The Better Leadership Team Show
The Better Leadership Team Show
Relationships as Your #1 Recruiting Strategy
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In this Mike on the Mic episode of The Better Leadership Team Show, I explain why relationships—not job boards or recruiters—must become your number one hiring strategy. I break down the true cost of mediocre hires, why resumes no longer differentiate top talent, and how to build a virtual bench of superstars before you need them. I also share practical strategies for employee referrals, alumni programs, and leadership-team involvement so you can consistently raise the talent bar and build an elite leadership team.
Thanks for listening! Connect with us at mike-goldman.com/blog and on Instagram@mikegoldmancoach and on YouTube @Mikegoldmancoach
It's the whole idea of digging the well before you're thirsty. Don't wait until you have a need to start looking for and building relationships with great people. Now, while that sounds like an obvious thing to do, and you might be saying, Hey, that's a good idea, or, Hey, I already knew that we need to be pragmatic about it. We need to. we need a set of steps to do that, or it's going to, for a lot of us, it continues to be a nice idea, but we don't implement it.
Mike Goldman:You made it to the better leadership team show, the place where you learn how to surround yourself with the right people, doing the right things. So you can grow your business without losing your mind. I'm your host and leadership team coach, Mike Goldman. I'm going to show you how to improve top and bottom line growth, fulfillment, and the value your company adds to the world by building a better leadership team. All right, let's go.
Mike:On this episode, I want to talk about hiring and specifically why you need to start to use or build your ability to use relationships as your number one hiring strategy. Not job boards, not recruiters, but relationships as your number one hiring strategy Now. Why is a hiring strategy so important? Well, there is a tremendous cost of hiring the wrong people. And when you hear me say hiring the wrong people, you may think that I'm talking about hiring people that turn out to be low performing team members, and certainly that would be a bad hire. But I'm also talking about hiring folks that with coaching, with development, they can't reach any higher than mediocre. Mediocre is death to your company if you listen to this podcast often at all. You know, I say over and over again that the number one driver of profit growth is people growth. Yeah. Part of people growth is coaching and developing the people you already have. That's what my book, the Strength of Talent is all about. But a big part of people growth as well is raising the bar of your organization. With every new hire, a new hire should raise the average. Of the quality of folks that you have within your organization. and you know, I always go back to something I learned from Kip Tindell, the founder and CEO for many years of the Container Store. He's got this philosophy I talk about over and over again called one equals three, one superstar performer equals the productivity of three mediocre performers, we could pay our superstars double and still get a greater return on investment than a bunch of mediocre folks running around. There's also the BCG study, Boston Consulting Group that showed that companies that they characterized as talent magnets. Those folks that scored highest in a whole bunch of leadership and talent development characteristics, including hiring, grew their revenues 2.2 times faster and their profits 1.5 times faster than the talent laggards. Those folks that. Scored lower, so you may not need to hear me say it, but I'll say it. Say it anyway. Hiring is critical. We can't skip, we can't just think we're gonna go put a job on a job board and kind of hope for the best. job postings are the worst way. To find superstars for our organization. Wherever you're posting a job, LinkedIn, indeed, they've, that's the lowest return on investment. What you're doing there is you are attracting the mediocre job seekers. You are attracting folks that are out there desperately looking for jobs, and while a part of you might say, of course, if I'm recruiting, I need to find people that are looking for jobs. Superstars are typically not browsing the job boards. They're busy, thriving somewhere right now. The way to access those superstars is through relationships, not through traditional job postings. and here's another problem with job postings, that's relatively new. Is, I was actually talking to my daughter about this, and this happens to be a problem for both folks looking for jobs and folks that are trying to hire. When you post a job out there now, you are getting hundreds, if not thousands of cover letters and resumes that look amazing. They are so incredibly focused on who you are personalized to your company, the kind of cover letters and resumes that two years ago or even a year ago, you would've been ama, you said that. That's our person. They're all great. Now, why are they all great? They're all great because of ai, because anybody's got the ability to say, take my resume, make it look better for this perspective. Company, take my cover letter and make it totally personalized to what that company is all about. Resumes and cover letters don't differentiate anymore. So on top of the fact that the people who are on job boards are people who are looking for work versus superstars that are already thriving, it's almost impossible to differentiate in that world anymore. So I wanna talk to you about. Some specific ways to use relationships to source potential job candidates and hire potential job candidates. and a lot of what I'm gonna talk about. It comes from a book I love, by Jeff Smart and Randy Street, and the book is called Who The A Method for Hiring. It talks about amongst a lot of things that it talks about, it's really focused on this top grading methodology and now there's a book called Top Grading and I hope. Brad Smart isn't listening to this podcast. He's the author