The Backdoor Reference Check

Great Scott!!! The new-hire we thought would make us look golden to senior management, just turned out to be a total dud!

If only we had a DeLorean so we could crank that baby up to 88 mph, go back in time…

…and implore our younger-self to do just a little more due diligence.

But since since we haven’t invented time travel yet…

Let’s use the next best thing McFly:

The backdoor reference check

Notice I said “backdoor.” The problem with contemporary reference checks is that they have long since lost value in the recruiting process and have become nothing more than a “check the box” exercise.

Let’s face it. The reference list given to you by a candidate is no better than a list of paid endorsements. Their references have been told what to say, and will always put the candidate in the best possible light.

Sure you might get an occasional negative comment, but they’re usually only slightly negative as to make the reference seem more legitimate.

What started many years ago as a practice to validate a candidate’s experience and accomplishments, has become over the years a zero-value, time-wasting exercise.

This is why most hiring mangers don’t take them seriously anymore.

Why else would they tell an outside recruiter to do a couple references for the file, AFTER the hiring decision has been made?

Considering that nearly 1 out of 2 hires made are mis-hires…

(And that is legitimately true…look up LeadershipIQ’s huge study on this)

Why wouldn’t you want to give yourself every possible edge in the interview process?

Because regardless of how flawless the candidate interview performance was, reaching out to relevant external observers that haven’t been proper by the candidate will put you in a better position of assessing whether the candidate will be successful.

That’s not to say that you shouldn’t call the references given to you by the candidate. But take everything they say with a grain…no a BOULDER, of salt.

Instead of relying on what the candidate gives you, run a quick search on LinkedIn, and track down the candidate’s past direct managers.

Call them, confidentially of course, and ask them to assess their past employee’s experience.

Because these people weren’t expecting a reference call, nor were they prepped with talking points, I guarantee you’ll get an infinitely more honest and useful response.

…and with the advent of LinkedIn, it’s becoming more and more easy to find the key references you want to talk to.

I’m often asked “Are back door references are ethical?”

Would asking a mutual acquaintance for their opinion on a candidate you’re interviewing be unethical? Not at all. With LinkedIn, our professional world is shrinking.

There’s a better than even chance that you know, or at least are connected to, people who have valuable information on your candidate.

But even if you cannot find a mutual connection, reach out anyway. Just don’t forget to stress the confidential nature of the candidate’s job search, and of the call itself.

Just keep in mind however, particularly with passive candidates, you cannot put them at risk with their current employer. Meaning, do not call the candidate’s current employer.

It should go without saying, but sadly I’ve seen it happen, and it’s not pretty.

And before you ask; yes, backdoor references are 100% legal.

So make those backdoor references on every hire, so you don’t have to travel back in time to save your hide…

“If my calculations are correct, when this baby hits 88 miles per hour… you’re gonna see some serious ____.”

~ Dr Emmett Brown, Back To The Future

Call Me Crazy, But Turnover On Your SAP Team Can Be Good

Call me crazy, but I think turnover on your SAP team can be good.

Jack Welch agrees…

Sure, ask any HR consultant about the cost of turnover, and they’ll tell you that the true cost of turnover can be 2-3X’s the cost of that employee’s annual salary.

And I agree. Turnover’s expensive. You’ve got the the hard recruitment costs, decreased productivity and morale, training and on-boarding costs, lost institutional knowledge…

I could go one, but you get the point.

To make things even worse, a new study by Ladders has found that 67% of workers earning over $100,000 see themselves quitting in the next six months.

Think about that number for second… 67%. That is a full 2/3’s of your team who could see themselves (potentially) walking into your office and handing you a resignation letter in the next six months.

That’s a nightmare scenario for a lot of leaders.

So if 2/3’s your team will consider leaving in the next 6 months, and that the cost of turnover is 2-3X’s the amount of an employee’s annual salary, in an industry (tech) with the highest turnover rate out of any business sector (and that is verifiably true), it may seem like the sky is falling.

But know this. Turnover is good.

Or at least, the right turnover is good.

Executives are always sounding off about how bad turnover is, but is it really? I think they say this blanket statement because it’s just such widely-held, sacred cow belief that very few leaders are willing to publicly challenge.

I’ve always thought that sacred cows make the best burgers.

The way I look at it, turnover costs are significant, but they still pale in comparison to the cost a misfire can have on your team.

If Homer Simpson were on your team, would you really be upset if he were to walk in one day and hand you a resignation letter?

Admit it. There have been times in your leadership career where you’ve had certain employees who, if they handed you a resignation letter, you wouldn’t miss. In fact, you’d breath a sigh of relief, knowing that you could now work to replace them with a top-performer.

