This is a reality article series. Over the next few weeks, I’ll document an actual retained search we’ve just received for a VP of operations for a $300 million medical services company. Our goal is to start presenting candidates within two weeks. Throughout these articles, I’ll review every step of the search ó how we beat out the competition, how we found great candidates, and how we closed the deal. Hiring one great person is tough enough. Systematizing the process is how you make hiring top talent a business process. At the end of this real search, we’ll use some of the lessons learned to show how to scale up this process throughout an organization. Here are the basic steps involved in just about any search. The few upfront steps pertain to third-party recruiters, but even corporate recruiters might find ideas on how to deal with their hiring manager clients and their outside recruiters. Step 1: Get invited to participate (completed). We’re a small search firm located in Southern California and have NEVER done a search in this field of health care. However, I wrote an article a few years ago on how to assess executive talent. As a result of this article, I had a chance to present these ideas to a CEO forum in 2003. As a result of this talk, the CEO of the company asked us to help evaluate his hiring processes. This in turn led to us proposing to handle the search for his future #2 person. The lesson: Differentiate your marketing. Don’t market just your search practice. Market your hiring expertise and take every opportunity to present your ideas to decision-makers. Step 2: Demonstrate competency (completed). When we learned that this company was looking for a VP of operations, we suggested that we prepare a performance profile. A performance profile gives the hiring manager real insight into what a person needs to accomplish and how it needs to be done. During the process of preparing the performance profile, we then demonstrated how to use the one-question interview to assess candidate competency and motivation for the job. As a result of this, it was very clear to the CEO that we knew the job and what it took to achieve success. Remember that we had NO EXPERIENCE in this type of search. However, we did have extensive experience in breaking work into its component parts and understanding what it takes to accomplish complex tasks. The process of preparing a performance profile convinced the CEO that we were different from the other search firms we were competing against, even though they had far more industry expertise. Lesson: You must understand the job and be recognized as an expert in your field. The performance profiling process I’ve been writing about on these pages for years ó plus the one-question interview ó was all the proof needed. Step 3: Beat the competition and negotiate the fee (completed). Things now started to get sticky. For one, our fees are the highest in the industry. For another, we had never done this type of search. While we have completed many searches at this level, the CEO was concerned that we didn’t have a network of candidates, and he couldn’t understand why he should pay 25% to 30% more than the competition for our services. Certainly our knowledge of the job as demonstrated in Step 2 helped get us to the table, but now we were in new territory. On the experience side, I indicated that with new Internet searching tools, including online databases (like AIRS Oxygen and Eliyon), and the ability to purchase competitive intelligence, we are able to identify potential candidates within days. The need for a network is far less important now ó if you know how to identify potential candidates, contact them professionally, and then network and recruit these people. We were experts at this, and the fact that we train other recruiters to do this helped our cause. However, the fee issue was still a sore point. The CEO couldn’t understand why our fee was so high, and the fact that we wanted to be paid before we delivered candidates. While we didn’t reduce our fee, we did agree to adjust the payment schedule based on the presentation of qualified candidates. This clinched the deal, along with our one-year guarantee. Lesson: Base fees on results, not on the competition. Provide a solution rather than assume your search activity is just a transaction. Step 4: Prepare the job description (completed). We started this during the presentation phase. By using a performance profile to determine what the person in the role needed to accomplish, rather than what the person must have, we changed the nature of the assessment process. We will update the performance profile and work with the hiring team to prioritize the performance objectives. At the same time, we’ll show the team how to use a performance-based interview to assess competency. This ensures that all of the people involved in the hiring process are using the same criteria to evaluate candidates and that they are reasonably competent at it. This step allows us to minimize the “moving job spec” problem and also increases the chance that good candidates won’t be excluded because one of the interviewers doesn’t know how to interview. Lesson: Leave as little to chance as you can. You don’t have to time to do searches over again. Step 5: Prepare the candidate profile (to be done). A candidate profile describes the background of the ideal candidate and lists potential companies, organizations, associations and groups the person could belong to. From this, we’ll build a sourcing and networking plan. Once we know who knows the candidate, we’re well on our way to finding the person. Step 6: Develop and implement sourcing plan (to be done). We’ll use a multi-step sourcing plan to find the candidates. This will consist of targeted compelling advertising, the use of Internet data mining tools like AIRS Oxygen and Eliyon, and the purchase of competitive intelligence, in combination with an aggressive referral and networking program. Once we identify 50 or so potential candidates, we’ll begin the recruiting and networking process in earnest. When recruiting this way, not only who you call but what you say is very critical. In upcoming articles, I’ll describe this process in more detail. To make our job even more challenging, we’re planning to use a researcher who has never recruited before. We have a very capable person in mind who we can train to do this in a few days. This should be a fun part of this reality article, so stay tuned. Step 7: Process candidates for recruiter (to be done). Once we have some candidates identified, we’ll begin the recruiting and interviewing process. This should start within a week or so from the kickoff meeting. Step 8: Present candidates to client (to be done). Our presentation will be formal. It will consist of the candidate’s resume, a formal assessment write-up using our 10-factor candidate assessment form, and a short write-up which the candidate will prepare describing his or her two most relevant accomplishments. We’ll also prep the candidate a little on how to handle the actual interview. Step 9: Assessment and selection of final candidates (to be done). We’ll be more involved than most firms at this stage. More than likely, we’ll lead one panel interview with the hiring team and each final candidate. At the end of the interviewing process, we’ll lead the candidate debriefing session. During this session, we’ll assess each candidate on the ten factors on the assessment form. Each interviewer will be required to substantiate his or her ratings with actual examples of relevant accomplishments, not gut feelings. This insures balance across all of the criteria. Interviewers tend to globalize strengths or weaknesses, so ensuring objectivity across all job factors is a critical piece of the final evaluation. Step 10: Negotiate the offer and overcome concerns (to be done). The actual negotiation will be described and how we handled the major concerns. This is always a critical aspect of any recruiting process. The challenges I think we’ll be facing include a less-than-ideal location and a comp package that might be a bit on the low side. Offsetting this is a legitimate chance to become the COO in a few years for a company that has significant upside. More on this later. Step 11: After offer acceptance (to be done). It’s not over until it’s over. We use a very formal on-boarding process which consists of a series of meetings and a formal review of the performance profile with the hiring manager and new employee. We want to use the on-boarding process to clarify job expectations, get the candidate quickly up to speed, and minimize the chance of counteroffers or competitive offers. Over the next week, we’ll finalize the job description, prepare the candidate profile and then develop and begin implementing the sourcing program. I’m sure we’ll hit some bumps along the way, but that’s reality. We’ll probably all learn a lesson or two along the way. Stay involved with us on this. Submit any of your own ideas as the story unfolds. It should be an interesting summer. [Note: Next Friday, August 6th, at 11 a.m. PT / 2 p.m. ET, we'll be conducting a free online semi-sourcing course. If you've read my sourcing article and submitted your response, you've already received login instructions and your secret word. There's still a chance to attend. If you don't know the secret word, there are hints on the login page. If you want to learn about new recruiting techniques to find more top candidates, you should attend this course.]