of Top Grading and Brilliant, um, as you'd suspect with a last name like Smart. But the book top grading is a slog to get through and it's written like you need to be a multi-billion dollar company to implement it because he actually created the process working with Jack Welch at GE many years ago. But Jeff Smart. Brad's son, in writing who the, a method for hiring wrote a book that's much easier to get through and much more implementable for the small and mid market company. So the framework in that book is the, inspiration for a lot of what I'm gonna talk about. But I really wanna dive specifically into one piece of it, which are the relationship based. Recruiting strategies and some of this comes from who the A method for hiring and some of this is certainly some things that I've worked on with my clients over the years. But number one, relationship-based recruiting strategy is you wanna build a virtual bench of potential superstars, build a bench of potential superstars before you need them. It's ongoing, proactive identification and relationship building with potential future. Hires. It's the whole idea of digging the well before you're thirsty. Don't wait until you have a need to start looking for and building relationships with great people. Now, while that sounds like an obvious thing to do, and you might be saying, Hey, that's a good idea, or, Hey, I already knew that we need to be pragmatic about it. We need to. we need a set of steps to do that, or it's going to, for a lot of us, it continues to be a nice idea, but we don't implement it. So here's what I'm gonna suggest is that you make a list of 10 people that you know, like, and trust and hopefully they know, like, and trust you back. They don't all have to be from your industry, but some of them probably are. And you start at the top and you call that person and you say, Hey, you know, I am leading this company, or, you know, I am working, you know, working for this company. And we are, you know, we have some, we've got some serious, very exciting growth plans. and in order to achieve those plans and those goals, most important thing that we need to do is surround ourselves with great people. So who do you know that's a superstar that I ought to talk to? Now, most people when they're asked that question, they wanna help, but they're gonna say, well, what are you looking for? You know, are you looking for a great salesperson? Are you looking for an accounts payable clerk? Are you looking for a COO? Like, give me a sense, what are you looking for? And I believe your answers should be, in time. I may be looking for all those roles. This is not about a job opening I have right now. This is not about a job interview. This is about building a bench of potential superstars that we wanna build relationships with because we know we are gonna have needs given our growth plans for many different types of people. So who do you know? And the person you're talking to may say, well, you know, I know. I, you know, I know that this, you know, this guy Owen, um, he worked for me five years ago. He was the greatest marketing analyst that I've ever worked with, but he had a better opportunity. He was ready to become a marketing manager. And I just didn't have that opportunity for him. So, so he left. I keep in touch with him. I think he's really happy where he is though. Is that the kind of guy you want to talk to? And my answer would be absolutely, that's the kind of person I want to talk to. So I get an introduction to Owen, this great marketing person, and Owen and I sit down and have a cup of coffee or a virtual cup of coffee. And I learned a few things. I learned that Owen is amazing. I had such a, you know, such a powerful conversation with him. I think he could be a superstar anywhere. I also learned that Owen is super happy where he is. Lastly, I learned that while Owen's great, I don't have a need for what he does, but we keep in touch. And by the way, the last question, very last question I ask Owen. You might guess it is. Hey Owen, who do you know? That's a potential superstar that I ought to talk to. Introductions, beget more introductions. Now I built a relationship there with someone new that's valuable, but it didn't help me do any recruiting as of yet. But I keep in touch with Owen every two or three months, nine months later, things have changed. Owen's not very happy anymore. Owen was hoping to get a promotion to VP of planning. Not only did he not get that promotion, but they hired someone that he's now reporting to who he's not getting along with very well. At the same time, my team now has a need for a strategic marketing leader. We've gotta match. We've gotta match. Now I'm still gonna take Owen through a thorough hiring process, a thorough vetting and evaluation and interview process. But because I had him on my virtual bench, I've got a potential superstar in the waiting. Now if you do that and you go through your list of 10 people and introductions, beget more introductions. That's gonna be really helpful, but is it a game changer for your business? Maybe. I'm not so sure. I think it's gonna be really helpful. What will be a game changer is getting the entire leadership team to do the same thing. They each make a list of 10 people they know, like, and trust. Call those people, go through that list introductions beget more introductions. It doesn't take much time before you have dozens and dozens of people on your virtual bench, and that's the first place you go, not a recruiter, not a job board. The first place you go to hire someone or to source great talent is you go to your virtual bench, and I believe you ought to make a commitment as a team, as a leadership team. None of you're gonna turn into full-time recruiters, but make a commitment. Something like, Hey, every quarter each of us are gonna add three people to the virtual bench. That's not so hard getting the entire team to do it. That's a game changer. So dig that well before you're thirsty Thursday. So number one, build a virtual bench. Number two. Is something you are probably familiar with and it's called an employee referral program. Paying employees, paying your team members for referring great people who you hire. That's not a new concept, but it tends not to work very well. Companies have those programs, but they're not getting a lot of value from it, and one of the reasons why is they're not paying real money for it. When I ask companies, that where it's not working, I say, how much are you paying? I hear numbers like$250,$500, a thousand dollars. You're not changing anybody's behavior with that. I believe you ought to pay at least$5,000. Why not$10,000? Now, obviously it might differ for different levels in the organization, but.