Over half of all businesses fail within their first five years. There are a number of reasons for that happening—keeping up with a business is hard—but inevitably, experience teaches us that the success of any business is ultimately determined by the quality of the talent you have on board.

The people you hire can make or break you. They can make everything easier, or they can make your life a never ending nightmare. Mediocre talent is everywhere. Good talent is plentiful, too. But the type of talent that really pushes you forward is rare and hard to find. That’s why paying close attention to how and when you’re recruiting talent for your business is so important.

There’s a lot to juggle when it comes to talent, and that’s why we’re spending this month running you through the basics. In this first week, we’ll be covering everything you need to know about recruiting top talent. Next week we’ll cover onboarding and training, the next week managing, and the last week we’ll cover retaining talent. By the end of March, we hope you’ll have everything you need to be prepared to not only make a great first hire, but one that lasts.

Today, we’re going to take our first dive into all things recruiting.

THE 6 LAWS OF RECRUITING

When it comes to recruiting, there are a lot of points to cover. That’s why we’re going to start by getting a few of the most important things out of the way. Below are what we consider to be the six fundamental rules to recruiting:

1. Talent Attracts Talent

2. Great Recruiting Requires a Great Vision

3. Recruiting is a Habit

4. Compensation Shouldn’t Be a Hurdle

5. The Best Recruits Come from the Bench

6. Work from a Process

If you don’t read anything else, read these and take them to heart. They’re tried and true, and have been the mantra of many successful recruiters over the years.

#1 Talent Attracts Talent

It’s a familiar story of the rich getting richer.

Above all else, talent is most attracted to talent. That means talented people look at who they may be working with before considering anything else, including pay, ownership, environment, and culture. The most desirable thing for talented individuals is to be surrounded with like-minded and willed people. There are a few theories behind why this is, but really what it comes down to is that opportunity exists where talented people are. And talent, by and large, is magnetized to opportunity.

This is incredibly important as you look to grow your business. As Bradford D. Smart describes in his book, Topgrading, “Hire one A [player] and other A’s follow – a ‘two-fer’ or ‘three-fer.’” Hiring top-level talent should be your standard, not an anomaly.

This isn’t just conjecture. Psychologists have been studying and debunking the myth that “opposites attract” for the better part of a century now. While they’ve confirmed that people tend to gravitate toward those who share similar characteristics, only recently have researchers discovered that people actually prefer friends and spouses who share a similar personality. The same holds true for the workplace.

For first time business owners, the trajectory of your organization begins with you. If you want to attract the type of talent that will propel you forward, you have to become the type of person they want to be in business with.

#2 Great Recruiting Requires a Great Vision

The importance of a clear vision can’t be understated. Recruiting becomes a lot easier when you know the type of person you’re looking for and what you need them to be able to do. Before you make a hire, you’ll want to create a wish list of all the qualities you want to see in your employee. We call this a missing person’s report, because we expect you’ll have a pretty good picture of the person you’re looking for when you’re done with it. Write down in detail all of their skills, their behavior and experience. Having a mental picture not only gives you some place to focus when recruiting, it also helps you set standards on who you’ll hire and who you won’t.

It’s not uncommon to hire for specific jobs. But in the grand scheme of things, that’s taking a tunnel-vision approach to your business. Having a vision about the future of your business, the roles you’ll need as it grows, and the type of people you need to get you there is crucial to your sustained success.

A good tool to use to forecast your vision for your company is the GPS. If you’ve read The ONE Thing, you’re probably familiar with how it works, but if you haven’t –  no problem, we’ll run you through it right here.

GPS stands for goals, priorities, and strategies, and it’s a way for you to gain clarity on the goal you’re pursuing and who you’ll need to help you get there.

Every vision begins with a destination, so at the top of your GPS, you’ll have ONE goal that satisfies the BIG vision you have for your business. Underneath that, you’ll list out three priorities. These are milestones that need to be met in order for you to accomplish your goal. For example, if your goal is to do $400 million in sales, then each priority would be an avenue to take a chunk out of that sales goal. Underneath each priority, you’ll list five strategies for accomplishing each one. At a fundamental level, these are the daily activities that compound into larger achievements.

Once you’ve written your GPS, go ahead and turn it on its side. That’s your organizational chart.

