Why software companies are wasting time and money on ineffective hiring processes, and what to do about it

Software companies have never spent as much time and money on their hiring process as they do today. And the interesting thing about that fact is...they’ve never done a worse job of it.


The company often starts by preparing a detailed job analysis to determine what tasks the job requires and what attributes a good candidate should have. Next they do a job evaluation to determine how the job fit into the organizational chart and how much it should pay, especially compared with other jobs. Ads are posted, and applicants apply. Then comes the even more difficult task of sorting through the applicants. Some studies estimate that up to 75 percent of the applications recruiters receive are from candidates who are unqualified for the job. And even jobseekers themselves admit to only spending a measly 76 seconds reviewing a job posting to determine if it’s worth applying to, a practice that understandably can result in applying to a job that’s not a good fit. In most cases this process can go on for weeks, before narrowing down the long list to a few they feel are worth interviewing.


Today’s approach couldn’t be more different. Census data shows, for example, that the majority of people who took a new job last year weren’t searching for one: Somebody came and got them. Companies seek to fill their recruiting funnel with as many candidates as possible, especially “passive candidates,” who aren’t looking to move.


A passive candidate is someone an employer is considering for a certain position, but who is not actively seeking a new position. Passive candidates have not applied for an open position and are not searching for a new job. However, for a variety of reasons their qualifications and experience make them attractive to hiring managers, who may begin recruiting by inviting considered candidates to consider the position. Passive candidates are often those with in-demand skills and experience, making them desirable to employers, and sometimes difficult to recruit, especially if they are happy and well-compensated in their current employment.


Unlike traditional candidates, passive candidates don’t actively search job boards or apply for available positions. Instead, instead use alternative means to source and contact passive skilled candidates for open positions. Most of the time, finding these passive candidates will require a retained search provider to manage such tasks as asking employees or other contacts within their network for referrals. They may search for attractive profiles on LinkedIn, review data from previous employees or candidates, consult professional websites and communities, or utilize recruitment technologies or talent management systems. Social media or even search engines may be other helpful resources for locating passive candidates.


Utilizing a retained search provider is a form of business process outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider. A can provide its own, or may assume the company’s staff, technology, methodologies, and reporting. In all cases a retained search providers in that it assumes ownership of the design and management of the recruitment process and the responsibility of results.


Today the recruiting environment is rather complex. In order to effectively recruit top talent, you need to navigate a tight labor market; become proficient in a set of relevant technologies; and manage and nurture candidates and hiring managers. RPO providers are subject-matter-experts; talent acquisition is their core competency. They know how to navigate the recruiting environment, stay current with the latest recruiting technology and have the resources to scale recruiting capacity to meet hiring demands. A retained search provider can bring people, technology, process, and metrics into a talent acquisition function.

According to many experts, the number one reason companies succeed, struggle, or fail directly correlates with who they hire. Depending on what an organization is looking for, a retained search provider can bring an array of many benefits including managing hiring fluctuations throughout the year, reducing total recruiting cost and dependency on staffing agencies, improving hiring manager satisfaction, reducing time-to-fill, elevating employment brand, improving candidate experience, simplifying or streamlining the hiring process; and saving time for other duties among other benefits.

Over the past few years professional recruiters been trickling down into the smaller and middle market domain as outsourced recruiting becomes applicable to these markets. As a result, smaller, agile retained search providers are rising into the higher ranks of strategic recruiting partners and carving their unique niche in the talent acquisition marketplace.


Smaller organizations have the additional challenge of managing hiring capacity and fluctuating needs. It is typical for human resources personnel in smaller organizations to wear multiple hats: managing employee relations, training, payroll, compensation, and benefits, in addition to hiring and recruiting. Or the hiring manager may be tasked with managing the entire hiring process themselves. Smaller firms also have a fluctuating number of hires throughout the year, making it challenging to staff an internal recruiting team based on demand.

Retained search providers bring scalability to the process and variability into the cost. Recruiting engagements can be structured and priced based on hiring needs, providing a flexible solution to recruitment requirements. An added benefits to using a professional recruiter is that when managed well with a quality provider, A recruiter can reduce time to hire by 40 percent and deliver cost savings of more than 50 percent.