Inside the Brain of the Passive Candidate

Before building Entelo and since weve started the company, weve had hundreds (probably over a thousand by now!) of conversations with people about how they recruit. Weve heard all sorts of interesting stories and a lot of great ideas. A recent conversation with a recruiter spurred something thats been smoldering for a while here at Entelo. This recruiter felt that the recruiting industry is getting it wrong. He believes that there is too much focus on the wrong aspects of recruiting and that, if you could shift the recruiting mindset, recruiters would be more successful and companies would be more satised with their recruiters. And for him, the missing piece boiled down to one metric: Candidate Response Rate (CRR) Companies in fast-growth mode that are attempting to ll in-demand roles in technology, sales, marketing, etc. cant simply wait for the right candidates to come to them. They need to proactively nd their talent. In the industry, this is referred to as passive candidate sourcing (a somewhat weak phrase for a critical company activity, but thats a topic for another day!). Facebook does this. So does Google. And if you believe the research, many more companies will be doing passive candidate sourcing in the future. If youre doing passive candidate sourcing, the number of responses you receive from candidates is a function of two variables: (1) The number of candidates you contact and (2) the percentage of candidates who respond.
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Inside the Brain of the Passive Candidate

Lets break down each element. (1) The number of candidates you contact: Theoretically, this number is unlimited. The major limitation here is your time as a recruiter. However, there are two schools of thought. School #1: Recruiters should aim for volume, trying to mass-message as many people as possible. This is one of the benets people nd in tools like LinkedIn Recruiter. It allows them to mass-message more efciently, thereby increasing the number of people who have been contacted. School #2: Mass-messaging candidates is not efcient. For starters, its not ideal for candidates to receive dozens of generic-sounding messages in their Inbox each week. Many of the opportunities might not be right for them. Some candidates even view these messages as spam, which both annoys them (to the point that many folks have stopped checking their LinkedIn InMails) and potentially reects negatively on you and your company. (2) The number of candidates who respond: Sending customized messages to candidates is often best (see a thorough blog post on this here). Personalized messages involves doing homework on potential candidates to assess t and crafting messages specically for each
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candidate. This process makes for a much better candidate experience (most candidates are thrilled to receive messages from recruiters who very clearly took the time to understand their work and expertise). The response rate from custom messages is signicantly higher than that from mass-messaging But thoroughly researching candidates and crafting custom messages is hard work. An automated sourcing tool like Entelo can save you 80-90% of research time. Nevertheless, time and effort will need to be spent in using that research to draft a custom message. Because of this time commitment, youre only going to be able to send a certain number of messages per day. Therein lies the rub and the crux of this whitepaper. If youre limited in the number of messages you can send per day, then one of the most important decisions youll be making as a recruiter is which candidates you choose to message. This decision will be a critical factor in determining your organizations success. For many open reqs, there are more than enough quality candidates. Tools like Entelo, LinkedIn and others make it possible to view candidates with the skills that youre company needs. If youre looking for a Ruby on Rails
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Inside the Brain of the Passive Candidate

engineer in the Bay Area and there are 10,000 Ruby on Rails engineers in the area, you cant message all 10,000 of them in the appropriate fashion. You must choose your battles wisely. How do you do that? Identify which passive candidates are actually more likely to be open to new opportunities. The rest of this whitepaper is devoted to the signals that you can use to identify which passive candidates may be more likely to take on new opportunities.

people at Acme may be more likely to leave, either because they fear being laid off themselves or because layoffs typically have such a hit to morale that even those with more job security start to look around. If youre attuned to these things, it can mean that you now have many candidates who may be more receptive to your job opening. Cons - Company-level data is often not the most powerful indicator of propensity to change jobs. Even in companies with bleak environments, there are often many die-hards who wont want to leave. The inverse is also true. Companies that are doing well have people leaving them all of the time for a variety of reasons. If youre only focused on company-level data, you would miss these individuals. Therefore, you also need to look at individual-level data, which is explained in the second half of this whitepaper. When youre looking at company-level data, keep in mind that youre looking for anything that would suggest a candidates propensity to leave or not leave their current job. Even more important, look for leading indicators of candidate availability. Weve done countless hours of research on this topic. Below is a list of things to look for.

