You said:

‘The point was that there are great recruiters on both sides of the fence and that a corporation deciding to invest more in their internal Recruiting teams is a good thing. There will always be a need for TPR’s so don’t you worry. As a matter of fact our Receptionist is out this week. Can you help?’

That’s a fabulous point–that it’s a good thing. Socrates couldn’t have made a better argument
I just missed that completely, no doubt it’s somewhere in scripture.

As to your receptionist being out–just have your calls forwarded to me–I’ll take care of everything.

Cheers,
Eamonn

I’ll get you that cubicle, but due to a new corporate policy you’ll have to bring your own push pins. Also please note that any pictures, automobile or otherwise, not previously approved by management will be in direct violation of section b-3 in the employee handbook.

But to get back to the point that was obviously missed in your last e-mail…

The point was that there are great recruiters on both sides of the fence and that a corporation deciding to invest more in their internal Recruiting teams is a good thing. There will always be a need for TPR’s so don’t you worry. As a matter of fact our Receptionist is out this week. Can you help?

Yes, successful TPRs long for large pay cuts and are easily converted when this incentive is offered.

They also like multiple layers of management, dress codes and other policies that come from afar.

Hell, if you threw in one of those neat little beige cubicles and a box of pushpins (so I can pin up the picture of the Porsche I’ll have someday) I?d take the job myself!

Bill Wager
Hunter Green
40 Exchange Place
New York, NY 10005 212-742-0990

It would seem then, that pharmacists have become a high volume job in your hospitals. If you can get the volume you need, cheaper and faster, then it works for you.

However, most situations are not as straightforward as yours–and yours may be less straightforward than you are cognizant of.

Do you have useless co-workers? An empty suit manager who wanders about asking for endless reports? –did you go to that job fair? do you need a new computer?, subscribe to a job board?, —-and I’m not saying that this is the case with you, but those are the sort of questions one would ask when assessing the cost of internal recruiting. You, personally, may not cost 250,000 but the infrastructure that enables you to function may, in fact, cost more than it produces. I don’t know this without knowing the numbers but I offer this as speculation.

I have a suspicion that many, many companies that have embraced the notion of internal recruiting are not getting the value that they thought they would when they started.

Bill Wager
Hunter Green
40 Exchange Place
New York, NY 10005 212-742-0990

So – before you walk into Compensation or your VP of HR and say we need to reward our Recruiting staff using metrics suggested in this article, consider this (I commented on What You Should Reward):

1. Rewarding on volume of hires can be dangerous, misleading, and by the way ? mean absolutely nothing to your organization.

Hopefully somebody has actually figured out how much time, resource, and money is needed to execute all the positions that need to be filled in the organization. If that is the case, then the right amount of people are in place to fill the roles that do come open.

Most managers with an open role expect it to be filled. So I am not convinced measuring ?how many you fill? makes any sense. Go tell your business unit leader ?My team last year filled every role that came open?. I am sure the response will simply be ?Good ? that is what you are supposed to do?.

Besides goals on volume tend to draw on past performance, and do not account for new business conditions. What if the business launches new products, installs new technologies, gets bought, or so on. Goals would likely have to adjust in staffing.

2. Rewarding on the job performance of new hires may be inappropriate – if your organization separates Recruiting from HR, then Recruiting recommends hires, but does not have the final say. They are rarely a part of building the goals and objectives of a new hire for the first 3, 6, and 12 months, and almost never get to manage or train someone’s performance after they are hired. Last time I checked, most companies don’t have recruiting comment on a person’s 6 month evaluation.

3. Reward on retention rate – for HR Generalists who wear the recruiting hat only. See comments on number 2. This can work when Recruiting has control over the manager of the employee and can influence their management, coaching, performance development style, and so on. Organizations that combine HR generalist duties with Recruiting can look at this as an option, but it?s more difficult when Recruiting / Staffing is its own function.

4. Reward manager satisfaction – ABSOLUTELY. In fact, I recommend extending that to also the candidate and HR. Recruiting gets high marks when Recruiting, Hiring Manager, Candidates / New Employees, and HR agree that all is well. You only need one of those parties to perceive a problem for there to be one.

5. Reward applicant / new hire satisfaction ? Agree – see number 4.

6. Great overall recruiting – No disrespect intented – but what is that anyway? Getting the job done? Using social networks and blogs?

Simply focus on customer and applicant feedback plus the ability to stay in budget for the hire as a measure.

Did you stay within the resources we have at our disposal, did you spend more than the budget we agreed to, and did you spend more or less time than you expected on the hire?

7. Competitive Intelligence gathering – great idea but be cautious – hopefully the customers of Recruiting understand why you are doing that instead of filling the requisition. Each organization uses a percentage of strategy, execution, and management to make up each recruiting position. If the position has been designed to capture strategy, then go for it. But if it is designed to hammer the phones and boards for candidates, competitive intelligence will likely get some blank stares in the board room.

Here is one of my own. It may work (and I truly mean ?may?) for your organization when considering how to design Reward programs for Recruiters:

>> Reward differently for ?Staffing? activity than you do for ?Recruiting? activities. <<

Some of this job is simply processing what comes to the ATS, and some of it is finding people who did not apply. Figure out where your team has strengths, and if that matches with what your organization’s needs in order to fill its open roles.

Build metrics and goals around Recruiting (what is takes to make an non-employee an applicant – cold calling, sourcing, prospecting etc) and others around Staffing (making an applicant into a hire – candidate care, processing, hiring manager communication, etc) and then make your Reward program.