Recruiters remain overwhelmed with resumes and candidate applications; perhaps even more so now that the economy has improved a bit. But these same recruiters also remain skeptical that they can provide the quality and personal customer service that I insist is core to being an effective 21st-century recruiter. Here are a few quotes I have heard from recruiters recently:
- “I have received almost 500 resumes in the past two weeks. Over 90% of these people are not qualified or not what my company is looking for.”
In late June of 2004, the U.S. District Court for the Northern District of California certified a large class-action case involving workplace discrimination. For those of you who are not familiar with this lawsuit, Wal-Mart, which is the largest private employer in the world (operating about 3,400 stores in the U.S. with more than one million employees), is being sued by women seeking to represent both themselves and other similarly situated women for sex discrimination in pay and promotions. Relying heavily on the disparate impact theory of discrimination, which uses statistics to examine gender differences in pay and promotions, the plaintiffs built a formidable case against Wal-Mart. At issue was whether or not the proposed class, which has the potential to include over one million people, would be certified. In other words, the judge needed to rule on whether these plaintiffs could represent a potentially huge group of women or not. From the plaintiffs’ perspective, being certified as a class constitutes a major victory, often leading to a quick settlement offer from the company. Conversely, from the company’s perspective, refusal by the court to certify the class is a major victory for itself. Having said that, it is important to note that attaining class certification involves somewhat different requirements than proving discrimination has occurred. Acknowledging the significance of this lawsuit, the judge provided an 84-page document explaining his reasons for granting class certification. In light of the judge’s detailed explanation for his decision, there are many lessons to be learned by recruiters and other HR professionals who are responsible for talent management activities in their organizations. Following an analysis of some of the most interesting points addressed by the judge, I offer a few suggestions for companies to reduce the chances they find themselves in a similar situation. Selected Points in the Dukes vs. Wal-Mart Case Because of the length and complexity of the case, I will only comment on a few selected points that are particularly relevant for recruiters and HR professionals. Here they are:
- Simply having diversity goals or winning diversity awards is not enough. The judge was not persuaded by Wal-Mart’s diversity policies and programs. Although the judge noted that the company kept statistics on gender composition of the workforce, he observed that there was no attempt to identify barriers to women’s advancement within the company. Furthermore, he noted that the goals established by Wal-Mart for the number of women in the workforce appeared to be largely “ad hoc” and subjective. That is, many managers made their own goals for female representation or simply set them as incremental improvements over last year’s targets. Moreover, the judge noted that diversity goals were not linked to such things as incentive pay, which in turn meant these goals were not always effective. The fact that the company had won national diversity awards and that diversity issues were addressed in executive discussions, handbooks, and training programs was not seen as enough by the judge to defeat class certification. One of the tools used by the plaintiffs’ experts was benchmarking, in which women’s representation at higher levels was compared to other companies in the retail business. Unfortunately for Wal-Mart, they did not fare well in this comparison.
Time to hire is one of the most frequently used metrics for evaluating staffing functions. Usually measured in days, time to hire broadly reflects the total elapsed time required to staff an open position. Despite its wide use, time to hire appears to be one of the more poorly understood metrics in the field of staffing (two other metrics that fall into this category are job performance and candidate quality). The purpose of this two part article is to clarify key elements that should be considered when using time-to-hire statistics. I’ll look at several case studies illustrating the value of taking a more well-defined and analytically rigorous approach to this frequently misinterpreted metric. The first thing to acknowledge when looking at time to hire is that it is primarily a measure of staffing speed; it is not necessarily associated with candidate quality. There is little value in making bad hires quickly, and the emphasis time to hire places on time over quality significantly limits its value for measuring staffing performance. Simply put, time to hire is grossly inadequate for evaluating overall staffing effectiveness. However, it does provide useful information for evaluating staffing efficiency. Like most staffing metrics, time to hire also suffers from poor definition. For example, some organizations measure time to hire starting with the initial approval of a requisition, while others don’t start measuring it until a requisition has been assigned to a recruiter or posted to a career site. One of the most critical difference in time-to-hire definitions is whether to stop measuring when an offer is secured from an approved candidate or to include the time that elapses between when a candidate accepts an offer and when they actually start the job (these metrics are more appropriately referred to as “time to fill” and “time to start,” respectively). Many of the things that affect time to start do not affect time to fill, and vice verse. For example, company policies restricting internal employees from transferring to new positions until replacements are found for their current roles may radically lengthen time to start, but could have little effect on time to fill. A SHRM survey found that 50% of staffing professionals felt that the distinction between time to fill and time to start was not highly important*. This is disheartening, since there are many critical reasons to distinguish between time to fill and time to start. There are even situations where companies may want to intentionally increase time to fill while simultaneously trying to decrease time to start. Although such staffing strategies may initially seem contradictory, they make sense when time to fill and time to start are analyzed as independent concepts instead of lumping them together under a single, ill-defined time-to-hire metric. Can Time To Fill Be Too Low? The following case study illustrates some of the reasons why time-to-fill and time-to-start should be analyzed and investigated independently. This is based on work conducted by one of my co-workers, Dr. Robert Yerex. Robert oversees a team of workforce analytic researchers whose sole goal is to deconstruct, understand, and ultimately predict the financial impact of various staffing interventions and trends. Robert’s team recently looked at the impact automated staffing technology had on a company’s ability to hire employees eligible for Work Opportunity Tax Credits (WOTC). WOTC are provided by the federal government to encourage hiring individuals from geographic areas targeted for economic development. WOTC hiring can directly contribute to a companies revenue by as much as $2400 per WOTC eligible hire. A large retail organization was interested in the impact that in-store hiring kiosks had on their ability to recruit, identify, and hire WOTC-eligible candidates. Robert’s team used sophisticated mathematical models to analyze staffing data from 46,300 candidates across 174 different locations. Reporting the full results of Robert’s analysis would require me to use a lot of impressive mathematical terms like “approximated negative binomial distribution” that I only vaguely understand. However, one clear finding emerged from this study emerged that is both relatively straightforward yet somewhat counterintuitive: There are situations where it makes sense to purposefully keep job requisitions open in order to increase average time to fill, even though there are qualified candidates available that could be hired immediately. To fully understand this finding, it is important to consider what WOTC candidates represent in a more general sense. From a financial modeling standpoint, WOTC candidates represent “star” candidates who possess rare, highly valued characteristics. When hired, these star candidates provide exceptionally high levels of revenue to the company. These are candidates that companies would like to hire all the time. However, there are not enough them available at any given time or location to meet most company’s ongoing operational staffing needs. Because they are rare, receiving applications from star candidates is a relatively infrequent event. As a result, companies that focus on minimizing time to fill by hiring as quickly as possible may fill many positions with non-star candidates simply because they did not wait long enough for a star candidate to apply. So how long should companies wait for star candidates to apply before they decide to fill a position? Answering this question requires analyzing a range of variables using some relatively sophisticated mathematical models. However, putting in the effort to compute the answer can pay off in increased revenue generated by more strategic staffing. Consider the following example based on Robert’s study. The study found that on average about two candidates per day applied at in-store kiosks. In comparison, WOTC candidates applied about once every six days. The study found no difference in assessment scores for WOTC and non-WOTC candidates, so assume that both types of candidates pass the selection process at the same rate. Last, assume that each WOTC candidate hired generates $2,000 in cost savings for the organization, and that when given the choice the company always hires WOTC candidates over non-WOTC candidates. These parameters can be used to model how different time-to-fill policies impact the probability of hiring WOTC and non-WOTC candidates, and the resulting impact this has on financial returns. The results of four different time-to-fill scenarios are shown below. By the way, the modeling required to appropriately estimate these numbers is fairly complex, and cannot be done using closed form equations that are easily plugged into an Excel spreadsheet. Feel free to send me an email if you would like more information on how these values were computed.
