It’s a mistake you want to ask yourself if you’re making.

The story speaks to how often employers waste time, money, and creative horsepower when it comes to attracting and retaining talent because they put their attention in the wrong place.

So here’s the story … 

Years ago a friend of mine was telling me how much he loved his Audi. In the same “I love my Audi” story, he mentioned that he will never buy another one again … ever. Before I could ask how Statement A leads to Statement B, he told me that the one and only Audi dealer in the area was a nightmare to deal with. The car-buying experience felt sleazy and the service experience after the sale continued to be a horror show.

He then went on to tell me about another customer of he had met. That customer had brought his car to a dealership out of state for the very same reason my friend disliked this particular dealership.

I knew the name of the dealership, but never had an opinion of them prior to his story.

Fast forward two weeks.

I hear this dealership’s ad on the radio. It is incredibly creative and clever.

When it’s over, I think:

“Isn’t this classic. They spend all this money and creativity coming up with clever ways to get people through the door, only to drive them back out the door by the experience they deliver.”

Since I love analogies and tend to see them everywhere, I then found myself thinking:

“Isn’t this a perfect analogy for what employers do? They spend all kinds of time and money trying to get the best and brightest through their doors, only to drive them back out — or drive them crazy — by the frustrating, disrespectful, and spirit-crushing work experience they deliver.”

Wouldn’t it make sense to invest just as much time, money, and creative horsepower delivering the work experience you promise as you do making a compelling promise to job prospects?

Doesn’t it make sense to invest as much in making sure talent stays once they come through the door, rather than creating a revolving door experience?

Doesn’t it make sense to create a work experience that makes your employees not only happy to stay, but also want to tell their talented friends: “This is an awesome place to work. When there’s an opening, I’ll let you know”?

Think of how much money you could help your employer save in recruiting costs if you helped them create a work experience that turned your employees into a volunteer recruiting firm.

If all this makes sense to you, here’s what you can do about it.

Share this article with your leadership team and suggest that you, as a team, examine:

• Whether you truly deliver the work experience your recruiting campaign promises.
• Whether you really know what kind of work experience you deliver.
• Whether you truly understand the key components of an inspiring, commitment-generating work experience … and how to deliver them.
• Whether your managers know how to manage in ways that inspire loyalty, passion, and pride.
• How much you are investing in telling the world you are a great place to work, and how much you are investing in actually being a great place to work.
• If you are doing the things Todd described in the comment here that are the things that make a workplace a good workplace: appreciation, interesting work, the chance to make a difference, opportunities for new skills, work/life balance, recognition, flexibility, health and retirement benefits, nice co-workers, smart co-workers, good managers but not micromanagers, training, a good location, money, promotions, and raises.

Share this article with your employees as a conversation starter. Find out from them whether they would recommend you as an employer, and why … or why not. Don’t just do this as a survey. I have found over the years that interviews and focus groups provide much richer, more actionable information. I don’t recommend replacing surveys with them, but combining the two.

Invest in helping your managers learn:

• What key practices create an inspiring work experience where employees feel not only valued and respected, but they also have the resources, support, and training to do great work.
• What key human needs drive employee performance and engagement, and how to create a work experience that satisfies these human needs. Here are just a few: the need for meaning and purpose, the need to learn and grow, and the need to feel a sense of control over one’s experience.
• How to become more mindful of critical Managerial Moments of Truth that affect employee engagement and morale. Examples of such critical Managerial Moments of Truth include: 1) Onboarding a new employee, and whether it’s a “sink or swim” experience or new hires get the message: “We’re glad you’re here, here’s how we are going to help you succeed”; 2) Giving employees feedback and doing performance reviews; 3) Communicating to employees about major changes; 4) How you ask employees for input, and what you do with that input.
• The critical communication skills that make it comfortable for people with less power — i.e. their direct reports — to speak honestly and openly about difficult issues.
• The myriad of other skills and the managerial practices that bring out the best in employees.

If you are serious about not just getting talent “through the door,” but also keeping them and bringing out the best in them, forward this article to your management team and your direct reports, and get the process rolling.

HR and talent management leaders are constantly striving to become more strategic. But more often than not it seems that when they are presented with a strategic alternative that really breaks new ground, they retreat and stick with the status quo. However, if you are serious about making a strategic impact and you take a minute to reflect, it’s hard to think of many things that could have more of a strategic impact than increasing corporate revenues.

This is because increasing revenue or “topline growth” is on every CEO’s agenda and it is also almost always a top corporate goal and an executive success measure.

Other business functions like marketing, sales, supply chain, and product development have become corporate heroes (and are richly budgeted as a result) because they have demonstrated that they have a direct and measurable impact on this critical strategic goal.

HR has historically focused exclusively on cost cutting, but realize that increasing revenue is a far superior goal. That is because almost anyone can cut costs using an arbitrary number. However, in order to generate more revenue in the marketplace from your customers, you must meet a much higher standard, which requires that you be competitive in every aspect of the business.

Now if you are an HR traditionalist or someone who is happy to maintain HR’s status as a service/overhead function, you are probably already thinking that a strategic goal to impact revenue is a ridiculous idea. However, you would be wrong. We know that HR can directly increase revenues because several firms have already succeeded in demonstrating to their CFOs that they could directly increase revenue. At least take a minute and look at a quick example where HR has increased revenue.

Think it’s not possible? Here is a quick example to demonstrate the possibilities.

It’s obvious that average salespeople produce revenue and good salespeople produce more. So in an attempt to hire better salespeople, this technology firm analyzed its current sales hiring process and reengineered it, so that it measurably identified and hired better salespeople.

If the new process hired salespeople that sold on average 10% more (than those hired under the previous recruiting process), you could (with the CFO’s blessing), publicly state that this HR action had improved sales revenue by X dollars (i.e. the actual amount would be the 10% improvement in the average salesperson’s yearly sales revenue, multiplied by the number of new salespeople who were hired under the improved process).

Still skeptical? Here is another quick example of how HR can increase revenue.

The recruiting function at this Midwest bank realized it was losing significant revenue every day that a loan officer position was vacant. Obviously, with no one in the position, you can’t make or close any revenue-generating loans. In order to reduce the number of days that loan officer positions were vacant, it called on recruiting to apply its speed-hiring techniques on these positions.

By speeding up the requisition process, placing the best recruiters on these positions and identifying and eliminating “deadtime” throughout the hiring process, it cut the number of vacancy days nearly in half. At $5,000 per eliminated vacancy day, over dozens of requisitions, it increased the bank’s revenue by millions. Everyone from the CFO on down agreed that HR had substantially increased revenue. If these two brief examples are not enough for you, the next section contains the top 15 HR actions that can lead to increased corporate revenue.

The Top 15 Talent Management Actions With the Highest Impact on Revenue

Even if you’re not ready to implement an HR-wide coordinated “revenue impact strategy,” realize that there are many independent actions that the functions within talent management can take in order to increase organizational revenue. If you’re looking for some “low-hanging fruit” actions to take, here are some to consider (those with the potential for producing the most revenue impact listed first).

