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Episode 9 – How to Apply Market Segmentation in Talent Acquisition

Episode 9 – How to Apply Market Segmentation in Talent Acquisition

 
 
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Over the last several years, recruiting as a function has evolved from being a position tasked with filling open requisitions quickly and cheaply to being a strategic position tasked with helping businesses navigate the war for talent by hiring amazing talent efficiently, strategically, and on demand.

In this episode, we’re joined by SmartRecruiters’ founder & CEO, Jerome Ternynck. He explains why recruiters and talent acquisition leaders need marketing skill sets to be successful—in particular knowledge of market segmentation. To help hiring teams navigate that process, Ternynck outlines what’s known as the Talent Scarcity-Impact Framework, a model he designed to help companies better prioritize the positions for which they’re hiring.

Interested in learning more about how to apply market segmentation in talent acquisition? Download your free copy of The Definitive Guide to Hiring Success!

Episode Transcript

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Hey everybody. Welcome back to the hiring success podcast. It’s not often that I get the chance to say this, but today we’re going to talk about unicorns. No, there won’t be any mention of tales from King Arthur’s court or legendary creatures for that matter. The unicorns that we’ll be discussing are the rare breed of professionals that possess a mix of high impact skills, offer immense business value, and are difficult to hire. Joining me today is smart recruiters, founder and CEO Jerome Ternynck. We’ll be discussing the talent scarcity impact framework, a core component of the hiring success methodology that empowers talent acquisition teams to better prioritize the positions for which they’re hiring. It’s just one of many transformative recruiting tactics that can be found in the definitive guide to hiring success. Ternynck is the chief architect of the majority of the concepts found in the guide and in our discussion. Hope provide insight on how companies can use the talent scarcity impact framework to attract and hire not only unicorns, but every type of professional. Enjoy.

Mason Mitchel: Jerome, how’s it going? Welcome to the podcast.

Jerome Ternynck: Thank you Mason for having me. Really, uh, delighted to, uh, to be here. I’ve been listening of the street to where most of your course casts and, uh, find them really interesting. So thank you for having me.

Mason Mitchel: Thanks. That’s really nice to hear. Jerome, today we’re talking about the talent scarcity impact framework. For those of you who might be wondering, the talent scarcity impact framework is a rubric more or less, that was developed by Jerome to help hiring teams prioritize the roles for which they’re hiring. It’s explained at length in smart recruiters, definitive guide to hiring success, a comprehensive manual on how to build a modern TA strategy from the ground up. Jerome. Maybe let’s begin the conversation there. Could you provide our listeners with an overview of the definitive guide to hiring success? What is it and why is it so important?

Jerome Ternynck: Yeah, you know, I think we’ve seen recruiting as a function evolved, evolved from, uh, from what was originally a staffing function, uh, put people into jobs in the fastest and cheapest possible way. We then went to recruiting and then we transitioned to talent acquisition. Um, but really recruiting has seen the last five years a transition towards being a strategic function that is driven by its outcome, by its ability to help a business hire amazing talent on demand. And that is the definition of hiring to hire amazing talent on demand. Um, and then we got thinking on, you know, how do you achieve hiring success? How do you actually, as an organization, how do you build the ability to hire amazing talent on demand, which of course every CEO in the world would love to have, right? Recruiting top times remains the number one priority for over 70% of CEOs and at the same time, over 80% of fortune 500. But if they don’t hire great people, right? So this is a problem that hasn’t been solved. And so we’re, we’re really sewed like, okay, how do you achieve higher success? And this has been at the heart of our research and literally over the last five years, uh, accumulating best practices, working with customers to produce a methodology for hiring success. And that methodology is what we have now shared and open source to anybody out there in the definitive guide to hiring success.

Mason Mitchel: From all the research that you’ve done, what would you say your main finding has been or to put it differently, could you provide us with an overview of the key concepts of the hiring success methodology, the foundational pillars, if you will?

Jerome Ternynck: Yeah, absolutely. I mean, you know, recruiting is not rocket science, right? We want to hire great people. So what do you need to do? One, you need to find great candidates. You need to attract amazing candidates. Uh, and that speaks to candidate experience and talent attraction strategy too. Once you have good candidates in the vibe, you need to be amazing selecting the right person. And that speaks to hiring teams and collaboration. And in particular to hiring manager engagement, the teamwork between TA and recruiters. So hiring manager engagement, uh, is our second pillar. And the third is, of course, recruiter productivity. You need to have a function, the TA function that is able to manage, uh, what is effectively a fairly large and complex process where there’s a lot of data, a lot of moving parts, and those are the three core pillars of hiring success, candidate experience manager engagement, and recruiter productivity.

