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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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Foundations Of an SBB (Part 2)
(October 13, 2000) Recently, signed alliances with a number of high profile ASP providers of applicant tracking systems. Saying that they were backing out of the competition for the Recruiter's desktop, the company opened the doors to a number of customers by deciding to 'stick to their knitting'. The ASPs in the alliance are:

This is a remarkable step that underscores our emphasis on objectivity. Rather than trying to be all things to all people, the agreement positions as a source destination that can be reached through a variety of channels. Any entity that wants to play in the SBB (single belly button) arena will need to have interfaces with each of these ASPs (and a number of others).

"The Middle is The Middle and our job is to help customers get maximum bang for their buck" should be the motto of any SBB player. It will require expertise in applicant tracking systems, candidate sources and enterprise integration. While the SBB could run the back office of job boards, it would, by design, have to be uninvolved in their marketing or profitability.

Two additional pieces are essential components of an SBB play:

  1. The ability to measure performance dynamically, and
  2. A coherent design that limits choice to relevant issues.
On the surface, both appear to be insurmountable technical issues. With 30,000 actively competing candidate sources, a simple map of the terrain is very difficult to imagine, let alone execute. The SBB would have to demonstrate a very consistent pattern of movement towards this information engineering objective. Measuring performance, while bandwidth intensive, is a simple exercise (if patentable). The trick in this regard is to have enough control of the center to force the various outlets into routine measurement. (There's a lot of many being made by not allowing this to happen currently).

While we can imagine an SBB that hosts job boards, we have a harder time imaging one that demands the use of a specific workflow or applicant tracking process. Again, too much specificity robs the SBB of its most important attribute: objectivity used to further the ambitions of its customers.

- John Sumser © TwoColorHat. All Rights Reserved.

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Foundations Of an SBB (Part 1)

(October 12, 2000) We like the human-ness of a Single Belly Button (SBB). Really, what's required is a combination of a human being, lots of coherent data and a data interface. In the old days, when labor was abundant, recruitment advertising transactions were expensive and advertising opportunities were extremely limited, this person was called an Advertising Agency Rep.

Although the Bernard Hodes organization was smart enough to get out of the job board business, the agencies have lost credibility with their customers. Can you really expect the TMP advertising sales force to be objective when they are pumping their Monster product line? We assume that the Hodes team will start really using this difference to their advantage.

Objectivity is the single most important thing that an SBB can bring to the game. It is impossible to achieve that objectivity when you own one of the properties that you are selling. While we believe that Monster has earned its place as the default source for online recruiting transactions, the TMP strategy comes at the expense of traditional (and contemporary) advertising service delivery. The fact that Chief Monster (TMP's new executive level offering) competes directly with a core constituency (Search Firms) isn't lost on those firms. We've gotten large numbers of letters from the emerging "Just Say No To Monster" campaign. Third party firms (their postings are the foundation of Monster's success) are beginning to realize that TMP has organized to compete with them directly.

In other places (Canada, Australia and Europe), the historical distinctions between search firms and ad agencies are not as clear as they are in the US. Most of the Recruitment advertising business in those places is filtered through the Search Firms as an upsell. They position advertising as a performance accelerator in a contingency contract. While we're certain that TMP will bring that concept to the American market, the Achilles heel in pricing is that the non-US approach always involves an arm's length transaction. Objectivity is impossible when the thing held at arm's length is your own hand. By directly competing with its core customers, Monster is sealing its fate as a large player in the sourcing business.

It's not a bad position unless you are selling infinite growth to Wall Street. Monster clearly won't be going out of business anytime soon. But, they jeopardize their upside with a number of their current market moves. No objective middleman can deliver from its own arsenal.

Advertising Agencies that wish to seize on this market opportunity are caught in a pricing dilemma. 15% of a job board posting isn't enough to cover the cost of answering the phone. A business built on the basis of a percentage of media placement fees is in a terrible position to deliver SBB services. As the competition intensifies and pricing drops, the revenue to be gained from transaction involvement becomes negligible. Traditional ad agencies are limited by practice to an unenviable position.

The web counterparts (firms like IIRC) are also limited by the same factor. 15% of web transactions is not enough money to keep the doors open. This is why those companies have not grown more rapidly. SBB services can not be adequately delivered using a percentage of cash flow.

In order for an SBB to emerge, it will have to be a very clever combination of technology (one stop posting or robotic posting), market feedback (relative performance data), media planning, results measurement - tuning, site traffic development and hourly consulting. The last three items are where the margin is.

- John Sumser © TwoColorHat. All Rights Reserved.

Single Belly Button

(October 11, 2000) Don't get us wrong. Companies need lots of sources of candidates. The opportunity to advertise in the tiniest of niches really expands the capability of a company to find good workers. Assessment driven bio-data will certainly produce access to potential hires in unforeseen ways. Communities of job hunters are a good thing. The revolution in forms of Recruiting is producing hundreds of interesting and effective approaches.

But, consider the lot of the poor decision maker in HR.

