Recruiting Independent Sales Reps
When sourcing chews up too much time, tapping an outside firm may be the most cost-effective approach.
Books Are Fun, a Chicago-based subsidiary of Reader’s Digest, must recruit 250 to 300 independent sales representatives every year to cover high attrition rates and meet expansion goals for its four primary business lines.
As the largest display marketer for books and gifts in North America, the company needs 850 reps working in assigned territories to service 70,000 schools and 50,000 businesses. The cost of missed opportunities runs high when a rep leaves and is not quickly replaced.
Like most companies that rely on independent reps for all sales work, Books Are Fun faces a constant challenge in sourcing candidates who do not always fall into easily identifiable and accessible talent pools. The supply of potential applicants includes people who may not routinely post their résumés on job boards or explore traditional job-seeking channels.
When sourcing itself becomes a major task in the recruiting process, some companies determine that tapping outside recruiting firms may be the most financially viable approach. In a 2008 NelsonHall survey, recruitment process outsourcing providers reported a growing trend toward using RPO for contingent staffing.
In February 2007, Books Are Fun hired David Hammond as vice president of sales recruitment and as part of a new management team brought in to turn the company around. From the outset, Hammond was charged with re-engineering the recruiting process to improve the quality of hires.
Hammond found that the company still relied on newspaper advertising and job boards to source candidates, with six internal recruiters handling the full load. Screening applicants consumed 70 percent of their time.
"It was very apparent that the organization needed a more proactive approach and a sourcing strategy that would identify the profile for successful reps," Hammond says.
"We knew that the most important part of the recruiting process is the late-stage conversation that we have with a candidate about the job as a lifestyle change rather than just another position. We needed our internal folks to be able to focus on these late-stage conversations. It was a waste of time for my staff to handle the screening process."
RPO for reps
The basic qualifications for Books Are Fun sales reps are minimal. Candidates must be physically able to move the marketing materials and financially capable of making a small investment to get started.
But the skills and levels of ambition necessary to stay with the job and build a successful business are more complex. "The biggest challenge is that people who are truly qualified and suitable are difficult to find," Hammond says.
Hammond turned to RPO to improve sourcing and free his staff from screening and administrative work. He wanted better technology to manage the process, more outlets for sourcing and a more flexible approach to recruitment staffing so that the recruitment effort could expand and contract as needed.
"As candidates enter and move through the recruitment funnel, we want someone to handle the whole bottom end so that we only deal with the top," Hammond explains. He signed on for a one-year renewable contract with Pinstripe, an RPO company based in Brookfield, Wisconsin.
"We began with a process of investigation and moved on to technology and building out the back end of the technology process, and then we identified the candidate profile," he says. The new recruiting process launched on March 24.
With the new system, an applicant who passes through an initial online screening moves to an additional online assessment. If the candidate passes that test, a pop-up screen appears and asks the candidate to select an interview time with a Pinstripe recruiter at a specific location. If the applicant survives that stage, the applicant’s information passes into a new tracking system that schedules a second interview with a Books Are Fun internal recruiter.
"In the past, Books Are Fun offered a contract to the first qualified candidate that appeared," Hammond says. "Now we want to offer a contract to the most qualified candidates only. Our new system generates enough volume to provide us with real choices."
In the first eight weeks, the process harvested 16,000 online résumés that met the basic criteria for sales reps. After screenings and initial interviews, Pinstripe sent 330 candidates to Books Are Fun for additional screening and interviews. Hammond expects to hire 30 to 45 from the group.
Books Are Fun’s internal recruiting function now runs with a staff of three. Hammond’s goal is to flip the 70/30 split between time spent sourcing and screening and time spent talking to candidates to an entirely new model where the internal recruiters spend 70 percent of their time with candidates and 30 percent on sourcing and administration.
"We’re getting there," he says.
Hammond now tracks a number of recruiting metrics on a daily or weekly basis, including the total sourcing volume. He closely watches conversion rates, which measure how many initial applicants make it through to the company interview. These rates are a good measure of the quality of the sourcing strategy.
"One very important benefit is that I can report back to the business leader for each of the business lines on the number of candidates for the line and where they are in the recruiting process," Hammond says. "That level of reporting and transparency had never been part of our ongoing dialogue about recruiting."
Hammond also tracks requisitions and time to fill at a granular level.
"We can now begin to understand the cause of the delays," he notes. The 2008 NelsonHall study reports that RPO reduces average time-to-hire by 43 percent.
In terms of total spend, Hammond expects that at worst, the new model will be neutral against the old model.
"I think we will see some actual cost savings," he says. "But if you look at our ability to fill positions in the territories faster and hold on to customers, that has improved significantly. And this ability to replace reps more quickly represents a very significant amount of money."
The 2008 NelsonHall study found that RPO lowers the cost of recruitment by an average of 24 percent.
Hammond also anticipates a reduction in the company’s historic attrition levels.
"We could see substantial cost savings from this," he notes. "We incur heavy early-on expenses for training, shipping materials and the other costs of putting a new rep in place. If we lose a rep quickly, it’s expensive. Improved candidate assessment will help us minimize attrition."
Although Hammond is waiting for additional results before he fully evaluates the new system, he is confident that outsourcing is the most cost-effective and productive approach to maintain a sufficient supply of high-quality reps.
"The new RPO approach is already embedded in our going-forward strategy for recruiting," he notes.
Reshaping the funnel
Although the new approach to sourcing at Books Are Fun is producing better results than the old model, it still takes a huge number of applicants coming in through a very wide funnel to produce a fairly limited number of hires popping out the top. Pinstripe CEO Sue Marks notes that the shape of the recruiting funnel varies dramatically for different job categories.
In a recent assignment that entailed sourcing highly skilled engineers, Pinstripe harvested 1,023 applicants, conducted 360 phone screens and then sent 104 candidates for interviews with the client company.
"For the Books Are Fun salespeople, we wanted to cast a wide net, and then put the applicants through user-friendly self-service online screening," Marks says.
Of the 16,000 applicants harvested for Books Are Fun, Pinstripe phone-screened 2,200 using a 15-minute behaviorally based questionnaire.
"Especially for Books Are Fun and its parent, Reader’s Digest, every applicant is also a potential customer, so we treat applicants like customers," Marks notes. Pinstripe maintains the Books Are Fun contacts as a separate secure database that the client company can pull back in-house at any time.
Marks isn’t concerned about an initial search that produces such a large number of applicants.
"If you search by sending the Boolean string out into the deep Web, we create a large funnel. But then you can deconstruct that funnel to determine which sources are most effective."
According to Marks, the key to sourcing is search engine optimization.
"In five years, we’ll be pushing jobs out in a targeted fashion," she says. "It will look like an RSS feed."
Pinstripe is now running pilot projects that give clients a Facebook page with widgets that allow viewers to sign up as "fans" so that job openings pop up on the viewer’s own Facebook page.
These new methods work particularly well for "selective" candidates, who are commonly employed but may appear in career databases as job seekers.
"With selective and passive candidates, you have to keep up your marketing efforts to move them along toward the open position," Marks says. "We are constantly pinging passive candidates and monitoring selective candidates."
With these methods, recruiting closely resembles sales prospecting, with databases of selective and passive candidates maintained in a fashion similar to customer contacts. Marks notes that more companies are also turning to internships to capture early applicants.
"Talent management is an ecosystem," Marks says. "The goal is to make all processes work together for both internal and external candidates, from the initial sourcing to hiring, onboarding, training, promotions and, finally, tracking alumni."
The ecosystem approach pulls recruiting into a coherent strategy for optimal results.