
INSIGHTS
Understanding Total Addressable Market (TAM)
At Avenir, we are often asked by clients what is the biggest driver of a successful search. Typically, that is clear alignment among the client’s team on what you’re looking for and how to evaluate candidates. For Avenir it’s the total candidate addressable market (TAM), i.e.the supply of candidates that fit your criteria. The larger the TAM, the more flexibility you have with the search criteria (e.g. adding more stringent industry experience, required certifications, etc.) and compensation with less effect on the speed of the search . When we start a search at Avenir, we conduct a TAM analysis to understand the market, see if we need to adjust search criteria and which criteria have the largest effect on TAM to ensure a successful search.
On average, we find a TAM of 500 candidates is required to secure a hire.. Factors such as industry specialization, geographical limitations, and specific skill sets can dramatically affect the TAM.
Strategies for Increasing TAM
Embrace Remote or Hybrid Options: The most effective way to expand the TAM is to consider making the position remote or hybrid. This allows you to tap into a broader geographical talent pool, significantly increasing the number of candidates available. This route will allow you to be more stringent in other phases of the role (e.g., maintaining higher standards during each phase of interviewing since the candidate pool is larger). If remote work is not feasible due to the nature of the role, a backup option is to look for candidates willing to relocate to the area, though this significantly reduces the efficiency of a search (i.e. you’ll have to reach out to many more candidates than a local or remote search).
Flexible Role Requirements: If geographical flexibility is not possible, organizations can consider eliminating or making optional certain qualifications. This includes expanding or loosening requirements for years of experience, industry-specific expertise, certifications, formal degrees, etc. In general, your search firm/partner should provide clear guidance on each search criterion and its impact on the size of the TAM, e.g., reducing the required years of experience increases the TAM by x%) so that you can balance TAM with role requirements.
Enhancing Compensation Packages: Increasing total compensation is another approach to expanding the TAM. Competitive salaries, bonuses, and attractive benefits can make positions more appealing, if you’re not able to adjust other role requirements.
Creative Role Management: There are some other creative ways to create TAM for difficult roles, such as combining two roles into one or separating existing roles into more specialized positions. Your search partners can help you think through these options if needed.
Conclusion
Effectively managing TAM is critical to completing a successful search. Generally, we use a benchmark TAM of 500, though there can be a range of factors that affect this. If you need to expand TAM, the biggest driver to expanding TAM is flexibility in moving a role to remote or hybrid, though there are other options.
Have questions or need talent acquisition help? Please reach out to recruiting@avenirtalent.com