, but provide a reward.

Google conducted a recent study in which they doubled their referral bonus from $2,000 to $4,000, and it didn’t significantly impact the number of referrals.

Some companies pay different bonuses for different types of roles. I see this often when I recruit for my Silicon Valley clients. A company might pay $5,000 for an employee referral for a software engineer role, but $2,500 for an employee referral for any other position. The argument is that software engineers are harder to find, so a referral is worth more. The problem with this method is the message it sends to the rest of the organization. It says, “We value those people more.” It is a dangerous, slippery slope. We know from the Google study that the amount you pay isn’t the driver of the number of referrals you’ll get. So, determine the highest amount that you can afford to pay as a referral bonus and be consistent with it across the board.

To get the most out of your employee referral program, promote the program often and keep it fresh. I refresh employees about our program at least once every month. Use email, posters, company meetings, occasional contests, and other vehicles to spread the word. Nothing is more effective than the CEO making personal mention of the program.

Keep it simple for employees. Don’t make them do too much work. Just as when you ask your personal network for help, be specific and concise with what you’re asking of your employees. You want to open the funnel, not close it.

Once you receive an employee referral, it’s golden. Advance that person to the top of the stack. These people should be considered before anyone else, regardless of your initial instinct. And 100 percent of them must be at least phone screened because these are your best leads.

At most companies, employees won’t receive a referral bonus until the employee they referred has been working for three or six or twelve months. A practice that I’ve found works particularly well is instantly rewarding the specific behavior we’re trying to drive. What if you gave them a $10 Starbucks gift card right away, though, for each referral? That actually rewards the behavior you’re seeking. Give them a gift card right away, plus pay out the bonus when the person is hired. Rewards tied to controllable outcomes work best.

Be careful about information that goes into a black hole. If you fail to follow through with referrals and then circle back to the referring employee, don’t expect to receive more. When employee referrals are generating 50 percent of your hires, this often-overlooked administrative task becomes a great use of time.

An invaluable way to solicit additional names is to meet with every one of your new hires within their first thirty days and go through their Rolodex or LinkedIn network together. Literally sit with them and help them brainstorm who they might know that you should be talking to—for a current role, or a future one. You’re looking for the names of the best people they’ve ever worked with. Be specific and say: “We are looking for sales reps and software developers. Who are the best you’ve worked with? And can you introduce me to them?”

You’re not asking them to do much work, yet it’s hugely beneficial. When you reach out to that person, ask, “Did you know that so-and-so just started working here? He told us that we’d be crazy not to talk to you. I’d love to set up a time to sit down with you and tell you what we’re building.”

Employee referrals cost less, take less time, have longer retention, and are likely to improve your company’s culture because Rockstars aspire to work with the Rockstars they refer. Regardless of your current percentage of new hires referred by your employees, commit to increasing it by 50 percent in the next twelve months.

Online Job Boards

I have nothing against online job boards. I started one of the first ones back in 1995. In fact, they’ll likely comprise 10 percent of your hires. But in a market with record-low unemployment, the fact is that you just won’t reach many Rockstars this way. They’re simply not combing through job postings as they once did.

Because responding to job boards has become increasingly easy for candidates—just click “Apply” and “Apply” and “Apply”—it no longer behaves as the filter it once was. That said, it’s still worth a modest investment, particularly for lower-level jobs, and as part of your multi-pronged sourcing strategy.

But be sure to use a Job Invitation, not a boring job description, as discussed in the last chapter. Give your Job Invitation a title that will grab attention, much like a captivating email subject line. If it breaks through the clutter, far more people are likely to consider the role. A candidate sifting through job postings sees the same titles over and over again. When one is different, they’re far more likely to click on it.

Which job boards are worth using? There are the well-known boards such as LinkedIn, ZipRecruiter, and Indeed. Go ahead and use one. But lately, I find that I have the most success with niche job boards specific to an industry, function, or location. There are thousands of job boards for every conceivable job type you can imagine. Every trade magazine has a job board on their website. Even though the traffic is far less on the niche boards, they’re worth testing because you’ll reach the most targeted candidates.

