How to be a Headhunter - Part 1 - Research Target List

Talent acquisition is not only the greatest job in the world but also a vital and even quintessential skill that everyone needs to be successful in any endeavour.

In this course, we will explore the following four axes:

1. How to create a target list, a crucial step;

2. An introduction to the executive mindset, and how to use KII in your search;

3. How to use the recruitment function to strategically partner with the business, putting your career on the fast track and getting you promoted;

4. How to Compile a list of 100 candidates, and shortlist the top 3 who would be interested and qualified for the job, without any contact with them.

In the first axis of this course, you’ll be able to lay down the foundation of a successful career by understanding the market share of each player and the reason behind that: We’ll look at the traditional talent acquisition method of asking “who do I know who can do this job” and getting referrals that are often not relevant, and contrast it with the more effective method of prioritizing looking at companies first, and candidates second, and asking “which companies are the greatest in the market?”, effectively seeking out industry champions.

To compile your four-tier target list you need to ask yourself 4 questions: Where am I going? Where are my candidates? What are the top-performing companies? Whom do I approach?

To answer these questions, you need to explore the following four areas:

1. Your company’s direct competitors: Similar organizations that have similar clients, provide similar products and have a similar environment, so a candidate coming from such a company would be making a lateral move;

2. Your company’s indirect competitors: Organizations that are not in the same category as your own, but there would be some overlap and some connection in the activities you both provide;

3. The media outlets: include trade publications, blogs and TV shows, among others. You should connect with bloggers and influences in these circles because they know the best of the best, which would be very useful to you, especially if you do a lot of work in a particular industry;

4. Industry events: including all the trade events for the industry, LinkedIn groups, and virtual events, where people of the industry come together in official and unofficial service meetings.

The recruitment function is the best area to create strategic partnerships with the top decision-makers at your company and grow your career to its full potential, as it’s the only function that consistently and habitually speaks to the competition, making each interaction a good opportunity to capture competitive intelligence.

When you compile a list of direct competitors, it’s important to work according to the “no finance, no romance” rule, and look at the revenue, net profit and cost position of companies that your company is competing against daily.

You’ll need to look at companies that have growing market share, revenue, or profit and which ones are shrinking. The reason for that is that you don’t want to hire the staff of a losing brand because their losses stem from underperforming personnel, you want to hire winners from the companies that are performing well.

When you’re hiring for a strategy firm, for example, refer to dedicated websites to list all the strategy firms, then look at the revenue of these companies and their sizes.

After you compile a list of direct competitors, check which of them are publicly listed, then pull up their annual report, and the investor relation section on their websites. If their performance is favourable, this section will compare it to that of their direct competitors (where they would highlight the fact that their profit margin is higher than their competitors, for instance). This section will help you do your research, by helping you get familiar with the relevant KPI for the sector and the organization, allowing you to understand the executive mindset and what’s the biggest picture of the industry.

For consulting businesses, find the number of staff - it’s usually a part of their branding, then divide the revenue by the number of staff to get the equation of revenue by a full-time employee, providing you with an industry benchmark. Understanding the numbers of a company and the industry benchmark allows you to better understand the performance of candidates and allows you to spot red flags.

You can take this a step further by looking at the target list examining companies’ revenues, their staffing size, and adding up all companies’ totals to get the total market value per year, then in your interview, cross-check the numbers with your candidates, confirm or amend them, then report to the decision-makers of your company; that would allow you to have a better dialogue and give more relevant input.

Look at champion companies and who are outperforming the market, those who are most profitable, and the most efficient; that’s where you need to be pulling your talent from.

The order to follow in this process is first, to build the target list with top competitors, next, get involved with financials, and then understand where the volatility is.

In the first step, which is compiling the list, the best way to proceed is, to go according to the equation of revenue over the full-time employee (FTE), which allows you to see which companies have numbers that are above the market rate, and allows you to examine the strategies that are being applied to make themselves more profitable, and more successful than other strategy firms.

