Candidate Submittal is an alternative recruitment process offered by companies whereby the candidate submittal agency provides 'coaching' for the job seeker with respect to his/her job application. With candidate submittal, the job seeker usually sources their own prospective job opportunity ( eg. on Job Boards, Company Websites, Newspapers etc... ). The job seeker then applies for the job through the candidate submittal agency, which is usually run by ex-recruitment professionals or other industry veterans.
The candidate submittal service will often vett, edit or enhance the job seekers application before passing it on to the employer. The service will then act on behalf of the job seeker in the negotiations and would also may help prepare the job seeker for an interview process or other pre-interview engagement. They would also provide any relevant feedback to the job seeker with regards to his/her application.
Once the job seeker is accepted by the employer, the candidate submittal agency then may then refund a portion of the sign-on fee back to the job seeker . Usually in recognition of the fact that the candidate has completed some of the recruitment process themselves by sourcing their own jobs.
The Market :
With up to 80% of companies generally expecting to encounter difficulties in the recruitment process from year to year. It's obvious that there exists a market for broad recruitment solutions. Companies will generally employ a number of different methods to fill their recruitment needs including employee referral, company websites, recruitment agencies and job boards. Generally, it's found that around 27.1% of recruitment is done through employee referral - making it the largest source of company recruitment , with standard recruitment making up around 5.2% of overall recruitment.
The future of the recruitment industry is generally considered by industry analysts to be in 'Career Networks' , that can provide employee's with the backup necessary to optimize their job searching process - including having access to a 'career coach', utilizing niche recruitment channels, building a profile and receiving positive feedback.
Monday, August 25, 2008
Internal Employee Referral Schemes
Referral recruitment can be owned and managed internally by the recruiting organisation. Many companies are now finding Employee Referral Schemes can successfully complement their existing recruitment methods. Job vacancies are advertised on a company intranet site and existing employees are encouraged to find suitable candidates from their friends and acquaintances and refer them to the recruitment process. If a referral is successful, the reward or bonus is typically paid after the applicant has been working for 3 months or more.
For graduate / entry level positions, employee referral schemes in the UK typically offer c£3000 reward, though this varies by company and industry with many bonuses starting around £500. Experienced hires can earn rewards as high as 10% of the starting salary depending on the industry and the company’s employee referral policy. Employee Referral Bonus is a top Recruiting & Retention Tactics according to Workforce Recruiting magazine, August 12, 2004. Employee referral schemes offer a cost-effective means of attracting applicants and avoiding the need for advertising or [[employment agency] fees. Moreover, new recruits who have been recommended by existing employees often come to the company with more realistic expectations and can provide a better cultural fit.
However, there are a number of potential drawbacks. One of the greatest concerns tends to be that relying too heavily on employee referrals could limit diversity in the workplace, with new staff recruited in the likeness of existing employees. But, provided that there is already a diverse workforce in place this ceases to be such an issue.
According to the Chartered Institute of Personnel and Development's 2004 recruitment and retention survey, which showed more than eight out of 10 employers experienced recruitment difficulties, 38% of UK employers used employee referral schemes as a way of finding staff. This was up 4% on the previous year. Concerns that the policy will undermine efforts to increase diversity (why ask a largely white workforce to help in the recruitment of new staff, when we know even professional recruiters tend to employ people in their own image?) have, so far, been allayed.
As employee referral policies and schemes mature their usage is spreading to cover organisations of all sizes and all industries, not just blue chip. Cost-effective web based solutions are emerging specifically designed to maximise a company’s referral recruitment through their own internal employee referral scheme.
Organisations will develop their own in house process and employee referral policy to track employee referrals. Alternatively they may use a third party recruitment technology company to provide an application tracking system (ATS) that supports employee referral tracking. Early web 2.0 companies such as the CareerMole and Insiders Referral Network, were launched to cater for this demand.
For graduate / entry level positions, employee referral schemes in the UK typically offer c£3000 reward, though this varies by company and industry with many bonuses starting around £500. Experienced hires can earn rewards as high as 10% of the starting salary depending on the industry and the company’s employee referral policy. Employee Referral Bonus is a top Recruiting & Retention Tactics according to Workforce Recruiting magazine, August 12, 2004. Employee referral schemes offer a cost-effective means of attracting applicants and avoiding the need for advertising or [[employment agency] fees. Moreover, new recruits who have been recommended by existing employees often come to the company with more realistic expectations and can provide a better cultural fit.
However, there are a number of potential drawbacks. One of the greatest concerns tends to be that relying too heavily on employee referrals could limit diversity in the workplace, with new staff recruited in the likeness of existing employees. But, provided that there is already a diverse workforce in place this ceases to be such an issue.
According to the Chartered Institute of Personnel and Development's 2004 recruitment and retention survey, which showed more than eight out of 10 employers experienced recruitment difficulties, 38% of UK employers used employee referral schemes as a way of finding staff. This was up 4% on the previous year. Concerns that the policy will undermine efforts to increase diversity (why ask a largely white workforce to help in the recruitment of new staff, when we know even professional recruiters tend to employ people in their own image?) have, so far, been allayed.
As employee referral policies and schemes mature their usage is spreading to cover organisations of all sizes and all industries, not just blue chip. Cost-effective web based solutions are emerging specifically designed to maximise a company’s referral recruitment through their own internal employee referral scheme.
