One Firm Finds Passive Candidates Offer a Safe Selection Process

Synaptics Inc., a touchpad technology developer, blazed through the recession with fiscal 2009 revenue up 21 percent and net income up 75 percent compared with 2008.

Based in Santa Clara, California, the company generates $900,000 in annual revenue per employee—the highest rate in the hardware industry. Maintaining such a record requires extraordinarily selective hiring. For every 10 candidates that enter the company’s extensive interviewing process, only one leaves with a job offer, and the acceptance rate is an overwhelming 92 percent.

The high levels of unemployment triggered by the recession have altered the company’s stance toward active and passive job candidates.

“We hire only the top 10 percent of performers, but just because you’re still employed doesn’t necessarily mean that you’re a top performer,” says James Harrington, vice president for global human resources. “We look at the individual case. Maybe the candidate is from a startup that just shut down. And we’ve seen a lot of acquisitions where not all of the people were absorbed.”

Not all employers have adjusted their longstanding preference for passive candidates.

Thirty million Americans are either unemployed or underemployed, but employers continue to poach those who are still on the job. In a June survey by the social networking site LinkedIn, 60 percent of employers said that passive candidates were better employees.

In a recent study by the Institute for Corporate Productivity, one-fourth of the companies reported that they recruit new talent by directly contacting their competitors’ employees. More than 40 percent said they actively source competitors’ employees in certain positions to a moderate or higher extent.

Recruiting risk-adverse passives
Companies that still recruit passive candidates find them more difficult to reach.

“There are some active candidates for us in the market, and the same time, the recession has actually made it harder to hire passive candidates because of their fears about the uncertainty of a new position,” Harrington says.

Synaptics relies on ongoing informational interviews to keep its pipelines full and pull in risk-averse passive candidates.

“We get to know people before we need them,” Harrington says.

Synaptics hired 100 new employees in fiscal 2009 and expects to hire 50 more by July 2010. The company conducts exploratory interviews with potential candidates on an ongoing basis.

“We may not hire them until three years later,” Harrington notes. He works with a tactical plan for one to two years out and a five-year strategic plan.

Synaptics does not ask candidates for a résumé until it is well into the interview process.

“Passive candidates don’t have résumés,” Harrington notes. “At some point we want to share a candidate’s résumé with our own line organization, and we ask for it.”

Candidates go through two or three interviews, with a total of eight Synaptics employees participating.

“We hire not just for talent but for culture,” Harrington says. “We want head and heart. We want to know the candidate’s work values and personal values. We can do this because all of our managers are trained in behavior-based interviewing.”

Overcoming the risk aversion of passive candidates requires more extensive discussions to reassure them about the company’s intentions.

“Our turnover is low; we’re not a hire-and-fire organization,” Harrington says. “Candidates don’t see our actual turnover numbers, but we talk about it with them. They get to know us well.”

Harrington says that Synaptics’ employees are the best recruiters for passive candidates.

“Our secret weapon is that 36 percent of our total hires are from employee referrals,” he says. Harrington is not concerned that the company’s heavy reliance on employee referrals and social networking will lead to a lack of diversity or simply replicate the existing workforce.

“We hired from 45 companies and seven universities in 2009,” he notes.

Synaptics uses a uniform recruiting process worldwide, with some modifications based on location to take account of cultural differences. In 2009, the company expanded development centers in China, Japan and South Korea, and used social networking to help reach candidates.

“Social networks help build the pipeline, and this is a global phenomenon,” Harrington says.

Bypassing starts and stops
Ron Selewach, CEO of Human Resource Management Center Inc., based in Tampa, Florida, says that there is still a strong employer preference for passive candidates, but the preference is misplaced given the ongoing layoffs that mark the current market.

“The first people to hit the street are dispensable,” Selewach says. “But companies have cut so deeply now that they have surplused some top performers. Employers who don’t consider active candidates are missing out on top talent.”

Selewach believes that a résumé-based recruiting process is ineffective for both active and passive candidates.

“The best way to recruit passive candidates is to bypass résumé submission, onerous online application forms, phone screens, preliminary interviews and all the starts and stops in what we call ‘Mr. Toad’s Wild Ride,’ ” he says. “Passive candidates are not sufficiently motivated to tolerate all those starts and stops. They need to be recruited through a system that whips them through the vetting process. Recruiters can set in place a system or a procedure that does not ask passive candidates to present a résumé or fill out a burdensome application.”

A résumé-based recruiting process also handicaps active candidates who have experienced long stretches of unemployment. In November, the average duration of unemployment hit 28.5 weeks, compared with the previous recession’s peak of 18.5 weeks in December 2002.

“This recession has vastly increased the number of active candidates with substantial gaps in their résumé,” Selewach notes. “Employers need to examine the gaps, but résumés rarely provide an explanation of the breaks.”

“Recruiting methods need to change,” Selewach says. “The current method is focused on who can write the best résumé, not who can perform the job. Résumés look at what the person did in the past and force companies to read between the lines about whether the person has specific skills.”

Selewach suggests that employers should replace résumés and cumbersome online applications with automated interviewing systems based on questions that reveal critical skills for the job.

“Employers can create a career site that uses artificial intelligence to interview candidates for specific jobs and handle a large number of candidates very quickly,” he says. “We have systems that allow employers to focus on interviewing for job-specific questions, but many employers are still unwilling to give up résumés.”

Selewach believes that it may take a whole new generation of recruiters, hiring managers and human resources professionals to ditch résumés and move to more efficient methods for evaluating candidates. “But a first step is to move the résumé to the back of the process rather than keeping it in the gatekeeper position,” he says.