By compiling a revenue/FTE list, you can begin to ask the right questions “Which companies are the best, and why?”

When you interview candidates from companies that are achieving above-market results, it’s important to understand what they are doing to drive these results, then compare it to the strategy of your own company and bring your findings to the heads of business units, CEO or board. This approach will resonate with them.

For the next step, you need to scan to see if there’s volatility, examine the market like a stockbroker while being very strategic, and scan for signs of volatility. If you detect any, call their top performer right away because they’re the most mobile. Make sure to be dialled into your network and pick up changes to know about such situations before the news hits the media.

1. Zawya

2. Zoominfo

3. Linkedin

4. Owler

5. Hoover

Additionally, check out the investor relation sections of publicly listed reports, perform usual Google searches, ask candidates you interview about who in the industry has the best department, and check if you can get their contact information.

There’s a correlation between the skill set of the top performer and the revenue of the firm they are working for. If recruiters do not pair this information, they're applying the spray and pray method, where you get 8 candidates, try to see which one the Business Unit Manager wants to hire, and get frustrated because they like none of the candidates. Instead, you can go into the conversation and say “Here are the top performers, here are the organizational structures of these companies, given our salary and compensation data, we are not able to afford the top 3, and here are the people leading these departments, and here’s the name of the second in command. If we’ve interviewed the top 8 and none of them is good enough, why would we have better candidates in the bottom 10?” The business manager will then look at the data and be impressed, it would change their perspective to perhaps increasing the salary or compromising on the skill set, allowing you to have a much better dialogue.

This is a list that is useful to make at the beginning of the search because it comes in handy when everything is going wrong, and you feel defeated having already presented 2-4 shortlists of candidates that weren’t accepted, so you can say “our next plan of action is to explore indirect competitors”.

This is where you look into finding companies who are dipping into the sector you are recruiting for and are partly competing with your company.

Call candidates working in a volatile environment, get candidates to flow, get spirits up and deliver the next shortlist and close that search off, like a well-oiled machine despite fatigue.

To be effective in the industry, you have to know the industry gossip. It follows that you have to have contacts in the top circles of the industry media.

There’s nothing worse than calling a senior executive for a job, finding out they’re acquiring a new company, and realizing that you don’t know about it; it would be missing an opportunity to create an impact to engage with them and create a connection.

It’s in your best interest to have a relationship with the people who are creating that content based on Frigyes Carinthia's six degrees of separation:

• There are people who are in the middle, who constitute hubs in society, and who have many relationships; they are often media people.

• You can cut very quickly into the industry by having 1 or 2 highly placed connections because the editor who’s organizing a TV show on a subject will know who the top performers are and have their numbers.

As an added bonus, a lot of your research will already be done by the media, and your contacts will guide you to the sources that you need.

One of the worst things that can happen is for a recruiter who’s struggling to find a suitable candidate, to miss out on an industry event when it was close. Always attend these events.

Just like with having media contacts, you need to stay connected and have relationships with people who are organizing events in your sector, including LinkedIn groups and virtual events.

What you need to do then is do them a favour: ask them how you can help. The people running these events need star power and VIP, and these VIPs have a lot of pressure and some of them will cancel at the last minute, which creates a huge issue for event coordinators. That’s where you come in: offer to be a speaker at the last minute, or offer VIP contact on the house and build a relationship with them. This allows you to ask for favours and catapult your career very quickly because the people who organize these events will have personal relationships with top performers.

Add the additional filter and volatility, and you will be able to pick out the top 10 performers in the market who are willing to make the move in less than 2 weeks.

An applied example of how to utilize the previous techniques to get referrals, get results and how you can use this to build relationships within your organization:

We’ve already established that you should look at companies first, candidates second, compile your target list and rank them by size and performance, then highlight the ones that you want (think in terms of who has got the most successful department? And go for the head of the department).

Next, you need to think about who would know that person and who can give you their number. In the meantime, you can start interviewing people who are not on the target list to better understand the market, gather industry information and warm up with others, so you would be well prepared and so your first interview would not be with the top performer of the market.