Organisations will develop their own in house process and employee referral policy to track employee referrals. Alternatively they may use a third party recruitment technology company to provide an application tracking system (ATS) that supports employee referral tracking. Early web 2.0 companies such as the CareerMole and Insiders Referral Network, were launched to cater for this demand.
Referral recruitment
Referral recruitment is a process whereby vacancies are promoted and filled by recommendations rather than by traditional methods such as direct classified job advertisements or by employing a headhunter. Proponents of this recruitment method claim that since each candidate comes with a personal recommendation behind them, the applicants are likely to be better suited to the job and the applicant already has a referee.
Many companies offer incentives to the referee, usually a monetary fee. A potential downside of referral recruitment is that these incentives can lead to candidates inventing an online alter ego for themselves to claim the reward or for them to contact a friend and split the reward.
The key advantage of referral recruitment is that it allows recruiters to reach passive candidates, those who are not actively looking for a new job but are sometimes amongst the most prized employees.
Many companies offer incentives to the referee, usually a monetary fee. A potential downside of referral recruitment is that these incentives can lead to candidates inventing an online alter ego for themselves to claim the reward or for them to contact a friend and split the reward.
The key advantage of referral recruitment is that it allows recruiters to reach passive candidates, those who are not actively looking for a new job but are sometimes amongst the most prized employees.
Reduction in Recruitment Expenditure
Employee referral scheme’s empowers existing employees – the people best placed to recruit for their team and company – to screen, select and refer only the best candidates to the recruitment process. This eliminates the often considerable cost of third parties service providers who would have previously conducted the screening and selection process
The costs of operating an employee referral scheme extends to the cash bonus’ paid to employees and internal promotion and administration, the total of which is considerably lower than the expense of recruiting using traditional recruitment consultants, headhunters and online recruitment methods
As candidate quality improves and interview to job offer conversion rates increase the amount of time spent interviewing decreases meaning the company’s Human Resources headcount can be streamlined and be used more efficiently. Marketing and advertising spend decreases as existing employees source potential candidates from the existing personal networks of friends, family, acquaintances and associates.
The opportunity to improve candidate quality, ‘fit’, and retention levels, while at the same time significantly reduce recruitment expenditure has seen the emphasis employers place on increasing the volume of recruits by employer referral increase dramatically. However, there are number of obstacles to achieving the desired increase:
* An employees social network is limited – only a small proportion of the network may be suitable for referral
* Recruiting from an employee’s limited social network may compromise the diversity of the workforce
* Actively referring candidates increases an employee’s workload and may be detrimental to their main responsibilities
* The best and most relevant candidates may not be acquainted with an existing employee of the company and therefore cannot be recruited via the referral scheme
An employee referral scheme is only as good as the volume and quality of candidates applying through the channel.
The costs of operating an employee referral scheme extends to the cash bonus’ paid to employees and internal promotion and administration, the total of which is considerably lower than the expense of recruiting using traditional recruitment consultants, headhunters and online recruitment methods
As candidate quality improves and interview to job offer conversion rates increase the amount of time spent interviewing decreases meaning the company’s Human Resources headcount can be streamlined and be used more efficiently. Marketing and advertising spend decreases as existing employees source potential candidates from the existing personal networks of friends, family, acquaintances and associates.
The opportunity to improve candidate quality, ‘fit’, and retention levels, while at the same time significantly reduce recruitment expenditure has seen the emphasis employers place on increasing the volume of recruits by employer referral increase dramatically. However, there are number of obstacles to achieving the desired increase:
* An employees social network is limited – only a small proportion of the network may be suitable for referral
* Recruiting from an employee’s limited social network may compromise the diversity of the workforce
* Actively referring candidates increases an employee’s workload and may be detrimental to their main responsibilities
* The best and most relevant candidates may not be acquainted with an existing employee of the company and therefore cannot be recruited via the referral scheme
An employee referral scheme is only as good as the volume and quality of candidates applying through the channel.
Employee referral
Employee referral is an internal recruitment method employed by organisations to identify potential candidates from their existing employees social networks. An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidates from their social networks. As a reward, the employer typically pays the referring employee a referral bonus. Recruiting candidates using employee referral is widely acknowledged as being the most cost effective and efficient recruitment method to recruit candidates and as such, employers of all sizes, across all industries are trying to increases the volumes they recruit through this channel.
Proponents of employee referral schemes claim the benefits to be an improved candidate quality, ‘fit’, and retention levels, while at the same time delivering a significant reduction in recruitment expenditure.However, there are a number of potential drawbacks. One of the greatest concerns tends to be that relying too heavily on employee referrals could limit diversity in the workplace, with new staff recruited in the likeness of existing employees. But, provided that there is already a diverse workforce in place this ceases to be such an issue.
According to the Chartered Institute of Personnel and Development's 2004 recruitment and retention survey, which showed more than eight out of 10 employers experienced recruitment difficulties, 38% of UK employers used employee referral schemes as a way of finding staff. This was up 4% on the previous year.
Proponents of employee referral schemes claim the benefits to be an improved candidate quality, ‘fit’, and retention levels, while at the same time delivering a significant reduction in recruitment expenditure.However, there are a number of potential drawbacks. One of the greatest concerns tends to be that relying too heavily on employee referrals could limit diversity in the workplace, with new staff recruited in the likeness of existing employees. But, provided that there is already a diverse workforce in place this ceases to be such an issue.
According to the Chartered Institute of Personnel and Development's 2004 recruitment and retention survey, which showed more than eight out of 10 employers experienced recruitment difficulties, 38% of UK employers used employee referral schemes as a way of finding staff. This was up 4% on the previous year.
