Job Search Revolution

volume 4 • number 2

This is our last newsletter of the millennium so we thought it was fitting to take an in-depth look at three trends that are revolutionizing the job search.

The most profound and far-reaching of these is clearly technology, which Intel chairman Andy Grove calls "a rebuilding of the infrastructure." Two other trends - an increasing shortage of talent and shifts in employee motivation - are also significant. All these changes have implications that will affect the hiring process well into the next century.

One of those implications is even greater candidate mobility, and another is an increase in the speed with which candidates are interviewed and hired. Finally, effective interviewing techniques will be more important than ever in the years ahead.

Trend #1: Technology-Driven Change

Back in 1994, Jeff Taylor, then a 33-year-old ad agency executive, started an Internet site that was supposed to help link employees with employers. Job seekers could post their resumes for free and look through a job database; employers paid a nominal fee to access resumes or post job listings. Today that site, Monster.com, boasts a database of more than a quarter of a million jobs and 1.5 million resumes. But Monster.com is more than just another multi-billion-dollar web venture. It has also been the catalyst for an employment revolution.

In the five years since Monster.com began, close to 30,000 Internet job boards have been launched. Right now, at least 2.5 million resumes are available online, and more and more employers are using the Internet to find and recruit candidates. A year ago, only 17 percent of Fortune 500 companies were recruiting online; this year that number was 45 percent. For some companies the figure is even higher. Cisco Systems says it hires 66 percent of its workers and receives 81 percent of its resumes through the Internet.

These are not just entry or mid-level jobs, either. A number of top companies, including Motorola, Prudential, and Sony, are listing executive positions; one Motorola offering has a compensation package of over half a million dollars. And contrary to popular belief, the Net isn't only for techies; 65 percent of all online job seekers work in fields other than technology.

What's more, digital job search and recruitment is not only getting bigger, it's becoming much more sophisticated. Until recently, all job seekers had to wade through interminable listings on huge sites like Monster and CareerPath. Now, though, they can find thousands of niche sites, from the sublime (projectmanager.com; 6figurejobs.com) to the, well, less than sublime (funeralnet.com). They can even auction themselves off in Monster's new Talent Market, a concept that so far is generating more debate than actual jobs.

Employers are also benefiting from technology upgrades. For one thing, the playing field has become much more level; a small company can compete for talent right along with the national firms by sending its job postings directly into students' dorm room computers.

Corporate recruiters, too, are using technology to identify and source prospective employees in ingenious new ways. Known as e-recruiting, this approach is basically digital James Bond.

One particularly sneaky, though completely legal, technique allows users to "flip" a company's web site - that is, access pages not available through the site's home page. Recruiters can visit an unsuspecting employer's web site and find staff directories (sometimes with photos and contact information) and even organization charts. Recruiters also track prospective employees online, listening to what they say in Internet newsgroups and then approaching them via e-mail.

Meanwhile, the ultimate use of technology in job hunting may be just around the corner. Jeff Taylor, the man who started it all, envisions employers and employees setting up electronic relationships with each other long before job openings ever exist. Candidates, in effect, are always in the market, and the ideal job offer just a mouse click away.

Trend #2:
Demographic-Driven Change
Although there is no doubt that technology has forever changed the way people find jobs, trends in the labor market have also had a huge impact on the job search.

Most of those trends began in the 90s with a decade-long decline in the number of entry-level workers - approximately five million fewer than in the 1980s.

But it is not only new workers who are in short supply. McKinsey & Company predicts that the demand for executives will increase by about a third over the next 15 years. Yet the number of 35 to 44-year-olds, the age group that represents much of the future mid-to-senior level management pool, will actually decline by 15 percent between 2000 and 2015. In the past, similar shortfalls were offset by immigration and an influx of women into the workforce, but that isn't likely to happen now.

At the same time, corporate recruiters are confronted with an increasingly diverse pool of candidates, especially in high tech fields. Because fewer American students are earning degrees in computer science and engineering, for example, companies are hiring foreign nationals to fill key positions. This trend is clearly reflected in the numbers. In 1997, foreign nationals accounted for 11 percent of those receiving B.S. degrees in Computer Science or Electrical Engineering; 42 percent of those receiving Master's degrees; and 48 percent, or nearly half, of all Ph.D.s.

McKinsey points out that companies will continue to need more sophisticated and better educated workers to meet the challenges of this increasingly multicultural workforce as well as to stay competitive in a global marketplace.

Trend #3: Motivation-Driven Change

A third major change is in worker motivation. As Betsy Morris noted in a recent Fortune article, nearly every B-school student in the country has a bad case of web fever. But dot.comitis isn't just affecting MBAs; it's also striking law school grads, art history majors, and student teachers. Still, the infection is most noticeable at the top-tier business schools whose alumnae traditionally swell the ranks of consulting firms, investment banks, and other not.dot companies.

Now, though, many B-school graduates are opting for something other than the "blue-chip path:" they're trading a comfortable corporate berth for a risky but exhilarating ride with an Internet startup.

In 1995, for example, 38 percent of Harvard MBAs joined consulting firms, while 17 percent went into investment banking. In 1999, these numbers had shrunk to 29 percent and 12 percent respectively. On the other hand, 12 percent of Harvard graduates joined venture capital or high tech firms in 1995; this year, 32 percent did. Futhermore, an increasing number of MBAs are opting to start their own businesses - more than 50 in the class of 1999 alone.