Mason Mitchel: Okay. In an ideal world, we would have enough time to talk about all three pillars at length. But for today, let’s just focus on the first one. Talent, attraction and engagement. Um, it really kind of represents the moment when the rubber hits the road and the hiring success methodology begins the process of actualization. And this is important because every subsequent step of the recruitment process, one could argue is dependent upon how well candidates are attracted and engaged.

Jerome Ternynck: Yeah. And it’s really interesting actually, to see the difference that exists between recruiting and marketing and sales in this respect. Mmm. Attracting is a sales and marketing process. It is really just, uh, just the sales and marketing process. Now, when I say just the sales and marketing process actually means a lot. And because when you think about the evolution of marketing decades and the level of sophistication of marketers, modern marketers, and you compare this to what the TA leaders should have in their toolkit to attract candidates, um, it’s actually really, really different. And in order to, uh, in order to succeed in recruiting, obviously you need to be able to attract amazing candidates. So we would, we’ve looked at in this first pillar of talent attraction and engagement is how do you apply modern marketing techniques to recruiting? Um, and how do you actually, uh, allocate the right resources, the right efforts, the right channels to the right candidates, the right investments? So if you really look at all the hires you got to make next year, have you actually built a proper talent attraction strategy similar to how the CMO is building a marketing strategy to create pipeline and to attract prospective customers?

Mason Mitchel: The process of attracting prospective customers, which in this case are the candidates, will sound familiar to the marketers out there. Uh, in order to allocate the right resources and choose the right marketing channels. First, you have to pinpoint your target audience through market segmentation. Could you tell us a little bit more about how that process is applied in talent acquisition?

Jerome Ternynck: Yeah, absolutely. I mean this would be a few tasks as CMO to build a marketing strategy down there. They were first go to segmentation and be like, okay, who am I selling to? Um, and in, in, uh, in TA, uh, we find that actually segmenting, uh, the talent that you are trying to reach is the first exercise that is frankly often overlooked. Um, so how do you segment your candidates? Say you’re going to hire a hundred people next year and uh, you have to prepare your talent attraction strategy and you’re trying to define what you’re going to do to find this a hundred candidates in.

It seems obvious that in some cases you might actually have to reach outbound and do some direct sourcing to those candidates on the team. Sometimes you might have to advertise the job and people won’t go inbound. You might do some more creative marketing campaigns to find these people. Or maybe you would, you’d have a reseller program or you’d have even internal mobility. And so there’s many ways you can actually attract. But how do you, how do you start by segmenting those diamonds?

So you have the right resources and a good frame for that, which is our impact. And Scott goes like this and you look, in fact, I do two fundamental questions which are on how hard is it to find this person? And, uh, some talent is really hard to find a data scientist and some are a lot easier to find a young graduate fresh out of school, two extremes thereof one is easy to find, hard to find the other dimension. So that’s the other dimension is how much impact, uh, does this position have on your business. And so, uh, obviously if you’re hiring a software delivered, it operates great, but if you are hiring your chief technology officer, then this has a higher end. And so you now have two dimensions of impact and scarcity.

And so that framework which is detailed in the definitive guide to hiring success really gives you a simple way to look at each physician and a set of questions to actually define which position, which role fits in in what books. We ended up with four categories of the high impact, high scarcity, which we call unicorns. Our teammate unicorns would be your CEO, your CTO, and people who are both super hard to find and very impactful. Then you have the professionals, which are people who have high impact but low scarcity. So in this you find jobs like consultants, marketers and people who have impactful positions don’t have the scarcity.

On the other side you have then the start category, the specialist which has high scarcity. Uh, but the lower impact, for example, the software developer, um, so software developer is, he is hard to find, but if you have a thousand developers, it’s not a, it’s one of a thousand people. So they impact level. And the fourth category is what we call core, which has both scarcity and lower impacts for this is where you find your back office function, your identity strategic function that are fairly easy to find with your impact. No, you are, you want to have categorize, uh, these, these foreign or all your talent into these four segments of, uh, unicorns, professionals, uh, specialists and core. Uh, then you are actually in a position to better define your talent attraction strategy.