Recruitment Process Outsourcing
Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.
To quote the Recruitment Process Outsourcing Association, "Recruitment Process Outsourcing is when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the on-boarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance."
On the other hand, occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example the service provider is "a" source for certain types of recruitment activity. The biggest distinction between RPO and other types of staffing is Process. In RPO the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.
To quote the Recruitment Process Outsourcing Association, "Recruitment Process Outsourcing is when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the on-boarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance."
On the other hand, occasional recruitment support, for example temporary, contingency and executive search services is more analogous to out-tasking, co-sourcing or just sourcing. In this example the service provider is "a" source for certain types of recruitment activity. The biggest distinction between RPO and other types of staffing is Process. In RPO the service provider assumes ownership of the process, while in other types of staffing the service provider is part of a process controlled by the organization buying their services.
History Of Recruitment Process Outsourcing
While temporary, contingency and executive search firms have provided staffing services for many decades, the concept of an employer outsourcing the management and ownership of part or all of their recruiting process wasn't first realized on a consistent basis until the 1970s in Silicon Valley's highly competitive high tech labor market. Fast-growing high tech companies were hard-pressed to locate and hire the technical specialists they required, and so had little choice but to pay large fees to highly specialized external recruiters in order to staff their projects. Over time, companies began to examine how they might reduce the growing expenses of recruitment fees while still hiring hard-to-find technical specialists. Toward this end, companies began to examine the various steps in the recruiting process with an eye toward outsourcing only those portions that they had the greatest difficulty with and that added the greatest value to them. Initial RPO programs typically consisted of companies purchasing lists of potential candidates from RPO vendors. This "search/research" function, as it was called, generated names of competitors' employees for a company and served to augment the pool of potential candidates from which that company could hire.
Over time, as business in general embraced the concept of outsourcing more and more, RPO gained favor among Human Resource management: not only did RPO reduce overhead costs from their budgets but it also helped improve the company's competitive advantage in the labor market. As labor markets became more and more competitive, RPO became more of an acceptable option. Furthermore, through the advent in the 1980's and 1990's of human resources outsourcing (HRO) companies that began taking on the processes associated with benefits, taxes, and payroll, companies began recognizing that recruiting--a significant cost of HR--should also be considered for outsourcing. In the early 2000's more companies began considering the outsourcing of recruitment for major portions of their recruiting need.
There have been fundamental changes in the US labor market that serve to reinforce the use of RPO as well. The labor market has become increasingly dynamic: workers today change employers more often than in previous generations. De-regulated labor markets have also created a shift towards contract and part-time labor and shorter work tenures. These trends increase recruitment activity and may encourage the use of RPO.[citation needed] It should also be noted that even in slower economic times or higher unemployment, RPO is still considered by companies to assist in an increasing need to screen through a larger candidate pool.
Over time, as business in general embraced the concept of outsourcing more and more, RPO gained favor among Human Resource management: not only did RPO reduce overhead costs from their budgets but it also helped improve the company's competitive advantage in the labor market. As labor markets became more and more competitive, RPO became more of an acceptable option. Furthermore, through the advent in the 1980's and 1990's of human resources outsourcing (HRO) companies that began taking on the processes associated with benefits, taxes, and payroll, companies began recognizing that recruiting--a significant cost of HR--should also be considered for outsourcing. In the early 2000's more companies began considering the outsourcing of recruitment for major portions of their recruiting need.
There have been fundamental changes in the US labor market that serve to reinforce the use of RPO as well. The labor market has become increasingly dynamic: workers today change employers more often than in previous generations. De-regulated labor markets have also created a shift towards contract and part-time labor and shorter work tenures. These trends increase recruitment activity and may encourage the use of RPO.[citation needed] It should also be noted that even in slower economic times or higher unemployment, RPO is still considered by companies to assist in an increasing need to screen through a larger candidate pool.
Arguments surrounding recruitment
In addition to the general debates about war and the alleged connection of the military to homophobia, sexism, racism, and imperialism which take place across the anti-war movement , there are debates about the benefits of military service and the promises of recruiters which take place specifically in the context of counter-recruitment:
* Whether recruiters exploit a lack of other options for underprivileged young people, in a phenomenon sometimes called the "Poverty Draft."
* Whether recruiters are honest. Various investigations, such as one in May 2005 by Cincinnati's WLWT, have revealed dishonest conduct by individuals; a recruiter interviewed in the documentary Why We Fight notes that people in his profession have "the bad reputation of used car salesmen." Military defenders argue that the bad actions of a few shouldn't taint the whole. Counter-recruiters argue that high pressure on recruiters creates systemic dishonesty. The U.S. Army shut down its entire recruitment apparatus for a single day in 2005 in order to "refocus" on ethical conduct.
* Whether the military will pay for an education. Through various programs, such as the G.I. Bill in the U.S., which offers up to $71,000, young people are given an incentive to join the military in the form of scholarships for college when their enlistments expire. This is the primary reason why many enlist; a young recruit interviewed in Why We Fight, William Solomon, cites this as his motivation. Counter-recruiters argue that this is a false hope, noting for example that 57% of those who apply for G.I. Bill benefits do not receive them, and that the average net payment to those who do is less than $2200. This is a consequence of various eligibility requirements; 65% of eligible veterans receive money.