#1 - Company-level data

Company-level data is composed of information and news about the company where a candidate is currently working. There are pros and cons to using company-level indicators. Pros - When you identify data which suggests that candidates may be more likely to change jobs, you identify a whole new host of candidates to contact. For example, lets say that Acme Software Corp just announced that they will be laying off 1,000 people at the end of the year. This immediately raises the odds that
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Inside the Brain of the Passive Candidate

What to do: As a recruiter, you should spend at least a portion of your day paying attention to the business press. Read the high-prole newspapers and online media publishing business news, and set up google alerts. #2 - High-prole departures. Another sign of trouble at a company is when senior-level executives leave. The departure of, say, the VP of Engineering of a company doesnt necessarily mean that others will defect as well but, as with all of these things, youre playing the odds. There are a number of reasons why the domino effect exists within companies. Sometimes it signals internal struggles. Often, the seniorlevel executives will see trouble on the horizon earlier. What to do: Similar to layoff announcements, youll learn a lot of this through the business press. Think about where high-prole departures get announced for your industry/ geographic location and pay attention to those publications. You can even set up custom Google alerts to help you stay on top of these types of events. #3 - Stock price declines. For candidates working at publicly-traded companies, one of the biggest leading indicators of people leaving is the recent performance of the stock price. Stock price declines are telling
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#1 - Company layoff announcements. This is perhaps the #1 leading indicator of employees departing the company and looking for new opportunities. Of course, theres the obvious fact that those being laid off will leave the company. But when layoffs happen, it typically means that others who arent laid off start looking for greener pastures. The announcement of impending layoffs signicantly raises the odds that the companys employees will change jobs in the coming months. Its one of the reasons why layoff announcements can be so toxic to a company.

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Inside the Brain of the Passive Candidate

of all sorts of things. They may precede the kind of rough nancial performance that could lead to layoffs. Poor stock performance also affects employee stock option value, which could impact retention. And stock price is of course highly correlated with morale in a company. At the end of the day, very few people want to go work in a dreary environment all day. What to do: Stay in touch with stock price movements for companies that you are recruiting from (e.g., if you are recruiting for a gaming startup, you might include the ticker symbols of all of the publicly-traded gaming companies in your portfolio). Set up a portfolio on a site like Google Finance and check in every day or two. In addition to being able to better track stock price movements, youll also get updated news on related companies. #4 - Acquisitions. When companies get acquired, people leave. Not everyone leaves and people typically dont leave right away, but the news of a company getting acquired is something to pay attention to. There is typically a lock-up period in which people who leave prior to the lock-up will forfeit signicant value, but employees nevertheless nd something else right away. Many startup employees get quickly frustrated by big company bureaucracy and choose to leave money on the table instead of
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continuing to work in a stiing environment. What to do: Theres a two-step approach here. First, be aware of acquisitions. Youre probably not going to have the best results emailing people right after the acquisition is announced. Other recruiters are likely contacting them and candidates havent really had a chance to know if they will enjoy working for the acquirer. Its better to wait a month or two before sending a message. In addition, you may want to set up a task to reach out to the candidate 10 months or so after the acquisition. The lock-up may expire after 12 months (many are longer, typically 24 months) but even if it doesnt, the 1-year mark may be important nancially. If candidates know that they will be leaving after 1 year, the 10-month mark (give or take a month) is typically when employees start looking for new opportunities. #5 - IPOs. IPOs are almost identical to acquisitions in that many people will stay through the IPO but depart shortly thereafter (e.g. high-prole Facebook departures after the IPO). IPOs tend to be less determinate because many people will leave prior to the IPO and some will stay well past, particularly if the stock does well. The event of an IPO has an emotional component as well, as
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Inside the Brain of the Passive Candidate

there are few things that are more enjoyable than being at company headquarters on IPO day. What to do: At the risk of sounding like a broken record here, pay attention to the business press.

Lehman Brothers ling for bankruptcy on short notice during the nancial crisis of 2008). #8 - Alexa/Compete/Quantcast rank. The health of consumer Internet companies can often be ascertained, at least in part, by their web trafc. That information is publicly available on sites like Alexa, Compete and Quantcast. #9 - Negative news about company culture. Occasionally, there will be a story in the press about the negative conditions at a particular company. While sometimes this is just the feelings of a few select employees, often where theres smoke, theres also re.

Other factors: #6 - Funding status. If a company announced funding a while ago but hasnt announced anything recently, its possible that the company may be on the verge of shutting down. Sites like Crunchbase can be helpful in identifying this. Also look for any press that the company has gotten recently. #7 - Bankruptcy or shutdown. By the time a bankruptcy or shutdown is announced, the writing has typically been on the wall for a while and most employees have secured new jobs, but occasionally these announcements are actionable (e.g.,
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#10 - Quarterly earnings announcements. This is tightly tied to stock price. When a company announces that they missed their earnings for a quarter, thats usually a sign of worse news to come. This list may seem overwhelming. Remember that incorporating any of this data into your recruiting process will put you ahead of 99% of recruiters. While savvy recruiters look at many of the above items, most dont, which is a huge missed opportunity. One nal point on company-level data: the above data points should not be thought of as data only for one
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Inside the Brain of the Passive Candidate

specic company. Industries often move in lockstep. If you hear that a company is announcing layoffs, its possible that its competitors may also be announcing layoffs soon (due to macro-level factors). Factor this into your calculations as well.