Each priority and each strategy should have someone’s name on it, and it should be their job to make sure that each one is completed. This a great way to see the holes you need filled in order to achieve your vision for the company.

The best part about working from a vision while recruiting is that you can use it to sell candidates on their growth potential within your business.

Nobody likes a dead-end job. Top talent thrives with open doors. They don’t want their aptitude to be hampered by any roadblocks—so make sure you’re up front with them and don’t give them any.

#3 Recruiting is a Habit

Business owners understand that finding top talent is harder than finding a needle in a haystack. You’re looking for a unicorn. Someone who not only can do it all, but wants to do it all—and do it for you. Making matters worse, they’re not always going to be looking for you when you’re looking for them. That’s why the best recruiters make it a point to never stop the search—regardless of their current talent needs.

The amount of time and focus we spend on recruiting typically depends on how desperate we are. If we’re in high-water, it’ll demand everything we have. If we’re coasting, it’ll seemingly demand nothing. Neither is the ideal approach to take. When we talk about building a recruiting habit, we’re talking about finding a happy medium between the two. It shouldn’t command all of your attention. Just enough so that, over time, you’ll have built up a sizeable network of talent so you won’t need put all hands on deck ever again.

Most importantly, making it a habit simply increases your chances that you’ll come across someone truly exceptional—that unicorn. During a typical hiring process, you may come across hundreds of applicants. And while it may seem like a lot, it’s only a small sample of what’s out there. Instead of recruiting the best, we often handcuff ourselves to recruiting the best of what’s available at the time.

The easiest habit to get into that will increase your odds of finding top talent is simply making a point to meet with someone else once a week. Reach out to your network and ask them who they think you should be in business with.

Douglas Conant, the President and CEO of the Campbell Soup Company until 2011 followed this approach with great success. As he explains:

“Every month, I have dinner with two of the top people in any field — finance, marketing, I.T., general management, human resources, supply chain, you name it — that I have heard about through our recruiters or by word of mouth. Over dinner, I ask them to tell me about their work. Over the years I’ve met with 400 of the best people anywhere, and have developed a good visceral understanding of the talent landscape. Of these, perhaps 50 have had the combination of qualities I look for, and over time I’ve been able to hire some of them. I have kept up this practice even when there have been no jobs to fill, because I learn a great deal every time I meet someone new.”

Your meetings don’t have to feel like a pitch, because that’s not really the point. The point is to begin building relationships with people who you believe are talented. That way, when an opportunity opens up, you have a bank of names to pull from for the job.

#4 Compensation Shouldn’t Be a Hurdle

When it comes to that one person you can hire who would make everything else in your life easier or unnecessary, worries about compensation should be thrown aside (within reason).

Accomplishment demands a higher price, which at times can put some pressure on your budget. There’s no way around it. But the most talented people will generate a return on investment.

This law requires you to be judicious as a business owner. Understand that there’s going to be some risk involved with any hire you make. There’s no way to really tell if someone is truly talented until you work with them. We just have to determine what level of risk we’re willing to take. Don’t break your budget on a hire — make sure you have the ability to survive any potential mistakes.

Top talent, especially in a leadership capacity, might put some pressure on your budget. But at the same time, true talent will expand your budget. They’ll literally wind up paying for themselves.

Set standards and milestones for them to meet within the first 90 days that will tell you whether or not:

#1 They are who you expect them to be.

#2 They can generate a return on your investment.

If someone fails to meet your standards, then it’s okay to pull out your investment.

If you’re unsure about someone’s potential, then see if you can work with them on a contract or freelance basis first. Get a good look at the type of work they can do for you and your business before committing.

Also, when it comes to hires, it’s easy to forget that there’s more than one way to skin a cat. Compensation can be creative. We see it all the time in the tech world, where talented individuals are given rolls of stock or other perks to compensate for their lack of salary. In our eyes there are eight ways to compensate someone:

1. Commission

2. Base + Commission

3. Base + Commission + Bonus

4. Profit Sharing

5. Salary

6. Set Aside Money

7. Profits Interest

8. Stock

The list starts with the most non-committal way to compensate someone: commission. Commission basically says “You’ll be in charge of your own pay.” It gives them ownership over their outcomes and is the traditional way to compensate people in sales roles. As you work your way down the list, you come across more cumbersome methods, which requires you to pony up in order to satisfy someone’s financial goals.

