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It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall


The Electronic Recruiting News is a Free Daily Newsletter For Recruiters, HR Managers, Advertising Agencies and Clasified Advertising Operations

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(June 09, 2000) You're gonna get a charge out of this.

The pay-for-referrals market is exploding. Like many ideas, once the cat is out of the bag, the sparks fly (oops, we mix metaphors like an old immigrant friend who called cutoff jeans - shortcuts). Anyhow, new ideas move through our space like electricity down a fat high-power line. As with any piece of brilliant insight, the claims of fatherhood exceed the available number of children. (Interestingly, once an entrepreneur is successful, the inverse is true. The paternity claims expand beyond the prowess of even the most testosterone riddled team.) So, we're at the starting point of market traction. Like an electrical circuit, we've found ground and the juice is flowing.

We're guessing that it will be like the explosion in Free Agent and Recruiting Exchange platforms. Minus the buzzword nonsense (b2b, c2c, b2c, c2b, 2b2, 2c2, ccc, bbb, 222), there's actual progress being made in the raw conceptualization of the marketplace. Like a glass of root beer when you add the vanilla ice cream, the market is bubbling up and flowing out of the glass. With any luck, we'll get more root beer float than mess (but that's always the gamble with root beer floats.)

Doug Layman, CEO of suggests the following (somewhat self-serving) framework for making a decision about which ICR (Internet Compensated Referral) Vendor to use.

With some minor variations, people value referrals because of two basic premises. First, the power of a referral is in a privileged relationship with both the employer and candidate. Second, the person making the referral has put their reputation on the line and assumes that their high-quality candidate will be treated well by the employer. What inspires referrals in an internal employee referral program is loyalty to the employer, publicity for the program, easy access to making referrals, and attractive short, medium, and long term rewards (the hiring life cycle can be a long time to wait for a referral bonus).

Among a number of other things 1) today's worker views job changing as a way for career advancement and 2) loyalty from an employer today is based on skills and contribution, not seniority. People have increased their focus on building personal networks beyond the boundaries of their own companies. In order for Internet compensated referrals to be effective and sustainable, referrals must be established in a context of personal relationships with both the employer/candidate, and a high-level of preferential treatment.

  1. Do you have established relationships with employers?
  2. How do you ensure that a referred candidate is a match to the job specification?
  3. Do you have a mechanism for assessing candidate's skills and cultural fit?
  4. How do you make sure the candidate is informed if they are not a fit for the position?
  5. Do you have metrics quantify the number of candidates who were screened out for quality reasons?
  6. How does the system track payments to individuals making referrals? Is there a good feedback mechanism for both referrers and candidates that builds trust?
  7. Can a person be easily be reached if there is a customer service issue?
  8. Can you deliver qualified candidates and help close the candidate allowing the employer to replace traditional agencies?

It's a modest start that we'll try to refine over the coming months. One thing is certain. By November (budget season), the question of whether or not to use an ICR vendor will be squarely on the table for any HR VP in the Fortune 2500.

- John Sumser © TwoColorHat. All Rights Reserved.

Dem Profile Thingies

(June 08, 2000) Whenever we write a piece about the death of the resume, we get swamped with notes from inventors who have found the holy grail. Their particular profiling system, they proselytize, will be the technology that triggers the transformation of recruiting. Amazingly, they all seem to use the same copy editor. So, we're bracing ourselves for another avalanche of bad marketing materials.

The resume is dead.

Although there will continue to be tens of millions of them circulating for another decade or so, resumes are an outmoded tool that was necessary in a time when there were always more workers than jobs. In the olden days, in order to switch jobs, one was required to become a marketing genius for a moment and generate a sales brochure. With ever increasing demand for ever decreasing supply, it is inevitable that the requirement that someone work to get another job will decrease rapidly.

This is not an argument that profiling systems will replace resume generation. Hardly. The only folks who think that profiling provides any advantage to a job hunter (the person who has to do the work) are either the inventors of profiling systems, recruiters who dream of an easier life or other schemers who don't get the new employment economics.

Simply, compensation, which used to begin at the point that a person was hired, now starts at the point that a potential worker begins to generate value for a potential employer. In those glorious olden days, Recruiting budgets never had to account for the hours invested by a potential employee. Today, they do.