As a recognized expert in the area of HR metrics, I’ve had the opportunity to advise numerous large firms on what HR metrics they ought to be utilizing. Through this experience, I have observed that a good number of firms make the same two errors when it comes to developing and implementing metrics. Avoiding these two errors will not guarantee success by itself, but it will go a long way towards ensuring that you are set up to handle any roadblocks or problems you may encounter along the path to using world-class metrics in your organization. These two common errors are:
- Developing and implementing HR metrics in a vacuum
What’s all the fuss? Hiring top people isn’t as tough as most recruiters and hiring managers make it out to be. Job branding is the key. But before you start job branding, you must first stop doing dumb things that prevent you from hiring top people. No hiring initiative will work effectively unless you stop doing these things first:
- Stop using traditional job descriptions (TJD). I’m tired of writing about this. For more on the subject, read my recent article on how to prepare a performance profile if you want to know why traditional job descriptions prevent you from hiring top people. I’m personally aware of over 500 placements (entry, staff, mid- to senior management) where “A” candidates were hired just because a performance profile was used to describe the job instead of a TJD. The first-year turnover of these 500 placements was less than 5%. This is unbelievable. I have not found any comparable consistency in hiring top people when a TJD was used.
In the U.S. there’s a phrase that goes, “shooting yourself in the foot.” I suppose it started with some uncoordinated cowboy firing his gun before pulling it out of the holster. Oops! But shooting yourself in the foot is an activity not limited to dim-witted cowboys. Every so often, my jaw drops at how organizations shoot themselves in the foot. Here’s a real-life example. A large organization provides call-center services to worldwide customers. Their process was envisioned as follows:
- A salesperson would close a deal with a new client who needed service reps.
James Bryant Conant ó who was a significant player in the Manhattan Project (the team that created the atomic bomb), as well as the President of Harvard and the U.S. ambassador to Germany after World War II ó certainly should know what it takes to be successful. One of his favorite quotes was, “Behold the turtle. He only makes progress when he sticks his neck out.” Conant was a pioneer at bringing new thinking and practices to the organizations he was part of. While none of us are creating atomic bombs (as far as I know anyway), leading a major university, or negotiating with foreign governments, we face uncertainties, problems, and concerns that are challenging and often even frightening. I know of recruiting leaders who are faced with finding hundreds of highly skilled people to meet the demands growth is placing on their organizations. I know of others trying to bring in replacements for the high numbers who are leaving, perhaps because of poor leadership. Some recruiters face skill shortages, foreign outsourcing threats, and the uncertain economic status of their own organizations. Others are bogged down in archaic systems and outdated concepts about recruiting. Whatever it is that’s bothering you, it will require a positive attitude toward change and a willingness to take risks in order to move forward. It is easy, given these scenarios, to pull into our shells and go about thing as we always have. There is a lot of comfort in the past and in doing what is routine and uncontroversial. No one gets fired for doing what the boss wants. On the other hand, not many get promoted or do anything exciting either. Progress and growth only come to those who “stick their necks out” and try new things. I have distilled five criteria for making positive change happen from the hundreds of articles and stories that are written every year about creativity and about those who lead effective organizations. 1. Become a change fanatic. Focus on what you can make different or better rather than on doing the same old things. While it might seem as if doing what you do better and better would result in more recognition and success, it is often the opposite that does that. Recruiting leaders at Cisco pioneered recruiting concepts that have now become common. Cisco was one of the first to push using the Internet for recruiting, to rely heavily on the Internet for sourcing, and to focus recruiting advertising and sourcing efforts on targeted groups of candidates. The leaders of Guru led the development of job boards for temporary workers and then moved on to apply technology to assessment and screening. While Guru itself was not particularly successful, their ideas have been picked up and are part of Unicru today. Change is often the result of frustration with however things are currently done. As the frustration levels rise, the creativity levels also go up. Think about what frustrates you and then brainstorm ways that you could change the situation. Invite a few colleagues to help you figure out new approaches. The ideas you come up with may be the pioneering ones of the 21st century. 2. Collect and use data wisely. Effective change should be based on data. When change is based on facts and numbers, it’s easier to defend to management than when it is undertaken on a whim. Data also makes it much easier to see if you have made progress. Collect all the information you can and spend the time you need to learn what it is telling you. Get the numbers and then look for patterns and connections. Qualitative information can also tell you a lot, so ask candidates and hiring managers about their experiences, attitudes, and ideas. Often the best leaders identify an issue and then put together small SWAT teams of recruiters (and maybe others as well) who are asked to address the issue with creative brainstorming and problem solving. Then it is up to you to get the resources and stick your head out of your shell to run some experiments and see how the issue responds. When you have the data of how things were before the change initiative, you can then use it as a baseline to assess the impact of the change and make course corrections. 3. Act boldly, quickly, and often. Above all, great leaders act with decisiveness and boldness. Timid people don’t usually last long as leaders, or if they do, they become cautious, rule-obeying bureaucrats. Innovative leaders are trying out new ideas all the time ? often on a small scale where the potential damage is controlled. Because there is much more failure than success, it is critical to move quickly, try as many experiments as you can, and assess their impact. It is often better to ask for forgiveness than permission. 4. Fail fast. The only real learning, it is often said, comes from failure. Success is nice and we all enjoy reading case studies of how people implemented new programs. However, you can learn much more from the experience of failure, especially if you can fail quickly and as quickly try another new idea. If you don’t dare touch the burner on the stove, you never get to experience what a burn is or what is does to your finger. While getting burned is never pleasant, it gives you clear knowledge of the power of fire. Thomas Edison used to say that genius was 99% perspiration and 1% inspiration, meaning that hard work and trial-and-error were the best ways to bring new ideas to fruition. It is still the best way. 5. Copy blatantly. Constantly look for good ideas everywhere and then put them to use in your organization. I don’t mean just looking for recruiting innovations. Also look at marketing or other similar functions and see what they are doing around the issue you have. Chances are the same concepts might work for recruiting. Scan magazines and books, talk to friends, ask candidates what they find exciting about anything they have experienced while job hunting, and then see if you could implement some of the same ideas in your organization. I could expand this list to 8 or 10 more rules for leadership success, but this should be enough to give you some ideas on how to get moving. The challenges we face are going to get bigger and more complex and the recruiting leaders who reap the rewards will be the ones who have dared to stick their head out of their shells and take a few risks.