* Whether military service provides job skills. Recruiters often suggest that personal and technical skills learned in the military will improve later employment prospects in civilian life, with very similar skills utilized for nursing and electronic and mechanical repair. Counter-recruiters claim that this does not apply to most recruits, citing for example a study in the U.S. which found that 12% of male and 6% of female veterans say they have used their military skills in their civilian careers.[6] However, a study titled "Military Experience & CEOs: Is There a Link?" found that "leadership skills acquired during military training can absolutely enhance one’s chances for success in corporate life."
* Whether reform from within is a better solution than disassociation. Many who agree that there are problems in the military argue that these will be better solved if those who recognize them as problems gain influence in the military rather than avoiding it. Others argue in response that the military's problems are structural, and that its disciplinary hierarchy prevents successful internal pressure. This debate occurs mostly in narrower contexts, such as debates about whether left-wing activists should join the military or whether universities in the U.S. should have ROTC programs, rather than in discussions of general enlistment.[8]
* Whether the military inaccurately promotes a "romanticized" view of combat - using catchphrases such as honor, courage, and service - and glosses over death, injury, and civilian suffering, in order to give recruits a "soft" vision of the job.
* Whether recruiters exploit a lack of other options for underprivileged young people, in a phenomenon sometimes called the "Poverty Draft."
* Whether recruiters are honest. Various investigations, such as one in May 2005 by Cincinnati's WLWT, have revealed dishonest conduct by individuals; a recruiter interviewed in the documentary Why We Fight notes that people in his profession have "the bad reputation of used car salesmen." Military defenders argue that the bad actions of a few shouldn't taint the whole. Counter-recruiters argue that high pressure on recruiters creates systemic dishonesty. The U.S. Army shut down its entire recruitment apparatus for a single day in 2005 in order to "refocus" on ethical conduct.
* Whether the military will pay for an education. Through various programs, such as the G.I. Bill in the U.S., which offers up to $71,000, young people are given an incentive to join the military in the form of scholarships for college when their enlistments expire. This is the primary reason why many enlist; a young recruit interviewed in Why We Fight, William Solomon, cites this as his motivation. Counter-recruiters argue that this is a false hope, noting for example that 57% of those who apply for G.I. Bill benefits do not receive them, and that the average net payment to those who do is less than $2200. This is a consequence of various eligibility requirements; 65% of eligible veterans receive money.
* Whether military service provides job skills. Recruiters often suggest that personal and technical skills learned in the military will improve later employment prospects in civilian life, with very similar skills utilized for nursing and electronic and mechanical repair. Counter-recruiters claim that this does not apply to most recruits, citing for example a study in the U.S. which found that 12% of male and 6% of female veterans say they have used their military skills in their civilian careers.[6] However, a study titled "Military Experience & CEOs: Is There a Link?" found that "leadership skills acquired during military training can absolutely enhance one’s chances for success in corporate life."
* Whether reform from within is a better solution than disassociation. Many who agree that there are problems in the military argue that these will be better solved if those who recognize them as problems gain influence in the military rather than avoiding it. Others argue in response that the military's problems are structural, and that its disciplinary hierarchy prevents successful internal pressure. This debate occurs mostly in narrower contexts, such as debates about whether left-wing activists should join the military or whether universities in the U.S. should have ROTC programs, rather than in discussions of general enlistment.[8]
* Whether the military inaccurately promotes a "romanticized" view of combat - using catchphrases such as honor, courage, and service - and glosses over death, injury, and civilian suffering, in order to give recruits a "soft" vision of the job.
The Recruitment Process
These are the main recruiting stages.
Sourcing :
Sourcing involves 1) advertising, a common part of the recruiting process, often encompassing multiple media, such as the Internet, general newspapers, job ad newspapers, professional publications, window advertisements, job centers, and campus graduate recruitment programs; and 2) recruiting research, which is the proactive identification of relevant talent who may not respond to job postings and other recruitment advertising methods done in #1. This initial research for so-called passive prospects, also called name-generation, results in a list of prospects who can then be contacted to solicit interest, obtain a resume/CV, and be screened (see below).
Screening & selection :
Suitability for a job is typically assessed by looking for skills, e.g. communication, typing, and computer skills. Qualifications may be shown through résumés, job applications, interviews, educational or professional experience, the testimony of references, or in-house testing, such as for software knowledge, typing skills, numeracy, and literacy, through psychological tests or employment testing.
In some countries, employers are legally mandated to provide equal opportunity in hiring.
A British Army etc. recruitment centre in Oxford.
A British Army etc. recruitment centre in Oxford.
Onboarding :
A well-planned introduction helps new employees become fully operational quickly and is often integrated with the recruitment process.
Sourcing :
Sourcing involves 1) advertising, a common part of the recruiting process, often encompassing multiple media, such as the Internet, general newspapers, job ad newspapers, professional publications, window advertisements, job centers, and campus graduate recruitment programs; and 2) recruiting research, which is the proactive identification of relevant talent who may not respond to job postings and other recruitment advertising methods done in #1. This initial research for so-called passive prospects, also called name-generation, results in a list of prospects who can then be contacted to solicit interest, obtain a resume/CV, and be screened (see below).
Screening & selection :
Suitability for a job is typically assessed by looking for skills, e.g. communication, typing, and computer skills. Qualifications may be shown through résumés, job applications, interviews, educational or professional experience, the testimony of references, or in-house testing, such as for software knowledge, typing skills, numeracy, and literacy, through psychological tests or employment testing.
In some countries, employers are legally mandated to provide equal opportunity in hiring.
A British Army etc. recruitment centre in Oxford.