#5 The Best Recruits Come from the Bench

Your biggest tool against turnover and your greatest asset for top-grading talent within your business is your bench.

Say what you want about the cheese heads in Wisconsin, but the Green Bay Packers’ 2010 season was definitely one for the record books. Among those listed in the starting lineup for their first game, every player but one would find themselves on the team’s injury report at some point during the season. Seven would sustain season-ending injuries. Of those who started at least one game for the Packers that year, 35 of the 44 were listed on at least one injury report. Combined, starting and reserve players would go on to miss 259 games throughout the season.

Looking at those stats alone, it would be easy to write off the season as a total loss. But don’t tell that to them— they won the Super Bowl that year.

No other team in the history of professional sports has sustained so many injuries and still gone on to win a championship. To put this in perspective for readers who may not enjoy football, imagine having 80 percent turnover in one year and still topping your market. Not many business owners are prepared to handle those types of losses—let alone surge to the top their market in spite of their losses. But the secret to doing so is having a good bench.

Over the years the Packers drafted and recruited talent at every level of their organization, so that if one person should fall, there would be someone with equal or greater talent to fill the void. Players like Erik Walden, who had been cut mid-season by the Miami Dolphins, would go on to start in several games throughout 2010 for the Packers, and earn a position at the top of the depth chart for future seasons to come.

The lesson in all of this is that the type of talent that fills the bottom-tier of your organization matters. That’s because talent doesn’t sit on the bench to fill a void, they’re there to put pressure on your A-team to continue performing at a high level.

Like we talked about in the last law—the best recruiters are the ones who make recruiting a habit. And having a bench on hand to give people an opportunity at any given moment, is a big part of making that habit successful.

It’s no wonder why the general rule of thumb for promoting is to “promote from within”. A number of mega-companies from GE to Proctor and Gamble have shown the full extent of this tried and true method. Internal hires are more motivated, and they already know your company’s culture. This makes them better prepared to handle whatever comes their way. And if you’ve continued to share your vision with them, they’re eager at the opportunity to prove themselves. When it comes to talent, this is a big deal. A lot of companies talk a big game about providing their employees with opportunities for growth, but ultimately fail to do so. By having a bench and making a point to promote from within, you can show recruits that your business offers real opportunity.

#6 Work from a Process

The best recruiters work from a process that is developed through a combination of research and practice.

When we work from a process, everything becomes easier because we’re able to hold our actions accountable to a method fine-tuned by our previous experiences and results. If something goes wrong, then you can reference your process to see where you failed. It just makes everything easier.

Most importantly, processes keep you focused on what you need to do to succeed.

If you’ve ever listened to an interview from anyone involved with the University of Alabama’s college football program, you’ve heard them talk about “the process”. After every win, they credit the process, after every loss, they credit the process—and go back and figure out how to fix it. It keeps everyone focused on one thing: the outcome. It’s systematic at the school, and Alabama continues to pile up championships and rings.

If you don’t have a good process, this list is a good place to start.

1. Search

2. Screen

3. Interview

4. Judge

5. Discuss Compensation

6. Negotiate

7. Reach an Agreement

The search phase is all about sourcing talent—finding people to talk to. Then, you’ll have a screening process. This is where you cull the herd down in search of people who stand out among the rest. After interviewing them, reflect on how they think, the skills they bring to the table, their past experience, their ability, and their personality. Judge them hard. Do they stack up? Compare candidates based on their pros and cons—where they fit within your organization and where they don’t.

Then you go through compensation and negotiation. Finally, when you both see eye to eye about your expectations, seal the deal with an agreement.

You’ll add your own flavor to each step of the process—tweaking it to give you more insight into candidates. As you move through the process again and again, you might discover new needs or remove steps because the needs don’t exist.

THE BEST PLACES TO LOOK

In a 2014 survey of over 1,400 companies, SilkRoad found that internal sources produced 59 percent of all hires. Today, with companies like Indeed taking stride, those numbers have dropped to 30 percent. Online sources seem to be on the rise in terms of their influence among recruiters.

But before you throw your network out the window, consider this: Hiring through websites like Indeed is generally inefficient. While you’re likely to get a large flow of resumes and applications from these talent mega-hubs, you’ll put a ton of time into interviews that lead nowhere. In the same 2017 survey, they found that interviews from Indeed took up almost half of all interviews across the board, but constituted for less than 30 percent of all hires. On the flip side, employee referrals actually generated a positive return on company time.

