Category Opinion and View

The Secrets of Hiring Great Sales People Finally Revealed

Over the years, I’ve been involved in developing hiring tools for sales representatives in a variety of industries including high technology, financial services, industrial products, consumer products, auto sales, woman’s cosmetics, business services, medical products, pharmaceuticals, and healthcare.

Surprisingly, most sales managers make the same bad decisions, regardless of the product or industry.

Here’s the list of where most sales managers go wrong. Start eliminating these error-producing behaviors and just about all of your sales hiring mistakes will go away.

They think their job is unique. They’re not. There is a common sales process behind each one, that when understood can be used to benchmark any candidate’s past performance against.
They overvalue first impressions. First impressions don’t predict performance. People with great first impressions are frequently incompetent and people with marginal first impression often have a track record of great success. It’s best to measure first impression at the end of the interview and then determine how the candidate’s first impression affected their performance in consistently achieving quota. From what I’ve seen, the best sales managers don’t worry about first impressions, they worry about the candidate having a track record of achieving good sales results selling similar products, to similar buyers, in similar situations.
They overvalue their gut or instinct. This is only acceptable when the sales manager has a track record of hiring all top performers who all make quota in combination with very low department turnover. Emotions, intuition, or instinct are poor predictors of on-the-job success. A track record of past performance selling similar products or influencing similar buyers is a great predictor.
They don’t know the job. Sales is a process that starts with lead generation and ends at closing. Certain aspects of the process are more critical than others. If a sales manager doesn’t know what these are, it’s unlikely that he’ll be able to accurately assess them in the candidate. As a result, the sales manager shifts the decision criteria to first impressions and gut instinct.
They assume they’re great managers. Most great sales people aren’t great managers, yet this is the person most likely to get promoted. It takes a great deal of work to build, develop, and manage an effective sales team. As part of the assessment process, the sales manager has to assess the fit between her style of management and how each person on the team needs to be managed. This directly relates to Hershey and Blanchard’s situational leadership model.

Flipping this over, here are some things you need to do to achieve better results hiring sales reps:

1. Know the sales process from beginning to end before ever interviewing another candidate.

Whether the sales cycle is 30 minutes long or months, there are some typical steps that ultimately determine how successful the sales rep will be. Breaking your company’s sales process into these steps enables the sales manager to identify the critical drivers and then assess the candidate’s past performance against these. At a broad level most sales processes can be categorized into these big segments:

Prospecting and lead generation
Qualifying the lead and conducting needs analysis
Proving your product’s worth in comparison to the customer’s needs
Preparing some type of offer or proposal
Closing and negotiating the offer
Of course, there are multiple variations to this depending on customer need, the complexity of the offering, the type of buyer involved and how the buying decision is made, the dollars involved, budgets available, economic conditions and competitive positioning, to name just a few.

A performance profile summarizes these details in the form of a series of prioritized performance objectives including specific results and time frames. For example, a performance objective for a sales rep developing a new territory might have an objective like, “within 30 days prepare a detailed territory plan including target clients to meet.” A similar performance objective for a outbound telesales person might be, “within 30 days after completing the training convert 35% of all sales calls into minimum $100 orders.”

Once these performance objectives have been determined put them into priority order. The top two or three (out of 6-8) tend to become the critical success drivers. For example, conducting needs analysis with a decision-maker might be relatively easy, with the real key to success being the ability to get past a gate-keeper and arrange the meeting with the decision-maker. It is essential that the members of the hiring team understand these critical success drivers and then hone in on them during the interview. (Here’s more information on how to prepare performance profiles and interview for a wide variety of sales positions.) From what I’ve seen lack of understanding of real job needs is the primary cause of bad hiring decisions, not only in sales, but for all jobs.

2. Benchmark the candidate’s performance against the performance profile by asking about these issues:

Get specific details about how the person managed the process and how well they did.
Find out their track record of making quota and how they recovered when things went sour.
Walk through the sales process at a few major successful accounts and compare this to yours.
Walk through the sales process where the person was unsuccessful and compare this to yours.
Find out how the person learned the product line and compare this to yours from a complexity standpoint and the amount of training provided.
Go step-by-step through all of the team issues including managing and processing leads, orders, and pre- and post-delivery issues.
Compare your typical buyer to the types of buyers the candidate successfully handled.
Find out how successful the candidate was working for different sales managers, ask about their styles, then compare these to the hiring sales manager’s style.
3. Benchmark the candidate’s past performance to the performance profile, especially against the critical success drivers.

We use our 10-Factor Candidate Assessment template as a guide to evaluate the candidate against ten factors we’ve seen to be strong predictors of on-the-job success.

For sales, the primary keys to an accurate assessment include a comparison of the sales process, the types of buyers involved, the sales cycle, the complexity of the product and associated terms, and the degree of competition. Of course, the behavioral issues can’t be ignored including persistence, learning the product line, organizational skills, and team leadership, among others, but these are secondary to having a track record of sales success in a comparable situation.