You need to fully accept and be prepared for the reality that your top candidate will likely say no to you, and that your job begins then and there, where you will have to turn that no into a yes.

Only after using all the pitching techniques, attempting to turn their no into a yes, and not getting a positive outcome, should you attempt to get a referral from your top performer, and that’s again based on your target list, and by being very specific: ask them who is the head of the successful department over a company X, and ask if they can introduce you.

When you speak to a candidate and it appears that they are not interested, even after your multiple and persistent attempts, start asking for referrals, and get very specific; ask them if they could introduce you to other top performers, heads of departments at other companies that you would have previously highlighted. If your initial candidate is not interested or if they’re too old, add that information to your talent map and then start to look at the background of these people: what is their background? What is their age? Etc.

For instance, hospital CEOs will generally be older because of the time it takes them to complete their education, and head departments, and by the time they rise to the rank of CEO, they’re at least in their sixties. Conversely, CEOs of digital firms will generally be young, in their late twenties, and marketing CEOs will generally be in their fifties. Your job is to make sure that the decision-makers at your company are prepared for that fact.

Now that you have your media contacts, you’re tapped into events by the people who run them, and you know who your top performers are. So, take your target list and create an unparalleled talent map.

This information and talent map make you a lot more powerful, and interesting to talk to, and you’ll be in possession of a treasure trove that you can use when you interview people: you’re now a better interviewer and better at conducting assessments.

When the referrals start pouring in, that’s when it’s your time to shine, as a recruiter. Here are key principles that separate average recruiters from top-performing recruiters:

Average recruiters: will not be focused, they’ll work organically without working off a target list, and they will not rank companies by their financial performance. They will not do any company research. They are only interested in answering the question “Who do I know who can do this job?” They would want to close the assignment and move on with their lives – they will have no interest in advancing to the point of adding to the strategic dialogue in their organization.

Top recruiters: will be highly focused, working off a target list, they will be working to identify the top-performing companies in the market, they’ll be highly aware of the financial performance of these companies, and be able to hold a basic financial dialogue about their target companies. They’ll be interested to know which companies are the best in the market at this function, and they’ll work their way back from there. They are intellectually curious about the strategies that very successful companies are using, and then they look at their own companies and ask if they are using these strategies. They are interested in contributing to the larger vision and strategic dialogue; they start to add to the strategic dialogue in their organization.

Here’s an example of a theoretical market and market size, that highlights the importance of a target list and understanding the financial aspect, and how it allows you to do your job and yield results that go above and beyond:

A specific market contains 40 companies, 4 of them generate $10M/year, 6 generate $5M/year, and 30 generate $1M/year, totalling $100M. If you add the inflation rate of 5%, you can project what the numbers will look like the following year.

So when you’re interviewing a candidate who states that they will double the size of their business by the next year, even without being a financial expert, you know that you should ask the candidate the very simple question of how they plan on generating that additional income, and they should have a very good answer to that question.

If they cannot, then that raises a serious red flag. This allows you to see who among them is running their business professionally, and strategically, and who among them is just tossing numbers around. You’re the only person speaking to every single one of the competitors, which makes you a very powerful player.

Make the 4-tier target list your go-to, not just for recruitment, but for the rest of your career; always be aware of who the direct and indirect competitors are and remain in the loop of media and tradeshow events.

When you’re interviewing candidates, or interacting with them, extract competitive intelligence, and report it to your leadership.

You can walk through the strategies that the most profitable companies are using, contrast them to your company’s and highlight them to your leadership.

If you want to have meaningful interactions with the board, you need to understand how the market share is split up, and who the key financial players are.

The end product of your process should be a detailed talent map that allows you to pull up some patterns: what are candidates’ backgrounds, ages and schools? You can then interact with these people and create events.

Look at the larger picture and say what makes a company great, who are these top performers? It’s a quintessential, business 101 tool that you can use your entire career if you want to be successful.