A British Army etc. recruitment centre in Oxford.
Onboarding :
A well-planned introduction helps new employees become fully operational quickly and is often integrated with the recruitment process.
The recruitment industry
The recruitment industry has four main types of agencies. Their recruiters aim to channel candidates into the hiring organisation’s application process. As a general rule, the agencies are paid by the companies, not the candidates. The industries practice of information asymmetry and recruiters' varying capabilities in assessing candidate quality produces the negative economic impacts described by The Market for Lemons.
Traditional recruitment agency :
Also known as a employment agencies, recruitment agencies have historically had a physical location. A candidate visits a local branch for a short interview and an assessment before being taken onto the agency’s books. Recruitment Consultants then endeavour to match their pool of candidates to their clients' open positions. Suitable candidates are with potential employers.
Remuneration for the agency's services usually takes one of two forms:
* A contingency fee paid by the company when a recommended candidate accepts a job with the client company (typically 20%-30% of the candidate’s starting salary), which usually has some form of guarantee, should the candidate fail to perform and is terminated within a set period of time.
* An advance payment that serves as a retainer, also paid by the company.
* It may still be legal for an employment agency to charge the candidate instead of the company, but in most places that practice is now illegal, due to past unfair and deceptive practices.
Online recruitment websites :
Such sites have two main features: job boards and a résumé/Curriculum Vitae (CV) database. Job boards allow member companies to post job vacancies. Alternatively, candidates can upload a résumé to be included in searches by member companies. Fees are charged for job postings and access to search resumes.
In recent times the recruitment website has evolved to encompass end to end recruitment. Websites capture candidate details and then pool then in client accessed candidate management interfaces (also online). Key players in this sector provide e-recruitment software and services to organisations of all sizes and within numerous industry sectors, who want to e-enable entirely or partly their recruitment process in order to improve business performance.
The online software provided by those who specialise in online recruitment helps organisations attract, test, recruit, employ and retain quality staff with a minimal amount of administration.
Online recruitment websites can be very helpful to find candidates that are very actively looking for work and post their resumes online, but they will not attract the "passive" candidates who might respond favorably to an opportunity that is presented to them through other means. Also, some candidates who are actively looking to change jobs are hesitant to put their resumes on the job boards, for fear that their current companies, co-workers, customers or others might see their resumes.
Headhunters :
Headhunters are third-party recruiters often retained when normal recruitment efforts have failed.
Headhunters are generally more aggressive than in-house recruiters. They may use advanced sales techniques, such as initially posing as clients to gather employee contacts, as well as visiting candidate offices. They may also purchase expensive lists of names and job titles, but more often will generate their own lists. They may prepare a candidate for the interview, help negotiate the salary, and conduct closure to the search. They are frequently members in good standing of industry trade groups and associations. Headhunters will often attend trade shows and other meetings nationally or even internationally that may be attended by potential candidates and hiring managers.
Headhunters are typically small operations that make high margins on candidate placements (sometimes more than 30% of the candidate’s annual compensation). Due to their higher costs, headhunters are usually employed to fill senior management and executive level roles, or to find very specialized individuals.
While in-house recruiters tend to attract candidates for specific jobs, headhunters will both attract candidates and actively seek them out as well. To do so, they may network, cultivate relationships with various companies, maintain large databases, purchase company directories or candidate lists, and cold call.
In-house recruitment :
Larger employers tend to undertake their own in-house recruitment, using their Human Resources department. In addition to coordinating with the agencies mentioned above, in-house recruiters may advertise job vacancies on their own websites, coordinate employee referral schemes, and/or focus on campus graduate recruitment. Alternatively a large employer may choose to outsource all or some of their recruitment process (Recruitment process outsourcing).
Traditional recruitment agency :
Also known as a employment agencies, recruitment agencies have historically had a physical location. A candidate visits a local branch for a short interview and an assessment before being taken onto the agency’s books. Recruitment Consultants then endeavour to match their pool of candidates to their clients' open positions. Suitable candidates are with potential employers.
Remuneration for the agency's services usually takes one of two forms:
* A contingency fee paid by the company when a recommended candidate accepts a job with the client company (typically 20%-30% of the candidate’s starting salary), which usually has some form of guarantee, should the candidate fail to perform and is terminated within a set period of time.
* An advance payment that serves as a retainer, also paid by the company.
* It may still be legal for an employment agency to charge the candidate instead of the company, but in most places that practice is now illegal, due to past unfair and deceptive practices.
Online recruitment websites :
Such sites have two main features: job boards and a résumé/Curriculum Vitae (CV) database. Job boards allow member companies to post job vacancies. Alternatively, candidates can upload a résumé to be included in searches by member companies. Fees are charged for job postings and access to search resumes.
In recent times the recruitment website has evolved to encompass end to end recruitment. Websites capture candidate details and then pool then in client accessed candidate management interfaces (also online). Key players in this sector provide e-recruitment software and services to organisations of all sizes and within numerous industry sectors, who want to e-enable entirely or partly their recruitment process in order to improve business performance.
The online software provided by those who specialise in online recruitment helps organisations attract, test, recruit, employ and retain quality staff with a minimal amount of administration.
Online recruitment websites can be very helpful to find candidates that are very actively looking for work and post their resumes online, but they will not attract the "passive" candidates who might respond favorably to an opportunity that is presented to them through other means. Also, some candidates who are actively looking to change jobs are hesitant to put their resumes on the job boards, for fear that their current companies, co-workers, customers or others might see their resumes.