$10,000 sounds like a lot of money until you compare it with what you are paying a recruiter. A recruiter is gonna cost you what? 25% of annual compensation?$10,000 is not a lot. And the way I would do it is I would say of this$10,000, you get 5,000 When we hire the person that you recommended. If you're both here a year from now, you get the other$5,000. The power of that part, of the power of that, other than your extending out the cash flow is you now have a built-in mentor within the organization. Because if I refer somebody to work for our company and I've gotta wait, make sure they're a year before I get the other half of my money. I'm going to, first day I'm gonna go in and say, Hey, who can I introduce you to? Let's go out for lunch. How you doing in your office? What can I get for you? They've got a built in mentor. So if you have an employee referral program, how much are you paying and are you paying enough to actually. Motivate and incent a behavioral change. I had a client that was looking to hire for a very important role. They were paying a thousand dollars for employee referrals and they couldn't find anybody through recruiters job boards, and the employee referral program was leading to nothing. They were reminding people of it, but I don't know anybody. So they said, what should I do? And one of the things I coached them to do is I said. Raise your employee referral program from a thousand dollars to$5,000. Soon as they did that, two people said, huh, let me make some phone calls, and they took some effort and they found some great people. So again, it's about relationships. Building a virtual bench was about relationships from the people you know, and the employee referral program was specifically using the great people within your own organization. So you need to pay enough and you need to market that program internally and keep it top of mind. Third thing I want to talk about is alumni programs. Now many large companies have alumni programs. I worked for Deloitte Consulting many years ago, and I still get a bunch of information from them. They invite me to things. They have this alumni program where, you know, they're hoping, you know, someday I might be a client of theirs or refer a client or maybe come back as an employee or refer an employee. They do a great job of keeping in touch. But it's not just about Fortune 500 companies. It's not just about billion dollar companies. Why can't we do that as smaller companies? Why can't we have an alumni program? Everybody that leaves our company is not, it's not a bad person. Some people leave for great opportunities. They leave for the right reasons. Why not keep in touch with them and continue to add value in the hopes that, number one, we may wind up with a boomerang hire, where someday they may decide to come back to us for the right opportunity. They may refer us, you know, someone that we're adding to our virtual bench, or they may refer a client one day. Who knows? There are so many benefits. Of having an alumni program, and again, you don't have to be a, a big company. You, it's as simple as, you know, creating an email list, a group on LinkedIn or a Facebook group having events for alumni, you know, reengaging with top performers. Why not have X employees be kind of ambassadors of your company even if they're not working for you anymore. There's a great coaching organization called Gravitas Impact. That I was a member of for about 10 years. I have not been a member of that organization for God, it's three or four years, but Keith Cupp, the leader of that organization knows how important alumni are. So I'm what they call a trusted alumni of gravitas impact, which means I get to go back to events every once in a while. I just spoke, I was the keynote speaker at their annual symposium about a month ago, and if I happened to meet a great coach, where do you think I'm gonna refer them? so don't just let people walk away. And say, well, I guess we lost them. How could you develop an alumni program? So let's wrap up some takeaways and one of the things I suggest you do is do a little audit. Where did your best hires originate from? Look at your team. Who are the best people? You know, on your team and where did they come from? and my guess would be many of them came from relationships. You may have gotten lucky with some job boards, of course that happens, or recruiters. But I would guess a lot of your best hires came from relationships. And by the way, if they did, you get what I'm talking about? If they didn't, I think you're missing something. Relationships need to be your number one hiring strategy. As I said earlier, set targets for building your virtual bench as a team. don't just talk about it as a concept. Supercharge your employee referral program. Pay more, talk about it. Launch or revive an alumni program, outreach personal notes. Invite them to reconnect, create events. This is not a project, it's a habit. You've gotta, you've gotta build to be continuing to build these relationships every single day. So what we're really talking about is switching from using resumes to build elite teams, to using relationships to build elite teams. What could you do today to start building your virtual bench, your referral program, your alumni engine? Go make it happen. And I promise it will help you build a stronger team. And as I always say, you can't have a great company without a great leadership team. I hope I got you closer there today. Hope to see you soon.