That doesn’t mean that you should favor one over the other. It’s our suggestion and advice that you use both. However, when you use both is going to depend on whether you’re “recruiting” or “hiring”.

When Recruiting, Favor Your Network

Just about every actor in the world is at most six steps away from knowing Kevin Bacon. (You can test the theory for yourself by visiting the Oracle of Bacon.)

While finding connections between obscure and prolific actors is all fun and games, this is actually a working example of a theory called the “Six Degrees of Separation”. The theory is that, at any given moment, we are only six connections away from being connected with anyone else in the world. In the case of Kevin Bacon, it works like this:

To date, Kevin Bacon has played a role in 87 movies and has personally worked with 3,452 actors. Those actors collectively have worked with 403,921 actors that Kevin Bacon hasn’t. That means if he worked his network, he could have been pals with Ronald Reagan or silent film star Buster Keaton. Beyond that second level, an even larger opportunity presents itself. The third level of his network consists of 1,504,560 actors he’s never worked with. That means if he were to reach out to a friend of a friend, he could have connected with the likes of “America’s Sweetheart” of the 1920’s, actress Mary Pickford. As you go on, the possibilities are virtually endless.

The same principle works in our own lives. You probably wouldn’t have to go that far to find that you have an inside connection to the White House or a reason to dine with the Duke of Windsor.

Several studies have shown that referrals are better overall hires. They’re more likely to stick around, and their initial job performance has been shown to be better than those who weren’t referred. The problem is that working your network take time. Thankfully, finding out who you’re connected with is easier today than it ever has been thanks to social media tools like LinkedIn. Flex your network, and reach out to those you know. Make a point to looking through your connections once a week, finding someone you might want to get into business with in the future, and meeting them one on one.

Like we talked about above, if you build a habit around networking for talent, the results will pile up and you’ll increase your chances of finding that ONE person you’re looking for.

When Hiring, Mix in Job Sites

Despite advances in technology, networking still requires a lot of personal time. That means that if you’re feeling pressure to make a hire, while this tactic may give you the best possible candidates, it won’t give you the tidal wave of applicants like you might hope for. That’s when adding job sites like Indeed and CareerBuilder to your arsenal is a good idea.

These websites are great at getting a ton of eyeballs on the positions you have available within your business. People can apply to hundreds of jobs in a matter of seconds, and source their options without having to leave the comfort of their home. It’s really great. And when you supplement your habit of recruiting and network exercises to your recruitment efforts, it can be really effective. However, it doesn’t come without its own set of challenges.

A big part of the problem with working through job sites is that they’re really good at fielding resumes—and like you’ll find out below, that doesn’t always tell you a lot about a person. That means you’ll have to find creative ways to screen these candidates so they don’t suck up all of your available time.

SCREENING FOR TALENT

Like we mentioned above, the best judge for talent is seeing how they work. The reason is because every candidate hides behind a façade during the interview process. They’re on their best behavior, and work hard to make themselves look flawless. That’s why traditional methods of judging talent (i.e, resumes and fishing for canned answers to questions like “What’s your greatest weakness?”) don’t really work.

The truth is, we often do these things because we have to, not because they’re the most effective methods of evaluating talent. In order to break through a candidate’s façade, you have to be willing to break with tradition. You’ll have to actually invest in getting to know candidates and interact with them, testing their skills and measuring their personality. But you don’t have to break the bank or put extra pressure on yourself to do that. More often than not, getting a deeper dive just means getting more intentional about the type of outcomes you expect from your screening and interview process.

Save the Resume for Later

If you want to get serious about recruiting, you’ll have to rethink how much weight we give to resumes. They’re extremely outdated. (Even Leonardo Da Vinci had one.) People stretch the truth or just straight up lie on them. (That includes top-dogs at Wal-Mart, Yahoo, RadioShack, and MIT.) And they’re chock-full of useless information. (And it’s not even a recent trend, in the 1940’s, resumes included dead-weight like a person’s weight, age, height, marital status, and religion. Like that has anything to do with your ability or potential.)