Any recruiter worth his or her salt knows that there are three essential elements to recruiting: 1) sourcing or finding names, 2) assessment, and 3) selling the candidate. Most corporate recruiters are weakest at the first stage, which is finding the names and contact information of the ideal candidate (the working professional that has the same job title as your open requisition). Fortunately, there is an easy solution to this candidate identification problem that, for some reason, 75% of the corporate recruiters and 98% of the managers I have worked with have never heard of. It’s puzzling to me that they don’t utilize it, because this solution to finding and targeting candidates is quick, relatively inexpensive, and essentially ends the candidate identification problem. The solution goes by a variety of names including:
- Names research
Although it is happening a bit more slowly than many of us would have liked, the worlds of applicant tracking and assessment are slowly beginning to overlap. This is a good thing, because these two components of the modern staffing system actually complement one another very well. For instance, applicant tracking systems add value because they:
- Help companies effectively manage excessive resume volume
Paul Smith, the EVP of marketing at XYZ Company, placed a call to Jeremy Jones at around 5:00 p.m. on a Thursday. Jeremy was a long-time acquaintance and ran a successful retained search business focused on marketing and sales executives. Paul had been searching for a new VP of marketing for the Western U.S. for several months without success. His in-house recruiters had brought him a handful of resumes that looked pretty good, but when he contacted the prospective candidates he quickly found reasons to be unhappy. Some of them lacked the specific skills he had indicated were required, some were well qualified by experience but just didn’t have the verbal skills he thought the position required, and a few others were skilled and seemed competent but just didn’t make Jeremy very excited. He had been through this a hundred times with the internal recruiting team and with his golfing buddy Mike, who also happened to be the VP of HR. In fact, that past Saturday they had discussed the poor results he was getting and he had told Mike he was going to go outside. Mike hadn’t really been able to argue against it. Paul knew, however, that Samantha, who headed up search internally, was going to be very upset. But he couldn’t hold off on filling this position much longer, and he had little faith in her ability to all of a sudden perform better than she already had. Samantha had been given this search over 60 days ago. She had initially had a short meeting with him to go over the job description, but neither of them has felt the need for much in-depth discussion. Paul was confident that she would get him a couple of good candidates within a few weeks, given the current job market and the number of layoffs he had heard about. But he didn’t actually set any specific timelines with Samantha and she never mentioned when she would have candidates for him. They never talked about how hard or easy it would be to fill the position, either. Paul’s retained search friend Jeremy, on the other hand, spent about an hour on the phone with Paul and seemed eager to get started. They set up a meeting for the next morning. Jeremy looked over the job description and asked questions that defined the position better. One of the things that Paul always liked about working with Jeremy was his thorough questioning and his knack of getting him to think differently about the position. In fact, he realized during the conversation that he really didn’t know how important several of the skills he had indicated as important were to being successful in this job. He had indicated that written communication was essential, but after being carefully probed by Jeremy he wasn’t so sure. Of course, the person had to be able to write, but they certainly didn’t need to be Steinbeck or Hemingway! Maybe he had put too much emphasis on that, as well as on the verbal communication. The main focus of this position was strategy, long-term trend identification, and the ability to hire good marketing and salespeople. He hadn’t really nailed that down until this meeting with Jeremy. After about an hour and a half of great conversation, where he learned that the job market for these positions was actually pretty hot, they agreed to a deal that would get him three qualified candidates within the next month. He agreed to interview these candidates promptly and get back to Jeremy with concerns or feedback within 24 hours. In the meantime, Jeremy was going to interview the other two VPs of Marketing that had responsibility for the Midwest and the East to see what their backgrounds were and get their opinions about this position. This was something Samantha had apparently not done, but that Paul felt was a very smart move on Jeremy’s part. By the following Thursday, much to Paul’s amazement, Jeremy called and said he would like to present two candidates to him the next day. He said it was urgent, as one of them had a tentative offer from a competitor but actually was more excited by XYZ. Paul went over the resumes of both candidates and was impressed. These people both met his requirements and had the necessary experience. In fact, the one with the tentative offer looked really great. He made room in his schedule for the two interviews. By the next Wednesday he had extended an offer and was about the happiest guy in XYZ Company that day. What Samantha Could and Should Have Done What happened? Why did this story unfold this way? What did the internal recruiter, Samantha, do or not do that led to this very predictable outcome?
- Samantha needed to spend more time with Paul and probe into the skills and competencies that were really necessary. Jeremy spent time, made a special trip over to Paul’s office, and actually engaged in a conversation with Paul that helped him see the position a bit differently. This led to a better ó more specific and real ó job description. She never talked about the job market or gave Paul any sense of the ease or difficulty in filling this type of position.