Because it’s so easy for people to apply online, I look for candidates who seek to differentiate themselves in some way. I notice insightful applicants, who have taken the time to make it clear that they’re applying because of a genuine interest, connection to our mission, or understanding of what we do. “Dear Sir” goes directly to my trash.

A final note: acknowledge all applications. I don’t expect you to do this personally. But even the most basic applicant tracking systems can now provide automated replies, thanking the candidate for their application and adding them to a “keep in touch” list. Somehow, acknowledge your applicants. Some of them are Rockstars and will be right for you in the future. And each of them knows other Rockstars—you can’t afford for them to badmouth your company’s poor manners.

Glassdoor

If you’re not up to speed on Glassdoor.com, you’re missing a beat. This is the website where people leave anonymous reviews of what it’s like to work at—or interview with—your company. Go ahead and take a look. I’ll wait.

(Un)fortunately, Glassdoor has become the first place that people look when deciding to even speak with a company. That’s troublesome because anyone can post a review on Glassdoor, even people who potentially never even worked at the company. There’s no vetting process and it takes an act of God to have a review removed.

The best way to combat this is by asking people who are doing well at your company to leave a positive review. Don’t force them, of course, or entice them with incentives. It must be genuine and heartfelt. When reminding them about your employee referral program each month, just mention Glassdoor. Suggest: “By the way, we know from our research that the first place that Rockstars go is Glassdoor. So, if you feel inclined to help us spread the word by leaving a review, that would be great. It takes thirty seconds, and we’d be really grateful.” Don’t specify “positive review.” Their review needs to be pure and unvarnished, and you need to hear the truth anyway—no matter how much it hurts.

Other Sources

The final 20 percent of your hires should come from other sources: boomerang hires—people who return to your company after leaving—headhunters, and other creative ways. In fact, I’ve tracked a list over the years of the wildest places that I’ve snagged Rockstars. I’m happy to share it with you—download it free from www.RecruitRockstars.com/Bonus

With regard to boomerangs, it’s important to welcome returning employees. They often leave in search of greener pastures, only to discover the grass was greener back home. These people are invaluable because they discourage others from following suit. This is why it is also crucial that they’re allowed to leave on good terms whenever possible. Burning bridges is just bad business anyway. Don’t show your hurt feelings when they leave—keep the door open.

While we’re at it, let’s talk a bit about working with headhunters because they’re likely going to help you fill at least some of your vacancies.

The Insider’s Guide to Outside Recruiters

If you hire an outside recruiter (executive search consultant, headhunter, call us what you will), choose one that truly adds value. There are 90,000 recruiters in the United States, but sadly, many of them add little value to the process. Plus, they’re expensive. Most recruiters charge 20 to 33 percent of the candidate’s first-year compensation. If they’re truly adding value by tracking down and vetting candidates, they’re worth every penny. However, identifying candidates—the first phase of the recruiting process—has become so much easier, thanks to LinkedIn and the Internet.

That wasn’t so thirty years ago, when it was difficult just to identify prospective candidates. Then, a headhunter had to “smile and dial” all day long, calling companies to try to identify people who might be good candidates. It took countless hours.

Fast-forward to today. The candidate-identification phase is the easiest part of the process. I can generate a list of people in two hours. Anyone can. The hard part is sifting through the list, assessing candidates, interviewing, vetting candidates, completing reference checks, and negotiating the offer.

As with job boards, niche recruiters who specialize in a certain area are often a better choice than a recruiter from a large generalist firm. Though the large search firms have well-deserved reputations and solid training programs, you can find individual recruiters who spun off from the big firms and now specialize. They will often be a better choice. In addition, you’ll avoid the restrictions or off-limits lists of the big firms (they can’t touch candidates from any of their current or recent clients). So, small-time recruiters can deliver big-time results.