If any profiling system is going to gain real market traction, it will need to provide compensation for the person filling out the form. In other words, profiling systems currently make the most sense as tools to be used inside the firewall. We think that will change as the competition for high-quality candidates heats up.

It is very clear that few of the current large, newspaper classified advertising oriented databased job boards are able to deliver anything like an assurance of quality. Just the opposite appears to be true. Almost by definition, job boards collect the resumes of people who still have to create them. As that requirement slides down the food chain (and it already has) the "quality" of the job boards will decline. Like coastal oyster farmers working the beds, their ability to produce is constrained by the vagaries of season, availability, weather and so on.

Compensated profiling systems have the potential to introduce quality control into our process at a resource (not data) level. But, the move to these systems requires a major inversion in current economics. Yesterday's announcement ( is an interesting move in the right direction.

- John Sumser © TwoColorHat. All Rights Reserved.

The Return Of Lars

(June 07, 2000) When we first saw the announcement, we misread the company name. "," we thought to ourselves, "Someone is doing our idea one better. This will really attract those passive candidates." Well, misread it we did. is a new project that involves the reintroduction of Lars Perkins. Our industry will be much stronger with his hands on involvement.

Lars, as you probably know, is the smartest fellow to ever be involved in the Recruiting Industry. He single-handedly invented the Applicant Tracking sector when he founded Restrac (now Webhire). There just aren't any other 20 year veterans of the business with his credentials and brainpower. Recently, Lars left Webhire to run the Boston branch of idealab. It is as a managing Director of idealab that he returns to his roots. We're extremely happy that he's decided to return.

The premise of is simple and powerful: On the web, everyone is a headhunter. Capitalizing on the time honored internal employee referral network (which absolutely everyone agrees is the best way to recruit), stakes out a middle ground between companies and their jobs. If you refer someone to and they take a job as a result, you get paid a referral bonus ranging from $1,000 to $5,000. If someone you refer refers someone who gets a job, you still get a piece. A bit Amwayish in its economics, the idea is timely and potentially viral.

It won't be long now until all corporate employment pages incorporate some form of this approach. While is clearly that early winner and will be credited in history for the innovation, the idea has its roots in the pioneering work of Tom Murray at IT-TA. We know a number of companies who are setting this process up internally and planning to capitalize on their "PCs in the home of every employee" programs.

We bet that broadly distributed referral programs are the Gnutella of our business.

The data that comes from's projects will be astonishing. Unlike the primitive renditions of newspaper classified advertising that dominate the current landscape, will be in a position to map social networks and nodes. At a large scale, this is a Direct Marketer's dream. The information that generates will ultimately create a new, post winged-bicycle, category in the business.

Meta-recruiting, the beginnings of real Labor Supply management, requires a clear understanding of the social network that surrounds a company. Mapping and optimizing that collection of vendors, employees, management, investors and (most importantly) potential employees is now possible as the result of web technology. is a powerful step in that direction. It has the delicious added benefit of being likely to be profitable from the get-go.

Leave it to Lars to advance the game this powerfully. We're glad he's back and playing.

- John Sumser © TwoColorHat. All Rights Reserved.

Pac Hell

(June 06, 2000) We love DSL.

Oh, how we love it. We zoom around the internet faster than speeding bullets. We download files and software upgrades in the blink of an eye. We are able to leap across state lines and datelines in a single bound. In our line of work, DSL is not a toy but an indispensable tool. It enables us to conduct our research and site evaluations in a timely manner. It allows us to take the time to tackle the other pressing issues that lurk around our office.

When we have to use a dial-up, it's like Kryptonite around our neck.

In the last week-and-a-half, crime has run rampant at the Daily Planet as Superman is nowhere to be found and Clark Kent shuffles into the office late, hung-over, and less than enthusiastic about the day's work. Due to a screw-up of super-heroic proportions, and through no fault of our own, our DSL has ceased to be. Who's to blame? Paying homage to the 1967 James Coburn film, The President's Analyst, we would blame TPC (for those unfamiliar with that late 60's gem, The Phone Company). In our case, that would be Pacific Bell.