#1 - Length of time at existing company.

#2 - Individual-level data
There are a lot of things to consider at the company-level which play a role in a candidates potential availability. However, there might be even more individual-level data to consider. Recruiters have exponentially more data available to them today than ever before. As we mentioned with company-level data, this can seem overwhelming but once again, remember that by incorporating even just a small amount of this type of data into your recruiting process, youll be signicantly ahead of most of the recruiters that youre competing with for talent. Here are the things to look for in an individual candidate to assess whether or not they may be open to a new opportunity.

You can think of this like a bell curve. People that have been at their job for only a few months arent likely to be looking for something new at this point. Even if they are, it raises a red ag that they might be a job hopper and even if you could hire them, you may not want to. On the other hand, people who have been at their jobs for, say, 10 years, are also unlikely to be randomly looking to leave their company after all that time. You want to focus on the most likelies, which includes people who have been at their job for anywhere between 10 months to 4 years. It breaks down like this: 10-month mark - If someone is miserable early in the lifecycle of their job, they will often look to wrap up in a year and may be looking for their next gig around the 10-month mark. Also, employees may have a 1-year cliff for stock options that they want to hit before leaving. If they are looking to leave after 1 year, theyll likely start poking around for new stuff around the 10-month mark. If your message arrives then, the timing could be perfect.
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Inside the Brain of the Passive Candidate

2-year mark - As with the 1-year mark, the 2-year mark is also signicant. It often will mean that employees are 50% vested in terms of shares and 2 years at a company usually looks better than a 1-year stint. Similar to the above, you may want to reach out to them 2-3 months in advance of their 2-year anniversary. 4-year mark - This is the point at which many people become fully vested. If things have gone really well for someone at a company, staying 4 years is usually pretty common. And very few people would fault an employee for leaving after 4 years.

who looks slightly less ideal but who has been with their current company for 23 months. #2 - Social networking activity.

So the sweet spot for recruiting passive candidates is usually between 10 months and 4 years with spikes at 10 months, 21-22 months and around 45 months. What to do: Looking specically for people who have been at their company for 21-22 months is hard. However, this general thinking should guide you when looking at a candidate. Someone who looks great on paper but has only been at their company for 5 months is typically not as good a candidate as someone
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If youre looking for the top leading indicator of a career change, youve found it. Most people dont change their social networking proles very often. They may be undertaking a lot of activity on a social network (e.g., posting status updates to Facebook) but actual prole changes are rare. When they happen, more often than not, its because people realize that someone will likely be viewing their proles soon and they want to make sure their proles looks as good and accurate as possible. Sound like a job hunt? :) Social networking activity indicators: Prole updates - This is the obvious one. When people change certain things on their LinkedIn, Twitter, Github and other proles, it is highly correlated with their starting to look for a new career opportunity. Of course, this isnt true 100% of the time. But once again, were looking for positive correlation, not perfect correlation.

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Inside the Brain of the Passive Candidate

Uptick in activity - A recent uptick in activity is another important indicator. Did someone who never used to go to Meetups all of a sudden start attending them frequently? Or perhaps you see someone on Github who has committed a lot of code very recently. These things can often be highly correlated to someone looking for a new job. New membership on social sites Engineers are starting to hear that Github is the new resume. This motivates engineers who dont already have a Github prole to create one before they begin a new job hunt. The same is true for many other sites. There is a challenge here in that many sites dont make it easy to determine when a prole was created, but if you are able to gure that out, it can be helpful. Connecting with recruiters - If you notice that someone you are connected with starts connecting with recruiters, thats often a sign that theyre looking to make a move. In addition, if you see a lot of back and forth on Twitter between a candidate and a recruiter (even if its just friendly banter and not related to work) that can also be a leading indicator. Adding recommendations on LinkedIn - This is probably the biggest giveaway that someone is looking to make a move. After all, almost no one thinks about asking for
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recommendations when they are happy at their current job. LinkedIn lists the date the recommendation was posted. Looking for the addition of new recommendations when youre looking at a candidates prole could give you a leg up. Sentiment analysis on Twitter - While its possible that someones mood on Twitter can indicate their potential willingness to make a career move, this is tough to get right. There are too many factors here to consider and so much noise vs. signal for most people. Sure, if you see someone say I hate my job and my boss is a schmuck on Twitter, then that person might be open to a new career opportunity. But this may not be the person you want to hire anyways. What to do: Were publicly launching something on Entelo to greatly help with this soon but in the meantime, check out tools like Bullhorn Radar, Job Change Notier and LinkedIn Signal. These tools have varying degrees of efcacy for this (e.g., Bullhorn Radar only shows you changes for your 1st degree LinkedIn connections; Job Change Notier sometimes isnt helpful because it often shows you people who have already changed jobs, etc.) but these tools can provide valuable insights. LinkedIn Signal in particular can be useful because it will allow you to see changes for people you arent connected to (a relatively recent
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Inside the Brain of the Passive Candidate

feature) although the interface through which to do this is fairly confusing.