At the same time, more and more old guard firms are losing personnel to startups. McKinsey & Company has seen its turnover rate increase from 17 to 20 percent in the last five years, primarily because of raiding by technology companies. Even established talent seems to find the assured future at an established firm less motivating than the opportunity to be part of a cutting-edge venture, not to mention a big IPO payoff.

A case in point - George Shaheen, former CEO of Andersen Consulting, left his firm, with its $9 billion in revenue, to join an online grocery delivery business whose revenue was almost zero. A dumb move? Not really. Andersen's compensation could potentially top $100 million if the online company's IPO succeeds.

An added plus for adventurers like Shaheen is that in the unlikely event their gamble doesn't pay off, a stint with a startup still looks good on a resume: it's not failure, it's "experience."

Still, the blue chip firms aren't taking defections of this sort lightly. For an idea of how they're meeting the startup challenge, see our article, Blue Chips Fight Back . . . Fast. Clearly, the establishment doesn't believe that the shift in employee motivation is a temporary fad. Neither do we.

Implication #1: Instant Mobility

Instant Internet access to thousands of job listings. Job seekers who increasingly prefer "risky business" to "business as usual." A tight labor market. Given all this, compulsive job hopping was probably inevitable. Inevitable or not, though, the fact is that people are switching jobs faster and more frequently than ever before, sometimes literally overnight.

It is now perfectly possible for a candidate to have a bad day at work, find a better job online that evening, interview the next day, receive an on-the-spot offer, and then start a new, entirely different job a few days after that. Since candidates' resumes are "in play" at many different web sites, and since they probably feel little loyalty to employers they have only interviewed with, job seekers are susceptible to new offers until they actually step through the door on their first day of work. And even then hot prospects aren't immune to recruiters; some employers admit to pursuing candidates for up to six months after they've accepted another offer.

Cisco Systems takes this one step further with its "just-in-time" recruiting. By keeping track of, and wooing, talented people on a continuing basis, Cisco can contact them whenever they're needed, no matter how far down the road that turns out to be.

Meanwhile, Korn/Ferry International, the largest executive recruiting firm in the world, offers a program they call "Future Step" recruiting. Their ads aimed at passive job seekers read, "It's not what you know, it's who knows you."

Implication #2: Need for Speed

For years, people in the executive search business have referred to the best candidates as "perishable commodities." That goes double today. Top prospects come and go so quickly in the new, warp speed world of recruiting that even a day's delay can cost companies their most desirable candidates. One Los Angeles-based executive recruiter says, "If a company doesn't call top candidates within 72 hours, it probably shouldn't even bother."

And this doesn't apply only to experienced candidates with highly-prized skills. These days it's not unusual for new college graduates to have three, four, five, or more job offers. Frequently those offers are made within hours of the interview. To entice candidates into accepting quickly, more companies are resorting to "exploding offers," which give the candidate a minimal amount of time to respond before the offer is withdrawn. A few firms even give candidates bonuses of as much as $5,000 just to not interview with their competitors.

But most companies, especially those dealing with executive candidates, would be better served by shortening the time they spend interviewing in the first place. Many organizations still require candidates to go through rounds of interviews over the course of several visits. They use the first round of interviews simply to determine if they're interested in a candidate. The qualifying candidates then return again and again to be "seen" by other groups. This cycle can drag on for weeks or even months, and by then most candidates have accepted other offers.

At a time when speed really does mean the difference between success and failure, some companies have learned to condense their interview process into a single in-firm visit. But to do that they have to have confidence in the judgment of the small group making the decisions.

Implication #3:
Effective Interviewing
On the other hand, although zipping through the interview in overdrive can help lure and secure top talent, it also makes the possibility of mistakes more likely. A lot of companies, especially startups, admit to skimping on reference checks for instance.

Startups want people with brains and ability and aren't especially concerned about academic credentials or references, but most established firms are. And they should be, because resume fraud is rampant. Estimates of fraud range from 30 to 90 percent; the American Psychological Association claims at least 67 percent of all job seekers embellish on their resumes.

Whatever the actual numbers, nearly everyone agrees that resume deceit has increased dramatically in the past ten years, even among those who have the least reason to lie. That includes people like Lotus president Jeffrey Papows, who lied about his Ph.D. from Pepperdine, his martial arts skills, his adventures as a Marine aviator (he doesn't know how to fly), and his parentage (Papows claimed to be an orphan, but his parents are alive and well).

Job seekers also falsify their credentials so they won't be rejected by electronic screens. They learn how to load their resumes with all the right words and acronyms, true or not, which means that unqualified applicants are more and more likely to be called for interviews. This, in turn, makes the need for effective interviewing techniques even more critical.

Furthermore, employers have to contend with increasingly sophisticated prospects who know the kinds of questions they're likely to be asked in a behavioral interview and so come armed with prepared answers. Helping job seekers prepare even more thoroughly is a new book written by one of the leading authorities on behavioral interviewing. His book and others are full of techniques for developing and memorizing "skill benefit" statements to use in a behavioral interview.

Unfortunately, the problem is not just well-coached candidates, but "nonauthentic" ones, a topic covered in a previous issue of our newsletter and addressed in the current issue of TRAINING magazine. No longer content to simply use their own experience to best advantage, candidates are now "creating" examples of behavioral qualities they know they'll be asked about. An interviewing methodology to deal with this problem is critically needed right now. Contact us if you want to know how we can help.

One final word - while it's essential to hire top prospects quickly, interviewers can't let speed get in the way of careful screening and evaluation of applicants.