As we struggle to restore our superhuman powers, we cannot but be amazed at the incredible efforts (or lack thereof) being made by this venerable monopoly to thwart our every effort to right the wrongs. With each department we talk to, it is as if for the first time. One department has no idea what the other department has or hasn't done, and vice versa. The number of hours that have been spent on hold. The number of "customer representatives" to whom we have voiced our concerns. From a purely mathematical sense, the numbers are staggering. Wasted man-hours. Loss of productivity. Speaking in greenbacks, our losses were in the thousands by the middle of last week.

Fighting this Goliath, our valiant David has been keeping a score card. Our whiteboard is embellished with an ever growing list of names and phone numbers as we continually move to the "next level" of our situation. We have become intimately familiar with the core of the Pacific Bell DSL "customer service" crew. On the list, most of the names are amended with such choice adjectives as moron, idiot, and jerk. David frequently finds himself having to explain to a mini-Goliath how to do some basic aspect of their job. Not in a snide way; they do not know how to perform basic customer service tasks. So-called supervisors tend to fare much worse. Managerial duties seem to be limited to organizing coffee breaks. On rare occasion, an intelligent individual (all too eager to discuss the faults of their particular department) has managed to push our case slightly closer to resolution.

Compensation for all our losses? We have been offered $20 and a couple weeks of free DSL by PacBell. In reality, it took heated negotiations to be offered anything beyond one week of free service. Only in the last few days, with the introduction of the PUC into the picture, have we been able to dream of the actual restoration of our DSL service. We look forward to lodging a formal complaint against Pacific Bell through the PUC, even though there is apparently quite a line. The fines can be quite substantial.

What other recourse do we have? None, really. Any company that offers DSL in our geographic location does so through PacBell. As such, we are still beholden to the blind idiot god that is Pacific Bell, even if we are paying some other company for the services.

How is this relevant to the world of Online Recruiting? That should be obvious: Customer Service. Most of the major players in the field are not known for quality customer support. Unlike The Phone Company, those who wish to prosper and grow in this industry cannot allow to be indifferent or neglectful of their clients. Customer satisfaction must become an integral aspect in the structure of successful companies. Those that have chosen to sacrifice customer service for volume will begin to feel the pinch. Soon, our researchers' whiteboards may be highlighting the idiots, morons, and jerks in the Online Recruiting sphere.

That is if we can resolve this current Kryptonite dilemma.

- Ingmars Lindbergs

Here Come The Elephants

(June 05, 2000) We're solidly in the middle of the next wave of Online Recruiting Tools. Ramer's RecruitUSA is tearing up the middle ground. Miller's CareerCast is quickly becoming a default platform. Frenkel's Pentawave is gaining market momentum while Farrell's CareerSite gains traction with its Recruiter's Desktop. Although the number of job boards continues to grow at astonishing rates, there is some settling down at the core. As soon as the credentialling issues are resolved, the free agent marketplace will explode in a similar fashion.

So, six years into the process, it's time for the aging, conservative players to start nosing around the marketplace. And, they are coming on like a herd of elephants with buzzwords swinging from their trunks.

SAP, the lumbering giant of enterprise software fame, has joined the fray with the introduction of Vivant's contractor exchange to In a breathy, hype laden announcement, the SAP PR machine kicked into high gear for this non-announcement. After carefully reviewing the details of the arrangement, we've arrived at a profound conclusion.


The press release announcing this non-event was titled "SAP and Vivant! Usher Talent Through for New Staffing B2B Suite: Vivant! to bring staffing solutions to Marketplace" A slow wade through the buzzword jungle suggests that SAP has incorporated Vivant into their website. As we said,


With no performance guarantees above those provided by Vivant, we wonder just how hard it will be to have users click on instead of These sorts of lame, trophy alliances, disguised as business innovations are the kind of awkward first steps that giants make when entering a market that they do not understand. Expect a thunderstorm of them over the next year as the old players start to understand that the web is an important part of doing business.

Oh, by the way. Vivant is an alliance of second tier staffing companies that share the opportunity to fill openings. According to their hype, joining Vivant entitles the new member to receive "unsolicited staffing opportunities from a host of companies". Now, there's a concept.

- John Sumser © TwoColorHat. All Rights Reserved.

© 2013 interbiznet.
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Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

Mill Valley, CA 94941
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