How to Spot a Great Recruiter

Ask your investors and Board members. Ask other CEOs. But don’t pick from a Google listing. You are outsourcing a crucial function. How can you find a Rockstar candidate unless you find a Rockstar executive recruiter? You need a recruiter who knows what they’re doing. Your recruiter should have a methodology and a high standard of assessing talent. Speak with a few before selecting one.

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Here are the questions you should ask:

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• What are their metrics? What’s the completion rate? What percentage of searches is actually completed? Numbers in the 80 to 90 percent range are strong. (If it sounds too good to be true, it probably is.)
• What’s their stick rate? A recruiter’s stick rate is the percentage of candidates still in place after two years. Eighty percent or higher is a good starting point, since twenty-four months is the current national average for job tenure with a company.
• What’s their speed? On average, how many days does it take them to complete a search? The national average is ninety to 120 days. An efficient recruiter who isn’t overloaded with searches can often do it in half that time.
• What’s their volume? Ask how many searches they’re currently conducting. Literally find out their capacity. You want to know if your search will be one of fifteen they’re working on, or one of three. Some recruiters limit the number of searches they take on, so they can give each one a lot of attention.
• Who will be doing the work? You may hire a firm, but you must know specifically who will be conducting your search. Who will do the research to develop the list of potential candidates, and what tools will they use? Who will reach out to candidates—is it someone who will get their calls returned because they have a reputation with Rockstars? Is it someone who is creative and smart about how to message the opportunity? Are they persistent?
• What is their vetting method for candidates? You’ll want them to assess based on the competencies and DNA you’re seeking. One of the first things you’ll do with an executive recruiter is talk about the Scorecard, the competencies, and the DNA fit. Who will do the interviews? How many rounds of interviews? Will the interviews be in person, on the phone, or via Skype video?
• What’s their recruiting methodology? Focus on selecting a recruiter who recruits consistent with your philosophy.
• Do they have an off-limits list? Usually, a recruiter doing a search for a company will agree not to recruit anyone out of that company for another client for a certain period of time, usually a year or two. The bigger the firm you work with, the more clients they have, and the longer that off-limits list grows.
• How will they position your company and your opportunity? You want to break through the noise. To attract Rockstar candidates, you need to differentiate your company and the opportunity. Ask the potential recruiter what the message will be and how it will be compelling.
• Will they provide visibility and transparency? Does the recruiter provide a weekly report and phone call on the candidates they’ve contacted? If they use an applicant tracking system (and just about everyone does), you should receive a weekly report of the entire pipeline—showing who’s been contacted, who they’ve spoken with, who they’ve vetted, etc.
• Do they offer a replacement guarantee? If a candidate doesn’t work out, how long will a recruiter guarantee that placement? Guarantees range from one month to one year. A lot can go wrong in a year; not much can go wrong in a month. This guarantee is worth something, especially when investing a hefty search fee.

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Have a variety of search firms on speed dial. Don’t automatically use a go-to firm for every search; choose based on the type of search you need. It’s difficult for a recruiter to be an expert and simultaneously have the capacity to take on all your searches.

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Paying a Recruiter

There are three basic types of fee structures: contingency, retainer, and hybrid.

Contingency

This fee structure requires that you pay only when the hire happens. While it sounds like a bargain, it actually has many downsides. If a recruiter doesn’t get paid until the candidate she found gets hired, she will be more likely to throw résumés against the wall and see what sticks. She’ll also be inclined to invest less time on each step of the process: research, outreach, interviewing, and vetting. Contingency pay also incentivizes headhunters to give up when the going gets tough and spend their time on easier projects where they have a higher chance of getting paid. They neglect to mention this, so while you think your search is being handled, they’ve sometimes moved on to another one in the queue.

Retainer

This method means that you pay regardless of a successful search. You are essentially locking in the consultant’s time. The downside of this structure is that it can lead to a lack of alignment of incentives because they are getting paid despite the outcome, and duration. Searches often drag for months and months. Because you can’t see the actual time invested by the recruiter on your particular search, the fee structure can conflict with incentive.