4. Assess managerial fit.

This is probably the most important, yet it is almost always overlooked. A sales manager must be dedicated to training and developing his or her sales team. This requires significant direction, on-the-job training, constant follow-up, the ability to motivate others, and involved planning.

In situational leadership terms these are the classic Director and Coaching styles. A self-managing Delegating style rarely works in sales, especially for a new hire. A Participating style involving territory planning and target account tactics would be appropriate for an experienced sales person who can achieve his goals with limited direction and support.

From what I’ve seen too many sales managers aren’t as involved as necessary to keep their teams on track. If a sales manager isn’t willing to devote 100% of her time to developing and managing her team, even it’s comprised of good people, it will underperform. That’s why choosing the sales manager is the first step in getting the sales hiring process right.

As part of the sales hiring process, we also recommend the use of some type of cognitive and behavioral questionnaire for all finalists. While there are many of these tests around, we’ve been using Profiles International’s for over 20 years with great success.

Knowing that some type of formal test is being used keeps the interviewers more focused, increasing overall assessment accuracy.

Hiring sales people is relatively easy if you don’t get emotionally involved. This alone will eliminate many common hiring mistakes. Regardless of your underlying sales process, the process of hiring great sales people is exactly the same whether you’re selling ERP software or part-time vacation villas. That’s the real secret to hiring great reps.

The Web 2.0 Job Seeker: Faster, Smarter, and More Connected

This year in the recruiting industry there has been a lot of talk about how companies are tapping into Web 2.0 technologies to enhance their recruiting. But how is the candidate community also using these technologies for their own purposes, and what impact is it having on our recruiting strategies?

Web 2.0 Candidates Are:
Faster. Candidates can gain access to more available jobs within minutes on any day.
Smarter. Access to salary, compensation, and corporate performance data is everywhere.
More Connected. Social networks help candidates identify insiders at any employer before or after they apply for any position.
Web 2.0 Candidates Are Faster
When job boards came on the scene 10 years ago, they made accessing available job information much easier for candidates. No more digging through the classified section of the Sunday newspaper, crafting up witty cover letters on fluorescent letterhead to get attention and postal mailing resumes. Remember when we’d put our fax numbers on our ads? Come on: how many candidates really had fax machines in their houses? Today, there are “job aggregators” such as indeed.com and simplyhired.com which put all the jobs from multiple job boards into a single search engine that stream directly into any candidate’s personal home page on Google via RSS feeds every day.

I think one of the main reasons that recruiters are after “passive candidates” is that we think we have more time to get them through the interview process, versus “active candidates” who machine-gun apply from job boards to a dozen jobs on any Monday. With the latter, we have to get them setup with an interview within 24 hours and make a hiring decision within two to four days. That’s how fast the market is moving with so much job data available online.

Web 2.0 Candidates Are Smarter
In addition to having access to an ocean of jobs, most candidates tap into salary and compensation data via sites such as payscale.com and/or salary.com. Not to mention that the younger generation of workers aren’t shy about sharing their comp levels in the lunchroom or over beers, unlike our parents’ generation who considered salary discussions to be so taboo they would only share this information with the IRS when filing their annual tax returns.

Many recruiters have candidates show up with a salary report printed from one of these salary sites and demand that their pay be at or above the level on the report. Candidates don’t care if our job descriptions aren’t perfectly matching the ones on those websites; they just see the numbers and get an expectation that’s usually out of line with our compensation levels. Regardless of how you handle this situation in your interview process, employers are under pressure to know how their pay grades compare to other major employers in their markets.

Web 2.0 Candidates Are More Connected
Remember when you would get an applicant resume, see which companies a candidate previously worked for, and then quickly find which of your internal employees had worked with the applicant in the past, in order to get “inside information” to determine if they were a good or bad prospect? (Never mind that 51% of people will comment positively or negatively on someone because of how they liked their personality — and not their actual work performance.)

During the interview process, candidates were lucky to run into a former colleague in the hallways. Or if they get lucky in the interview, they will discover who they might know in common with the interviewing managers and try to discover which “moles” they could find within the prospective company, which would help them do their own due diligence on the employer — not to mention that they will try and gain advocates to help them get the job should their interest grow.

Well, because of the growth of social networks (Facebook, MySpace, LinkedIn, Jigsaw, and many more), the minute most candidates apply for any job (and sometimes even before they apply for a job), they can now instantly see who they know at any prospective employer, all the way back to their old high school or college buddies.

This tilts the access of information toward the candidate community — who can now see if there are bad previous bosses or old enemies working within your company, which they may wish to avoid. The candidates’ reasoning will be if your company hires personalities the candidate disliked, it indicates that your culture prefers those types of individuals, which will have an impact on your employer brand whether you get a chance to enter the conversation or not.