Few people nowadays would disagree that recruiting is a business-critical function. Accepting that maxim would naturally lead to the conclusion that the tools used to support something so important (i.e. applicant tracking systems) should lend themselves to the task. Unfortunately, these products tend to be hobbled by low expectations among users and an antiquated approach to recruiting in the organizations that use them. Buyers vs. Users Low expectations are chiefly the result of the fact the “buyers” and actual users of applicant tracking systems are two distinct groups of people. The buyers ó i.e. the people in charge of making the purchasing decision ó are typically HR or IT executives, or a combination of the two. The typical senior HR executive today came up the ranks as a generalist or as a lawyer from the employee relations side. Other specialties ó such as benefits, compensation, or recruiting ó are rarely, if ever, a path to the top. A few enlightened companies move seasoned business executives into HR, but they are the exception to the rule. Unfortunately, a pure HR background does not include much understanding of strategy and talent acquisition. An incident from my own past illustrates the problem well. At the time, I was implementing an ATS for a large company as part of an effort to deliver centralized HR services, including recruiting. The company’s employee relations team produced a 28-page flow chart of the recruiting process that they wanted supported by the ATS. The process ensured compliance at every stage, no matter how irrelevant. The senior employee relations executive put the priorities in perspective: In the event of an audit he wanted to be able to sit an OFCCP auditor at a terminal and provide irrefutable proof of compliance. Considerations such as quality of hire, talent pools, etc. did not even enter the picture. He never even bothered to ask executive management if there might be other goals associated with the implementation of the ATS. At the time I asked if he had computed the risk of non-compliance. This is a relatively straightforward equation: (probability of an audit) X (probability of being found in violation) X (dollar amount of the likely fine or loss) This equation produces a dollar amount that should be compared to the business impact of delays in finding talent or getting poor quality talent. Obviously such a calculation should not be the only justification in deciding on how to value compliance; there are higher goals and ethical considerations that supersede any financial calculation. But these numbers do help frame the debate. Businesses do these kinds of cost/benefit analyses all the time ó so why not apply the same to recruiting? The trouble is that quantifying data to decide on a course of action is not something that HR does very frequently or very well. The situation I found myself in is not atypical. More often than not an ATS is intended to serve as a compliance tool and little more. In 2003, the OFFCP audited 4% of the 192,000+ firms considered to be federal contractors. Of those audited, 1260, or 16%, were cited for violations. Do the math and you’ll see that the odds of being found in violation are about 0.7%. Consider, too, that there are no penalties for failing an audit, other than the risk of being debarred from doing business with the federal government. This is a serious consideration, but in reality it is an unlikely occurrence. Fewer than two hundred firms have been debarred since 1972. Considering that over a million firms have done business with the Federal government over the same period, the risk of debarment is 0.02%. Federal and state agencies would much rather work out a conciliation agreement than debar a firm. Even the most egregious violations don’t necessarily translate into huge risks. In 2003, twelve firms were considered for litigation stemming from systematic discrimination, but suits were only filed against five, resulting in damages of $6.2 million. Using the same formula above, the risk is about $32. Considering the cost of a high-end ATS, that’s an expensive insurance policy to protect against a rather small risk, if that’s the main purpose. If the buyer is an IT executive then the situation is even worse. Now the focus is entirely on factors like support and security. While these are not insignificant considerations, they should not precede functionality and value delivered. Then again, with no concept of value in recruiting, one can hardly blame IT executives for focusing on what concerns them most. Small wonder that ERP vendors find most of the successes for their recruiting modules at organizations where HR has abrogated the decision to IT. At the end of the day, what all this means is that buyers are hobbling users with second- or third-rate functionality. Their best recruiters are stuck with systems that provide support where it least counts. Suborning the creative talents of good recruiters to an administrative process destroys value. The better recruiters lose their ability to stretch their talents. Contact Management Functionality That Doesn’t Deliver Just one example of this limitation is the poor support among most ATS products for networking and contact management. Few ATS products, except for those targeted toward the staffing industry, offer capabilities that allow a recruiter to build and maintain a pipeline of talent. In many ways, contact management products such as ACT or Goldmine are far better as recruiting tools than your typical ATS, given how important networking is to effective recruiting. Even a free product such as Plaxo provides a more robust alternative to managing a network of contacts or candidates. The much vaunted resume database is not an acceptable alternative. There is usually no way to keep it updated with useful information and no tools beyond a search engine to tap what’s in it. Having the ability to just convert it into a skills database would at least be a beginning, but that typically requires third-party functionality. Contact management products like the ones mentioned above give users the ability to enter detailed contact information, cross-reference names, store documents, to view records of changes in the contact’s personal or business situation, and manage and view other useful information. Contact data can also be modified to suit a particular need. Reports can be generated that show the status of a relationship or activities relevant to a need. By contrast, an ATS maintains a candidate profile within rigid parameters, with virtually no ability to customize the profile. Details outside the profile are limited to notes that cannot be meaningfully reported on. The core design of an ATS has missed the point. Astoundingly, virtually all ATS products have glossed over the sourcing component, choosing to lump it in with workflow ó once again exposing the lack of business acumen in HR and IT. The significance of good support for sourcing capabilities cannot be overemphasized. Finding quality talent takes more than just having a career site or access to a job board. To state the obvious, the better candidates are almost always sought after and harder to find. An ATS, with its emphasis on process and treating candidates like so many parts on an assembly line, eliminates any ability to creatively source talent. This approach works for most entry-level jobs where little distinguishes candidates and the supply often exceeds demand, but it does not work well for jobs that require complex skills and extensive or unique experience. The supply-chain model of staffing that gets implemented with an ATS also fails because it assumes that supply will be available and delivered at the point where it’s needed. That may well be relevant for manufacturing toilet tanks or PCs, but it doesn’t apply to recruiting. This is why organizations pay search firms the big fees. The skill set required to find high quality talent is the same, whether it’s with a recruiter employed by a large organization or at small search firm. The recruiter at a search firm is not concerned about compliance and focuses instead on maintaining a network of contacts that can be tapped as needed. Hiring managers know that their in-house recruiters are forced to work within a straight jacket of regulations and compliance, regardless of the cost. Consequently, turning to a search firm is often the only option for filling critical jobs, with the less important jobs left to the in-house recruiters. What is needed in an ATS is a modular approach to functionality ó offering progressively more advanced functionality to the more talented recruiters. Better contact management is one area that needs to be addressed, but another can be simple override capabilities, that is, allowing the better recruiters to adapt a process to their needs. Of course, the compliance brigades would be apoplectic at the idea, but this is not exactly a unique concept. Accounting and financial systems all support overrides for those who know what they are doing. Every now and then that produces an Enron, but the overwhelming majority of users are not on a quest to create trouble or violate compliance requirements just because they have the opportunity to do so. In any event, for the small number of violators that exist, compliance is better enforced by management action than technology. An accident of history placed recruiting in the HR department. This was most unfortunate since HR has little understanding of or much desire to do anything with recruiting. Generalists do not aspire to be recruiters (there is not a single for-credit course on recruiting available at any accredited college or university anywhere in the country). HR is about predictability and stability: paychecks, benefits, and employee relations. HR is among the last bastions of socialism: equity and consistency is more important than speed and quality. Looked at through this lens the recruiting process represents a potential hotbed of radicalism. Left to their own devices, recruiters would simply focus on finding the best talent at whatever price the market requires them to pay, ignoring issues like compliance, pay equity, and that ultimate sacred cow, diversity. So an ATS ends up catering to the lowest common denominator instead of raising the bar. In this respect it’s not just about destroying value but also preventing value from being created. Recruiters working with an ATS are often forced to reach out to external search firms, adding to their organization’s staffing expenses, while depending on a resource that does not have any stake in the success of their organization. Providing a good recruiter with the functionality in a typical ATS is like putting training wheels on Lance Armstrong’s bicycle. There may be value in doing so for the novice or poorly trained recruiter, but they drag down a more talented professional. Anyone who has even average recruiting skills loses their ability to improve on them if they’re straight-jacketed by an ATS.