Headhunters :
Headhunters are third-party recruiters often retained when normal recruitment efforts have failed.
Headhunters are generally more aggressive than in-house recruiters. They may use advanced sales techniques, such as initially posing as clients to gather employee contacts, as well as visiting candidate offices. They may also purchase expensive lists of names and job titles, but more often will generate their own lists. They may prepare a candidate for the interview, help negotiate the salary, and conduct closure to the search. They are frequently members in good standing of industry trade groups and associations. Headhunters will often attend trade shows and other meetings nationally or even internationally that may be attended by potential candidates and hiring managers.
Headhunters are typically small operations that make high margins on candidate placements (sometimes more than 30% of the candidate’s annual compensation). Due to their higher costs, headhunters are usually employed to fill senior management and executive level roles, or to find very specialized individuals.
While in-house recruiters tend to attract candidates for specific jobs, headhunters will both attract candidates and actively seek them out as well. To do so, they may network, cultivate relationships with various companies, maintain large databases, purchase company directories or candidate lists, and cold call.
In-house recruitment :
Larger employers tend to undertake their own in-house recruitment, using their Human Resources department. In addition to coordinating with the agencies mentioned above, in-house recruiters may advertise job vacancies on their own websites, coordinate employee referral schemes, and/or focus on campus graduate recruitment. Alternatively a large employer may choose to outsource all or some of their recruitment process (Recruitment process outsourcing).
Saturday, August 23, 2008
Sales Incentive Plan
A Sales Incentive Plan (SIP) is a business tool used to motivate and compensate a sales professional (or Sales Agent) to meet goals or metrics over a specific period of time, usually broken into a plan for a fiscal quarter or fiscal year. A SIP is very similar to a commission plan, however a SIP can incorporate sales metrics other than goods sold(or value of goods sold), which is traditionally how a commission plan is derived. Sales metrics used in a SIP are typically in the form of sales quotas (sometimes referred to as POS Shipments), new business opportunities and/or MBOs (Management by Objective independent action of the sales professional and is usually used in conjunction with a base salary.
SIPs are used to incentives sales professionals where total dollars sold is not a precise measure of sales productivity. This is usually due to the complexity or length of the sales process or where a sale is completed not by an individual but by a team of people, each contributing unique skills to the sales process. SIPs are used to encourage and compensate each member of the sales team as he/she contributes to the team's ability to sell. It is not uncommon for the members of such teams to be located in different physical locations (often working in different countries) and for the product introduction to happen in one location and the purchase of such a product to occur in another location.
Types Of Share Incentive Plan (SIP) :
Free Shares :
Companies can give up to £1500 of Free Shares to employees in each tax year. A participating employee can normally only take their Free Shares out of the SIP in the 3 year period from the date of award if they leave the company. Income Tax and National Insurance will be payable on the market value of the shares at the date of removal.
If Free Shares are removed between 3 and 5 years from the date of award, then Income Tax and National Insurance will be due on the lower of the value of the Free Shares at the date of award and their market value on the date on which they are withdrawn from the SIP.
If the Free Shares remain in the SIP for more than 5 years, there will be no Income Tax or National Insurance liability when the shares are eventually removed from the SIP. In certain circumstances, prescribed by HMRC, there will be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
Partnership Shares :
Employees can use their pre-tax salary to buy shares up to a maximum of £3,000 or 10% of salary (whichever is the lower) each year. Partnership Shares will be free of Income Tax and National Insurance at the date of purchase.
If an employee takes their Partnership Shares out of the SIP within 3 years of the date of purchase, Income Tax and National Insurance will be payable on the market value of the shares at the date of removal.
If the Partnership Shares are removed between 3 and 5 years from the date of purchase, then Income Tax and National Insurance will be due on the lower of the value of the Partnership Shares at the date of award and their market value on the date on which they are withdrawn from the SIP.
If the Partnership Shares remain in the SIP for more than 5 years no Income Tax or National Insurance is payable when the shares are eventually removed from the SIP.
The purchase of Partnership Shares can be funded in 2 ways; either a single lump sum contribution once a year; or monthly contributions (subject to a maximum of £125 per month or 10% of salary, whichever is the lower, and a minimum of £10 per month). If the employee opts to make a lump sum contribution, the Partnership Shares must be purchased within 30 days of the deduction from salary.
Contributions from salary can be accumulated for a period of up to 12 months. Partnership Shares must be purchased within 30 days of the end of the accumulation period; or contributions from monthly salary can be used to buy Partnership Shares within 30 days of the deduction.
The company can give employees up to 2 Matching Shares for each Partnership Share they buy. These shares will be free of Income Tax and National Insurance at the date of award. To receive their allocation of Matching Shares the employee remain employed with the company for a period of between a minimum of 3 years and a maximum of 5 years. An employee can normally only take their Matching Shares out of the SIP in the 3 year period from the date of award if they leave the company. Income Tax and National Insurance will be payable on the market value of the shares at the date of removal. If the Matching Shares are removed between 3 and 5 years from the date of purchase, then Income Tax and National Insurance will be due on the lower of the value of the Matching Shares at the date of award and their market value on the date on which they are withdrawn from the SIP. If the Matching Shares remain in the SIP for more than 5 years no Income Tax or National Insurance is payable when the shares are eventually removed from the SIP. In certain circumstances, prescribed by HMRC, there can be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
Dividend Shares :
Dividends paid on SIP shares can be re-invested in further shares known as Dividend Shares. Up to a maximum of £1,500 per participant can be used to buy Dividend Shares in each tax year. These shares are free of Income Tax and National Insurance at the date of purchase. An employee can only take their Dividend Shares out of the SIP in the 3 year period from the date of award if they leave the company. Dividend Shares are subject to a 3 year holding period. If the shares are removed after 3 years from the date of award there is no Income Tax or National Insurance liability. In certain circumstances, prescribed by HMRC, there can be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
SIPs are used to incentives sales professionals where total dollars sold is not a precise measure of sales productivity. This is usually due to the complexity or length of the sales process or where a sale is completed not by an individual but by a team of people, each contributing unique skills to the sales process. SIPs are used to encourage and compensate each member of the sales team as he/she contributes to the team's ability to sell. It is not uncommon for the members of such teams to be located in different physical locations (often working in different countries) and for the product introduction to happen in one location and the purchase of such a product to occur in another location.