This puts a new pressure on employers to create a working culture that will attract these more web savvy candidates. These Web 2.0 candidates don’t believe most of our career sites’ language about having an exciting work environment. They want to find out for themselves (via networking) what it’s really like to work within the sub-cultures within our company, which are driven by management personalities and business cycles which are exciting to certain candidate types, and a turnoff to others.

Make Better Offers

After a lengthy screening process, the hiring committee feels it has found the right candidate for the company. Now comes the tricky part: how do you design an offer and go through the offer stage of the process without damaging the relationship with the candidate?

Many companies are not prepared to go through the offer step of the process. As a result, they damage the relationship with the candidate. This leads to one of two unfortunate conclusions. Either they lose the candidate or the candidate comes on board, but with scar tissue. Applying some of the best practices from the sales world into a sales talent screening program helps to avoid that scenario.

The offer stage of the hiring process parallels the proposal phase of sales. Best practices in sales say that you don’t present a proposal until a thorough needs analysis has been completed. If a sales person is presenting a proposal to a prospect, he has acquired the information needed to design a solution, has discussed budget, has a full understanding of their solution requirements, and has set an expectation on pricing. This is certainly the case if the salesperson is going to be successful in winning the account.

Looking at this process in relation to the offer stage of the sales talent screening program, many of the same best practices from sales hold true. During the screening program, information needs to be gathered from the candidate to determine their financial requirements. Unfortunately, many sales talent screening programs focus exclusively on screening the candidate for fit, but do not consider the needs for the offer phase of the process. This leads to a last-minute scurry to mine the information from the candidate, or they design the offer blindly. Neither of those are best practices for the offer stage.

In sales, it is said that if you are going to lose, lose early. This prevents you from making a huge investment in a relationship that will not generate revenue. The parallel to screening sales talent is understanding the financial requirements of the candidate early enough to stop the process before over-investing in the relationship. There is no point in continuing a process with a candidate who requires a compensation level 25% above what you can offer. This probably seems logical, but hiring executives rarely focus on this as a de-selection element early in the process.

Just like discussing pricing with a prospect, the financial-needs discussion requires finesse. The candidate knows that you are asking questions about their financials, just like a prospect knows a sales person is fishing for budget information. The better-skilled salespeople tell their prospects, “I don’t want to waste your time by getting you excited about a solution that will not fit in your budget constraints…”

In much the same way, this discussion can be had with the candidate, “I don’t want to excite you about an opportunity that might not be a match for your financial needs. As you look at making a change in position, what thoughts have you given to your compensation requirements?”

With continued finesse, you can dig further into the mix of salary versus commission. Some candidates may rebuff this discussion as they feel the information will be used against them. In some instances, they are justified for having that concern. Hopefully, that is not the case in your company. We’ll come back to this point later. The bottom line is that the two goals of this phase are to gather information that allow you to formulate an offer and to de-select those candidates whose requirements exceed your financial package.

In sales, the proposal phase should not be like a magic show. The prospect should not be shocked by what is included in the proposal. In essence, the proposal is the documentation of what has already been discussed. No surprises. The same holds true for candidates. The time to review the compensation plan details is not after they are hired, or even at the offer stage. The compensation plan should be reviewed at the point where you have a genuine interest in pursuing the candidate and they have a complete enough understanding of the company that they will be able to comprehend the compensation plan.

One of the core requirements associated with any process is that it is measurable. The offer phase of the sales talent screening program should be measured statistically to determine effectiveness. The key statistic is number of offers made versus ones that are accepted. If the acceptance level is less than 80%, the process should be reviewed by asking the following questions.

At what point of the process are the candidate’s financial requirements reviewed?
When it is known that the candidate’s financial requirements exceed the package, is the candidate removed from the process?
At what step is the compensation plan reviewed with the candidate?
In what level of detail is the compensation plan reviewed with the candidate?
How often is the initial offer to the candidate rejected, and subsequently, negotiated successfully?
The last question in the list above ties back to my opening position about damaging the relationship. Again, this ties back to lessons that can be learned from sales. Many years ago, a procurement training specialist shared a pearl about the counsel he gives to salespeople who ask about pricing strategy. He said, “Provide us with the best pricing that you feel comfortable providing and either way you are happy.” This always puzzled salespeople so he explained further. “If you provide your best pricing and are selected, you are happy because you won the account. If you are not selected because we found lower pricing elsewhere, you are happy because you would not have been happy at that price point. Again, either way you are happy.”