Take a lesson from one of my business idols, Jack Welch (of General Electric fame):

“The team that wins fields the best players. A leader’s job is to sweep away the action blockers, the change resisters, the process obsessives … these people are nothing more than self-appointed, self-righteous scolds. They drain energy,” Welch wrote in his 2015 book “The Real Life MBA.” Even if an employee isn’t in the bottom 10% of performers, know when they’re dragging others down.”

My message is simply this…your job as a leader is to hire the best people, and get out of their way.

…and the ones who want to jump ship? Unless they’re a top-performer, show them the door.

Ready for a true test of your SAP leadership? Hire a Rockstar...

Ready for a true test of your SAP leadership? Hire a Rockstar…

One of the earliest lessons I learned in the headhunting game was that people don’t work for jobs.

People work for people.

People don’t quit their jobs. They quit their leaders.

B and C players don’t mind working for other B and C players. In fact they prefer it, because it allows them to fly under the radar.

But Rockstars want to work for Rockstar leaders.

Rockstars are a different breed. They are thoroughbreds, and working for B or C-player managers are anathema to them.

They’re going to get frustrated and lose their inspiration for their work. They’re going to feel held back, and when Rockstars built for speed are held back, they leave. This is why exiting weak managers should be a new executive’s mission #1 when taking over the reins of an organization.

If you’re new to leadership, I’ll give you a piece of advice that I wish I had learned earlier in my own leadership career:

Rockstars will keep you honest. If you want to be in the Rockstar business, you better bring your A-game, and you better be constantly improving. Rockstars will 100% keep you accountable, and will call you out on your *you-know-what*. They
will make you a better leader over time, but you need the stomach for radical honesty.

Hire those that are so good, it’s intimidating. Rockstars will force you out of your comfort zone, and stretch your leadership capacity.

They will expose you for who you really are. A king or a pawn…

Do You Think You'll Find Your Next SAP Rockstar 'On The Streets?'​ Think Again...

Ahhh, the allure and the mystique of the passive candidate. That ‘Unicorn Candidate’ that every search firm pontificates about on their websites, even though they post all their jobs online like everyone else…

Everyone says the passive candidate is better, but is he really?

Consider this, according to LinkedIn’s own research, only 18% of professional employees are actively seeking new opportunities and applying to job postings, while 20% of employees are what they call super-passive, meaning they are not interested in opportunities at all.

That leaves 62% who are open to considering a new opportunity, but are not actively looking, and as a result, not applying to your job posting, or talking to the 5 contingency recruiters you have on the job.

(Ever wonder why you always get the same people from multiple recruiting agencies? This is 100% why).

BTW this 62% number is awfully close to Glassdoor’s new study saying 67% of professionals making $100K or more are considering leaving their employer in ethics next 6 months. Gotta love it when you see consistency across these studies…

These are where the Rockstars live, in that roughly 2/3’s of the candidate population that never see your job posting, or to put to more accurately, are bombarded with so many job postings that it all just becomes “white noise” in their world.

They’re numb to it, and they’re doing so well in their current role they just don’t see the value in applying for a cookie-cutter role and dealing with the stress of a job search. They’ll pass thank you very much.

But why are passive candidates so valuable?

  • They’re qualified: They’re busy knocking the cover off the ball for their employers, They’ve proven themselves, and continue to prove themselves every day, which is why their employers work hard to keep them off the active market.
  • They’re impactful: They’re 120% more likely than active candidates to want to make an impact, 33% more likely to want challenging work (see my post about self-actualization in the comments), and they don’t need to be micro-managed; they’re 17% less likely to need skill development and 21% less likely to need recognition.
  • They’re motivated: When you convince a passive candidate to make the switch to your company, they saw something in you that they didn’t see with their prior employer. They’re not accepting your offer because it was the first one on the table. In fact, when they make a switch they typically have something to prove and want to demonstrate you didn’t make a mistake in reaching to get them.
  • They’re not BS’ing you: Passive candidates have a job. They don’t need you, and they’re not desperate to leave their employer, or desperately trying to move out of the unemployed ranks. Because of this, you will typically find them to be more honest and frank on their resumes and during the interview process.

Simply put, while not impossible, it’s rare to find a Rockstar on the streets.

So when SAP leaders have always relied on job postings and contingency recruiters to find their talent, they’ve never been called to task on what tends to be very weak Employer Value Propositions. They haven’t needed one when so many active candidates will take the first half-ways decent offer they get.

Passive candidates are harder to reach, harder to sell, and they expect more out of an employer.

But they deliver, In spades.