Hybrid (Often Called “Container”)

In this model, you pay a portion of the fee up front and the remainder after the search is complete. In my twenty-five years of working with—and leading—search firms, I’ve found this to be the ideal model because it leaves enough on the table to keep the recruiter focused, engaged, and motivated, yet there’s enough of an up-front fee to lock in their time and attention on your assignment.

Regardless of structure, most recruiters charge a percentage of the total estimated first-year cash compensation (base + bonus + any other cash components). Typically, this ranges from 20 percent to 33 percent, the latter being the going rate for executive hires. Record-low unemployment rate means record-high fees and demand for headhunters. So, they should always be the last resort, after you’ve tapped out your own network and the previously mentioned sources.

But once you’ve exhausted your sources, engage a recruiter. The cost of a vacancy is far higher than the fees of an outside search consultant. What is that vacant sales territory in Atlanta costing you?

When Should You Begin Sourcing?

This is a trick question. The answer is never stop sourcing. You’re always hiring, which is why I insist that my clients invest 30 to 50 percent of their time on talent. You are proactively building a talent pipeline ahead of the need. Just-in-time hiring no longer works. When someone quits and there’s a vacant seat, the clock is against you. If you haven’t built up your pipeline before then, you are more likely to settle for a warm body.

I recommend forecasting your hiring needs for the next two years. How many people will you need, and in what roles? Your talent strategy should be a derivative of your business strategy. Are you doubling your salesforce over the next year? Where is the growth going to be? What functions, what levels, what types of jobs?

Focus on the areas in which you anticipate the most growth and begin building a pipeline. Remember, you need on average 150 qualified candidates per Rockstar hire, so the numbers can be daunting. If you’re going to fill twenty positions, you’ll need to look at 3,000 candidates. That’s why it’s crucial to build the pipeline of candidates ahead of the need. Unless you’re a name-brand employer—Facebook, Tesla, Amazon—Rockstars aren’t beating a path to your door.

Furthermore, don’t forget about natural attrition. Your projections need to account for your turnover rate as well. One hundred employees with 20 percent turnover means you’re hiring twenty employees this year just to stay even. Where will they come from?

I help my clients create a Candidate Relationship Management program, often in the form of an email newsletter—just as they have for their prospective customers. We’re always growing the list of recipients. Through this every-other-week email, we remind potential candidates about our company and what we’re doing. We include news about the company, funding, new customers, new hires, evidence that the industry is taking off.

Over time, this tool is often enough for people to raise their hand and say they’re interested in learning more. It’s also an effective way to stay in touch with candidates you’ve identified who haven’t yet decided to engage, for whatever reason. You’re dripping on them every other week.

You should also meet regularly with promising candidates—even if you don’t have a specific job for them today. Have two of those meetings each week to continue building your pipeline. The people you invest time with are also good people to tap for candidate referrals.

To do all this, LinkedIn should become your best friend. Its Advanced Search function allows you to track down just about anyone. In fact, it’s the most robust database of people in the world. Even though not quite everyone is in there and not every profile is completely up to date, it’s become the essential tool that I use to find Rockstars.

Reach out to the people you want to get to know. Don’t be pushy or arrogant. Don’t send them a laborious job description. Instead, say: “I want to share our story with you” or “I’d love to speak for fifteen minutes.” It’s an invitation mindset. You’ll be surprised how many people will engage in that kind of discussion. Rockstars, in particular, are always thinking about career progression. Used correctly—in a non-solicitous transactional way—LinkedIn opens a world of potential candidates.

Time is your most precious asset. That’s why it’s vital to be selective about the people you invest your time with. Train your hiring managers to do the same. When I see a résumé or a LinkedIn profile, I ask myself whether the person is worth twenty minutes of my time. The reality is that recruiting takes a lot of time—vetting, researching, referencing—which is why you sometimes hire an outside recruiter. You either pay in time (yours) or money (to a recruiter) when it comes to recruiting.

Recall that we talked about wanting 150 candidates in our funnel for a given vacancy. Typically, we can eliminate 130 of those off the bat; they’re just too far off the mark. That may mean we have some false-negatives, but we have to start somewhere. It begins to narrow the field to twenty. So, how do we separate the wheat from the chaff?