Part 1 of this article series covered recruiting “questions From hell” that related to the overall effectiveness of the employment function. Here in Part 2, sourcing and other important areas of the employment function will be covered. Section 3. Sourcing: Do you spend the majority of your money and time on the most effective sources? 1. Which recruiting source produces the very best on-the-job performers? Which source produces the worst quality hires? Does the budget percentage spent on specific sources match the effectiveness of the source? Discussion: If you run the data in recruiting, you invariably find that among each of its elements, sourcing has the highest impact on the overall success of the hiring process. Unfortunately, few recruiting departments have accurate processes for identifying which sources produce the best candidates for key jobs. In order to be strategic, recruiting managers must look at not only the cost of every source, but also the quality of the hires that come from those sources. In addition, it is invariably true that, for some unknown reason, the percentage of the recruiting budget spent on weak sources exceeds that spent on the very best sources. (For example, top-performer referrals are almost always the best source of candidates, but most companies have not funded a single program designed to solicit top-performer referrals.) 2. Which recruiting source produces candidates that stay a long time (i.e. have a high retention rate)? Discussion: In addition to assessing recruiting sources based on their ability to produce top-performing hires, it’s equally important to look at sources based on their ability to produce employees who stay on the job a long time. Since some sources produce hires with high voluntary turnover rates, it’s important for recruiting managers to identify the sources that produce both high-quality candidates and those who don’t quit within two years. (For example, recruits from third-party search firms often have a higher turnover rate than similar hires from employee referrals.) 3. What schools do your top performers come from? Do you spend the most time and money recruiting at those schools that produce the best performing hires? How long does it take for a college hire to reach the performance level of an equivalent experienced hire? Discussion: Few college recruiting programs are data driven, and many collect no effectiveness data at all other than the number of hires made. As a result, companies continually return to the same schools and use the same approaches to college recruiting. But strategic recruiting managers continually reassess the schools they attend and the techniques they use based on the effectiveness metrics from the previous years. In addition, recruiting managers quantify the economic cost/benefit ratio of college hires to ensure that their firms hire the right mix of college hires and experienced hires based on their relative economic return. Incidentally, many firms find that their very best current employees did not in fact graduate from “top 10″ targeted schools. In addition, close analysis of college recruiting processes almost always finds that most current college recruiting programs are incapable of truly global recruiting. 4. Do the best hires come from active candidates (people actively seeking jobs) or from currently employed top performers that are not actively looking for a new job (often known as “passive” candidates)? Discussion: The single biggest error that recruiting departments make in sourcing is focusing on active candidates. The majority of candidates at most firms are in fact active candidates. Although these active candidates will literally come to you, they might not become the very best performers on the job. Strategic recruiting managers go the next step and compare (and quantify in dollars) the on-the-job performance differential between active candidates and currently employed candidates who must be poached from other firms. Because the performance difference is often significant in key jobs, it’s important to continually reassess sourcing to ensure that your processes and recruiters focus on the harder-to-recruit currently employed top performers. 5. Which has a higher ROI, recruiting great talent from the outside, or recruiting, retraining, and developing your current average employees? Discussion: In most firms, external recruiting is independent and totally divorced from internal job transfers and promotions. Unfortunately, this “silo” approach can result in some bad decisions regarding when to hire externally and when to look internally. Wise recruiting managers calculate the costs, benefits, and relative success rates of each approach. They then develop systems to coordinate their efforts with those of the internal transfer/promotion function to ensure optimal overall results. 6. Which source produces the top diversity hires? What factors cause such a large number of diversity candidates to be screened out before hiring? Why doesn’t diversity recruiting also take responsibility for diversity retention in order to effectively increase the number of diverse employees? Discussion: If diversity recruiting programs are to increase their effectiveness, they must, like all other business processes, become data or metrics driven. Yet few diversity recruiting managers track source effectiveness, and even fewer do failure analysis in order to identify why such a high proportion of diversity candidates are screened out of higher level job searches. It’s important to identify these reasons and to develop mechanisms for eliminating these barriers. Barriers often include unnecessarily high experience requirements and difficulties that occur during the interview process that are unique to diverse candidates. One final area of concern is the relative lack of connection between diversity recruiting and diversity retention. Since a high diversity turnover rate essentially “negates” effective recruiting, it’s important for recruiting to work closely with diversity retention efforts to ensure that the reasons for early turnover are factored into the recruiting process. Section 4: Questions from purgatory. This section contains questions, that although important, don’t quite have as much impact as the questions from hell in this and my last article. They are still, however, important questions that most recruiting managers cannot answer with facts rather than opinions.
- If recruiting is so important, why aren’t managers measured and rewarded for doing it effectively?
This is not an article on semi-sourcing. It’s a quiz. After each sourcing problem described below, you’ll be asked a multiple-choice question. If you get all of the questions right, you’ll be able to attend our free August 2004 online course on how to find top people. Actually, if you just take the quiz and respond reasonably well you’ll be able to attend. Just send an email to email@example.com when submitting your response. As you know, I believe that the roles of TPRs (third-party recruiters) and ICRs (internal corporate recruiters) are converging. TPRs contend this won’t happen since ICRs don’t have the ability to find top passive candidates. My position is that with improved applicant tracking system design and better recruiter training, ICRs will have the time and skills necessary find top people for 90% of all corporate positions. The key to this is semi-sourcing (see these two articles for more details). Semi-active candidates are top employed people who look on jobs boards infrequently, generally when their jobs become frustrating. Semi-passive candidates are top people who are waiting for a recruiter to call. What you do to find and attract these semi-candidates is the key to the ICR-TPR convergence I believe will occur over the next year or so. The following scenarios are typical hiring problems that ICRs face each day. What would you do to find these people? Scenario 1 Are you aware that Circuit City now has a geek patrol? These geeks are the company’s field technical representatives who drive to your house in geek-labeled patrol cars in order to install your new HDTV in-home theater system. Which of the following approaches do you think would be the best way to find 500 people to join this geek patrol over the next 120 days, and why?
- Run an ad on all of the major boards with this title: “Field Service Reps for Large Retailer.”
