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In the last few years, it’s become apparent that a severe hiring crisis is crippling the ability of startups to hire the talent they need. Because of this shortage, something important has changed in the recruiting process: the best people are rarely on the market and startups are having to learn how to develop a recruiting process to find and sell passive candidates. Recruiting has become a crucial startup skill — it’s no longer enough to build a great product a sales and marketing machine to sell it.
I recommend approaching recruiting as a funnel: sourcing at the top of the funnel, evaluating, and selling, closing and onboarding new hires at the bottom. I discussed the top of the funnel — sourcing in post 1 of this three part series, covering in-house recruiters, CEO involvement, building a brand and candidate experience.
In this post, we’ll discuss the middle of the funnel — selling and evaluating.
In the past, the middle of the funnel was all about evaluating the candidate. However, in today’s environment, a lot of the candidates you source will be happily employed and not looking to leave their current jobs. Consequently, I recommend you develop a process to keep nurturing and selling passive candidates to get some smaller number of them to the point where they are willing to talk. Often the first conversations will be more about selling them on why they should consider the job than about interviewing and evaluating them.
During this phase, a recruiter’s job is to schedule execs and others to do the selling and evaluating, collect feedback and manage communication flow back to the candidates.
At some point, your pipeline of candidates to nurture becomes too large to manage via spreadsheets. At this point it is extremely helpful to have a good modern SaaS recruiting tool such as Lever to manage the funnel. (Note–we are investors in Lever, so my view is biased.) However, we looked carefully at the other SaaS recruiting tools and concluded that Lever was the only one that was built around the recognition of this huge change, where almost all of the really important recruits are now passive candidates who are hard to source and require a ton of selling work. Other tools appeared to be developed around a different scenario, where there were tons of applicants applying to job postings.
Lever is equal parts CRM tool and Applicant Tracking tool. The CRM part helps the recruiter research and source passive candidates and manage nurturing in extended sales cycles. Lever allows the ability to grab any LinkedIn profile for a prospective candidate and drop it into the system with a single click. Automatic syncing of all external email correspondence makes sure the complete history of interaction with the candidate is known, which is important when there are multiple people communicating with a candidate.
If you are sourcing effectively, you will always have a set of interesting people who won’t be ready to leave their current positions. We recommend these prospects go into a nurturing bucket.
There is a good chance that somewhere down the road there will be a trigger that makes your top passive candidates open to looking. When that happens, you want to be top of mind.
Nurturing works best when it’s personalized and coming from the hiring manager. It could include emails sent around exciting company milestones, invites to company events, reconnecting for lunches from time to time, etc. This is one of the features you should be looking for in your modern SaaS recruiting tool–it should maintain a CRM-like database of inactive candidates and give you tools such as reminders to reconnect at regular intervals to maintain these relationships.
A key part of recruiting effectively is creating a structured interview process that evaluates whether the candidate has the necessary skills and cultural fit to be a good hire. My partner at Matrix, Dana Stalder, has written a blog post on a data-centric approach to interviewing, a specific skill where a lot can be learned from the very best.
Few founders and managers have had any training on the best way to conduct an interview and fail to ask the questions that get to the heart of whether a candidate possesses the key competencies.
In Matrix workshops, we spend a lot of time on interviewing and loosely follow The A Method for Hiring and TopGrading. We discuss how to incorporate three types of interviews into the evaluation process:
Reference checks are critical to validating what you’ve discovered during the interview process.
When hiring senior people, I have found references to be far more important than the interview.
Those who are new to hiring can be tempted to cut short reference checking after a good interview. Experienced recruiters know that is a huge mistake that can have costly repercussions. I can’t tell you how many candidates I’ve interviewed who appeared great in the interview, only to find there was a major flaw through reference checking.
The ideal reference check is from a trusted and calibrated source in your own network, who you are closer to than is the candidate. (Use LinkedIn to search for overlapping connections.) When this is not possible, we recommend candidates be asked to provide personal references from any of their former bosses you choose. (If they refuse, this is a major red flag that may indicate they have something to hide, which is something you’ll want to get to the bottom of.)
Knowing how to conduct a reference call is another important skill that is not obvious without some training. It’s easy to have the call led by the person giving the reference and not to cover the detailed validation of their achievements and attributes. This is another area Matrix focuses attention on during our recruiting seminars. Similar to the advice above for interviewing, we strongly recommend probing the exact details of what the candidate achieved while they were on the job which gets at factual details rather than relying on opinions of the candidate, which can easily be biased by personal friendships. Sometimes references can be reluctant to tell you negative things. One way to get at weaknesses is to ask them to rank the candidate against the best person they’ve ever worked with in that role. If they are not the best person, ask them to tell you what things the candidate would have needed to improve to be the best.
When checking references with people who are not known to you, I usually find it necessary to do a greater number of these to get at the real story. When I begin to hear consistent feedback and no longer learning anything new on each additional call, then I feel like I know the true story. In cases where you have specific concerns, it’s also extremely valuable to try to get blind references from people who were not on the candidate’s list of references. To get these, I’ve found a useful technique in telling the candidate’s reference that it is our policy to get blind references and to ask them for introductions to peers who worked alongside the candidate. These are best done at the candidate’s previous employers — asking this of their current employer could put them at risk.
For more on reference checking, I strongly recommend you read my fellow partner Josh Hannah’s blog post “Executive Hires: The Case for Extreme Referencing.”
If you missed the first post in this series on the top of the funnel — sourcing, you can find it here.
You can find the third and final post here: Part 3: Bottom of the Funnel — Closing and Onboarding. We walk through the bottom of the funnel — selling and closing and discuss how to onboard effectively to set new hires up for success and how to best utilize your investors throughout the recruiting process.
This post was originally published on forEntrepreneurs.com.
Follow us on Twitter: David Skok, @BostonVC and Matrix Partners, @Matrix Partners.
