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State of the Sector Recruitment and Staffing

Employers get smarter about using the Web and strengthen employee referral programs. Meanwhile, companies that match job seekers and employers report that business is picking up.

May 11, 2005
Related Topics: Internet, Candidate Sourcing, Latest News

A s more people enter the workforce, a hiring manager in a bind may discover that fresh talent is as close as the nearest computer terminal--and the person sitting in front of it.

    The Internet and employee referrals, accounted for more than 61 percent of external hires in 2004 among companies surveyed by CareerXroads, a recruiting technology consultancy in Kendall Park, New Jersey. That figure has jumped in each of the past three years, keeping pressure on traditional means of hiring as the economy improves.

    Even though employers still flock to Internet job search sites like Monster and the thousands of job boards that cater to specific industries, experts say that many firms lack a home page that allows people easy access to career information. Some have yet to capitalize on the Internet at all.

    Last year was the first time that all of the Fortune 500 companies had Web sites, and even now several dozen organizations don’t use them for recruiting purposes, although the recent approval of a ".jobs" domain could change that situation. In any event, the Internet is a blind spot no company can afford, especially if the economy is strong. Many industries, like construction, health care and financial services, continue to add jobs, and if the economy holds, there will likely be a favorable hiring environment throughout 2005.

    Job creation did slow in March, but unemployment dropped to 5.2 percent from 5.4 percent.

    To find talent, smart companies are taking steps to hire both active job seekers, defined as those looking for work, and passive job seekers, those who have jobs and aren’t really looking for a change but would take the right opportunity if approached. Though the Internet continues to be a locus for recruiting activity for both segments, companies are beefing up employee referral programs and going out of their way to make sure skilled workers know that they’re hiring.

    Many firms begin that task with their own Web site, which makes job advertising and job application clear, fast and cheap. But some firms are spoiling their chances with job seekers.

    CareerXroads principal Mark Mehler says turf battles between human resources and marketing diminish a company’s ability to recruit, as does a lack of Web savvy. He cites an insurance company that buried a jobs link at the bottom of its home page, requiring users to scroll past unrelated information. Job-related inquiries dropped by 80 percent. Other companies understand the importance of grabbing a candidate’s attention and are putting that skill to work as they build their recruiting pages.

    Consider Red Lobster, which is an "older brand," says Anita Dahlstrom-Gutel, director of organizational development for the company, now the biggest holding of Darden Restaurants. Darden, the world’s largest casual-dining company, has annual revenues of $5 billion.

    Red Lobster might be a tried-and-true brand, but its jobs page has just undergone a seven-month-long makeover in order to be more appealing to applicants.

    Candidates can click on four distinct opportunities based on their level of experience and by the type of opportunity they seek, be it hourly or managerial. The site provides detailed descriptions and requirements for prospects to consider before they apply.

    And to ensure that the language on the page captured the essence of the restaurant and appealed to the type of people management ultimately wants to hire, it had existing employees sign off on it, too.

    "Some managers were initially skeptical, preferring that candidates come in off the street to apply in person," Dahlstrom-Gutel says. "We had to tell them, ‘No, this is what 24-year-olds are doing now.’ "

    The company intends to perpetuate its culture from the inside, too. Red Lobster rewards any employee whose referral results in a successful managerial hire with gift certificates totaling $1,000. Dahlstrom-Gutel wants to broaden the reach of the program, which currently accounts for about 9 percent of new management hires.

    At Cognizant Technology Solutions in Teaneck, New Jersey, employee referrals account for more than 40 percent of lateral hires. In this case, that means software engineers and MBA graduates with six to eight years’ work experience, CEO Lakshmi Narayanan says.

    "They remain longer and they’re a good fit compared to fresh recruits," says Narayanan, whose 17,000-employee company manufactures IT software and provides data warehousing for U.S.-based clients in financial services, health care and retail.

    Cognizant rewards the referring employee with cash or reimbursement for external training. Narayanan won’t specify the amount. "It’s substantial, but we’d like it to be more," he says of the fee, which the company determines based on the level of the new employee’s position. The company pays the job finder’s fee after the new hire has successfully completed training.

    With operations in India, Europe and the U.S., Cognizant is planning to increase its ranks by 7,000 positions by year’s end, an increase of 46 percent. The boost comes as the company continues to expand. Its client base in the U.S. grew to 233 last year from 153 in 2003; this year, it will expand its client base in Europe.

    Companies aren’t only making the push online to attract skilled workers, however.

    Fort Worth, Texas-based BNSF Railway, a company that requires a variety of skilled workers and serves as an indicator of how the U.S. economy is doing overall because of its role in commerce, has hit the cineplex to recruit employees.

    Rail traffic hit record volumes in 2004, moving coal to produce energy and products ranging from agriculture to consumer goods. To keep pace, BNSF hired 3,700 new workers, a net gain of 5 percent after accounting for turnover. The company now boasts a workforce of more than 38,000.

    Though BNSF posts openings for specialty positions on one or two of the major employment Web sites--such as HotJobs or CareerBuilder--and recruits from obvious places like the National Academy of Railroad Sciences, it now also produces movie theater advertisements.

    By putting ads in theaters near primary BNSF locations in Minneapolis and Chicago, the company "attempts to secure a diverse candidate pool," says Barbara Cook, BNSF assistant vice president for human resources. The ads are timed to appear in the days leading up to job fairs BNSF has planned for those cities.

    "Rail doesn’t sell itself as a career," Cook says. Unless there’s a family history of working in the industry, it can be tough to convey the "romance of the rails."

    And so the ads do the work, with selling points that include the mystique of railroad travel and practical information, such as high starting salaries--$50,000 for conductor trainees.

    BNSF’s theater ads direct applicants to the company’s Web site, where the career information page includes a breakdown of job specialties, a searchable database of open positions, a rundown of benefits and a list of frequently asked questions.

Workforce Management, May 2005, pp. 49-56 -- Subscribe Now!

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