1. Prioritize revenue-generating business units, jobs, and employees — the highest impact and the lowest cost action is prioritization. HR needs to work with executives, the CFO, and risk management to identify and then prioritize the specific business units that generate the most revenue. You should also identify the highest revenue-generating jobs and employees. Next, you must also identify revenue “impact” jobs, which are jobs that don’t directly generate revenue but the actions of the employees in the jobs directly “influence” the likelihood of subsequent revenue generation. You should also identify revenue “impact” functions (note that product development and customer service are often the highest revenue-impact functions). Finally, you should identify and prioritize jobs where a major error would significantly decrease revenues or increase costs. Obviously after setting your priorities, you need to develop processes that ensure that the most HR resources and the best HR personnel are allocated to those priorities.
2. Targeted recruiting from competitors — recruiting talent away from your direct competitors has a high ROI, because if you are successful, your revenues will go up and theirs will go down. Start by “mapping” the revenue-generating talent at your competitors. Next, recruit away the top sales manager or exceptional salespeople from your competitors. Once you land a “magnet” individual, others are likely to follow. Other high-impact targets for your recruiting from competitors might include innovators, game-changers, pioneers, and individuals with expertise in monetizing products and services.
3. Retain revenue producers — retention has a high ROI because most of the factors that cause top revenue generators to leave are not related to their pay. Interview the most successful revenue producers and those who significantly impact revenue. During the interview, identify the factors that currently frustrate them, as well at the factors that would make their job a dream job. Put together a personalized retention plan to minimize the negatives and to increase the positives.
4. Hire revenue producers — external hiring brings in individuals with a proven track record for generating revenue. External hires also bring with them revenue-generating ideas. Focus your employer branding and recruiting processes on revenue-generating jobs. Reengineer the process so that it leads the industry in its ability to identify, attract, and hire individuals with a superior revenue-generating track record. For example, a major mobile phone network provider found that by adding an online testing component to its hiring process , the resulting call center rep that were hired produced over 10% more revenue than the untested hires.
5. Training on how to increase revenue — revenue generation and the related skills that support it must become a key corporate competency. The T&D function must target its offerings so that they cover all aspects of revenue generation. The quality of the offerings must also be improved, so that individuals show at least a 10% improvement in revenue generation after returning to their jobs after completing the T&D programs. In addition to targeting revenue-generating employees, revenue impact learning modules need to be developed so that every employee (regardless of their position) can understand the concept and subsequently improve their support of revenue-generating employees and business units. In this light, Wal-Mart routinely makes it a part of pre-shift store meetings to make all employees aware of which specific products produce the highest margins and revenue. This awareness allows employees to focus their sales and customer service efforts.
6. Identify barriers — HR must proactively use surveys, interviews, and metrics to forecast upcoming revenue-generating problems and opportunities. HR must also have a process for rapidly identifying current problems and the barriers that restrict revenue generation.
7. Create a fast-reaction team — HR must put together a team of specialists that can respond rapidly to the identified revenue problems that occur anywhere in your organization. Team members should excel at discovering HR related “root causes” and have the skills and experience necessary to solve sudden revenue generation problems.
8. Leadership development and succession must focus on revenue-related competencies – revenue generators also need to be effectively led and managed. So as a result, the leadership function needs to make revenue generation a key competency and development area for leaders. The ability to increase the revenue impact of their team should also be added as a key criterion for promoting managers and leaders.
9. Proactive internal movement — employees and contingent workers need to be proactively placed into the “right jobs” where they can have the highest possible revenue impact. The initial placement of top revenue producers needs to be regularly re-assessed so that key individuals (and even teams) are redeployed to the needed business areas. Seasonal and business cycle rotations may also be required to ensure that there is no excessive idleness among revenue generators.
10. Identify those who support revenue producers — once a year, survey your top revenue producers and ask them which individuals or support positions have directly helped/contributed to their revenue production. Make sure that these impactful support personnel are rewarded and recognized.
11. Release poor performers quickly – the performance management process must be redesigned so that it focuses on rapidly identifying, fixing, and releasing employees who fail to meet their revenue or revenue impact goals. The recruiting function should also continuously be on the lookout for top-performing talent that can be “swapped” with these lower-performing current employees.
12. Implement revenue-impact metrics and rewards – work with the COO, the CFO, and performance management to develop a process and a set of metrics that accurately assess an individual’s revenue generation and revenue impact. Rewards and recognition programs must also be focused and reengineered to better encourage revenue generation.
13. Onboarding — even the onboarding process can impact revenue generation if a weak process means that new-hires get up to speed slowly. As a result, the onboarding process must be reengineered so that new-hires on the first day clearly understand the importance of revenue generation, no matter what job they have. They also need to be informed about how their revenue generation/impact will be measured and rewarded. And finally they need to be educated as to where they can go to get help in this area.
14. Contingent workers and vendors must be included — because a significant percentage of the “workforce” are not technically employees, HR must also work to ensure that contingent workers are hired and evaluated based on their ability to impact revenue. HR should work with purchasing to ensure that vendors, contractors, and consultants are also all capable of increasing revenues.
15. Generate a direct profit — the least ambiguous of any HR action is directly generating revenue from external activities. Firms like Disney, HealthEast, Southwest, and Wachovia have generated revenue as a result of offering their HR services externally in areas including training, temp services, building a culture, and executive recruiting.

The Benchmark Firm to Copy

In addition to the 15 examples that were provided above, you should also know that the HR function at Google is the world’s leader in operationalizing a business-impact strategic approach. HR leaders at Google consistently use metrics and mathematical algorithms to scientifically improve business performance from programs like hiring, retention, and leadership. HR leaders can tell you the revenue impact of people management offerings like 20% time, free food, workspace design, and collaboration practices. They can also easily show you which business units (i.e. Adwords) have the most impact on revenue.

Understanding the five key components of a “revenue focused” HR strategy.

If you decide to implement this revenue-focus strategy, be aware that there are five key components that make a “revenue-focused” HR strategy successful.

Collaboration with the CFO — the first component is collaboration with the CFO. HR leadership must work directly with the CFO’s office (who is the undisputed “king” of measuring revenue). Together they must develop a credible process for proving when an action has a revenue impact and what the value of that impact actually is. Next, HR can provide the CFO’s office with a list of its intended actions and then finance can help to sort out any on the list that simply wouldn’t be credible no matter what the data said (i.e. an example of an action that might be sorting out as not credible could be the premise that hiring and retaining better janitors would increase revenues).

Make it an HR goal — the second component of the strategy is goal setting by making “impacting revenue” a major HR and talent management goal. As a major HR goal, it would need to be part of every HR function’s execution plan. The importance of the goal would be reinforced by adding revenue impact to the HR reward and metric structure. Together these actions would help to get everyone in HR to focus on this goal.

Prioritization — the third component is prioritization. If you start with the assumption that there will be no additional budget at least initially for this strategy,focus and concentrate your current HR budget and your best HR people on the business units, the jobs, and the employees that have the most impact on increasing revenue. Instead of equal treatment or first-come first-serve, high-priority jobs and employees would be serviced first. Resources would also be channeled toward the HR programs and processes which proved to have the most success on increasing revenue (i.e. usually they are hiring, retention, training, metrics, and rewards).

A process for identifying problems and barriers — the fourth component of the strategy involves identifying barriers to prohibit revenue from increasing. By applying benchmarking, research, and analyzing metrics, HR can determine which “people management problems” or barriers are having the most impact on reducing revenues. (Examples of problems include extended position vacancies in revenue-generating jobs, high turnover among top salespeople, salespeople unwilling to attend sales training etc.). The same effort should be put into identifying “positive people management opportunities” that when taken advantage of, directly increase revenues.

Best-practice sharing – the final strategy component is best-practice identification and sharing. Under this component, HR uses research, benchmarking, and metrics to proactively identify and then rapidly spread the implementation of the most effective revenue improving “people management practices” to all managers throughout the organization.

Final Thoughts

If you are still skeptical about this strategy and approach, ask your CEO whether they would prefer that you hire great clerks versus great salespeople. Also ask them if they would prefer that HR excel at low hiring costs, hiring without fewer legal issues, or would they instead prefer you to hire innovators and individuals who can increase revenues by 10 to 20%?

Although the initial concept might seem daunting, a number of advanced HR departments have been using a piecemeal approach to increasing corporate revenue for years. If you’re HR department were to adopt “revenue impact” as a primary HR strategy, the net impact for even a medium-sized firm would literally be in the hundreds of millions of dollars. If you implemented the strategy, not only would you “have a seat at the table” but you would be listened to and respected because you successfully made the transformation from “overhead function” to a strategic contributor. Your work would be noted in the annual report, so even the shareholders would become aware of the major contribution that HR made.