The new choices are overwhelming. The competitive language does little to discriminate one offering from another. Global reach has turned out to be a nightmare for any manager trying to effectively spend her budget.

In clinical terms, it's market psychosis. (Psychosis is often defined as an overabundance of choice where neurosis is defined as a lack of choice.) We've taken a group of professionals who, at one time, had a limited array of possibilities and thrust unimaginable levels of chaos at them.

Although we enjoy those deli menus with hundreds of sandwiches listed on them, we always end up ordering club sandwiches. It's our modest reaction to an overabundance of choice. The anxiety at the desk level of a recruiting manager is palpable. "What if one of these sources can produce the candidates I want? What if I'm missing it? I can't afford the time (let alone the money) to assess all of my options."

The reason that the Do It Yourself (DIY) movement, championed by AIRS and other consultants (including our own Seminar In A Box) has gained such traction is directly related to the abundance of choice. It's well understood that the time consuming methods involved in detailed market research (the basis of the DIY approach) is singularly less effective than the online database alternatives. While the DIY techniques are fantastic introductions to the web, Recruiters are always more effective when they are Recruiting. Monkeying around in the gory details of a university website is extremely expensive when you consider that the research effort comes at the direct expense of real recruiting.

Even though DIY Recruiting is more expensive and less effective, the results do not show as a drain on spendable budgets. They show as reduced effectiveness for the department. Surfing the web allows Recruiters to substitute busy-ness for results. But, given the choice between planning and doing, most people prefer doing. Sifting through the myriad choices produces anxiety. Surfing the web reduces it. The fact that DIY Recruiting is so popular can be directly tied to the level of anxiety produced by the other alternatives.

Most decision makers try to reduce anxiety in their decision making even though it is well understood that the information age requires us to endure more of it. It's an old school adaptation to a new school problem. In the industrial era, gaining an increased sense of control was a sound reason to make a decision. In the information age, amping anxiety up to the highest tolerable level is the right path. It's just very hard to feel good about doing it.

That's why so few vendors have been willing to step up to the plate as a "single belly button". The vendors feel the same anxiety as the working level recruiters. The role of "one stop shop" is terrifying because the marketplace is so dynamic. Even the best of the multiple site posting companies won't take responsibility for producing results.

The market needs a company to emerge that will take responsibility for helping customers decide the most effective way to spend a budget. When we call it a "single belly button", here's what we mean:

A customer should be able to call a single account representative and say, "we're looking for the following types of employees; what should our budget be and how should we spend it? Given that we don't have that much money, how should we spend our available budget and what types of results should we expect?"

The "single belly button" company would guarantee performance to the extent that the budget was adequate.

- John Sumser © TwoColorHat. All Rights Reserved.

When Recruiting Becomes Advertising

(October 10, 2000) Recruiting Is Advertising. It's really that simple....and that complex. The skills of the traditional Staffing industry, refined with sophisticated data-mining techniques and communicated interactively through the web boil down to the next generation of advertising.

In the rush to proclaim a revolutionary market, prices were artificially lowered for the first wave of Web Recruiting. Low prices created an odd set of expectations in the marketplace. Even today, we are undergoing a revitalized Resume Database giveaway trend.

We think there should be a plaque handed out to all web entrepreneurs that says: "It's easier to lower prices than it is to raise them."

Really, how could this process be less expensive? It has lower "friction", for certain. The distance between the candidate and the opportunity is being squeezed, every second of every day. But, the cost of tailored communications, as everyone knows, is higher than the cost of bulk communications. The cost of having a relationship hasn't changed. The cost of acquiring one is going up rapidly. The available number of relationships to be had is in an aggressive decline.

While Recruiting IS Advertising, the conditions for both have changed. Today's Recruiter works in an environment where candidates are scarce and inventory management is everything. That's the exact opposite of historical conditions. The financial fundamentals of Recruiting have changed in profound ways as a result.

Advertising is also undergoing a radical change. In an earlier time, it was funny to quote Ogilvy, who said "I know that half of my advertising dollars are wasted. I just don't know which half." In today's universe, advertising can be quantified. Major, non-recruiting advertisers are shifting to a skin-in-the-game, pay for performance model. Web advertising requires authentic one to one communications (and therefore more people on the response end).

So, when we say Recruiting Is Advertising, we mean the new Recruiting is the same as the new Advertising. It's more expensive, more direct, more prone to failure and more proactive on the Recruiter's end. The burden of adding value to the Recruiting relationship has shifted from the Candidate to the Recruiter.

We're amazed at the resilience of old outmoded ideas. The labor shortage is permanent and can only be solved with radical improvements in productivity accompanied by a massive wave of immigration. Candidates are not going to flock to use new screening tools. When we say the Resume is dead, we mean that the idea that a candidate has to market him or herself to get a job is dead. Good 21st Century advertising is proactive and identifies targets rather than depending on them to identify themselves.

Recruiting is advertising if you understand that today's advertiser is 100% accountable for results.

- John Sumser, © TwoColorHat. All Rights Reserved.


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- John Sumser © TwoColorHat. All Rights Reserved.

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