According to a study by career site TheLadders, employers only spend six seconds looking through each resume. They pay attention to format, spelling and punctuation, and judge the candidate based off of whether or not it looks like they made an effort. But that’s pretty flawed. Punctuation, spelling, and format are skills—not signs of effort. (If you want a real example of effort, you should look at Japan, where many companies won’t even look at a resume unless it’s handwritten and still bleeding pen-ink.) If the skills aren’t relevant to the job being offered, then we should save the resume for a more in-depth interview, and rethink how we’re filtering out candidates.

Filtering Through a Test

Van Halen’s pretty famous for hating brown M&Ms. In their performance agreements, the band would request large bowls of M&Ms backstage with all of the brown ones removed. In a random section within their contracts, they’d insert a clause that said if they found a single brown M&M backstage, the concert promoters would forfeit all of their earnings. For a long time fans just thought it was a quirk of theirs, but they were dead serious about it. In fact, it was a test to see how well each part of their contract was executed.

According to David Lee Roth, it was for their own safety. Van Halen concerts were intricate affairs. There were tons of lights, special effects, and stage mechanics that went into each show, and each contract came with thousands of instructions on how to set up properly. If the instructions weren’t followed, it would endanger the band and crew.

Because of that test, Van Halen knew exactly what type of situation they were getting into every time before they got on stage.

Like the M&M test, the best tests do two things– they save time and reveal a lot. For recruiting purposes, a great test will tell you exactly what you need to know about a candidate before investing an exorbitant amount of time trying to break down their façade.

Typically, these types of tests come in the form of an exercise—a quick problem that they can solve that shows they have the skill or talent to do the job. Your first filter in the recruitment process is whether or not they actually did the exercise. If they don’t do it—then that can typically be a good indication of whether or not they’re taking things seriously.

When hiring here at KellerINK, we include a writing exercise for applicants to complete and include with their application. First and foremost, it measures effort. Secondly, it measures whether or not they have the skills required to perform the job at an adequate level. We’ve found that top talent loves to show what they can do.

When figuring out what test you should offer, the best tests are typically centered around some actual work they might do on the job. The only caveat is that if it’s actual work, then you need to pay them for their time. So keep that in mind. If it’s clearly a generic exercise, however, then you won’t need to worry about that—just remember to be respectful of their time.

THE MARKS OF TALENT

When recruiting, you’re looking for someone who not only has the skills needed to complete the job, but the personality and motivation to take it to new heights.

There are a lot of factors that play into that, but we’re just going to focus on a few of the most important: Trajectory, Culture, Thought, and Behavior. Once you’ve determined your candidates have showcased an ability to do the job, explore these four characteristics during your interviews to see if a person is an overall good fit for your organization.

Trajectory

Resumes, while they have their flaws, come in handy when you’re trying to piece together the trajectory of someone’s professional life. But while some recruiters just take the resume at face value and try to piece together a timeline from what they’ve been provided, the best recruiters make a point to walk through it with their candidates in person.

A person’s trajectory outlines their past and present to help project their future. If someone’s moved through the ranks of their previous employers quickly, if they’ve jumped from jobs to better positions (and succeeded), or if they really just have a moment where they blasted something out of the park—those are all good signs of a steep trajectory.

When interviewing a person to determine their trajectory, the most important point to uncover is whether or not the opportunity you’re offering is their next logical step.

Many business owners realize that if the opportunity they offer and the path of a hire’s life are misaligned, then turnover is going to occur. Top talent simply doesn’t stick around when they aren’t hitting their goals or realizing their own personal vision.

Walk through a candidate’s resume with them and get a detailed look at each position, their successes and failures, and how each position helped prepare them for their next opportunity. When you get to the last one, take a good hard look at what you’re offering and see if they’re in alignment with one another. If they’re not, then let them know and keep them within your network in case a better opportunity emerges.

Culture

On his way through the forum, Caesar bumped into a soothsayer who spoke of a premonition regarding his death. He ignored her warning and not long after was ambushed by a group of conspirators who killed him in front of the Curia of Pompey. The most famous among them was Brutus, a leading politician and close friend of Caesar. In the words of Shakespeare, as he dug his knife into his back, Caesar turned and looked the man he once considered a son dead in the eye and said, “And you, Brutus?”

Say what you want about the assassination of Julius Caesar, but the truth is that when it came to Brutus, Caesar forgot the importance of culture in an organization. And he’s not the only one.