Consider this when making an offer to the sales candidate. Develop an offer based on what was learned from the candidate that represents the best offer you are willing to make. Early in the process, tell the candidate that you don’t negotiate offers, but rather put your best offer on the table upfront. It demonstrates a professional message to the candidate and reduces their fear of attempts to lowball them. When companies negotiate offers, while they may “win” the candidate, they damage the relationship. This person is onboarded with the worst scar tissue of all, a lack of trust. The salesperson will always be on the lookout for the company to try to cheat them.

As with any component of the sales talent screening process, preparation is the key to success. Organize your team and design a process that achieves your desired results. This will allow you to create longlasting, fruitful sales marriages.

10 Rules for Dating and Recruiting

Dating and recruiting have a lot in common. Learn how to improve your recruiting efforts by applying the most common dating rules.

Dating rule #1
First impressions are critical.

Recruiting application:
Differentiate yourself. Resist the “I have a great position for you” especially if you have never spoken to them.

Dating rule #2
Don’t believe everything you see. We have all heard stories from people that signed up for an online dating service and were shocked when their date was two feet shorter and 10 years older than the profile.

Recruiting application:
Candidates exaggerate their strengths and skills and down play their weaknesses. Do not assume anything. Prescreen, interview, administer assessments, and call the references before you present the candidate to your hiring manager.

Dating rule #3
Play hard to get. Desperation is the world’s worst perfume.

Recruiting application:
If you make a huge fuss over the candidate and beg them to interview, you will diminish your negotiating power.

Dating rule #4
Be selective. You can not change people.

Recruiting application:
Look for the red flags; don’t avoid them. It is better for you to uncover any candidate weaknesses or issues than your hiring manager discovering them. Your name and reputation is all you have in this business.

Dating rule #5
Prepare for the date.

Recruiting application:
If your candidate has spent 20 minutes on the phone with you and takes time off work to come to interview, and then you ask them “so, tell me what you want to do?” — you are wasting the candidate’s time. You should have notes on the candidate’s resume that you want to clarify, and if appropriate, the company profiles that best match what your candidate’s needs.

Dating rule #6
Don’t talk too much. People who express the “enough about me, what do you think about me?” attitude sit home alone, a lot.

Recruiting application:
The candidate should be doing most of the talking. Assess what the candidate has to offer, what they need, and then set expectations of how you will work together. Let the candidate talk about the interview before you disclose the hiring manager’s view. If you blurt out “they love you, you are the best candidate they have ever met!” — what do you think happens to the candidate’s salary requirements?

Dating rule #7
Follow up with your date.

Recruiting application:
As an industry, one of the biggest complaints we get from candidates and hiring managers is the lack of communication. No news is still considered news to the candidate; make sure you keep your candidate in the loop.

Dating rule #8
Don’t be afraid to end the date early.

Recruiting application:
Prescreen carefully, ask the hard questions, and always tell the candidate the truth. If they are not going to fit into your recruiting focus (skills, salary expectations, location, etc.), coach or make suggestions regarding who may be able to help them in the market.

Dating rule #9
Improve your odds by hanging out where (like) people hang out.

Recruiting application:
If you are recruiting technology talent, sign up and participate in technology activities in your market. Volunteer at association meetings to check members in: you will meet every attending member, every meeting.

Explain to people you meet that there are two types of people you would like to be introduced to: those who are leaders in their field and are looking for an opportunity and those who are leaders in their field and are not looking for an opportunity right now. You are an expert in your market, so people who are not looking now would still benefit from knowing you and the people in your network.

Dating Rule #10
They will not buy the cow if they are getting the milk for free.

Recruiting application:
When you agree to represent a candidate, you are entering into a business agreement. You need to set clear expectations of how the process must work. If the candidate will not agree to the terms, they are not committed to you, so turn them loose.

Winning the Negotiating Game With Candidates

For most recruiters the make or break moment comes at the end of the process, when it’s time to negotiate the offer. A successful negotiation means that the process concludes with a hire, and the recruiter rides off into the sunset.

But a successful negotiation doesn’t mean coming out on top with a low-ball offer that gets accepted. That can cause the candidate to get turned off and in the worst-case result in the candidate walking away. Even if accepted, it could leave the candidate with a sour taste in the mouth and essentially starting off with a negative attitude toward the employer. An overly generous offer on the other hand is a waste of the employer’s resources and can upset internal equity. Getting it right is not easy as few recruiters are trained in negotiating.

The number of books that have been written on negotiating can fill a large room — several thousand are in print. But an easier approach can be discerned from recent research at Northwestern University. A study by Prof. Adam Galinsky and his colleagues suggests that a powerful way to influence the outcome to be closer to a win-win situation is to view the situation from the candidate’s perspective — also know as the perspective-taking approach.

What this means and how it works is explained below, but the research has demonstrated that recruiters using such an approach consistently achieve the highest level of economic efficiency, without sacri?cing their own material interests. They produce a better overall outcome for both sides.