#3 - Explicit hiring signals

All of the signals that we have listed thus far are primarily indications that someone might be looking for a new opportunity. The aforementioned indicators are positively correlated with passive candidates being on the lookout for something new, and can serve as strong signals of candidate availability. However, its even easier when passive candidates explicitly say that they are looking for something new. This is the middle ground between a candidate actively applying for a job via your company website or a job board and a passive candidate who has not explicitly stated an interest in a new opportunity. Below are ways that people signal that they are looking. #1 - Language indicators in social networking proles. Candidates will often put phrases into their bios, resumes, etc. that signal that they are looking. Examples of these are things like the following:
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actively pursuing actively seeking available available for in search of new job new opportunity new opportunities open to pursuing seeker seeking

These are just a dozen. There are hundreds more of these types of phrases that might be utilized and many recruiters will incorporate Boolean strings to nd resumes that match on these phrases. (Note: You will typically nd a good number of false positives when doing these types of searches.) Glen Cathey at Boolean Black Belt has written a very comprehensive article on this topic entitled How to Find and Identify Active Job Seekers on LinkedIn. We highly recommend
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Inside the Brain of the Passive Candidate

that you check it out for additional background. LinkedIn is also a special case here for another reason. Every LinkedIn prole contains Opportunity Preferences, a section that allows each user to signal their openness to being contacted about various things. The settings in this section are as follows: Career opportunities Expertise requests Consulting offers Business deals New ventures Personal reference requests Job inquiries Requests to reconnect Career opportunities and Job inquiries are the items most closely correlated with someones likelihood of being open to something new. New ventures might also have some signal, especially if youre recruiting for a startup. Do note that these preferences are notoriously out-ofdate much of the time for candidates. That said, it does make sense to look at these for each candidate that youre planning to contact. LinkedIn strongly advises against contacting candidates for inquiries unless they have explicitly mentioned that they are open to that type of communication.

#2 - Participation in hiring-related sites. Recently, there has been a rise in sites that attempt to match jobseekers and employers in a nonpublic way. While these services are still fairly niche, they can often provide good candidates depending upon the industry and geographic region that youre focused on (theyre best right now for tech candidates in major U.S. cities). Some examples are the following: AngelList Talent Developer Auction StartupDigest VIP WhiteTrufe Sites like these are either completely free (in the case of AngelList) or charge a fee only upon successful placement of a candidate. This lowers the risk of using these services to no avail.

#3 - Presence in a resume database. While resume databases are on the decline in many industries (the growth of social networking sites has, in large part, led to their demise) they can still be valuable sources of data. For free
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Inside the Brain of the Passive Candidate

resume databases and any paid resume databases that you have access to, you should be looking for the following: Recently added resumes. Candidates typically only add their resume to a database when they start looking. If the database allows you to see who recently added their resume, youll get a good sense of availability. Recently updated resumes. Similar to recently added resumes, people typically only update their resumes when they are thinking about looking for something new. Other explicit signals. There are literally hundreds of other ways for people to explicitly signal their availability. For example, on the website Dribbble, people have a ag called Hire Me that indicates their openness to new opportunities. Freelance websites are other good places to look as the mere presence of a prole on one of these sites typically signals openness to job inquiries. What to do: Familiarize yourself with the various signals that are out there related to explicit availability. Then, depending on the roles that youre looking to ll, do a deeper dive in the areas that are the most relevant to you. For example, if youre doing tech recruiting in the Bay Area, denitely sign up for AngelList, WhiteTrufe, etc. as theres no harm in doing so and it may yield some candidates. If youre recruiting for a position where people commonly post their resumes to a resume database, actively check for new and newly updated resumes. Summary There are, no doubt, many factors that can signal passive candidate availability. Were really excited about what were releasing at Entelo, which relates to many of the things discussed in this whitepaper. If youre interested in using our product, sign up at www.Entelo.com. We wish you the best in your recruiting efforts and if you have additional ideas on this topic, please dont hesitate to drop us a line at contact@entelo.com.

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