Mason Mitchel: Okay. And so once you’ve determined which category or categories your target candidates belong to, how exactly does that inform the next step of the talent and engagement process?

Jerome Ternynck: so that’s exactly what a CMO would do, right? And the chief marketing officer, once they’ve segmented their, their target market, they’re going to apply the right marketing strategy to each of those segments and make sure that they reach their prospective customers in your case, through your prospective candidate with the appropriate amount of investment and through the appropriate channel. Um, and so you, you, you can build your, your talent attraction mix, you know, your, your, your marketing mix, if you will. Uh, based on, on this segmentation and, and scarcity impacts model and it goes as follows. Uh, the talent that is in low scarcity, so core and professionals are typically going to be more receptive to inbound advertising. So job advertising.

So since there is a low scarcity, uh, you, you focus your uh, you focus your marketing efforts, your spend efforts for professionals and core on advertising. And generally, we would say you put a higher job advertising budget for the professionals and the core, you are mostly uh, mostly working with organic traffic, you know, free job boards, organic search depending on your brand or you shouldn’t be spending too much advertising on your core and put your advertising budget on the professionals. And this should be your primary source of, uh, of recruiting. Should be inbound people applying to jobs in those categories.

On the high scarcity, it becomes more tricky because they are hard to find. And uh, the core, eh, sorry, the, the unicorn which are high impact. High scarcity is where you concentrate your direct sourcing. So these are people that have high value and are hard to find. And this is exactly where you do direct sourcing. So being team emails and having a professional sourcers mind, why you died, making personalized message going outbound, direct sourcing, which is what people on the specialists from where you have, yeah, high scarcity, but lower impact, a larger volumes. Uh, this is where marketing and pipeline recruiting becomes interesting.

And so what’s a recruiter’s concierge? And so instead of picking up the phone and dialing to hire software developers one by one, which doesn’t work, create a marketing campaign, filling the funnel of candidates with a pipeline of candidates, nurture them over time, bring them into, do things at scale. Um, so there’s, there’s of course a lot of nuance and strategy there, but at the high level you could say specialists, I’m doing CRM, uh, unicorns, I’m doing direct sourcing professionals. I’m investing in job advertising and core and allowing just organic traffic to come in. And that framework gives you an ability to then allocate your resources, your efforts, your challenge to dedicate it to the right way or to the right segments.

And you can of course link that to your hiring budget. Um, so if you look at the hiring budget, so how much you’re spending in recruiting or in talent attraction as a percentage of salary, right? So typically people would spend about seven 8% of new new hire summary in recruiting there. You can use this framework also to say, okay, I’m going to spend $1210 12% of the hiring budget for the unicorns. I’m going to be at a nine eight nine 10 for the, for the specialties that are hard to find. But then I’m going to be at four or five 6% for the professional ones and two or 3% for the core, right? So you can also divide your budget so you are putting your money where it’s needed most and optimize your budget, which is in fact what a CFO would do when they’re thinking about attracting customers.

Mason Mitchel: All of the different approaches that you just outlined. I really liked that you described them as being part of a talent attraction mix, which I think translates perfectly and highlights just how many similarities there are between talent acquisition and marketing depending on your company and its hiring needs. Though this could mean that your talent attraction mix, they’ll be complex and have a lot of moving parts. What steps can hiring teams take then to ensure that these parts are moving together and in the same direction?

Jerome Ternynck: Yeah, well I think the next step is you’re building your, your talent strategy, talent attraction strategy, um, and you, uh, you then build the teams and the processes around it, um, and you reduce, uh, reduce budgets that are spent on the wrong target. For example, the direct sourcing for a core or professionals that you could find fibers over-investing in job boards for core staff that are your better, you optimize your budget, you build the campaign or build a town to attraction strategy and you’re off to the races. Um, and I would say, uh, you know, you’re, your best. Next step right now is download the guide to the definitive guide to hiring success center. Give it a shot.

Mason Mitchel: Absolutely. We will include a link to the definitive guide in the notes for the show. Do yourself the favor of a lifetime and download your free copy today. Jerome, thank you so much for your time and insight. It was great having you as a guest.

Jerome Ternynck: All right, thank you Mason.


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Mason Mitchel

Content Marketer at SmartRecruiters. Donut enthusiast.

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