Getting Inside the Candidate’s Head

The perspective approach means try to get inside the candidate’s head. To achieve an understanding of the candidate — their motives and likely behaviors — consider the world from their viewpoint. Basically, put yourself on their side of the table. This is not as ridiculous as it may appear. The research demonstrates that recruiters adopting such an approach achieve the best possible outcome close to half the time.

To be able to do this well recruiters need to do their homework before arriving at the negotiation. First, have an understanding of the likely issues. These always fall into three categories.

1) Distributive: issues for which the parties’ preferences are diametrically opposite. For example, the candidate wants a higher salary and the recruiter wants to pay a lower one.

2) Compatible: issues on which the parties’ preferences are identical. For example, the job location.

3) Integrative: issues on which the parties have different high and low priorities. For example, bonus and vacation time. The candidate may care more about the bonus amount because of a belief in her own ability to earn it. The recruiter may care more about getting the candidate to accept a smaller amount of vacation since that represents guaranteed income.

The solution to the disagreements is not to split everything down the middle, but rather to try and maximize the joint outcomes. That requires having a good idea about what makes the candidate tick — taking their perspective. Recruiters need to make an effort during the interview process to gauge what is important to a candidate. An assessment can help to fill out the picture, but even without that it’s important to pick up cues about what drives a candidate. That does not mean to ask questions that are unrelated to the job, but to probe for what a candidate considers important or not.

Head not Heart
There is a danger that a recruiter attempting to take the candidate’s perspective may end up empathizing with them — that is, show compassion for the candidate’s situation. Successful negotiation, especially where economic outcomes are involved, do not require having an emotional connection with the other party. The research demonstrated that empathizing recruiters achieved the poorest individual outcomes, and the gains went almost entirely to the candidates.

It’s better to “think for” than to “feel for” the candidate. It is more bene?cial to get inside their heads than to have them in your heart.

Conclusion
Taking the perspective approach is easier said than done. It requires serious effort to try and understand a candidate, based on a lot of information that may not be readily available to the individual handling the offer negotiation. The more people who are involved in the selection process, the harder this gets, especially since most interviewers do a poor job of documenting what they learn about a candidate. Recruiters may also be constrained by the extent of flexibility they have in negotiating particular issues.

That being said, the Galinsky research does show that a failure to take a disciplined approach to an offer negotiation will produce a poor outcome for all concerned. Ultimately, organizations that fail to recognize this will suffer the consequences of losing good talent.

Female business leaders discuss “secrets” to career success

“I never use the advantage, or we call it disadvantage, as a woman while at work with my male colleagues,” says Dong Mingzhu, President of China’s Gree Electric Appliances, the top-selling air-conditioning manufacturer in the world, at a Women CEO Forum of the Global Summit of Women 2008 in Hanoi, the capital of Vietnam on Saturday.

“I see no difference between women and men at work…I don’t ask for special treatment because I’m a woman. Gender is not important in business. What’s important is decisiveness, judgment, and action,” says the strong-minded lady, joined by hundreds of other female delegates, who packed the grand ballroom of the Melia Hotel in the downtown area of Hanoi.

The women from about 70 countries, many dressed up in exquisite and colorful traditional clothes, were discussing secrets to career success, and the different working performance between men and women.

Sophia Tong, General Manager of IBM in China’s Taiwan, considers loving, caring and considerateness as special gifts for women, which help them deal with things in a more gentle and easily-to-be-accepted way. She also believes women are good at multi-tasking, which enables them to handle different things properly at the same time.

However, she believes that women, especially Asian women, are not as bold as men, thus letting good chances to slip away from their fingers.

“You need to think big, and then take action,” she suggests.

Yasmin Mahmood, Managing Director for Microsoft Malaysia, describes women’s roles as “jogging plates in the air”, like Chinese acrobats, without one plate falling to the ground. “This amazing versatility enables women to move quickly from one style to another. It’s everyone’s, not just women’s responsibility to help women to transform.”

In order to become a successful woman in career, Sophia asks all women at the forum to “go global”, to gain multiple capabilities, and “most important of all, have a clear self-awareness, to know yourself well, to know what kind of person you are, and what you really want. ”

The six panelists, all of them leaders of their respective companies, agree that they are still working in a man-dominant working environment, and it’s very rare for a woman to climb to a top position.

Ann Sherry, CEO of Carnival Australia, says that in her company’s decades of history, only two women have managed to “climb” to the CEO position, including her.

Yukako Uchinaga, CEO of Berlitz International in Japan, says the top-ranking women in Japanese companies are still rare species, while the middle-level female managers are more and more commonly seen.

“Sometimes you’ll have to wait five, or ten years to move from the middle to the top, and many women stop trying during the process,” Yukako adds, “So my advice is: don’t give up!”

On personalities for a women to succeed in career life, Dong says she believes that passion and confidence are the two vital personalities in a woman’s career life. “Passion and confidence will make a woman love the job and be happy,” she says.