…and this is why restricting yourself to active candidates is the #1 cause of the coin-flip of hiring…

(46% of all hires turn out to be mis-hires…and this is verifiably true)

But here’s where it becomes even more challenging,

Also according to LinkedIn, the 18% of professional employees who are actively looking tend to be those with less tenure (2-3 years on the job) and at a more junior level. That means that the active candidate pool is made up of a higher proportion of junior staff who are not as likely to stay and grow with an organization..

In contrast, only 13% of executive leadership are actively looking vs 18% of managers and 20% of individual contributors. So the more impact your new employee will have on an organization (by virtue of level of position), the less likely you will find them actively on the market and the harder you will have to work to get them.

That’s why, when I get a new client who wants the moon but when asked what their Employer Value Proposition is, they either don’t have one or they direct me to their career site where I read things such as:

“We are a fun and engaging place to work” 

“We have on-site daycare” 

“We have flexible summer hours” 

“We have casual Friday” 

“We really value our employees” 

Etc, etc, blah, blah…

It’s like hearing nails scraping on a chalkboard.

If Hawaiian shirt Friday is your go-to value-prop, you may need to re-think your value-prop!

All the benefits you list on your career page are important, sure…but for those Rockstars who already have a job, and likely are already getting all of these things, how are you going to attract them to your opportunity?

Strategically rethink who you want to hire, and how you plan to attract them. It’s not easy, but it’s worth the work.

So remember, while passive candidates are the holy grail, no matter how much your recruiter says they only recruit in the passive candidate market, if they don’t challenge you…

…if they don’t push you to craft a real compelling reason to attract those ‘Unicorn Candidates,’ that’s a sure sign they’re trying to sell you a spray-painted horse.

The State Of The SAP Talent Market

Jack Welch, in building General Electric to become one of the most respected companies in the world, famously spent 50% of his time on talent issues.

Why were talent issues such a focus of his?

Because he believed despite a company’s technological innovation, intellectual property, or brand recognition, talent alone is the only true sustainable differentiator that really matters.

Larry Bossidy (Jack’s most well-known protégé, CEO of AlliedSignal, and incidentally one of my business heroes) famously said:

“Nothing our company does is more important than hiring and developing superior talent.”

To be a great leader, the quality of the team supporting should be your number one concern. But as a hiring manager who is judged by the quality of the team you can field, you know that finding SAP talent is challenging, let along hiring and retaining the top 10%.

The market has changed; candidates are in high demand and traditional hiring methods are becoming outdated. Ever more increasingly, the top SAP talent are no longer hanging out on job boards. It’s not that they’re not interested in opportunities, but it’s because of the constant white noise created by thousands of recruiters copy / pasting their clients’ job postings, and because of the negative candidate experience of submitting their resumes to a black-hole portal never to be heard from again.

They don’t respond to cold calls or InMails from recruiters they have no relationship with. They find this approach off-putting and damaging to the hiring company’s employment brand. One search on LinkedIn for the phrase “recruiters, do not contact” bears this out. It’s no wonder given that recruiters make up the largest demographic on the platform.

Almost 100% of recruiters still rely on job boards, LinkedIn, and their email lists as their main source of candidates. And with only 18% of the SAP talent pool actively seeking a job at any one time, 82% of the talent pool can remain untouched and unaware of your current or future hiring needs. Given that 86% of the most qualified candidates (the top-performers) are already employed and not actively seeking a new job, relying on these outdated recruitment methods leaves hiring managers with limited access to the top 10% of the candidate market.

It’s this lack of access, combined with a weak Employer Value Proposition to attract top-performers, a haphazard interview process that can’t screen the Rockstars from the wanna-bees, and no thought given to a retention program to keep the best people from being headhunted away by guys like me…

…means that SAP Leaders’ operations are severely impacted, their top-talent are going to their competitors, and they have to settle for hiring the best of the worst.

The mark of a great leader is the ability to field a team of top-performers.

…so if you want to be a Rockstar Leader, then you need a team of Rockstars supporting you.

You need a proven and trusted SAP recruitment expert who you can retain to deliver top-performers who can give you Rockstar results. Entrusting your SAP recruitment for your most business-critical positions to an expert means you can concentrate on what you do best, delivering value to your organization that has entrusted you with it’s success.

To avoid this article sounding like a self-promotional pitch, do know that there are quality SAP recruiters out there, not just me (although you’ll find no one quite approaches SAP recruitment the way we do here at The Kineta Group, but I digress).

I wrote about this in my What Jay-Z and Beyonce Have To Say About Your Candidate Problems article, but the concept of throwing your urgent and business-critical SAP position to 6 contingency recruiters because you think you’ll get 6 X’s the coverage will be an exercise in futility, and will likely result in a mis-hire.