Types Of Share Incentive Plan (SIP) :
Free Shares :
Companies can give up to £1500 of Free Shares to employees in each tax year. A participating employee can normally only take their Free Shares out of the SIP in the 3 year period from the date of award if they leave the company. Income Tax and National Insurance will be payable on the market value of the shares at the date of removal.
If Free Shares are removed between 3 and 5 years from the date of award, then Income Tax and National Insurance will be due on the lower of the value of the Free Shares at the date of award and their market value on the date on which they are withdrawn from the SIP.
If the Free Shares remain in the SIP for more than 5 years, there will be no Income Tax or National Insurance liability when the shares are eventually removed from the SIP. In certain circumstances, prescribed by HMRC, there will be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
Partnership Shares :
Employees can use their pre-tax salary to buy shares up to a maximum of £3,000 or 10% of salary (whichever is the lower) each year. Partnership Shares will be free of Income Tax and National Insurance at the date of purchase.
If an employee takes their Partnership Shares out of the SIP within 3 years of the date of purchase, Income Tax and National Insurance will be payable on the market value of the shares at the date of removal.
If the Partnership Shares are removed between 3 and 5 years from the date of purchase, then Income Tax and National Insurance will be due on the lower of the value of the Partnership Shares at the date of award and their market value on the date on which they are withdrawn from the SIP.
If the Partnership Shares remain in the SIP for more than 5 years no Income Tax or National Insurance is payable when the shares are eventually removed from the SIP.
The purchase of Partnership Shares can be funded in 2 ways; either a single lump sum contribution once a year; or monthly contributions (subject to a maximum of £125 per month or 10% of salary, whichever is the lower, and a minimum of £10 per month). If the employee opts to make a lump sum contribution, the Partnership Shares must be purchased within 30 days of the deduction from salary.
Contributions from salary can be accumulated for a period of up to 12 months. Partnership Shares must be purchased within 30 days of the end of the accumulation period; or contributions from monthly salary can be used to buy Partnership Shares within 30 days of the deduction.
The company can give employees up to 2 Matching Shares for each Partnership Share they buy. These shares will be free of Income Tax and National Insurance at the date of award. To receive their allocation of Matching Shares the employee remain employed with the company for a period of between a minimum of 3 years and a maximum of 5 years. An employee can normally only take their Matching Shares out of the SIP in the 3 year period from the date of award if they leave the company. Income Tax and National Insurance will be payable on the market value of the shares at the date of removal. If the Matching Shares are removed between 3 and 5 years from the date of purchase, then Income Tax and National Insurance will be due on the lower of the value of the Matching Shares at the date of award and their market value on the date on which they are withdrawn from the SIP. If the Matching Shares remain in the SIP for more than 5 years no Income Tax or National Insurance is payable when the shares are eventually removed from the SIP. In certain circumstances, prescribed by HMRC, there can be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
Dividend Shares :
Dividends paid on SIP shares can be re-invested in further shares known as Dividend Shares. Up to a maximum of £1,500 per participant can be used to buy Dividend Shares in each tax year. These shares are free of Income Tax and National Insurance at the date of purchase. An employee can only take their Dividend Shares out of the SIP in the 3 year period from the date of award if they leave the company. Dividend Shares are subject to a 3 year holding period. If the shares are removed after 3 years from the date of award there is no Income Tax or National Insurance liability. In certain circumstances, prescribed by HMRC, there can be no Income Tax or National Insurance liability when the employee leaves the company, no matter how long the shares have been held in the plan.
Value added selling
Value added selling is one of several sales techniques that relies on building on the inherent value of a product or service. By its nature the value add technique is a more flexible and customized selling approach that requires input from a defined range of average customers. These customers will help the sales and marketing leaders to outline value positions that are likely to benefit the largest number of customers.
The value add may not be initially apparent in the sales over view and is often tied to up-selling or vertical selling within a specific market segment. The utility of the product or service, ease of integration in to the customers business operations, or time saving benefits are just a few areas that may be exploited when focusing on value add.
One of the more recent examples of value added selling is the hybrid cars. These are cars that rely on a mix of gasoline power and electric power. The inherent value of the product is still the same. Basically it moves a person from point A to point B. The value add can be seen in several different ways. The first is the obvious fuel savings. But there is also added value in less time spent at the gas station, and the cars pollute the air less than a normal combustion engine. The value add in this instance is determined by the customer, and not the company selling the car.
The value add may not be initially apparent in the sales over view and is often tied to up-selling or vertical selling within a specific market segment. The utility of the product or service, ease of integration in to the customers business operations, or time saving benefits are just a few areas that may be exploited when focusing on value add.
