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We Don’t Need No Stinkin’ Requisitions

by
Jeff Hunter
Jun 9, 2005

In 1995 I decided that I had had enough of the administration game. I wanted to make money. More importantly, my wife wanted me to make money. I felt it would be nice to measure my success in easy terms, like dollars and cents, and not in “client satisfaction” and “atta boys”. So I decided to get into big ticket enterprise software sales. Software sales is a lot like recruiting. You have prospects (candidates), you have your “target number” (openings), and you try to figure out which prospects, given the right message and attention, will lead to making your number. Selling big software packages is tough. In order to close the deal you have to make a lot of pitches (sound familiar?), and when the deal goes critical you start burning a lot of company resources to make presentations and get the deal closed. There is a lot of inherent risk for any vendor in the sales process, because a salesperson can chew up a lot of the company’s resources trying to close a deal. This could be time better spent on other activities, like going to Hawaii or buying that new Mercedes. Yet in all my time selling software and enterprise services (about 10 years worth) I never once got a “sales requisition.” Not once. I never had the CFO call me up and tell me that the only way that I could start prospecting for my next customer was if I got a piece of paper with an “ideal sale description.” And yet there was at least as much on the line with a large multi-million dollar enterprise software deal as there is in the hiring of a junior programmer. Now that I am working inside a corporate staffing organization, I frequently end up asking myself, what good is a requisition? And the answer I arrive at increasingly is: not much. A Brief History of Requisitions In today’s dynamic staffing environment, requisitions are a dinosaur that should be at the front of the extinction express lane. At a time when internal staffing organizations are in need of ever more advanced tools to attract and close the best possible talent for their companies, the entire hiring process gets structured around an ancient relic of the days when human beings were just “cogs in a larger wheel.” Requisitions were created for two purposes: cost control and risk management. They don’t help recruiters hire more effectively or find the best candidates. They don’t help recruiters get better insight into their client’s business. To the point, requisitions are designed to ensure that those free-wheeling, devil-may-care nuts in staffing don’t go hiring a bunch a new CEOs, bankrupting the company in the process. There was a time when the use of requisitions made more sense. After all, if people are your number one liability, you definitely want to put big hurdles between the desperate flake searching for a job and the golden key to the executive washroom. In this scenario, a recruiter is nothing more than a frustrated social worker, secretly planning to save the world one ex-welfare recipient at a time. Only the wise hand of capital control can prevent every mental patient in the big house down the lane from ending up on the payroll. Thus the requisition was 1950s management’s way of saying, “Thou shalt not do anything risky, like talking to people before you actually need to hire someone.” Some further history may be instructive. Requisitions are a relatively recent phenomenon. They arose from the concept of the job order. A job order is like a purchase order, without the extra five letters to make it as important. The job order tells the outside recruiting firm that if they provide bodies that meet a certain specification (i.e “must be able to fog mirror”) then the company will agree to pay them. After this had gone on for a while people started thinking, “Hey, why pay the big bucks for an outside company when we could pay less and get the same result?” This thinking begat the corporate recruiting position. This in turn lead the finance department (as the protector of corporate capital) to have a collective coronary, as the cost and risk control mechanism of a job order would obviously not work with an internal corporate recruiting department. And so the “let’s control the risk of the corporate recruiter the way we control the risk of the outside firm” notion was born ó and we have been recruiting with requisitions ever since. Why Are Requisitions Used in Recruiting, But Not in Sales? A requisition is supposed to be an authorization (only once approved!) to the recruiter that they can now officially start their engines. It is the green flag of the recruiting race. But good recruiters fill their pipelines long before the approved req ever comes down from on high. At best, a requisition is a green flag to involve internal resources in the further exploration of the opportunity. At its worst, a requisition can be a serious distraction. But if recruiting is a sales function as is frequently argued, then we must ask some questions: Why isn’t there a requisition in software sales? Or any other complex sale? Why doesn’t the CFO issue a “sales requisition”? Any complex sale involves lots of internal company resources. Even in companies that interview a candidate 20 times, the relative cost of the interview process still pales in comparison to the cost closing a multi-million dollar software sale. If the requisition is the best way to control cost and risk, then why not use it in any “sales” situation where cost and risk are part of the process? There is no “sales requisition” outside of recruiting because of a fundamental belief most executives subscribe to: When you are closing deals, the customer is in the driver’s seat, but when you are closing candidates, the company is in the driver’s seat. In other words, candidates need jobs more than prospects need software (or services, or whatever you are selling). Which translates into: candidates are expensive and risky, and customers are not. (I am not saying that every company that uses requisitions believes this. I am saying that this is the fundamental assumption behind the creation of the concept of a requisition.) One would have to agree with that statement ó if there were only one employer in the universe for any particular sort of opening, and if there were vendors as numerous as the stars available for any prospective sales situation. But of course, it is usually exactly the opposite. In fact, the more talented the candidate, the more opportunities she has to take her services to the highest bidder, whereas large enterprise software companies will cut their prices all day long to win a deal. Enterprise software is increasingly a commodity, while talent is increasingly expensive and valued. If this is true, then perhaps sales management should start issuing requisitions with the exact deal properties listed. In that, way salespeople will stop wasting their time chasing deals that don’t help the company achieve the margins and market penetration needed to milk every last cent out of an increasingly commoditized market. This is not to say that there should not be financial controls on decisions that affect how people spend money. In sales, you have ongoing executive review of the deal pipeline to make sure that salespeople are not signing the company up for something that won’t yield expected returns. In recruiting, we call that kind of overview “offer approval.” All offer letters (and, by extension, the verbal extension of offer letters) should be reviewed by the finance department prior to delivery to ensure that the original budget assumptions are not invalidated, challenged, or changed. Top-tier talent executives view their number one responsibility as the ongoing management of talent resources (as opposed to finance’s focus on managing capital resources) and therefore constantly review recruiting pipelines for fit to specification. In a well-run recruiting shop, it is much more difficult for a recruiter to burn company resources than it is for a salesperson inside a well-run sales organization. So there are plenty of checks and balances on recruiters in a well-run recruiting department to make sure that someone isn’t hiring their best friend into a new “CMO” position (chief massage operator) with big bucks to boot. Yet requisitions are still almost universally used, even in leading-edge recruiting organizations. Even here at Electronic Arts, which was one of the first adopters of the talent pool concept and has sourced ahead of demand as a standard business practice since its inception over 20 years ago, we use requisitions as our final hiring control. But my experience has been that pioneering recruiting organizations use requisitions in spite of their effects, not because of them. Recruiting organizations often have to use a tool to initiate conversations with hiring authorities, track hiring activities for EEO/OFCCP purposes, or ensure that the needs of the hiring manager are validated. And the requisition is the most commonly acceptable, tried-and-true tool to tackle those all-pervading problems. But just like the proverb of a carpenter who has to use a hammer for every need, even to drive in screws, requisitions get used to deal with problems they were not designed for. Unfortunately, this leads many organizations to spend as much time trying to figure out how to deal with requisitions as they do solving the most important problems every recruiting organization faces: how to attract and close on talent that will extend your organization’s competitive advantage in its marketplace. In my next article, we will review the specific standard uses of requisitions, possible alternatives, and what this means for the staffing organization and its clients.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Christopher Young