And incidentally, if you like this strategy, you should also consider related HR strategies. Where instead of focusing on revenue, the strategy would focus on increasing quality, speed/agility, customer service or innovation throughout the organization as a result of HR actions.

And one final question … Did this article succeed in expanding your thinking?

• Laura gets 30% of her hires from referrals, has used only one headhunter in the past six months, and has a 42-day average time to fill. She filled 11 jobs last month.
• Jerry gets 20% of his hires from referrals, uses headhunters regularly, and has a 65-day average time to fill. He filled eight jobs last month.

Is Laura better than Jerry? Does Jerry suck? 

Wait.

What if I told you Jerry has 300 more Twitter followers than Laura? Ha. Now who sucks, Laura!? :)

I love – love — to hear provocateurs speak at conferences. I love to hear opinionated people make a case for doing stuff better, pushing us to hire better, faster. But I get tired of the measuring sticks we use to decide if we’re nailing it.

I spent most of my career in corporate recruiting, as a recruiting director with Amazon and Expedia. And now as a consultant, I get to work with some great companies. As we work to help them with sourcing strategies, recruiting process and systems improvement, or even recruiter and hiring manager training, we learn a lot about how they do what they do. And what we find is that there are a bunch of recruiters out there that don’t suck, but who think they do suck. That’s a problem. People who think they suck don’t usually do great things. And we need as much “great” as we can get.

Our team gets asked, “How does our [time to fill, source of hires, recruiter productivity, employer brand, candidate experience] compare to other clients you work with?” And we can share averages and help them to see what they do better and not-as-well as others. I completely get why we all want to know this stuff. But can we really compare one company to another? One team of recruiters to another? Along some dimensions and some standards, sure, probably.

But as many before me have pointed out, comparing cost per hire, time to fill, recruiter productivity … it’s not silly to benchmark, but I’m not sure the results are really that helpful. Why?

Geez, just start to make a list of all the things that may be different between two companies or two recruiting teams. Here are several:

The type of people hired

• Entry level customer service vs. software engineers vs. outside sales people

The number of recruiters

• This usually drives req loads/recruiter, which can almost dictate what a recruiter can/can’t realistically do

Access to scheduling and sourcing support

• Some of you have teams supporting you, and some of you are one-person, ass-kickers with a phone, Outlook, Google, a free LinkedIn license, and Excel for your ATS

The role of the HR generalist

• Friend or foe? Manager (or maybe they think they’re your manager ☺) or peer partner?

The engagement level of the hiring managers

• Are they sourcing? Do they drive quick, quality hiring decisions? Do they help close?

Your brand

• Do you have a strong consumer brand? A strong employer brand? Or, do you have to spend 10 minutes of your sourcing calls just to explain what your company does?

Your location

• Do people want to work where you have jobs? (In the late 1990s, before everyone knew who Amazon was, 50% of our sales pitch to software engineers was focused on Seattle, since we ended up needing to relocate the majority of our hires — much harder for my recruiters to source people from sunny California than companies who hired locally.)
• Are you in Europe, with practices and laws that slow down your process, even though you’re ready to move fast?

Your compensation packages

• Do you pay 50% of market? Or, 70% percent of market? Do you offer equity?

Tools!

• Do you have — and use — Linkedin Recruiter, Avature CRM, Job posting distributors … even an ATS?

Even the basics of how things are measured vary wildly. Take time to fill …

• Does your clock start when the position was budgeted, when the incumbent quit, when the req was approved, when the req was posted, or when you led the strategy kickoff meeting? I’ve seen it so many ways.

It’s almost never apples to apples. Req loads in retail and healthcare are typically much higher than in tech and corporate functions, so comparing results across industries is hard. And even within the same industry — take retail — you may have a model with a lot of centralized sourcing support, or one with field HR generalists who own recruitment, or one with only foundational field support (where hiring managers are largely on their own, with support from their district managers and a three-ring binder from HR).

And I find the same to be true when I’ve interviewed recruiters, trying to compare them to each other. I’ve probably interviewed 50 recruiters from Microsoft in the past 15 years, for example, and it’s even hard to compare Microsoft recruiters to each other!

My point is that very few of us will get a lot of value from comparing our performance to other companies. We’d likely get more from comparing ourselves to our internal targets, to goals that make sense in our resource model, and to goals that come from our unique business and talent needs.

I’m not saying you shouldn’t benchmark externally. That can be key to making business cases, key to executive influence, and key to getting your raise. And don’t get me wrong — I want more from the folks at the Corporate Executive Board, Staffing.org, CareerXroads (great, transparent Source of Hire reports), not less. It’s very helpful. You just need to … Put. It. All. In. Context.

I want you to hear it from me first. You don’t suck.

• I’d love comments from those of you who have worked in multiple environments, to share with everyone what kind of differences really help — or hurt — you.
• I’d love to hear people share how they gather external benchmark data that really helps them.
• And I’d love to get a halleluiah from people who are kickin’ ass despite the fact that they have little budget, little support, unrealistic req loads, and systems that make their job harder, not easier.

Many in talent management have been hoping that this chaos is a short-term phenomenon, but it is a permanent condition that we must all learn how to manage under.

Because they were designed for more predictable times, almost all current HR, talent management, and workforce planning processes fail to perform in this chaotic environment. In a VUCA environment, there are more changes, a faster rate of change, and the size of the changes are so impactful that they must be labeled as “disruptive.” So the question for talent leadership becomes, “how do you effectively hire, develop, place, and retain individuals and leaders in the volatile environment where literally everything changes in months rather than years?”

V.U.C.A. (pronounced voo – ka) is an acronym for an environment that is dominated by:

Volatility – where things change fast but not in a predictable trend or repeatable pattern.

Uncertainty – where major “disruptive” changes occur frequently. In this environment, the past is not an accurate predictor of the future, and identifying and preparing for “what will come next” is extremely difficult.

Complexity — where there are numerous difficult-to-understand causes and mitigating factors involved in a problem.

Ambiguity – where the causes and the “who, what, where, when, how, and why” behind the things that are happening are unclear and hard to ascertain.

Talent Management Has Been Lagging in VUCA Preparation

The concept of operating in a chaotic environment is not new. Tom Peters has been talking about managing under chaos for years, and “decision-making under uncertainty” is a well-established academic field. What is new is that most economic, business, and political leaders have realized that the VUCA environment is a permanent condition.

Business executives have been preparing for the VUCA environment for years. Although most of the initial work was done by the military and in counterterrorism, VUCA planning has been part of business processes like supply chain and risk management for years. A few firms like GE, Unilever, and McDonald’s have even begun changing their leadership development model to fit the VUCA environment. But unfortunately, no one in recruiting, retention, skill development, compensation, performance management, onboarding, etc. has paid more than lip surface attention to this strategic problem. As a result, the time has come to face the fact that you can’t be strategic in talent management, HR, or recruiting unless you can manage and thrive in a VUCA environment.

Why Talent Managers and Workforce Planners Must Prepare for VUCA

Under the established 20th-century talent management model, the future was relatively predictable. As a result, firms hired, trained employees, and developed leaders in order to prepare for the “predictable” upcoming business environment. Most firms prepared their employees for the single-most likely future scenario (i.e. scenario A), which was usually a 5%-10% extrapolation from the current situation.

The more advanced firms prepared for not just the single-most-likely scenario but also for one or two alternative predictable scenarios (i.e. scenario A and B, C). But unfortunately, in a world of continuous disruption and VUCA, using this traditional model usually means that you end up hiring, training, and developing for business and talent management scenarios that will literally never occur. Planning, forecasting, and training simply cannot work if the environment that you are preparing for never appears!

A Quick Example to Illustrate Complexity and Volatility

For example, recruiting routinely plans for three distinct scenarios: no hiring, moderate hiring, and large-scale hiring. However, in a VUCA environment, talent acquisition must plan for each of those scenarios, but in addition, it must also plan for periods where the firm will do rapid hiring in some business units and regions, while simultaneously having a hiring freeze or even layoffs in other business units.