Ten Tips on Making a Successful Career Change

Are you looking for more than just a better job? Are you looking for a more rewarding profession, one that better aligns with your skills, interests, values, and plans for the future? If so, be prepared to face a lot of reflection and planning.

It’s important to take a serious look at the many possibilities and outcomes before you jump into a new career or field. Consider these 10 tips as you make a transition from your present career to your next:

Have a clear plan. The smartest move that you can make is to carefully map out an effective career-change strategy. This should include a detailed action plan that takes into consideration finances, research, education, and training. Keep in mind that a successful career change can take several months or longer to accomplish, so patience is key.
Wait for the right time. The best time to consider a new career is when you are safely ensconced in your existing position. It goes without saying that a steady paycheck can relieve a lot of pressure. There are many ways to take steps toward your new career path; you can volunteer or offer yourself as a freelancer or consultant. This can help you to “test the waters” in your desired new field.
Be sure of your reasons. Just because you’re unhappy in your current job isn’t a strong enough reason to make a total career break. Carefully analyze whether it is your actual career you dislike or whether your employer, supervisor, or office situation is the problem.
Do your research. Be sure to examine all possibilities before attempting a career jump. Talk to people in your network; read career and job profiles; meet with a career management professional. The more information with which you arm yourself beforehand, the more successful you will be.
Decide what’s important. This is the best time for thoughtful self-reflection. Ask yourself what it is you really want to do with the rest of your life. Take an honest inventory of your likes and dislikes, and evaluate your skills, values, and personal interests. Many people who are looking to change careers do so to find a balance between their personal and professional lives, to accomplish the right mix of meaning and money. You may want to consider consulting a career coach and/or taking a career assessment test.
Examine your qualifications. Do you have the necessary experience and education to be considered a qualified candidate in your desired career field? If not, you need to find a way to bridge the credentials gap. This might mean making your goal more long-term while you go back to school or receive additional training.
Learn about the industry. Get a feel for the field that interests you. Read industry journals, attend conferences, and talk to people in the profession about what they do. Learn whether your target industry has growth potential. Trade magazines, organizations, and entrepreneurs have created a slew of Web sites that offer searchable databases where job openings in many specific industries are listed. Start looking at these sites on a regular basis.
Develop your network. Begin nurturing professional friendships early and tend them regularly. Professional organizations and job industry trade associations are a good place to start. Many of them hold networking events and job fairs.
Update your job search skills. It is especially important to polish up your job-hunting skills and techniques before you get out there and start networking. Make sure you are using your time and resources as effectively as possible.
Pay your dues. Don’t expect to begin at the same level of seniority in your new career that you held in your old one. It will take time to move up the ranks, but if you find a new career that you absolutely love, it will be worth it.

What is China doing to its workers?

Arvind Subramanian / New Delhi February 08, 2008
Is the dramatic decline in labour’s share of the economic pie ominous.

A silent revolution has been taking place in China. Somehow, without anyone noticing, the capitalists have upended the People’s Republic. Over the past few years, they have effected a significant redistribution of income away from workers. This might well be the mother of all redistributions.

Normally, in most countries, the distribution of income between labour and capital changes not at all or very slowly. For example, in the United States, the share of the economic pie going to workers has been, with some small exceptions, roughly stable in the post-war period. In China itself, this share was roughly stable for over 25 years since the Chinese economy took an outward turn in 1978.

But recently there have been tectonic shifts. Between 2002 and 2005, according to Berkeley economists, Chong-En Bai, Chang-Tai Hsieh, and Yingyi Qian, the share of the economic output going to workers decreased by about 8 percentage points, from about 50 per cent of GDP to 42 per cent of GDP. Which means that China — yes, the People’s Republic — now has perhaps the lowest labour share of any major country in the world.

What does the decline in labour share mean? It does not mean that the absolute fortunes of labour have declined. To the contrary, in China, real wages have been growing at a decent clip of about 7 per cent a year. What it does imply is that real wages have been growing more slowly than productivity. This failure of workers to capture their productivity gains — as economic theory would predict — has proved costly to them. If the sharing of the pie had remained the same in 2005 as in 2002, the average Chinese would have received $160 more than he or she actually did, which represents nearly 10 per cent of current per capita income.

How did this happen? Historically, such major shifts are rare. When they have occurred, they have typically been associated with political transitions as Dani Rodrik of Harvard University documented some years ago. Transitions from democracy to autocracy (Chile in 1973, Turkey in 1980, Argentina in 1976 and Brazil in 1964) led to a large decline in the share of the pie going to labour. In fact, during these four transitions, the share of labour fell on average by 11 percentage points.