The last three articles in this series outlined a few personality assessment basics, as well as a sales example and a call center example. This article will cover some personality basics as they apply to managerial positions. What’s a Manager? When I was in the training business, I was enamored of all the neat leadership programs out there. There were John Wayne models, leadership definitions, manager definitions, situational definitions, and so forth. In fact, all you had to do to learn everything you need to know about leadership was read a book or take a course. Too bad everyone had a different opinion… What can we make of this situation? Most people don’t have a clue about leadership because it is NOT a “raw” competency. Leadership only emerges over time as a person combines competencies and AIMs to accomplish a goal through the activities of others. Selecting Managers When so-called experts cannot agree on leadership definitions, how can an organization pick the right people as managers? First, you need to recognize that this stuff is only complicated by people who don’t understand the basics. Second, go back to basics. For example, good managers:
- Let us know what we are expected to do
XYZ Corporation has seen the economy get better quarter after quarter. Its recruiters have seen the number of open position going up quickly as well. The handful of recruiters at XYZ is faced with recruiting a high volume of call center staff, key technical talent, and management and executive positions, and they recently learned that the CEO wants to ramp up college recruiting for next year. My question to you is where do these recruiters focus their recruiting efforts? What do they outsource, if anything, and what do they do internally? These are the questions I run into almost every day in my work. Managers, recruiters, and CEOs are all confused about how to allocate the scarce recruiting talent and skills that remain. Usually there is no option to add more staff, as budgets are still tight and the doors to contract recruiting remain closed. There are several things to think through in allocating the skills you have. First of all, have you created a list of the most important positions in your company ó important meaning how much these positions contribute to the success of the product or service your company provides or to your customers’ satisfaction? Certain positions in every company are vital to the company’s survival and the people who fill them are almost impossible to replace. These are the product creators or the sales folks who have the key customer relationships. Sometimes, though, the most important people are those who interface with the customers directly and lead to higher sales or to customers coming back to buy more. They can also be the research people or the key programmers. While it feels perhaps unfair to rank positions as more or less valuable, this is the reality of the market. Some jobs pay more, some contribute more, and there ought to be a relationship between the two. Usually there is, but salary alone is not the best guide. I suggest that you rigorously examine every position in your company and determine which the key ones are and which are not so important. The only evaluation criteria should be how much the position contributes to your firm’s products or services and how much to the profitability of the firm. People with little or no direct contribution are, by definition, placed in a lower level than those that do. I usually create a two-by-two grid that has each position located on it. The lower-left quadrant shows the positions that are not particularly hard to fill and that are of low value to the company. These are positions such as clerks and receptionists. The upper-left quadrant ó where the positions are hard to fill but not really all that valuable to the firm ó may include employees such as lawyers and accountants and so on. The lower-right quadrant is for positions that are not too hard to fill but that are critical to the company’s success. These might include key salespeople, content providers, or college grads with high potential. The upper-right quadrant is where the most difficult to find and most valuable positions lie. These might include the key technical providers, the key account relationship managers, or the product inventors or developers. In many cases, I find that the emphasis is placed on recruiting for the left side of the two-by-two grid, because that’s where volume hiring takes place and it is relatively easy to find people for those positions. Yet that is exactly where you should place the least emphasis. In fact, I recommend using your least experienced recruiters to fill the lower-left positions or outsourcing them to an agency or third party. Positions that fall into the upper-left quadrant can be filled through outsourcing, referral, or by minimal involvement of the recruiting staff. Often, managers can recommend good people for those spots. The lower-right quadrant is a critical one and represents those people who are both current contributors to the organization’s success and those who will move up into the upper-right quadrant as they become more skilled. Again, often hiring managers themselves, with some guidance from you, can recruit for the lower-right positions. After all, these are positions that are not extremely hard to find people for but are very important to the firm’s success. It is also a vital area for recruiters to focus on. Good hiring in this area means that those people will leverage the strength of others to achieve extraordinary results. That leaves the upper right for the most senior and experienced recruiters. This is where they can focus on those few positions that add the most real value and that make the difference between your firm’s long-term profitability and its demise. Make sure you focus your efforts where it counts and let go of the recruiting that feels good and that meets quotas but does little to make the company a winner. Putting recruiters to work hiring those in the lower-left quadrant or on the highly skilled but marginal contributors who reside in the upper left quadrant reduces the power of your talent team. By making a strong business case for assigning them to recruit for the critical jobs, you put yourself and your organization in a better light.
I’m a prolific writer, with well over 500 articles and four books produced. When people ask me what my favorite article I’ve written is, I answer without question that it’s the HR “questions from hell” article that I wrote several years ago. As a follow up to that article, which covers all aspects of HR, here is a companion article that focuses exclusively on recruiting. I encourage you to read it closely and heed its lessons. It may be the most thought-provoking article you read this year. What CEOs Want To Know About Recruiting When economic conditions get a little tough, it’s not uncommon for CEOs and CFOs to dramatically cut the recruiting budget. But instead of just wondering why they always seem to pick on recruiting, you might instead take a step back and try looking at recruiting from their high-level strategic perspective. This article is comprised of a list of questions derived from numerous independent conversations I’ve had with senior managers at Fortune 500 firms. The questions that follow might not appear on the surface to be unfair or unrealistic to the casual reader, but what turns these seemingly reasonable questions into “questions from hell” is the fact that almost no recruiting executive I have met can answer even a majority of them, concretely, with data or facts. I attribute this to the fact that HR in general, and recruiting in particular, has traditionally been a “soft discipline,” a characteristic that now must change. Are you a recruiting expert? Can you answer these CEO questions from hell? Forget all of the certifications, degrees, and “titles” you might have obtained. If you really know the recruiting profession (and your own recruiting department) you should be able to answer each of the questions about recruiting. Don’t be surprised if you find yourself “shocked” by the simplicity of the questions. If just reading the questions alone makes you uncomfortable, then that’s a good sign, because that is what this list of questions are designed to do ó make you uncomfortable with your present approach! If by chance, you are one of the few who believes that these questions are “unrealistic” or that the answers are “unobtainable,” let me assure you that each and every question can be answered. Here is the list of compelling strategic questions for managers of recruiting, separated into four sections by topic area. Section 1. Does great recruiting really matter? 1. Do the most profitable firms in your industry have great recruiting functions? In contrast, do the bottom-performing firms have weak recruiting functions? Have the firms that have moved relatively rapidly from the bottom to the top of the industry strengthened their recruiting function as a precursor to their improved success? Discussion: It’s easy to assume that whatever you do in business is important, but it’s better to check and find out. It’s relatively easy to do a simple correlation between the firms in your industry that have great recruiting functions and their corresponding business success. In most cases, there is a direct connection between excellence in recruiting and business results ó but there are exceptions. With this proof in hand, you can show senior management the importance of great recruiting. 2. Does having great people really matter at your firm? As the percentage of top performers in key jobs at a firm increases, does business success improve proportionately? If top performers make a difference, can you demonstrate in dollars the difference in the value of the output of a top performer compared to the output of an average employee (or even a bottom performer) in the same job? Discussion: What if it made absolutely no difference if a particular firm had a high percentage of great versus average employees, since the firm succeeded primarily because it had a strong brand, good location, or a large market share? Would it make any sense to have strong recruiting, development, or retention programs if that were true? If having top performers doesn’t matter, it makes economic sense to aim lower and recruit “butts in chairs.” 