What Is Needed Is an Agile Talent Management Model

The 21st-century VUCA model that I am advocating requires talent management to have plans for handling numerous “disruptive events” that traditional narrow workforce planning simply can’t handle. Some of those disruptive events might include generational shifts that occur every six years, social media changing the way we communicate, and simultaneous talent surpluses and shortages.

One possible conclusion for talent management leaders could be that you should stop any planning process that never accurately forecasts the future. But that would be a major mistake. Instead, in a VUCA environment, talent management needs to develop an “agile model” that prepares for a wider range of options (i.e. scenario A-Z) but more importantly, it must also develop Talent Management processes/systems that can actually shift and handle any unpredicted upcoming event “just-in-time.” It might seem counterintuitive at first, but the military has proven that you make people more agile and successfully prepare them for handling unpredicted events that literally no one thought of in advance.

Things That Talent Management Must Start Doing to Meet the VUCA Environment

Talent management leaders must prepare for disruptive problems and opportunities that cannot be predicted. Some of the action steps that you should take to prepare for complete surprises and the VUCA environment include:

• Agile employees — Develop as a primary goal a focus on the hiring, training, and retaining of employees and managers who are agile, who thrive in a VUCA environment, and those who have the capability of acting effectively in unforeseen and unpredicted situations.
• Agile processes – Require agility, flexibility, and a rapid change capability as an essential component in all current and new talent management processes and programs.
• Self-obsolescence of processes — Require all talent management programs and processes to include a component that continually “self-obsoletes” its own current practices and replaces them with updated ones.
• Training to solve unanticipated problems — training and development must create the capability to prepare employees and managers to identify and effectively handle previously unknown problems. A high volume of scenario training and simulations can make an employee more comfortable and confident when they encounter a completely new situation. With repetition, employees can eventually develop skills and their own processes for handling “brand-new” volatile and complex situations that are full of uncertainty and ambiguity.
• Focus on innovation — Prioritize talent management so that it focuses on innovators, game-changers, and pioneers who are essential for success in a VUCA environment.
• Rapid learning — Develop systems to increase the speed of individual and organizational learning.
• More internal movement — Develop process to proactively speed up the movement of employees internally to where they can have a greater impact.
• Contingent labor — Use contingent labor as a significant percentage of the workforce, in order to increase your capability to meet sudden upturns, downturns, and new skill needs.
• Rapid increase in talent — Develop the capability for rapid hiring for sudden needs through poaching, with pre-identifying talent pools and by building professional communities.
• Rapid release of talent — Develop the capability for rapidly releasing surplus and inappropriately skilled workers.
• Fluid job descriptions — Develop continually evolving job descriptions and hiring standards that reflect the continually changing work.
• Outsourcing for flexibility — Use outsourcing to fill sudden needs and overflow work.
• Competitive advantage — Develop talent management processes and programs that provide a continual competitive advantage over other talent competitors.

Things That Talent Management Must Stop Doing to Meet the VUCA Environment

Leaders must dramatically modify or stop doing the following things to prepare for a VUCA environment.

• Stop seeking permanent solutions in talent management and HR
• Stop relying on the past and trends as an accurate predictor of the future
• Stop benchmarking best practices and solutions to most current problems
• Stop assuming that long-term employee retention is possible or even desirable
• Stop assuming that “one-size-fits-all” is a good approach to managing employees
• Eliminate “fit” as a desirable criterion in hiring and retention
• Stop assuming that the corporate culture and even corporate values should automatically remain fixed

You Must Also Prepare for Disruptive Changes That Can Be Predicted

Although these listed problems will likely appear unexpectedly, these dramatic changes in talent management can be anticipated, so they must be planned for.

• A continually changing set of required employee skills and job duties and a huge gap between the needed and the available skill sets
• A completely new set of leadership skills that will focus on agility, flexibility, and in developing a “just-in-time” solutions capability within the team
• Dramatic fluctuations in employee turnover
• Continually changing candidate expectations
• Dramatic shifts in the volume and quality of applications
• Frequent changes in offer acceptance rates
• Continuous development of new communications and learning tools
• Generational changes that occurs every 6 years instead of 20

Final Thoughts

The new talent management model that I am recommending is based on the assumption that for the foreseeable future, most problems and opportunities will simply not be predictable. The model however does take advantage of the fact that the skill and capability of handling completely new unforeseen situations can be developed. My challenge and question to talent management leaders is “What are you doing to ensure that every talent management process and employee can produce optimal results in a VUCA environment? The time is come to put together a planning session devoted to making the shift toward the new agile talent management model.

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

That would be a tall order in Silicon Valley or Research Triangle. How about if you were in Hong Kong, the hiring executive is in San Francisco, the job is in China, and the req asks for Chinese-speaking, retail-savvy, online experienced, e-commerce marketers?

Simon Heaton, Walmart’s managing director in Asia, admits it isn’t easy. It was, he says, “difficult to do and difficult to repeat.” Yet, starting with a “a good clear brief as to what was needed,” Heaton and his team assembled a group of candidates, qualified them, and had everything ready when the decision-maker flew in for the interviews.

At the end of that six weeks, Walmart’s new e-commerce group for China was hired and onboarded. “It requires good alignment,” Heaton modestly explains.

Not even a year ago Heaton was working in Bentonville, Arkansas. Today, he’s building Walmart’s executive team in India, China, Japan, and wherever next in Asia the company grows.

Heaton made the move during a particularly trying time for Walmart Asia. In the spring, 24 of the company’s stores were in the area of the 9.0 earthquake to hit Japan. In the fall, the Chongqing city government shuttered 13 of the company’s stores for 15 days and fined the company in connection with food mislabeling and handling violations. Two of the company’s top executives resigned immediately after the penalties were announced.

Yet in the months since Heaton arrived he opened Walmart’s first Asia recruiting office, brought in a recruiting team, and filled several senior positions in Asia. He manages global executive recruiting and helps with best practices for the recruiting teams in each country. “We’re a bit of a center of excellence for them,” Heaton says.

Filling such senior positions — whether e-commerce, or, more commonly, VPs, SVPs, and occasionally senior or executive director — is not an easy task. The group’s focus is primarily external recruiting, and his most important tools are all social media, especially LinkedIn.

The UK native has been a headhunter as well as a corporate recruiter, and has recruited professionals from all over the world during his 20-year career. “It’s much easier to find people, people with specific talents, than it used to be,” Heaton explains.

In China and India in particular, he says, the corporate retail market is not well established. Finding executives with the background and the cultural knowledge necessary to be successful often means his team searches for expats with retail training.

“It’s much different than when all I had was a Rolodex,” says Heaton. Now, his team will typically turn to LinkedIn first to scour the planet to find the kind of professionals Walmart needs to be successful as it expands globally. Not all expats want to return to their home country; others simply aren’t interested in retail.

“I’m not going to go in with a hard sell to convince someone who doesn’t want to return,” say Heaton. Enough do, making repatriation a key source for the senior positions Heaton fills.

One of the things that surprised him about recruiting overseas is how many people are connected to each other online. At a party thrown by a Hong Kong neighbor, he discovered several people with whom he had either a first- or second-degree connection. “Here,” he says, “You can quickly find someone who knows someone … people are very willing to share their network.”

Even early in his career back in the United Kingdom, Heaton knew he wanted to work globally. “I’ve always wanted to do a global role,” he says. To prepare, he would volunteer for projects that had a global component, and take on searches for overseas candidates or jobs.

“You kind of get a reputation for doing that kind of work,” he explains. So when an opportunity comes along, experience and reputation position you for the job.

That’s the path he recommends for others interested in working globally. “Put your hand up and volunteer to do the work,” he advises.”Network with your teams and colleagues. Help them when you can.”

