And what to do about it.

When I talk to my clients about the hiring process, I’m greeted with mixed reactions. Some of my clients know the drill; perhaps they’ve been through the process, even from the hiring end. Others listen wide-eyed; they’re not happy knowing their way of looking for work is the least effective.

Consider this scenario

On Friday the position of Sr. Software Engineer is announced internally. All employees who want to apply need to submit a résumé detailing their qualifications by close of business (COB) on Monday.

Three people feel they are qualified and hurry to update their résumé over the weekend. One of the candidates doesn’t have a résumé, has never written one. He’ll have to learn how to write one quickly.

On COB of Monday, when résumés are due, the VP of Engineering résumés from the internal candidates on her desk. She has a pretty good idea of who she will name Sr. Software Engineer. But there’s another résumé from someone who was referred by an employee for the position.

HR needs to announce the opening on Indeed, accept résumés, and interview external candidates. Then employees from various departments will interview the new candidates, internal included. The process could take up to a month.

This scenario is not uncommon. Is it fair? this depends on who you ask. Generally speaking, there are five ways employers prefer to fill a position.

1. Fill positions from within

The scenario above depicts the most preferred way employers fill a position; from within the company. Ideally they have someone who can fill it quickly and with little fuss. Is it fair to the unemployed candidates? Again, it depends on who you ask.

Unfair to the unemployed, but companies have one thing in mind, filling the position with a safe bet; and who’s safer than someone they know? This makes good business sense.

The hiring manager is familiar with the abilities, and inabilities, of the company’s employees. As well, promoting from within builds good will in the company. An employer that promotes from within is a good employer. So this is a win-win situation.

2. Referrals from employees

The second way employers prefer to fill a position is by taking referrals from their own employees. In some cases the employer will reward the employees with a monetary bonus for referring a person who sticks for, say, three months.

When I was in marketing, I referred my cousin to an IT position in a company for which I worked. I recalled years before how he spread the word of his unemployment at a family gathering, so I brought this up to the powers that be. The CIO read my cousin’s résumé, invited him in for an interview the next day, and offered him a job that day.

I was rewarded one thousand dollars, minus four hundred for taxes. I’ve heard of people who received as much as ten thousand dollars for making a referral. Of course the level of the position to be filled matters.

I never would have referred my cousin unless I was confident of his abilities, which is the case with most employees making a referral. People like me don’t want egg on their face if the person doesn’t work out, even if said person is family. By the way, my cousin worked out extremely well.

3. Referrals from trusted people outside the company

At this point the employer has tried their best to find an internal candidate or someone recommended by their employees. Nothing has worked out and the position has to be filled yesterday.

Their next move is reaching out to people they trusts outside the company. The employer may reach out to former colleagues, partners, vendors, even people who’ve left the company for greener pastures.

The employer trusts these people because they know what the employer’s looking for in job-related and soft skills. They’re the best bet at this point. Besides, the referrers don’t want to steer their buddies wrong.

In an Undercover Recruiter article, it states, “Employee referrals have the highest applicant to hire conversion rate – only 7% apply but this accounts for 40% of all hires.”

Further, it claims, “Applicants hired from a referral begin their position quicker than applicants found via job boards and career sites (after 29 days compared with 39 days via job boards and 55 via career sites).”

4. Hire recruiters

When requesting referrals doesn’t work, the employer’s next step is hiring a recruiter. This is less desirable than seeking referrals because recruiters are expensive but palatable because recruiters are more knowledgeable of the industry.

There are two types of recruiters, retained and contingency. While retained recruiters work strictly for the employer and are more knowledgeable of the industry, the contingency recruiters only get paid when they find the best candidates.

The employer’s cost for hiring a recruiter can range from 15-30% of the applicant’s first year salary. A hefty chunk of change.

Either way, the employer is paying for a few candidates to be delivered to the table. It’s still a risky proposition. Referrals are still the desired source of candidates for the reasons stated above.

5. Advertise positions

Now it’s desperation time, because this is when employers advertise their positions. There are two major problems with advertising a position, cost and uncertainty of hiring the right candidate.

You may think that it’s the cost of advertising online is the major concern, but it isn’t; the cost employers feel the most is the time spent reading résumés and interviewing unknown people. When I ask hiring managers (HM) if they like reading those résumé, approximately 98% of them say they don’t.

With applicant tracking systems in place, you’d think the process would be more manageable and pleasant, but this isn’t the case. For some, reading 25 résumés is reading 25 resumes too many.

Even with the advancement of the ATS, poor candidates get past it and make it to the interview. What many recruiters and HMs are experiencing are candidates who are not qualified and, in many cases, have embellished their accomplishments.

What do you do as a job seeker?

The obvious answer is to become a referral by reaching out to those you know in desired companies. This sounds easier said than done, but the steps you take begin first with determining which companies you’d like to work for. Create a list of at least 15 target companies.

Reach out to your former supervisors and colleagues. If they’ve moved on to another company, they might know of possible openings there or at other companies. The problem with relying solely on former colleagues, is that well will run dry; they will run out of time and ideas.

Attend industry groups where people who are currently employed are networking for business. You are there to offer your expertise either on a paid basis or as a volunteer. You are prepared with personal business cards and your personal commercial. It’s my opinion is that the best people to be with are those who are employed.

One of the best places to network is in your community. You never know when you could run into someone who knows someone who works at one of your target companies. Most important is that people know about your situation and that you’ve clearly explained what you’re looking for.

LinkedIn is ideal for identifying people in companies, as most hiring authorities are on LinkedIn. Make use of your online time by using the Companies feature and do advance searches. Work your way up by connecting to people on your level. Also, connect with people who used to work at the company; they can give you some insight.

The bottom line is that you cannot rely on applying online and waiting to be brought in for an interview. You must become a referral.

Photo: Flickr, Roger Braunstein