Again ? nicely done by Dr. Sullivan, but there is much to consider here, and some of the Behaviors, Arguments, and Tips likely may not apply to your culture.

You may want to simply start with this one question on a recruiting employee’s value as you go down this road:

With the external resources you partner with, the money your company spends on recruiting, and the time you allow them to work on a requisition, should they be making MORE or LESS than the people they place?

In this day and age corporate teams also build networks and candidate pools. They are no longer sitting on their thumbs waiting on the phone to ring after posting a bland add on the job boards. More often than not they are better equipped to fill the majority of their own internal openings. They not only have a stronger understanding of these open positions from working on a day to day basis with the hiring managers, but equally as important they better understand the intangibles that their company is looking for in a candidate.

I applaud Bill for being so passionate about his industry, but there?s no need for yet another voice on this sight to consistently down-play the talents that exist in the Corporate Recruiting world. I?ve seen my share of Pop Warner players on both sides of the fence.

Believe me, I know just how valuable the talents of strong Third Party Recruiters can be. We converted three internally last year!

You said ’25% on success is lots cheaper than the wages, resources, management, real estate, benefits, etc, than companies waste on internal recruiting.’
When I was asked to start recruiting pharmacists for my 5-hospital system, we were paying TPRs $20-25,000 per hire, approximately 10 hires per year. We no longer need TPR, but the cost of my salary, benefits, desk space, etc. comes nowhere near 200,000–250,000 a year! In addition, I work on 5-10 other hard to find job families on the same FTE.

A truly cunning plan.

The most cost effective way for a corporation employing over 200 people to recruit is to use internal recruiters for low level – high turnover positions and use TPR’s for everything else. Recruiting is not a core business to anyone but TPRs, despite all the obfuscation of the talent war crowd.

25% on success is lots cheaper than the wages, resources, management, real estate, benefits, etc, than companies waste on internal recruiting.

Recruiting is the original–and perfect outsource function.

Bill Wager
Hunter Green
40 Exchange Place
New York, NY 10005 212-742-0990

This leads me to think . . . would a company benefit from having a f/t ‘headhunter’ on the team? Instead of a retained search firm, would the organization be better served to have a headhunter superstar on a salary + bonus incentive plan? If you don’t want to pay the entire recruiting team incentives, would it be applicable to have one or two true headhunting salespeople on the staff? Personally, I would be more than willing to trade off my total compensation as the head of a small search firm if it meant that I could pursue an arrangement like this; an arrangement that allowed me to network deeper in the organization than the typical TPR; an arrangement that allowed me to learn more about change management and organizational development, critical tools for any high-level executive.

Being a PHD, I’m sure you recommend your students do their fair share of researching incentive systems within corporate America (most notably the Lincoln Electric HBR article) . . . so if anyone knows that incentive systems have caveats, it’s you. To Jeff’s point, the new incentive system has increased performance, which should lead to an increased ‘mean talent pool’ over time . . . and that’s the ultimate acid-test.

However, it is worth noting that you are treading thin ice in the way you go about implementing this new plan. Let’s be honest: some corporations would hurt from having a whole team of Agency TPRs’ join their recruiting team because of the amount of ‘cut-throat-ism’ that is par for the course in the TPR community. You also don’t want to create a culture of Agency-ism by an improperly implemented incentive plan.

My final assessment is that your article hopefully provides internal Talent Acquisition leaders some ‘food for thought’ about how they may be able to improve overall team performance through a modified incentive scheme. Kudos once again on an insightful and thought-provoking article.

As an owner of an agency for 13 years, and actively involved in a forum of several hundred owners, I have never, ever heard one voice of concern or fear of what would happen if corporate recruiters were bonused for their success. The overwhelming majority of corporate recruiters have little time for anything other than attending various forms of meetings, posting open positions on job boards, and slogging through the multitude of garbage resumes received from those postings, hoping to find the one nugget that might fit. If they were given the chance to actually recruit on a full-time basis, they would see why TPR’s are so ‘pushy’ about getting their candidate before an audience. They would also see why so many corporate recruiters are former TPR’s who left the salary+commission structure to go somewhere where they could get paid whether or not they had successful hires.

Corporate recruiters should get bonuses for successful performance. I just don’t know how they would get the time to do the job that a full-time TPR has to do in order to earn his/her bonus.

Coming from a Third Party background I was refreshed to see this new implementation in my new corporate environment. There were a few bumps at first while we rolled out this new plan, but it has proven to be a great success. I am very proud to have the opportunity to work for an organization that recognizes how Recruiting affects the bottom line.

I agree whole heartedly with Dr. Sullivan’s article and can only offer one small piece of advice for any company that decides to initiate a bonus plan for their Corporate Recruiters. Fortunately this is not a problem for our company, but it is a mistake that I have seen happen with other companies in our area…

Pay a competitive salary! – A bonus plan can backfire if you can’t attract and retain top Recruiting talent. Just because your team has the potential to earn big, keep them motivated by letting them know that you are going to invest in their careers on the front end as well. There will inevitably be months when the scope of work is far less than others. While a strong month can be a great motivator to a money-minded Recruiting team; the slower months can have an adverse effect if there isn’t a solid foundation to keep them engaged. A 50/50 split, base to bonus, might be a great opportunity for a sales team, but realize that they have unlimited potential to develop their business. Recruiting processes mirror Sales Account Managers more directly and they can only sell what they have. In other words; no open jobs = no bonus.