Referrals from my personal network, employees, investors, and my Board always get first priority. They are the best use of time. Remember, half of your hires should come from your employee referral program. So, they get the first call.

After that, you’ll have before you a stack of résumés, bios, and LinkedIn profiles. Some detailed, some sparse. So, the question becomes how to narrow the field to the twenty that I’d most like to speak with. If I’m going to invest twenty minutes each, for a total of seven hours, I’m looking for some evidence—something, anything—that they might have the competencies I defined earlier. We need to start somewhere.

I look for markers that may indicate a person is a top-performer. No résumé will tell me that the person is a Rockstar. A résumé is nothing more than a sales brochure, but here are a few tips to weed through them:

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• Look at résumés in batches, rather than one at a time. You’re only spending time with twenty candidates, so working in batches helps you compare and contrast across them. What initially may seem like a promising candidate on paper may pale in comparison to others I haven’t yet seen. So, I hold off before reaching out to begin scheduling conversations until I’ve reviewed the entire batch.
• Look for specific quantified accomplishments or achievements—growing sales, growing markets, turning around brands. Those are important markers of Rockstars because Rockstars deliver results; they make things happen and they are interested in telling you about those results. That doesn’t mean that the résumé that lists job responsibilities, rather than quantified results, isn’t a Rockstar, but the odds are far lower.
• Look for evidence of progression. That could be in the form of increasing scope of responsibility, in promotions (particularly within a company, not just from one company to another) or in expansion of scope of duties (did their team expand?). The inverse is true, too. When I see stagnation, it could be because the person is not a Rockstar. Or maybe they once were, but their star is beginning to fade. I’m unlikely to invest precious time on them either. I want rising stars on my client’s teams.
• Look for tenure with companies. How long has a candidate been at their current job? If you’ve got a candidate who hops from job to job, staying less than two years at each position, let them go. Don’t waste your time. Consider what I call the 3:10 Rule. I’m looking for people who have worked for three or fewer companies in the past ten years. Commonly, I’ll see candidates who spent two years at each employer over the course of ten years. That’s five employers, and in my book, that’s too many. It tells me that the candidate either made bad choices about where to work or the company didn’t see them as having enough value to retain their services and advance them through the organization. While the days of lifetime employment are over, the winnowing must start somewhere.
• Finally, pay attention to the presentation. How clear is the résumé or profile? This should be the candidate’s best work. If it has mistakes, it concerns me. If they’ve written a cover letter, is it compelling and authentic and insightful, or cliché and typo-ridden? Fewer than 5 percent of candidates provide an outstanding, thoughtful résumé or LinkedIn profile. It’s a shame, but it’s a great time-saver because Rockstars sweat the details.

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Okay, next step. It’s time to reach out to those that look most promising. If they applied for the position, it’s relatively easy. They’re hoping for the call. So, make it. I send an email letting them know that I’d like to schedule a twenty-minute intro call (I block out thirty in my calendar). I make three attempts: an email, then a call, and then a text.

But if the individual didn’t apply for the position, they’re a passive job seeker. So, before reaching out, I do everything possible to secure a personal introduction (using second-degree connections on LinkedIn—people who know both them and me). The response rate is far higher. Failing that, I do everything I can to get—or guess—their email address, inferring it from other folks I know at their company. If not, I send them a LinkedIn InMail, which will send them a note without revealing their email address. It takes a little bit of homework, but I’ve got this process down to about a minute each.

So, what does the note say? It’s a super short invitation to have a brief discussion. Kiss first, before proposing marriage.

The subject line is simply “Confidential.”

And the email or text or Inmail reads:

In my experience, outreaching to thirty or so of the right prospects with a short note will typically yield twenty phone conversations.

In this chapter, we talked about sourcing, including tips on how to use outside recruiters, how to narrow our list of candidates, the importance of always recruiting, and how to best spend your sourcing time.