    Interesting and comforting that others have this devil in details issue with clients and the pace of biz we operate in? Glad not the only one spinning wheels at times.

    However, not 100% if correct but think sales does have a ‘Job requisition’, I have heard it called many things but most meaningful was ?Opportunity Qualification’

    When working contingency if cannot get a requisition, then many times I did not get the control for representation sake and or fee, why I was working on it, for I am no social worker.

    Maybe a dying breed but I need a road map to take the need seriously and with all the people clamoring for the same talent, I force it personally and hope other hold accounts to the same, there is way too much commoditization in this role quickly becoming just a change management process internal where for some unforeseen rationale, companies seem to think people are tangible products lacking emotion and empathy.

    In any event going on a tangent ~ Thanks for letting me comment.

    Happy Hunting

  2. S. Kaye

    Yeah we do. In my organization it’s all about not going over budget. Without requisitions, hiring and cost containment would be out of control. Our requisition process is linked to a position management system for budgeted positions, which also streamlines posting to our ATS. It’s a big improvement over the free-for-all Wild Wild West that preceded it. And because it’s a system that has proven its effectiveness in helping the organization meet a primary goal, i.e., stop bleeding money, this dinosaur isn’t going down anytime soon.

    Just because their purpose has little to do with actual recruitment does not mean they are without value to the organization. As recruiters talking to other recruiters, it is easy to lose sight of the fact that the importance or priority level of the recruiting function varies quite dramatically from one organization to another. In not-for-profit healthcare, it’s budget first, hiring second if budget allows. Comparing requisiton to sales process is just not relevant in my world.

  3. Paul Davenport

    Interesting article Jeff!

    To play devil’s advocate, there is one big point you missed. From a Corporate standpoint, there is one HUGE difference between Hiring and Software Sales…COST! The biggest expense companies face is payroll. Therefore they need to maintain precise control over their biggest expense and what better way than through a Requisition process?

    With that said, it is true that waiting for a requisition to be approved before starting a search is absolutely the wrong way to solve your hiring needs.

    I look forward to your next article on possible solutions!

  4. Kevin Boylan

    I disagree with some of the details, but the overall point is well-taken.

    Requisitions are important in gaining commitment from a client on what knowledge, skills, abilities, experience, and personal traits an individual must have to perform a job. Without a requisition, the requirements seem to morph with each candidate and there’s no real ‘yardstick’ to measure people against. This seems more true for novel positions than for positions that an organization might be constantly recruiting for.

    With that said, I think if an organization hires the same type of individuals year in and year out, it makes sense to just always identify and market to these people on an ongoing basis. Recruiting’s responsibility is to have a talent pool warm and ready to go the minute those positions open. From a strategic standpoint, I think it just makes sense to have a pipeline of candidates available based on the number of annual positions you anticipate. For example, if you anticipate 25 sales positions, have a pipeline of 2 to 3 times that, i.e., 50-75 candidates that you’re talking to at all times. Recruiting doesn’t need a requisition to do that and they should require one.

  5. Kelly Johnson

    excellen point Paul… internal recruiters are not seen by others as a location where cost control is a consideration… but it truely is.

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