What is the "hidden job market," and why is it so important to understand? In a nutshell, the vast majority of jobs out there are filled without ever coming to the public's view. That means no online ads, and in fact the statistics show that only about 10% of all jobs found are through online resources. And this brings me back to my 80/10/10 rule when job searching:
80% networking
10% with agencies/recruiting firms
10% applying to positions posted online, in a newspaper, or other publicly advertised method
As a recent example, a CFO position I placed garnered over 700 resume submissions, 95% of who were not close to being qualified. Some of this applicant pool included a grocery store clerk, warehouse foreman and a welder (and these are just a few I sampled out of the hundreds). The problem that we are facing is the "shotgun" approach so many applicants are using out of desperation; a number of them have told me they apply to everything in hopes that, although the position isn't in their particular field, maybe someone who reviews the resumes will just happen to be looking for someone like them for a different position. I can understand the thinking, because it is hard out there. The problem though is that it becomes even more difficult of course for the legitimate candidates to come to light. Beyond the online applications though, the best way by far to find a job is through networking. My process is to present the top 3 candidates to the client after thoroughly interviewing a much narrowed down group. Once in a while 1 candidate that is presented is from the online application pool, but most time 0; the other 2 or 3 candidates come from referrals or through contacting passive candidates on LinkedIn. For most positions though, I'm not even advertising and finding all of my top candidates from the latter.
The reason why it is so important to network is because about 80% of jobs out there are not advertised. They are only found through the "hidden" job market. The problem I find with most job seekers is that they are spending 80-90% of their time applying online, when only about 10% of jobs are found through that method. One last thing I would add for job seekers is to work the LinkedIn route to find and develop warm relationships through networking with employees inside target companies before jobs are posted, but more likely so that you have an inside track to the hidden jobs when they arise. Your chances are much higher when you are able to have your resume presented with a referral from the inside versus even needing to be at a point of following up with a hiring manager when your resume is among a pile of 500 resumes or more.
Recruiters use various methods for finding candidates - advertising online, referrals, LinkedIn, and drawing from candidates already in an Applicant Tracking System are the most prevalent. However, just as is the case on the job seekers side, our best success comes from facets of networking - referrals and LinkedIn. Consider an example of when I was asked to place a VP of Human Resources for a very specific industry. This was a search that would fit into the hidden job market, because I did not advertise it publicly. Instead, I conducted targeted searches on LinkedIn with search parameters fitting key words that would produce results of professionals who were at a Director or VP level in all of the specific industry companies in the US, and a few abroad. The list of names I came up with and began to contact would be considered passive candidates; people who were employed, not currently looking for a new opportunity, but not going to turn an ear away if contacted about a new position either. As I contacted each, some were interested, others were not, but all were to some degree willing to give referrals of others who they knew who would be interested. Now I have a solid pool of candidates from both LinkedIn and the referrals I received directly from the same people I contacted. The important thing is it literally took me a few days to come up with a candidate pool of 25 very good candidates.
In this case (and most cases), there is no reason to advertise a position like this publicly. Why? Because the chances of the exact type of candidate I am looking for seeing this online and applying for it are remote. The client needed someone who had experience at a high-level of HR, AND who has worked "X" amount of years in that capacity within this specific industry. What I can expect though is a ton of resumes from people who are nowhere near being qualified. It's a complete waste of time to advertise the position, because I know for sure I am at best going to get one or best case scenario two candidates who fit the bill. Networking however got me 25.
So in the case where 700 applicants are received, it's a mix of thinning down with an Applicant Tracking System, and then further narrowing it down by looking through each that made the cut personally. Can mistakes be made with Applicant Tracking Systems? Sure. But keep in mind that the biggest reason mistakes are made are because the searcher is not putting in the right key words to conduct it. In other words, the program is only as good as the input it receives. In this case though, it's very safe to say that when I am narrowing down the pool with a simple key word of "accounting (for a CFO position)," and 90% don't fit the bill, it's a pool that is filled with people who should not have applied in the first place. A sampling of resumes (which is easier and quicker to do once parsed in the ATS) confirms the findings; I manually look through 50, and guess what? Not a single one has an ounce of experience in accounting, let alone at the CFO level to run a $200 million company.
Now if I spend my time manually searching 700 resumes, I'm not using my time wisely, This is especially true when I already know from experience that I am looking for a diamond or two among the coal. I did something in 20 minutes that would have taken a few days of wasted time otherwise. As it turned out, there were 3 out of 700 I interviewed personally, and 1 of those 3 made the cut to be presented to the client. The other 2 candidates I presented to my client were found through referrals and LinkedIn. And the individual who got the job happened to be 1 of the 2 I found through networking.
The problem with posting any job online is the response garnered from people you don’t want. Back before my days as a recruiter when I was a Director of Finance and Controller, I would post a position on CareerBuilder when I needed a new employee, and without fail I would have 25 calls in the next 2 days: 15 from recruiters and 10 from people personally. The recruiters were asking for the opportunity to work on the position, the other people giving their pitches for the position. This was a number of years back when the economy was stronger. Can you imagine what is happening today when positions that received 60 resumes just 3 years prior now receive 700? I had a website for my company for a while, but after incessant calls and emails from people I would never place, I took it down. I was spending my time fielding unproductive calls when I should have been focused on finding the right candidates for clients. It’s the same thing with advertising publicly, and why job boards like Monster and CareerBuilder are sputtering. Conversely, it’s why LinkedIn is thriving. We find the best candidates hands down on LinkedIn, not on the other job boards. Flipped to the applicant side, it’s exactly why we promote the use of LinkedIn and networking. The problem is most people devote 90% or more of their time during a job search applying online, where less than 10% of jobs are secured. They should be spending that time networking where the 80-90% in the hidden job market come from.
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