With Walmart expanding rapidly — some reports, Heaton notes, say the company plans to nearly double in size to 4.3 million workers — there will be a need for talented in-house recruiters in the months and years ahead. Right now, he notes, the next recruiting team is being built for Latin America. Spanish is one of the requirements.

“Globalization is going to continue,” Heaton says. And that means opportunities for recruiters who want to work abroad will expand. Start building the contacts and developing the experience and smarts now for those overseas jobs in the future.

“The first contact is not always when you have a job,” Heaton says. He’s speaking specifically of how his Walmart team works, but his comments are relevant for recruiters thinking of an overseas career. “Make those contacts and stay connected.”

During my first corporate recruiting position I felt that my role was as a “service provider” to my managers, so when they said jump, I did. Looking back on that now I realize how many opportunities I missed to set myself up as an expert in my profession of recruiting because I lacked the confidence to command a meeting and initiate a true partnership during the beginning of that relationship.

During my time as a recruiter I have run across several different types of managers and most can be intimidating. Below are some of the most common personality types that I’ve run across and ways that you can forge strong relationships with them despite some of their traits.

The “unemployment rate is so high you must have candidates banging our door down” manager: This particular breed of manager needs to be better educated on what is really out there in the market. The unemployment rate rising doesn’t always result in a rise in the actual candidates who you need for a given opening. Websites like the U.S. Bureau of Labor Statistics and Wanted Analytics are great starting points to use, and they’ll be able to arm you with some statistics on how many candidates for that job are actually out there. Be prepared for your first meeting with this manager by painting a realistic picture of the market from the very beginning of your search so that you set expectations correctly in the beginning.

The “I am an executive and feel I am better than you and want to hire an agency” manager: Oh my, this is my least-favorite manager, and there is always at least one in every company! Some managers no matter what your success rate is want to use an outside source just for the purpose of using an outside source. Try and compile a list of agencies that your company has worked with in the past and rate their success rate against your own, and how many hires have they made for your company vs. how many you’ve made. What has the success of those employees been in terms of tenure?

When I worked at Mike’s Hard Lemonade, I had an executive who just so happened to be best friends with a particular agency that he gave the exclusive to on everything. I wasn’t able to get him to stop using that firm on my first search, but I was able to see the candidates that agency was submitting and how easily they were finding them by pulling up the same candidates on Monster or LinkedIn. When you can illustrate that the 25-30% agency fee is only getting you a 10-minute Monster search, executives tend to listen a little more closely. With time I was able to convince that manager to allow me two weeks for a search before it went out to an agency. Over time my track record spoke for itself and I was able to gain trust and create a good partnership with this manager.

The “I don’t have time for hiring” manager: About half of my managers fall into the category of not having any time for recruitment, yet hiring and staffing their team is their No. 1 priority. These managers can be difficult to get any information out of, yet they assume you’re able to leave a five-minute meeting and produce a perfect candidate in a matter of days. The reality is managers need to be educated that the more information they provide to you and more information you get upfront, the less painful and slow the process of staffing for their team will be. I worked with a manager at Cobalt several years back, who was notorious for missing my meetings. So when I received a position from him I would do as much pre-work as possible, knowing from experience that I was only going to get yes and no answers from him, and that our first meeting about this position would most likely be our last.

Be prepared in that first meeting with candidate profiles. You most likely won’t get more than a job description from this manager, so use that to find some profiles and review them on the spot. Even hearing a yes or no on a profile can provide you with a sense of the type of candidate that they are looking for. Come prepared to the meeting with companies in your area that are hiring similar profiles so that you can provide the manager with a list of companies to pull from instead of expecting him to have that available for you. Ask if there is a lead or manager on their team who can assist with the candidate screening in an effort to save them time.

The “in an effort to look engaged I am going to ask for status updates on everything you do” manager: Some managers just like to micromanage the process and want to know everything you’re doing, including how many resumes you’ve seen, how many candidates you’ve rejected, etc. I try to be as proactive as possible with these ones and ask in the first meeting what kind of metrics they are looking for, and will create a weekly report for them. Most ATS’s have reporting functionality that you can use to build out custom reports without a lot of effort needed on your end. I use Jobvite, which has a custom report functionality that works great for this, and also allows for managers to go into the system and run their own reports at any given time.

The “even though I am a VP of _____ I am also an expert in your field and will tell you how to do your job” manager: You gotta love managers who know everyone in the industry, exactly where to find people, and how you should go about starting your search. While having a manager be networked and engaged is usually a blessing, sometimes it can go to the extreme and become a curse. Managers who know everyone in the industry and therefore start rejecting candidates based on rumors, hearsay, or reputation alone will really narrow down your pipeline. Use their knowledge to your benefit. If there are associations and groups that they’d like you to network in, ask if a member of their team can assist you as well so that you’ll have time to not only run your own search but also incorporate the ideas of your hiring manager without running yourself ragged.

This diverse and highly experienced virtual panel will debate the causes and solutions, the trends and gaps while opening the phone lines to the audience members. Register and join in the conversation.

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

Just in Time: “’An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed…’ –Investopedia

As a recruiter, I tend to be pulled into various recruiting projects based upon client needs. This is fine. What is not fine is when I am called in at the last minute. When I am called in because they need to hire a host of hard-to-find people fast. When their uninspired and clueless leaders failed to start recruiting before it becomes an emergency. This really bothers me and it bothers me even more when I am told to do it fast, because good work is seldom done fast. I am a recruiter, not a magician.

See the quote above? Just In Time deals with the procurement of parts, not people. It deals with inanimate objects that come to the company in boxes, not with employees who come to the company in cars. Waiting to the last minute to hire is a bad idea.

Seeing as we are talking here, do you ever wonder why companies wait too long to begin recruiting? Tough question to answer but I believe it is often out of a sense of entitlement — a type of arrogance among the uninitiated and the slow learners who honestly think that when they need Java developers, they will just interview a bunch and pick the winners. Honestly, this thinking is pitiful and it exists because leadership seldom knows how hard it is to make good hires.

Even worse, if you dig a bit deeper they usually want employees that meet three search criteria:

1. Hard to find
2. Need them fast
3. Not too expensive

Translation: fast, good, and cheap. (In reality, you can usually have two, but you can seldom have all three.) Is there anything that demonstrates failed leadership, anything that screams “I know nothing of hiring” more than this type of thinking?

New employees are your raw material and if you are smart, and your future too. You get great talent by earning great talent — by thinking ahead for a future that is coming at you hard and fast. Why so many leaders believe they are somehow entitled to have great talent simply because they need it escapes me.

Perhaps my patience runs thin but I have lost most of my faith in the belief that I will see intelligent leadership as it relates to talent acquisition. As such, I have three suggestions for recruiters to consider so they can lead the charge as opposed to waiting for direction from the slow and inept:

• Build candidate pools/communities: Take this point with a grain of salt as the concept of candidate pools/communities are still evolving. On the other hand I urge you to take a stab and at least begin to create movement here. How you do it will probably often be trial and error as your methods evolve but at least you will have begun. My good friend KC Donovan of Upwardly Me says, “The significance of emerging community-based recruiting is breathtaking, and once we figure out how to integrate them into current hiring practices, everyone will be using them to manage talent needs.”
• Speak with hiring managers ahead of time: Talk with your hiring managers informally at least once a month to determine what is coming down the pike. Even without a clearly approved requisition, this conversation will allow you to begin to engage your community and begin forward movement. Donovan told me “that the best way to break out of tactical ‘just-in-time’ recruiting is to get a jump-start on cultivating future talent projections in a way that allows you to anticipate requirements.” (Special Hint: if you get a key resignation, seek out that person’s hiring manager to initiate conversations about determining what is to be done to fill their shoes. Do this and you will learn a bit about succession planning and OD all at the same time. Fun, huh?)
• Have a quarterly CIO meeting. Few recruiters ever meet with their companies’ CIO. This is a mistake. This conversation will allow you to get a heads up on the types of technology you will be searching for 12 to 18 months out. It will also increase your value because you will be providing essential information to your CIO on who is out there, and the associated cost of acquisition, because knowing the employment characteristics of employees who will need to be hired is part of an awareness that every good CIO must possess.