3. If having great people really matters, can you demonstrate that, of all of the different HR functions, recruiting great people has the highest dollar impact on the business? What is the return on investment (ROI) of recruiting and how does it compare to the ROI of other business and HR functions? Discussion: What if most of the impact (increased productivity and profits) of having great people comes primarily from great recruiting (as opposed to having effective development, retention, compensation programs)? Wouldn’t it then be important to demonstrate to senior managers that recruiting has the highest impact of all HR functions? Comparisons can be made between the different HR functions on either their total dollar impacts or their ROI. 4. Do the most profitable companies in your industry spend the most money on their central recruiting function (as a percentage of overall spending)? Discussion: If in item #2 you’ve demonstrated that recruiting has a major business impact, can you also demonstrate that great recruiting comes as a result of having a great centralized employment function? It’s important to demonstrate the impact of a well-funded centralized recruiting function because it is possible that great recruiting is a result primarily of efforts by management and employees ó and having a well-funded centralized employment function in that case might actually have little impact on business success. 5. Which jobs, when you hire top performers into them, have the highest impact on company profits and success? Which jobs have little increase in business impact when you place top performers in them? Discussion: Even after you demonstrate that recruiting has a significant business impact, it makes logical sense to go further to identify which particular jobs great recruiting has the very highest impact on. It’s possible for a firm’s recruiting function to allocate equal effort and resources on recruiting all jobs, when in fact, what should occur is that recruiting should be focusing exclusively on the jobs where great recruiting has the highest economic impact. 6. Does your firm have the “right number” of people? How do you know if you are over- or understaffed in terms of total headcount? Discussion: Many people in the employment field think their job is to merely respond to requisitions and fill them. Unfortunately, such a narrow view of the employment function in the late 1990s resulted in “over hiring” and then massive layoffs. Strategic employment managers take a broader perspective, and they include workforce planning as an essential element of the employment process. As a result of this broader perspective, they have productivity targets (i.e. a fixed ratio between employee headcount and revenue) that alert managers well before they have excessive headcount. Section 2. What do you really know about the effectiveness of your employment function? 7. Have the people that you hired this year been more productive on the job (i.e. produced a higher average output or received higher ratings) than the people you hired last year? Discussion: Can you demonstrate that the recruiting function is constantly improving and continually producing better results? There is no better way to demonstrate continuous improvement in recruiting than to show that the on-the-job performance of new hires is continually improving. 8. What is the cost of a bad hire? What percentage of the people that you hire are mistakes? Is recruiting aware of what happens to them after you complete the hiring process? Discussion: In addition to not being productive, “bad” new hires can cause significant economic damage to the firm by making errors, offending customers, requiring additional management attention, and slowing up work teams. If recruiting is to become strategic, it is important to realize upfront that a certain percentage of new hires will be bad hires. Great recruiting departments go the next step and calculate the economic impacts of these bad hires. Excellent recruiting systems will have systems to rapidly identify those bad hires as soon as possible. In addition, excellent recruiting systems have feedback loops to ensure that recruiting processes learn as a result of bad-performing hires, early voluntary termination, and those new hires who must be involuntarily terminated. 9. When recruiting fails, what element of the recruiting process is most likely to be the key contributing factor to that failure (e.g. bad sourcing, bad screening, bad assessment, weak “selling/closing”)? Who is primarily responsible for most failures, managers or recruiters? Discussion: Few recruiting managers look at recruiting as a business process. It is rare for recruiting managers to take the time to study other business processes like supply chain, CRM, Six Sigma, and lean manufacturing in order to identify the successful strategies that they used to become corporate heroes and profit centers. What senior recruiting managers should do is utilize the Six Sigma statistical approach to “failure analysis” in order to identify the root causes of recruiting successes and failures. If recruiting managers continue to manage using their gut as opposed to data and facts, it is unlikely that their function will ever have a strategic impact. For these reasons, it’s essential to continually assess the overall recruiting process and then utilize that information to improve recruiting processes and shift budgets and time allocations in order to improve the overall success of this business process. 10. Does “slow” hiring negatively impact the firm’s profitability, product development or time to market? Does speeding up the time to hire increase or decrease the quality of the hires? If fast hiring means high-impact hiring, what is the dollar cost to your firm of each vacancy in a key position? Discussion: Many recruiting departments have begun to measure their overall time to fill for all jobs, but few have undertaken the next strategic step, which is to quantify the dollar impact of slow hiring and vacant positions on business results. Recruiting managers should begin early on identifying the number of days that top performers (for key jobs) remain on the market (often as few as 10 days) and then adjust their recruiting time to fill to meet that specific time target. One major firm, in particular, found that the cost of a vacancy in a key position exceeded $7,000 per day. 11. How satisfied are applicants who apply to your firm? How do you measure applicant satisfaction? What is the economic impact of low applicant satisfaction? Discussion: In many businesses ó particularly retail ó treating an applicant poorly might be tantamount to losing a future customer. Even in non-retail businesses, treating applicants poorly might result in damage to your firm’s valuable product brand. As a result, wise recruiting managers quantify the potential negative economic impacts of offending applicants. They next measure a sample of applicant satisfaction, and then they revise their recruiting processes accordingly, in order to increase applicant satisfaction. 12. What is your external image (i.e. employment brand) as a great place to work among potential applicants in your industry? How does your image compare to that of your competitors, and what is the economic value of maintaining a superior external image? Discussion: On the business side of the firm, every manager knows the value of having a strong brand. Unfortunately, many recruiting managers ignore or only pay lip service to assessing, building, and maintaining a firm’s employment brand. The very best firms like Cisco, GE, SAS, Starbucks, and Southwest Airlines continually build their employment brand because they realize that it is the single most effective tool for building a long-term stream of high quality applicants. Next week, in Part 2 of this article series, I’ll look at recruiting questions from hell related to sourcing and other areas of the employment function.
Here’s a riddle: Who is 18-25 on average, the first generation raised on the Internet since childhood, and ó strangely ó one of the last audiences for which companies leverage the Internet to recruit? If you guessed retail workers, buy yourself a ham sandwich! But the successes that some companies are having driving retail candidates to the web signal that the old days of walk-in applications and kiosks are soon coming to an end. In the last several years, companies like the Home Depot, Target, and Blockbuster have been written up in several publications for their use of job kiosks and IVR lines (Integrated Voice Response, i.e. phone lines that allow a menu of options that are then converted into an electronic application) to supplement their recruiting efforts while still realizing the benefits of automation. These efforts have largely paid off: millions in cost savings have been realized; hiring time has been reduced; and new hire quality and retention rates have improved. More importantly, perhaps, these organizations were able to overcome retail management’s fear of losing the ever-important walk-in applicant by taking an intermediate step towards full-scale online recruiting. The new generation of workers ó Generation Y ó represents the most wired generation that has ever lived. Research done by Carat Interactive last year showed that they use the Internet more than they watch TV. And this generation is now the primary target for retail and restaurant recruiting. So is it possible to recruit these individuals only on the web? The answer so far has been a resounding yes. Leaps of Faith Two Northwest retailers recently took their own leaps of faith into online recruiting, using applicant tracking systems that even I was skeptical were up to the task. Some of the common concerns they heard from hiring managers included:
- “It will take too long for people to fill out the application.”