Similarly, the transition from autocracy to democracy saw an increase in the share of the pie going to labour. In a few cases — Greece and Portugal in 1974, Spain in 1975 and Chile in 1989 — the increase in the labour’s income share was dramatic — an average increase of about 10 percentage points. Similar changes occurred when Korea and Taiwan moved towards democracy in the 1980s.

The association between political changes and the fortunes of labour has to do with the institutional arrangements that affect the relative bargaining power of labour and capital. Democracies tend to strengthen labour’s bargaining situation, either by allowing greater freedom of association or better means of redress against employers. In some cases, democracy simply encourages greater populism, leading to large and unaffordable wage increases. On the other hand, authoritarian regimes could favor cronyism and strengthen producer interests, resulting in a greater ability of employers to transfer income away from labour.

But China, of course, has not seen any radical political change that could easily explain the dramatic shifts that have occurred. Can market-related developments explain this puzzle? Consider the counterpart of the decline in labour share, namely the rise in the share of capital.

It is well known, for example, that China has a distorted financial, especially banking, system, resulting in cheap and easy credit, at least to those state-owned enterprises that get it. This distortion has if anything worsened over time. Capital has become even cheap relative to labour, contributing to rising investment, from 35 per cent of GDP in 2000 to nearly 45 per cent in 2006, and a growing capital intensity of production. With such high investment rates, it seems logical that capital’s share would have risen.

Actually, standard theory suggests the opposite. The rising capital intensity of production should have reduced the returns to capital, so that the total income accruing to capital should have declined. And this decline in turn should normally have been large enough to reduce capital’s share of income or keep it unchanged. But the opposite has happened in China: the returns to capital failed to decline so that capital’s share of income went up, and by a large amount. So, the puzzle deepens.

One possible explanation is technological progress. China’s intensive use of capital could have been simultaneously accompanied by rapid technological progress which made capital more efficient — or prevented it from becoming less efficient. In fact, there’s some evidence for this in the structure of exports, since over the past five years China has shifted from low-margin “commodity” manufacturing to high-margin “advanced products.” But the shifts are not significant enough to warrant large changes in income distribution.

How might this decline in labour’s share — a source of potential social disaffection and unrest — be reversed? To begin with, it is likely that public pressure will force the government to share the large returns to capital with savers, thereby improving household investment income. Most Chinese savers, who have their money in the Chinese banking system, today obtain zero or negative returns. And they have become wise to this large disparity. Thus, the government has been forced to list more firms in the stock market so that households can enjoy some of the high returns that companies are making. Households have also been investing heavily in the real estate market. But this government strategy has limits because stock and real estate prices are exceptionally high, and as they return to earth, households could be left with depreciated assets and poor returns, which might do little to increase their income.

Over a longer period, further economic forces will come into play. New entrants will emerge and bid away the excessive return to capital. But the big question is this: what if these forces are too weak, or too slow, and the public becomes impatient? Will the decline in labour’s share of the economic pie be reversed through political change? That may be China’s big question.

Arvind Subramanian is Senior Fellow, Peterson Institute for International Economics and Center for Global Development, and Senior Research Professor, Johns Hopkins University

Top 10 Hiring Errors

Hiring in China is still the number one issue and solutions are thin on the ground. Research by Deutsch and Remillard, who wrote the book on hiring, found that there are 10 common mistakes that companies should avoid if they hope to achieve success in hiring. This is a complement to our Top 10 Don’ts.

Job Descriptions. Interviewers tended to focus on experience and skills rather than the company’s expectations for the position. This is a strong mismatch which can be solved by taking it a step further. Check out Peformance Profiles.
Superficial Interviews. There was little in the way of checking or verifying of candidate’s experience and education.
Over-emphasis on Resume. Interviewers focused too much on details in the Resume such as education, technical skills, and industry experience.
Initial Impact. Interviewers relied heavily on first impressions to make their hiring decisions.
Historical Bias. Hiring teams used only past performance to predict future results. This was thought be insufficient.
Performance bias. Candidates who ‘performed’ at interview tended to be chosen over real job performers.
Active Candidates Companies tended to bottom feed and only attracted the active job seeker. Passive candidates were not succesfully targeted.
Best Predictors Interviewers tended not to focus on self-motivation, leadership, comparable past performance, job-specific problem solving and adaptability, and these have been shown to be strong predictors of performance.
Understanding Stars. Companies failed to understand the motivation of Stars and did not structure a process around their needs. It’s worth noting that in China, everyone is a star.
Shallow Approach. Companies did not budget sufficient time and resources for a successful search.

Customer Service: Key to Successful Recruiting

Fast and personal customer service is what I insist is core to being an effective 21st century recruiter. Every candidate should receive a personal response customized to their questions and needs. Candidates should be sold positions on the basis of the goodness of their fit in the position and to the degree they exhibit the skills and competencies needed.