In their 2014 State of the American Workplace Survey, Gallup found that employee engagement in the United States had continued to follow its long, steady swing from the gallows. According to the survey, only 31% of workers in the United States were engaged with their work—up one percent from the previous year, and five percent from the year 2000. Even more disheartening is that over 17% of American workers were reported to be actively disengaged (down 1% from 2000). In other words: if this lengthy trend continues, at any given point in time, one out of every five people employed by your organization will be actively working against your business’ interests.

Culture has a lot to do with our engagement problem because at its core, it’s a measurement of how we treat and interact with each other.

In his book The Best Place to Work, Dr. Ron Friedman shares the eye opening question Gallup uses to measure employee engagement: “Do you have a best friend at work?” He goes on to cite study after study that shows employees who have best friends at work are more focused, passionate, and loyal to their organizations. They take fewer sick days, have fewer accidents, and change jobs less frequently—they even have more satisfied customers.

If someone is a cultural fit within a company, you’re not only going to get more out of them, you’ll get more out of everyone else.

To find out if someone is a cultural fit, it’s important to have members of your team meet with a potential candidate. See how the people who work with you already get along with them. Pay for them to go out to a lunch together, ask them for their opinions and general vibes. Don’t pull a Caesar and ignore the soothsayers—take what they have to say to heart. If a candidate doesn’t fit well with the rest of your organization, continue your search.

Thought

Great minds think alike, and when it comes to the world’s most talented people, they never stop thinking.

Talent likes to grow. They learn and absorb and find pleasure in the nuance of their craft—and it shows up in the way they think. When you’re looking for talent, don’t be afraid to probe their thoughts. Challenge them and see how their gears turn.

You wouldn’t just hand over the keys to a nuclear submarine to a person who hasn’t proven their ability to handle it. In the same way you used your “M&M” test to find candidates with the right skills, giving people additional problems to work through during the interview process can be a great way to figure out how they think.

In 45 Ways to Hire Smart, Dr. Pierre Mornell suggests that employers give candidates a task before their first official interview. Have them do something you can ask about later. Whether it’s visiting one of your stores, experiencing one of your products, or critiquing a website—the goal is to get an idea of how a candidate processes ideas and thoughts.

If you want to figure out how someone thinks, walk through a different problem or exercise with them during an interview. If you’re hiring a programmer, ask them to program. If you’re hiring a content creator, ask them to brainstorm content. If you’re hiring a sales person, run through some scripts with them. See how they respond and ask them for their thoughts. Or if you want, give them an impossible task and see how they respond to failure. Do they learn from their mistakes or are they stubborn?

The last thing we want to do is to hire someone who doesn’t like to get better at what they do. When we invest in people, we don’t just invest in what they can do now, we invest in what they’ll be able to do in the future. Having a good track record of skill building and development is a good sign that you’ll see a return on that investment.

Personality

The way someone prefers to think and behave is a big deal. Every job has a personality type that thrives within that position. If someone has the right personality fit for a role, they’re going to be energized by their work. If they don’t, they’ll likely be drained by it.

For example, it wouldn’t make much sense to hire someone who isn’t very talkative to do a job that requires them to talk to people all day. While they may be able to perform the job, they might have a higher risk for burnout—and that isn’t good for anyone.

Figuring out what type of personality fits best within a role requires a bit of experience and conjecture. It isn’t an exact science. But the goal isn’t to pigeonhole people to certain roles—it’s to make sure that the people you hire won’t be miserable in their daily work. That’s why it’s important to use personality tests during the interview process. Have your candidates take one, walk them through the results, explore their personality together and use it as a jumping off point into developing a relationship. See what they agree with and what they don’t agree with. Oftentimes, when you run through a personality assessment with a candidate, you both walk away having learned something valuable.

There are several tests out there that insight into a person’s personality. The most popular in use are the Myer-Briggs and the DISC Assessment—however, many of the available tests require a fee to use. That’s why we suggest using them only after you’ve screened a candidate.

NEXT MONTH

Next month we’re going to take a deeper dive into the interview process to help you pull back the façade of your candidates even further. Over time, our hope is to give you all the tips and strategies you need to properly assess talent at every stage of the recruiting process. In the meantime, if you have additional tips and advice for finding top talent, please share your experience with us on our Facebook page!