I urge you to consider the above-mentioned ideas. This thinking will allow you to demonstrate leadership as opposed to the quiet misery of sitting around and waiting for it from others. Seem reasonable?

This article is for my good friend Samir Amirov

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

On its face, this would seem to make sense. But it rarely works. After a while, it becomes clear that things aren’t working out as planned. The new hire either does what the other staff are doing (abandoning their agency skill set), or they quietly leave.

It’s an old story: the agency recruiter comes into an established department overseen by HR, replete with processes, advertising budgets, and clear lines of authority. Internal company recruiters, especially those working for larger employers, are adept at marketing jobs designed around the company’s brand and managed through an ATS. There are teams, matrixed relationships, and lots of processes governing recruiters. The goal here is to create reliable, repeatable service levels.

Square Pegs in Round Holes

Agency recruiters find themselves wedged into an environment which is the exact opposite of the agency model — it relies on advertising, has much higher req loads, and is a place where process trumps results. They quickly realize they have to get with the program to fill so many requisitions. This is a situation where the agency skills are not much use. The agency recruiter who wants to stay in a corporate role learns they cannot afford to use agency skills unless they have a shorter requisition list, so they can work them intensely.

Recruiters who learned their trade at a company with a strong brand never really learned to recruit. The brand does the heavy lifting. The corporate recruiter runs a different game, emphasizing ads, job distribution, and SEO, instead of digging for candidates, because its the most efficient way to meet their needs. Anyone wanting to stay will do the same. So the agency skill set falls by the wayside.

Others take a different path.

Many agency recruiters hired into corporate roles know they are talented, and that their agency skills are valuable. For them, it’s not about fitting in, but using these talents. These people are often more innovative, and more resourceful. They are results-oriented, and approach recruiting as a business function (instead of an HR function). Those invited to join a corporate recruiting team may see a great opportunity to make a difference by adding their skills to the mix.

When their approach to recruiting butts up against layers of bureaucracy, they realize they’re in a land where process and predictability are prized over results. It’s more important to ensure that the process shows that every candidate was treated equally than to get a hire. Mediocrity is acceptable, and they are handcuffed with no way to use their skills. In short, their creative, aggressive strengths are at odds with an HR culture. The bottom line realization is that if you’re really talented, you’ll leave.

Corporate recruiting runs on programs and processes. Agencies succeed because they put on a pirate hat and exploit opportunities. Pirates aren’t in for the 9-5 grind, an annual performance review, and 3% pay increase. They want to make something happen. They are resourcefulness and occasionally bold. This isn’t very HR.

We owe much credit to “skills-based” hiring, where the personality and cultural characteristics are secondary to a skill set. Most companies say they look at skills first, then fit. But if true, they probably wouldn’t hire an agency recruiter into a corporate role. The talents that drive success in an agency clash with most corporate cultures. Agency work is best done by putting on a pirate hat and making something happen. Too many rules stifle creativity, and the orderliness of corporate recruiting programs are not conducive to such behavior. Indeed, companies hire executive search firms for this very reason: they need a pirate but can’t afford to have one associated with their brand. So they contract an outside vendor and gain the skills while sparing the brand.

… the last two candidates you have sent me are terrible! The agreement you sent me prior to engaging in this search requires me to pay you 25% of the individual’s first-year salary if I hire one of your presented candidates. In my case, that would be in the neighborhood of $17,000, which is a good sum of money.

I am feeling a little confused at the moment, as I was under the impression that you are to provide me the top 1% of talent available in the field of which I am seeking talent. Or, at least that is what you told me in your initial presentation of why we should use you.

Instead I opened both of the resumes you have sent me this morning, only to find the first individual, who has already applied to this position no less than eight times and we have already rejected, and the second individual has changed jobs more times in the past fiv years than runway models change outfits; am I to think this individual will stay with us any amount of time to learn our business and be a strong contributor?

When I signed up for this “executive search/recruiting” service, I was under the impression that you were going to bring me the best of the best, a game changer or an “A” player who can bring significant value and contributions to my business unit. But all I see here are average professionals and not the caliber that warrants me paying you $17,000.

I know it’s your business on how you operate, but I feel as if I need to share some suggestions for you and for what I really need in a search partner…

• Executive search is a science that requires patience. You don’t have to fire me every resume in the city on day one of the position being open. Take your time and bring me your top 3-4 high quality individuals from which I can make a selection.
• How do you know what I really need? All you asked for was a job description. You never once asked me what was/is important, what the key functions to be performed are, the type of individual that will fit in our group, why someone should take a job here, etc.
• Quality means quality. If you are asking me to pay you 25% of one’s first-year salary, this person better be worth my investment.
• Please follow up with me — after you sent me 20+ non-qualified resumes on day one, it was almost two weeks since I heard from you. I wasn’t sure if you were still engaged on my search or if I was to even expect another resume.
• Don’t circumvent the process. We started working together on Day 1 and next thing I know you are pinging my boss with other candidates and topics. This makes me look bad.

Hope these few pointers help you in the future, but at this time we are going to take this search in house and handle it ourselves.

Good luck,

Mr. Hiring Manager

The Staffing Management Association of Seattle (one of the nation’s most progressive professional associations for recruiters) has selected this topic for the closing keynote session I will deliver at its seventh Annual Symposium on November 9.

I’ll incorporate your views into my presentation and share my final list with the ere.net community following the event. Helping rank my list and identify missing things shouldn’t take more than five minutes and could prove very helpful to the entire recruiting community. Look through my list of 30 dumb things and select the five that you see as the most common and most egregious.

Use the comments functionality following this post to share your answer and also let me know what things I overlooked.

My Starting Point (please select the top five)