Yet, many recruiters are challenged to provide this level of service. Here are a few quotes from recruiters: “I have received almost 500 resumes. Over 90% of these people are not qualified or not what my company is looking for.” Another said, “I have been overwhelmed with candidates. Some fit our needs, but most don’t even take the time to read the job description…I wish I could reply to every candidate, but if I did, I would not be doing my job!”

Candidates, on the other side of the fence, say, “Now, as a candidate going through a very bad dry spell in finding recruiting work, I rarely experience this common courtesy among recruiters who post jobs that don’t exist and fail to follow simple due diligence.” And this: “I’m a downsized corporate executive who has been repeatedly appalled by the way companies and recruiters are treating candidates.”

We all, I believe, want to provide candidates with great service, and we all know that those who have been ignored, dismissed as not qualified, and otherwise treated with discourtesy will not forget and may never recommend our firm to friends or apply again, even when they may be excellent choices.

Every act of discourtesy will eventually be incorporated into the overall reputation that our firms have about people and how they are treated. As they say in the customer satisfaction business, for every customer that tells you they are satisfied, there are at least 3 dissatisfied customers who have said nothing. The same applies for candidates.

So, what does the overworked, overwhelmed recruiter do? How can you provide responsive service in the face of huge numbers of resumes? Here are three tips:

Don’t Post Job Descriptions, But If You Do, Make Them Precise and Specific

I have taken an excerpt from a job description I found on a website that is representative of many I see every day. The question I ask is who, with even a modicum of technical ability and a dash of experience, will not feel qualified for this job? There are no specifics, no details, and no firm requirements. I almost feel that I could apply for this and justify why if asked.

You’re looking for more than just a job in Information Technology. You want a career that challenges your IT experience while giving you the freedom and support to succeed. Look no further than [company name]. Our Professional Services offerings span the entire application life cycle, giving our customers a complete solution and our employees the opportunity to excel on all platforms.
With our technical focus and emphasis on delivery, we strive to hire experienced Information Technology professionals with broad skill sets and the desire and versatility to learn new businesses and skills. We are selective in hiring and serious about retaining those we do hire.
We are looking for candidates with the following attributes:

Oracle Financials experience
Oracle 11i application development experience
Strong PL/SQL
I am sure that this has generated many hundreds of unqualified resumes. Unfortunately, most job descriptions are written this way deliberately so that they will generate a large number of responses. When we lacked technology and reach, this was a marginally acceptable approach. But today, it creates big problems. Most candidates are very concerned with applying for an appropriate job, but how can they really tell from the way descriptions are written? Are the specific requirements spelled out? Are you using technology to screen for these?

We need to focus on a building a new mindset. We do not need mass marketing for most positions, we do not need to generate hundreds of responses to make sure we’ve “covered the field,” and we can’t ignore hundreds of applicants because of our own inadequacies. Many of us have attitudes that would be similar to those of a store clerk who, when overwhelmed with customers, simply walks off and leaves them.

We Need to Use Technology, and Use it Better
The new recruiting tools and systems have built-in tools for communicating, screening, and maintaining relationships with candidates. These candidate relationship management tools are not magical, but they ease the burden and automate a portion of the task. However, the sad fact is that after these systems are purchased, only a fraction of recruiters utilize their powerful communication and screening features. Most recruiters are still focused on the zero value-added backend “administrivia” and don’t see as clear a connection between the candidate experience and the type of response they get from recruiters.

Salesforce.com and all the larger Applicant Tracking Systems can automate the responses candidates get to various actions they take on the website. They can periodically send e-mails and newsletters, and they can be better programmed to send intelligent responses to candidates’ questions.

The bottom line is that all recruiters need to do a better job letting candidates know where they stand in the recruiting process by sending regular updates and letting them know as soon as possible that they are no longer being considered. Even automatic bounce-back responses can be more intelligently written and distributed.

Relationships and Referrals Are Keys to Your Success
I am more and more convinced that posting job descriptions is an archaic process. While I have no doubt that the practice will live on for a long time, it is not the best, cheapest, or faster way to find good people.

Using technology to develop relationships and to communicate regularly with a selected and screened pool of candidates is the key to your real success. By developing and using tools that allow candidates and hiring managers to co-create requirements and refine requirements as needed, more good people will find jobs that fit them better. Posting jobs on job boards and pushing descriptions that seem to have been written by a PR firm out to wary candidates is no longer effective.

Recruiters have to use social networks, referrals, Internet search, and face-to-face conversation to build trust and establish a relationship with candidates that can be leveraged whenever needed. Unfortunately, face-to-face relationship building is slow, expensive, and clumsy. Social networks allow you do this with much greater ease and gracefulness at a lower cost in time and money.

Base your recruiting on the customer service mindset, go for quality (not volume), and do that by building relationships and asking for referrals. If you are generating hundreds of responses to a job posting, you are doing something terribly wrong.