The numbers game, relationships . . . or both

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The craigslist posting for Washington D.C. (Northern Virginia). A similar ad is running in Philadelphia today.

What is the most effective approach to building your architectural, engineering and construction business?  Reaching as many potential prospects with your message, hoping to snare some results through effective marketing, or building and maintaining high-quality relationships one-by-one?

I expect most readers here will answer the latter is the wisest approach, especially the majority among us who consider repeat and referral business to be the base of our success.

Consider, for example, these remarks from Matt Handal originally posted in his blog, Help Everybody Every Day and to be reprinted as part of an article in the upcoming issue of The Design and Construction Report:

Many people believe that clients, especially government agencies procure work through open and fair procurement. This is simply not true. That’s why it’s so important to learn how a client procures your services. Large corporations will often have a rotating stable of consultants they go to. Whether you win work may have more to do with if it’s “your turn” than the quality of your proposal. On the government side of things, you have to consider how time consuming and costly open procurement is. Many agencies find ways around open procurement. Public agencies have awarded contracts worth millions without openly bidding them. While all of this is true, there are still more than a few procurements out there that are open and fair.

For some, like me, it’s often hard to accept the dual nature of procurement. I expressed this uneasiness one time in an exit interview. I explained to my boss, the Senior Vice President, how disillusioned I was after submitting what I, to this day, consider the worst proposal ever. Sloppy was not the word for it, it was simply and utterly atrocious. There were mistakes on nearly every page, the worst being I had the wrong spelling of the company’s name we were submitting it to. But what was so disillusioning about it wasn’t the quality of the proposal, it was that we had won. And the amount of work was not insignificant. What was the purpose of my job if the quality of my work did not influence the outcome?

“Well, that guy owed me a favour,” my boss explained.

It can be hard to come to grips with the dual nature of procurement. And I can’t help to see myself in less seasoned marketers who find themselves faced with this harsh reality. It’s natural to assume things should be fair. When dealing with government agencies, you also have to research their procurement process. For example, You will need to be pre-qualified with many agencies before you can work with them. Sometimes you need to be pre-qualified to even learn about agency rfps. If you get your hands on an rfp, you may not have enough time to go through the pre-qualification process before the proposal is due. Therefore, it is important to understand each agencies pre-qualification process and do what needs to be done before you should have done it.

In this case of the “well, he owed me a favour,” the numbers game means nothing, and relationships mean everything.  However, as Handal points out, not every bid is rigged so if you research well, and play the numbers (with some systems for evaluating the real potential of fairness) you have a chance.

In this light, I’m trying an experiment in our initiative to find a new publisher for the Design and Construction Report.  In the past, we’ve found that we need at least 150 to 200 qualified resumes (minimum) to even find one potential candidate, and sometimes we need to receive upwards of 500.  In our systems, we ask candidates to complete a brief questionnaire and sales aptitude test.  About 15 per cent of the people who send in resumes complete the assignment, and about one in five who get this far score well enough to be invited to proceed with a working evaluation (for which we compensate).  About half of the people back out before completing the assignment, and another half fail the evaluation, leaving us with one person who might be right for the work, and one of the two either drops out early in the employment agreement or we get cold feet for some reason or another (sometimes the reason at this stage can simply be “gut feel”.

So the numbers here are 500 to 75 to 15 to 8 to 4 to 2 to 1. (or 1,000 to 150 to 30 to 16 to 8 to 4 to 2.)

We can of course “abort” the numbers game with good referrals and connections (some of our best hires have been through personal relationships with current employees and in one case we successfully rehired a former employee).  In this situation, the story is 100 per cent about relationships.

The Design and Construction Report is a national publication (actually it is international in scope, though primarily serving the U.S. and Canada).  In the past year, we’ve tried three “sets” of Craigslist postings in the metropolitan Washington DC area.  At $25.00  per posting, we’ve spent about $200.00 on the posting series on three separate occasions, and received approximately 500 to 600 resumes altogether.  One person reached the stage where we contracted with him for a full evaluation but after seven days (for which we paid for his services) he said he didn’t feel comfortable about the probability of success.  Two other “finalist” candidates dropped out before reaching the paid evaluation stage.  (One offered some useful insights in the interviewing stage, so we wrote her a modest cheque for her initiatives.)  So far, our marketing and trial budget for this opportunity, then has been about $1,100.

What will happen if we step up the initiative by adding other cities to the list as, while relationships and connections for the publication are strongest in the metropolitan Washington area, the work can actually be done virtually anywhere in the U.S. or Canada?

The challenge is to figure out whether by effective advertising, we can get the “numbers game” to work.

However, most recruitment job boards are expensive, sometimes charging $150 to $500 or more for a single local listing.  If we use these services, we could burn through a significant budget quite quickly.  Craigslist is a different story.  Listings are free in some markets but wisely Craigslist imposes a modest $25.00 fee in most major cities.  This helps separate the spammers and multi-level marketers from employers with real jobs and the listing price is low enough that you can advertise frequently and often.

In my earlier tests, I’ve found I can get about 50 responses to a single Craigslist posting in the Washington area.  My approach is to post at midnight so ours is the bottom listing on the day’s schedule (avoiding getting caught in the middle).  Assuming that these numbers hold, if we spend $250 on postings, we should be able to hope for about 500 initial resumes.  Lets allow a margin or error, and double the number to 1,000 resumes — the cost should be $500.00.

There of course is a law of diminishing returns.  The employment market is like anything else.  There are a certain number of people “out there” at any time, and most of them you wouldn’t want to hire.  A few arrive and depart every day and a few will see your ad once but miss it the second time.  However, since I am ready to explore candidates outside of Washington, we could extend this experiment to other markets in a compressed time period and see if we can boost the number of resumes quickly with a concentrated multi-city campaign.

Lets say, as an experiment, we spend the initial $500 budget in 20 working days (one business month, approximately).  We could post one listing a day, generating upwards of 50 resumes every business day.    Could I automate the process and avoid having to deal or review these resumes directly?

I could hire someone for this work, of course, or I could try an autoresponder system.  Each person who applies receives automatically a form response directing them to more information including the application questionnaire and sales survey.  If this approach succeeds, I can be ‘hands off’ for the intiial stages — just place the ads, let the autoresponder co-ordiante the initial communications, and then wait for real candidates to emerge and express interest.

Its a tempting “numbers game” approach to the recruiting challenge.  If it works, I will ultimately connect and communicate only with about 30 candidates — a large enough number, but nothing too hard.  If we have many qualified candidates, we can set higher standards and expectations (and possibly compensate less) for the working evaluation phase, and so find our ideal candidate with much effort and with a truly modest budget.

Will this approach work?

Well, my sixth sense tells me the response we receive from Craigslist in metropolitan Washington may be higher than from other markets and another bit of gut feeling suggests that if I hope to use autoresponders rather than a personal, one-on-one review of the initial resumes, we will lose the opportunity to hire the right person.  But if we can still manage to receive and screen 1,000 resumes, our chances of finding someone reasonably good are high enough to justify the initial investment.  We can then concentrate our budget on the working evaluation exercise, and hopefully succeed with a total recruiting/marketing budget of less than $5,000.00.

I’ll report on my results here daily.  Last night, I posted in Washington (Northern Virginia) and Philadelphia.  At present, seven hours after the initial posting at Midnight, we have three resumes from the Washington area, none from Philadelphia and (not surprisingly) none have yet completed the questionnaire.

Popularity: 5% [?]

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