One of the more recent examples of value added selling is the hybrid cars. These are cars that rely on a mix of gasoline power and electric power. The inherent value of the product is still the same. Basically it moves a person from point A to point B. The value add can be seen in several different ways. The first is the obvious fuel savings. But there is also added value in less time spent at the gas station, and the cars pollute the air less than a normal combustion engine. The value add in this instance is determined by the customer, and not the company selling the car.
AIDA
AIDA is an acronym used in marketing that describes a common list of events that are very often undergone when a person is selling a product or service:
* A - Attention (Awareness): attract the attention of the customer.
* I - Interest: raise customer interest by demonstrating features, advantages, and benefits.
* D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs.
* A - Action: lead customers towards taking action and/or purchasing.
Nowadays some have added another letter to form AIDA(S) :
* S - Satisfaction - satisfy the customer so they become a repeat customer and give referrals to a product.
Media :
Quote: "A-I-D-A. Attention, interest, decision, action." — Blake (Alec Baldwin), Glengarry Glen Ross (1992).
New Developments :
Later evolutions of the theory have edited the AIDA steps. New phases such as conviction (AIDAC) and satisfaction (AIDAS) have been added. If you combine these phases with the AIDA-Formula you get AIDAS.
One significant modification of the model was its reduction to three steps (CAB):
* Cognition (Awareness or learning)
* Affect (Feeling, interest or desire)
* Behaviour (Action).
Along with these developments came a more flexible view of the order in which the steps are taken, suggesting that different arrangements of the model might prove more effective for different consumer-to-product relationships.
* A - Attention (Awareness): attract the attention of the customer.
* I - Interest: raise customer interest by demonstrating features, advantages, and benefits.
* D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs.
* A - Action: lead customers towards taking action and/or purchasing.
Nowadays some have added another letter to form AIDA(S) :
* S - Satisfaction - satisfy the customer so they become a repeat customer and give referrals to a product.
Media :
Quote: "A-I-D-A. Attention, interest, decision, action." — Blake (Alec Baldwin), Glengarry Glen Ross (1992).
New Developments :
Later evolutions of the theory have edited the AIDA steps. New phases such as conviction (AIDAC) and satisfaction (AIDAS) have been added. If you combine these phases with the AIDA-Formula you get AIDAS.
One significant modification of the model was its reduction to three steps (CAB):
* Cognition (Awareness or learning)
* Affect (Feeling, interest or desire)
* Behaviour (Action).
Along with these developments came a more flexible view of the order in which the steps are taken, suggesting that different arrangements of the model might prove more effective for different consumer-to-product relationships.
Sales
A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity.[1]
The "deal is closed", means the customer has consented to the proposed product or service by making full or partial payment (as in case of installments) to the seller.[citation needed]
A sale is completed by the seller, the owner of the goods. It starts with consent (or agreement) to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership, being a price the seller is happy to part with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price the sale is still valid and gives rise to an obligation to pay.
The "deal is closed", means the customer has consented to the proposed product or service by making full or partial payment (as in case of installments) to the seller.[citation needed]
A sale is completed by the seller, the owner of the goods. It starts with consent (or agreement) to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership, being a price the seller is happy to part with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price the sale is still valid and gives rise to an obligation to pay.
Selling technique
Selling technique is the body of methods used in the profession of sales, also often called personal selling.
Techniques in use in selling interviews vary from the highly customer centric consultative selling to the heavily pressured "hard close".
All techniques borrow a bit from experience and mix in a bit of guesswork on the psychology of what motivates others to buy something offered to them. Mastery in the techniques of selling can offer very high incomes, while failure in it is nearly proverbial. Coverage of the latter is popularized in the Arthur Miller play Death of a Salesman.
Because selling faces a high level of rejection, it is often difficult for the practitioner to handle emotionally, and is usually cited as the most common reason for leaving the profession. Because of this many selling and sales training techniques involve a lot of motivational material.
The various steps :
A selling interview based on counseling needs to be done in several steps, in a consistent order, from the identification of the needs to a close in which the prospect accepts the seller's proposal. It is better not to omit or change the order of any of those steps.
** Prospecting
* Referrals
* Qualifying
** Presentation
* Questions
* Selling the sizzle
** Closing
* Pre-closing questions
* Tie downs
** Handling objections
** Handling prospect attitudes
** Confidence
** Empathy
* Reading people
Techniques in use in selling interviews vary from the highly customer centric consultative selling to the heavily pressured "hard close".
All techniques borrow a bit from experience and mix in a bit of guesswork on the psychology of what motivates others to buy something offered to them. Mastery in the techniques of selling can offer very high incomes, while failure in it is nearly proverbial. Coverage of the latter is popularized in the Arthur Miller play Death of a Salesman.
Because selling faces a high level of rejection, it is often difficult for the practitioner to handle emotionally, and is usually cited as the most common reason for leaving the profession. Because of this many selling and sales training techniques involve a lot of motivational material.
The various steps :
A selling interview based on counseling needs to be done in several steps, in a consistent order, from the identification of the needs to a close in which the prospect accepts the seller's proposal. It is better not to omit or change the order of any of those steps.
** Prospecting
* Referrals
* Qualifying
** Presentation
* Questions
* Selling the sizzle
** Closing
* Pre-closing questions
* Tie downs
** Handling objections
** Handling prospect attitudes
** Confidence
** Empathy
* Reading people
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