Interview your potential search partners, as strictly as you would an employee for your own company, because they will have a direct impact on you, your team, your company, and ultimately your own career success as a leader in the SAP world.

What Beyoncé and Jay-Z Have To Say About Your Candidate Problems

Do you ever wonder why it feels like your recruiter represents the candidate, even though you’re the one footing the bill?

“Every damn candidate they send me looks the same.”

“Why aren’t I seeing top performers?”

“I haven’t heard from my recruiter in 2 weeks. Do they have any more candidates?”

“Why do I keep getting the same candidates from different recruiters?”

“Why didn’t my recruiter disclose that red-flag?”

“Wait! Why’s the recruiter representing the candidate? I’m paying the F#&%ing bill!”

To paraphrase the immortal one:

“If you’re havin’ candidate problems, I feel bad for you, son / I got 99 problems, but a recruiter ain’t one…”

You see, the problem isn’t the recruiter. The entire framework is flawed and benefits no one.

The framework within which external recruitment agencies work is fundamentally flawed.

The traditional contingency model is based on volume and speed, while lacking in quality. It’s KPI-driven and based on metrics, with recruiters usually having to work on 10 roles to just to fill 1. This means, in essence, they’re working for free 90% of the time.

This model encourages recruiters to act more like candidate brokers rather than recruiting agents working for their clients. They’re incentivized to gather the best candidates they can easily get (usually active candidates), and market them to as many companies as possible to try to earn a fee, including their clients’ competitors.

One of the dirty secrets that recruiters won’t tell you is that they’re sending your potential hires to the companies you compete with, causing unnecessary bidding wars and potentially meaning you having to start the whole search process again.

We are all trained to do this!

Here’s how it really works… Contingency recruiters don’t typically recruit in the passive candidate marketplace, because they only close 10-20% of job orders they work on, meaning they can’t afford to do a true deep dive on every search.

This results in the candidates you receive from them, on average, being more active than passive (recruited) candidates. These are candidates who are actively seeking a new position, either because they are unemployed, under-performing in their current role, or have a life event that’s forcing their job search.

(Obviously, there is nothing wrong with being an active candidate, but one must realize they’re active for a reason).

In other words, they’re applying for every job posting they can find, many of which are contingency recruiter job postings (copy / pastes of boilerplate job descriptions with the client name removed).

You can see this if you do a little digging and find a company posting a job, and then within 2-3 days multiple recruiting agencies post up the SAME JOB on the SAME JOB BOARDS. They’re counting on information asymmetry to make a placement.

Here’s where it gets bad. When a contingency recruiter secures an active candidate from a job posting, they now view that person not as a candidate for their client, but as a lead to a potential sale.

That contingency recruiter, whom you may have a great relationship with, and who told you that their candidate was a “slam-dunk”…that they’re “all-in”…will submit that candidate to as many other clients as possible, even to your direct competitors.

Why? Because every recruiting trainer tells them to. It’s called the Rule of Three: submit three candidates to three clients to maximize the odds of a placement. While the numbers don’t play out exactly like that, I’m sure you get the point.

When you have no skin in the game, because you throw your opening to multiple contingency recruiters, you create a scenario whereby those recruiters have zero obligation to you.

This is because you were never an actual client. Until money changes hands, regardless of what a contingency recruiter will tell you in an attempt to get a job order up on the board, there is no real client-recruiter relationship, and that recruiter will submit your best candidates to as many companies as possible.

Why wouldn’t they? It would be unfair and unrealistic to expect anything otherwise.

Like Beyonce so famously said in the song, “Single Ladies:”

“If you liked it, then you should have put a ring on it!”

It’s not the recruiter. Don’t expect monogamy unless you’re willing to give it in return.

If you want to de-risk your hire, and maximize your odds of not only identifying and attracting, but actually landing a Rockstar candidate the best time you have a business-critical role, make sure you work with an engaged / retained recruiter you trust. By putting even a small portion of the fee down up-front, you are effectively locking that recruiter in, obligating them to actually do a deep-dive into the passive candidate marketplace.

They’re also much better trained in transforming your opening from a boring job description to a ‘no-brainer’ Employer Value Proposition, and will also usually include a Right-of-First-Refusal clause right into their agreement, stipulating that they will not send your candidates to any other clients during the term of your search.

Otherwise, all you’re doing is the equivalent giving your taxes to 5 accountants, and telling them all to compete with each other and do your taxes for free. You’ll pay the one that finishes the job first.

Kinda scary when you think about it like that…

Bottom-line, if you want a Rockstar hire, work with a Rockstar recruiter and show them the love. They’ll work their butt off for you, and they’ll be committed because you put a ring on it…