1. Using the same recruiting process for different level jobs — it’s a mistake for recruiters to use the same search process, search tools, and sources for every job; tailoring the process to the job is more effective.
2. Using “active” approaches to recruit “passive” candidates — most who apply for jobs are active candidates however, many recruiters make the mistake of using the same active approaches to find the currently employed who are not looking for a job.
3. Not taking advantage of employee referrals — referrals almost universally result in the highest quality and volume of hires, so it’s a mistake for recruiters to discount them. A related problem is spamming employees with referral requests.
4. Not learning the business — top talent thrives in most organizations because they understand how the organization makes money (hint, it’s not selling a product). Recruiting top talent requires recruiters who can articulate the value the business creates and link specific roles being recruited for to that larger picture.
5. Not checking if a competitor is also hiring — recruiting is a zero sum game, so it’s a mistake not to know whether your talent competitors are simultaneously hiring for the same job.
6. Failing to identify and use the best sources — it’s a universal truth that if you don’t have top candidates in your applicant pool, you cannot hire a top person. It’s a major blunder for recruiters not to use metrics to identify the very best sources for each job family.
7. Underusing mobile — it’s an error to underuse the most powerful unified channel communications platform both to reach and support talent engaged in the recruiting process.
8. Trial-and-error social media use — social media is powerful but can produce mediocre results if not proactively managed and focused on the most impactful activities. A related error is spamming jobs on social media.
9. Mistaking software as systems or solutions — software is a tool that supports or automates process, but by itself it accomplishes little. Great efforts require that tools be wrapped in well-designed processes and procedures, which combined make up a system or solution.
10. Not quantifying the impact of great/bad hires — failing to make hiring managers aware of the financial difference of great hires and the negative cost associated with a bad hire can make hiring managers less engaged.
11. Not prioritizing  jobs — it’s a major mistake not to differentiate jobs and to focus on those with the highest business impact.
12. Failing to develop a business case because the organization doesn’t require one — developing a business case forces you make sure all the pieces of plan fit together, and that you haven’t overlooked components. Failing to develop a plan because the funding is easily available leads to ad hoc program development and inefficient use of resources.
13. Not learning fast — recruiting is a fast-changing profession, so it is an error not to continuously learn and adopt new approaches.
14. Not preparing for innovators — innovators are increasingly important, so it is a mistake not to change processes so that they effectively attract and select innovators.
15. Overemphasizing generic competencies — lots of organizations are guilty of this error. In a fast-changing world, competencies by design maintain the status quo. In addition, most are defined so loosely that they mean little.
16. Not identifying  job acceptance criteria — accepting a job is a major life decision, so it’s a mistake not to identify the factors and the criteria that top candidates use to decide whether to apply for and accept a job.
17. Assuming interviews are accurate — interviews contain many possible “error points,” so it is an error to overly rely on their results without secondary assessment.
18. Assuming resumes are accurate — almost everyone agrees that more than 50% of resumes include misstatements or major omissions, so it is a mistake to rely exclusively on the information in them. Doing so will result in some serious screening errors.
19. Assuming that recruiting tools work — it’s a mistake to use the approaches that “everyone else is using,” good recruiters assess on their own what tools work and what tools don’t work.
20. Expecting dull position descriptions to attract — if position descriptions don’t excite, you’ll miss many top applicants, so it is a mistake not to compare them to competitors and not to make them sales documents.
21. Not managing the candidate experience — it’s a mistake to treat current applicants and candidates poorly because it will negatively impact the willingness of future candidates to apply. It’s also an error not to sample candidate satisfaction.
22. Making slow hiring decisions — the very best candidates are snapped up quickly, so slow hiring can dramatically decrease a recruiter’s results.
23. Dropping the overqualified — prematurely dropping candidates who are overqualified can cause you to lose some superior talent.
24. Dropping  job-jumpers – prematurely screening out job-hoppers can cause you to lose some ambitious and rising stars.
25. Dropping  rejected candidates – it’s a major mistake to discard the resumes of top candidates who were not hired, rather than shopping them to other hiring managers or revisiting them later.
26. Not measuring the quality of hire – even if your organization doesn’t do it for you, it’s a major mistake for recruiters not to check to see if their hires perform better and stay longer them the average hire.
27. Overemphasis on the past — it’s a major mistake for assessment to focus exclusively on past performance without also assessing how the candidate will handle current and future problems.
28. Being a requisition coordinator — it’s an error to focus too much of your time and effort on requisition approvals and administrative matters, rather than sourcing and selling.
29. Allowing hiring managers to hire for their needs — hiring managers can be selfish and hire for their own immediate short-term needs, so it is a mistake not to provide direction so that the resulting hires are also the best ones for the future needs of the organization.
30. Investing or developing brand positions that fail to differentiate — it doesn’t take a rocket scientist to figure out that most of the employment brand positioning content developed to date makes all organizations seem pretty much identical with the exception of what it is the company does. Most brand positions are overly generic.

It’s Your Turn!

Tell me what you think the top five are from this list or what you think I have missed using the commenting functionality below.

This engaging and interactive program will evaluate your organization from the candidate’s perspective. You’ll learn what factors can influence a candidate’s decision to choose your company over a competitor and discover the tools and techniques to create a unique and memorable experience that engages and captures the best talent.

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

So says Mid-Market Perspectives: America‘s Economic Engine – Competing in Uncertain Times, a Deloitte survey of almost 700 executives at companies with revenue of $50 million to $1 billion.

A majority of the executives expect both revenue (61.2 percent) and profitability (52.6 percent) to increase next year, despite limited faith in any significant improvement in the national economy. What drives their optimism is a continued focus on cost controls and increased productivity.

Of the 70 percent of executives reporting an increase in productivity, the average saw a 6.1 percent improvement since the beginning of the recession. The majority of executives credit the rise to improvements in business processes (62.2 percent) and technology (50.3 percent), especially the automation of business operations and increased use of data analytics for business intelligence.

Less than 30 percent of the respondents attributed improved productivity to making better hires (29.7 percent) or better workforce training (28.6 percent). As the report declares, “if a job can be automated — if it can be reduced to an algorithm, an application, or a set of instructions — it probably will be.”

While 44 percent of the respondents expect to increase headcount of full-time employees next year, hiring is being restrained, 45 percent say, by the need to wring more productivity out of the company. Labor, say 49.3 percent, is the cost the company is most focused on controlling.

Another problem, survey respondents identified, was the challenge in finding new workers who can hit the ground running. The Deloitte report says 47 percent of mid-market business leaders report difficulty finding employees with the skills and education to become productive immediately.

This is becoming a hotly argued issue at ERE’s sister site, TLNT. A post by editor John Hollon asks, “Are We Short of Skilled Workers, or Is it Just a Training Problem?” The post amplifies the discussion that began here with a reference to an opinion piece in The Wall Street Journal by Dr. Peter Capelli.

He argued that employers are wrongly blaming schools for failing to train workers. “The real culprits,” Capelli says,” are the employers themselves.”

What’s interesting to note in the Deloitte survey are the responses to the question, “What organizational changes, if any, has your company attempted to implement since the onset of the U.S. recession?” Of the eight options, 60.8 percent chose “Improved business processes.” That would be where streamlining workflow and automation fit in — essentially the tech over talent decision.

“Improving training” was selected by 37.8 percent. “Higher standards, in terms of skills or education, for hiring new employees” was the choice of 35.2 percent.

For more podcasts, webinars, and articles on recruiting be sure to check out ERE.net!

Professional recruiters are citing an increasing number of independent studies claiming there is no difference in employee quality between internal and external recruiters; so, they argue, why should organizations hire full-time internal recruiters when external ones deliver the same results … cheaper? If I were an executive looking for ways to reduce costs, that argument would resonate with me. So, if you have anything to do with recruiting in your organization, how you react to this crisis could make a big difference to your career.

Same Old Same Old

Recruiters (both inside and outside) are like frogs swimming in a pot of cold water. Experiencing slowly rising temperatures, they are totally unaware they are about to be cooked. (Actually, I never boiled a frog, so I’m taking this story at face value). In fact, the last recruiting conference I attended was utterly packed with sourcing candidates and noticeably shy on evaluating them. When I buttonholed both recruiters and sourcers about the importance of qualifying candidates, their eyes would literally glaze over. They either knew it all … or cared less. I emphasize this story because I have not yet met a line manager who thinks recruiting is doing a good job qualifying candidates. And, guess who controls the money?

Aside from sourcing, the traditional method of hiring is to screen a pile of resumes, run applicants through interviews, and do background checks. We all know it’s easy to fake interviews, and results are mostly personal opinion. Furthermore, you don’t need research to know about half of new hires fail to meet expectations. Just look around. Is it any wonder HR outsourcing is a growing industry?

Nuts and Bolts

I did not invent best-practice hiring tools. They evolved from many years of research that, in my experience at least, most recruiters blow off as being too much work. Best practice starts with knowing critical skills associated with each job, then measuring them with hard-to-fake behavioral interviews, tests, simulations, and exercises. Does this process ensure 100% perfect hires? That would be nice, but no. There are simply too many factors that affect the future. Best practices significantly reduce the number of hiring mistakes. However, one fewer hiring mistake means one additional highly productive employee. Put another way, we know in a typical organization that 20% of the people produce 80% of the results. So, imagine what it would be like if that number was reversed to where 80% of the people were top-notch.

The reasons for poor performance are seldom the employee’s problem. He or she was coached to say anything to get a job; job competencies were unclear; and interviews were easy to fake. Imagine that!

Best practice hiring tools are different: they are considerably more accurate than traditional interviews, highly focused, and hard to fake. If you want management to consider recruiting or HR an invaluable department, I suggest ignoring job titles, organizing jobs into families (i.e., jobs with similar competencies), studying each family to identify job-critical competencies (i.e., ones that can be measured), developing reliable and trustworthy measurement tools, setting professional cut-points, and training your people how to use them.

Still need to use a professional recruiter from time to time? Professional recruiters usually have access to impressive networks or are able to screen high volumes of candidates. Let them know, however, that you will require each submitted candidate to successfully pass your best-practice screen. Don’t be surprised of instead of the usual 2-3 candidates, you have to test about seven to find the right-skilled person. Will the recruiters complain? Probably. But they don’t have to live with the consequences of a bad hiring decision.

Piece of Cake…Not!

You might not have the expertise in-house to set up a best-practice system. In that case, consider hiring a psychometric expert to get you started. I’m not referring to freelance salespeople who market out-of-the-box tests. They are probably well-intentioned, but limited in their range of tools, and totally unaware of limitations (e.g., if the only tool you know how to use is a hammer, every problem looks like a nail). Professionals can be identified by career and academic credentials, professional memberships, time spent interviewing people doing the job, use of different tools, professional validation processes, documentation, knowledge of the DOL Uniform Guidelines, and use of tests specifically developed for predicting job performance.

The entire investment of a best-practice hiring system is often recovered in 60-90 days. Isn’t it worth it to cut-through the sales-pitch and get the employee you actually thought you were getting?

Dead or Alive?

Is HR dead? That depends. Keep up the same-old practices, and the answer is probably, “Yes.” Move into the 21st century and master best practices, and I predict you will become managements’ new BFF.

• Requisition load — Most corporate recruiters cover between 20-40 openings, with some supporting up to 100 positions. As a result, recruiters don’t have the opportunity to spend the quality time recruiting that they would like. A recruiter can’t effectively and proactively support 40 openings.
• Incentive structure — Incentive pay on the corporate side does not reflect the impact that a top-notch recruiter can have on an organization. As a result it becomes nearly impossible to attract top agency recruiters to the corporate side. With financial incentives (bonuses) not closely tied to results (hiring top-notch candidates more efficiently) companies will always struggle with recruiter motivation. Said another way, good recruiters are worth every penny they earn. Corporate recruiters are typically eligible for annual or quarterly bonuses, so the timing of the reward is not closely aligned to result. Several corporate recruiting departments have implemented scorecards to create differentiated compensation for their top performers; however, they need to move more closely to a pay-per-hire model in order to get the results they want. Unfortunately much of this tracking is activity-focused and not results-focused. If corporate recruiting departments could implement a similar compensation structure as agencies (lower base salary, higher bonus structure), they would definitely reap the benefit. And in the end, organizations would hire more top talent at a lower cost per hire.
• Recruiter skill set — Corporate recruiting leaders have got to get to a point where they aren’t seen as just another HR function. Good recruiters, typically, are not the best “HR people” because they like the hunt and financial rewards that go with finding the best people. Typically this is not the mentality of a good HR generalist who is typically very process-focused. Once dedicated recruiters are compensated appropriately, developing/growing recruiters becomes a much easier task. They will see that the top paid recruiters are also the ones who are best at cold calling, networking, closing the candidate, salary negotiation, etc. and will seek development opportunities out for themselves. Most training dollars are wasted on recruiters who simply don’t have the time or motivation to change their recruiting approach.
• Poor recruiting process — Too many corporate recruiting departments are still built around post and pray. I don’t think it will come as a surprise that a lot of corporate recruiters post their positions and simply phone screen those who apply. Given the requisition loads it’s understandable why many corporate recruiters take this approach. Clearly this approach does not garner top talent, but it also provides the greatest opportunity for third party recruiters to add value. And the area that recruiting leaders must address immediately.
• Distractions – Corporate recruiters are tasked with a lot more than just recruiting. They may be pulled into overflow HR “stuff” (employee relations, open enrollment, compensation studies, etc.) that takes time away from their core responsibility. As long as corporate recruiters are tied to the HR function, they will be pulled in as HR pinch hitters. Additionally, corporate recruiting departments have a lot of reporting that they must commit time to, including corporate/departmental reports, OFCCP, EEO audits, and in many cases internal audit. These reports are time killers. Recruiting functions work best when they are supported by a dedicated administrative assistant to handle the details (offer letter creation, interview scheduling, paperwork, input in HRIS, etc) so recruiters can focus their time on actually recruiting.

In closing, don’t interpret any of this article to say corporate recruiters don’t work hard. Most of the ones I know do truly work hard, but they don’t have the recruiting skill set, motivation, and focus (see points above) to truly be successful to the degree their organizations need them to be.

In full accountability, a good part of these challenges are created by the recruiting function (or at least recruiting leadership) itself. We’ve not been able to provide enough on the value proposition side to say “leave us alone” when it comes to HR distractions. We’ve also not been able to create appropriate compensation structures to attract and retain the best recruiters in the market. I’m not completely sold that recruiting should be rolled into HR at all.

sixth studio album by Elton John

I really should go to bed because I have to get up very early tomorrow (by 10:00 a.m.) but my head is still spinning from my day-long attendance at the AOEP 2011 Recruiters Best Practices Summit. My thanks to Lou Gaglini and Dan Kilgore for putting up with me.

First things first: all sessions were great, but Jeremy Eskenazi’s presentation entitled “Navigating Corporate Politics” was funny and brilliant and in a sense, heartwarming — simply the best session I have ever attended.

The things I learned at the conference are endless. A quick example is Lou Gaglini’s brilliant question from his session entitled “Anatomy of an Effective Interview:”

Question: “What is an interview?” (Not really such an easy question, is it?)

Answer: “It is a very important business meeting.” (A simply inspired answer as I see it.)

I can go on endlessly about the conference, but one concept must be spoken of here and now. And that concept is “Recruiters as facilitators” — pointed out by Jeremy.

I have been in this business for a long time. I grew up in the agency biz and later moved into consulting and project work. Endless clients later I have never quite thought of it in that light. Silly me. Recruiters as facilitators is an eye-opening concept — a realistic model of the life we as recruiters must live.

Recruiters as facilitators holds sway big time because it inserts a sense of reality and clear thinking into the hiring process by pointing out what should be obvious but often times is not — that we as recruiters are only facilitators in the hiring process and nothing more. In what can often times be a long and convoluted process (should this even be a long and convoluted process in the first place? Most often no, but that is fodder for another article) that goes from the development of a position profile all the way to a candidate’s acceptance of an offer, we can only do three things:

1. We can drive the process by always moving things to the next level through a sense of urgency and effective communication.
2. We can act as a consultant to the hiring manager as well as anyone else involved in the process to ensure quality and professionalism at each step.
3. We can do whatever is possible to close the deal when an offer is made and be sure that the candidate is prepped to start.

Read the above stated three bullets again and remember them, because this is all we can possibly do in our roles as recruiters. Often times, we can cajole, push, pull, and politic in a heartfelt struggle to do what we see as right — to hire a great candidate who can do the job we seek to fill, and create a successful employment scenario. This is easier said than done.

Sadly, corporate sensibilities or lack thereof, internal wrangling, and endless other circumstances can stand in our way. When push comes to shove, the hire we seek will at times not happen. Notice my use of words. I did not say that we failed. I said that the hire did not happen, and I hope that the subtly of my message is not lost on the reader. We can only do so much, and beyond that, we are at the fate of winds and forces far beyond our control.

Is there comfort to be taken from the realization that our good work can lead to naught? That we can go home on a Friday knowing full well a hire that should have happened did not and now we must stare at beginning anew on a cold and cloudy Monday? I think so and I urge you to consider the following thought for your comfort.

Hiring by its nature is a difficult and messy business. I have seen this to be the case with every client I have ever known. I have seen it when it is fun and I have seen it when it was heartbreaking. As recruiters, all we can do is continue to grow and to exercise our best judgment. All we can do is hold true to the standard of care and consideration we know to be the best work we can impart. Simply stated, all we can really do is to try — and amidst our best labors, flights of fancy, and visions of success, know that at times, it simply will not happen. I do not see that as my problem. I see it as an organizational problem and I simply move on. That is our reality as facilitators.

As for me, please don’t shoot me — I am just the clarinet player.

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