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(Editor’s note: This is the fourth installment in Dr. Sullivan’s series. Here are Part 1, Part II, and Part III. Next week, installment five of this series will address tools and tips you can use to improve your job rotation program.)

This series of articles started out listing the pain points that many organizations are experiencing today as a result of rotation-based development initiatives rooted in history and antiquated by Henry Ford’s standard.

It then progressed into program goals and key elements that characterize more modern second-generation programs under development. Last week’s installment explored the many program variations that are expanding the scope of rotation programs, making them more relevant as tools capable of addressing retention, motivation, and productivity improvement.

This week’s installment looks at emerging best practices and program metrics that can be used to assess your program’s performance.

Best Practices in Job Rotations and Internal Movement

Over the years, many firms have used job rotations in a variety of formats.

The most famous firm that has used internal movement for development is General Electric, but other firms have developed some best practices that can also provide learning.

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(Editor’s note: This is Part III in Dr. Sullivan’s series. Here are Part 1 and Part II; next week in the conclusion to the series, look for best practices and program metrics.)

When corporate revenues are down or stagnant, talent managers typically shift their focus away from volume hiring to developing and improving existing employees.

Executives are always challenged to make the correct “buy or build” decision, but when hiring is frozen, organizations must place an increased emphasis on internal movement and job rotations to close critical gaps in talent supply and demand.

Unfortunately, many rotation programs are doomed from the start to produce mediocre results, because they employ a “one-size-fits-all” model that guarantees lower program participation rates.

As with most products and services, offering different program variations makes it more likely that your target employees will find a job rotation that fits their needs as well as the organization’s. Since the war for talent began more than a decade ago, the type of job rotation formats have expanded dramatically. It’s important to be aware of the various development opportunities available and the benefits and risks associated with each.

Here is a list of 26 different types of internal movements to consider.

Obviously, not every firm can offer employees all of these options, but it is not uncommon to develop programs that incorporate a handful.

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What does a modern recruiter need to be good at? Is it all about knowing how to leverage social media, or are the traditional skills of cold-calling, screening resumes, conducting interviews, and closing candidates more important?

I have just been at the Australasian Talent Conference in Sydney, Australia, for the past week and what was most interesting was to listen to the issues and concerns of those recruiters who have not been laid off and whose organizations are still hiring.

They are faced with challenges that many of the ERE writing team have talked about over the past year. keep reading…

It was agreed by all that the meeting was to be held in the strictest secrecy.

Only first names were to be used, and nothing was to be put in writing. Even though I was the head of recruiting and staffing for a large, multi-national company, I was putting my team in serious jeopardy just by having this conversation. Fortunately, the liaison was successful — we were not caught that day, and so far no one has discovered that we met together.

What am I describing? An international spy ring? The sale of competitive intelligence? keep reading…

About two-thirds of companies use “time to fill” as a metric, a measurement that Stephen Lowisz, for one, pooh-poohs.

Tony Blake, of last night’s recruiting-department-of-the-year award-winner DaVita, says the “infamous time-to-fill metric is somewhat of a necessary evil in recruiting.”

But, Blake said today at ERE’s Spring conference, a better metric is “time to find.” This is the time beginning when a job request comes in, ending in the time the recruiter sends the candidate to the hiring manager.

“If it took five weeks to fill the job,” Blake says, “but if they sent the job to the hiring manager after seven days, the time-to-find is seven days. The great sourcers on our team are literally sending great candidates in the first 10-14 days of the process.”

By lowering registered nurse time-to-fill 15.1%, DaVita saved $5.5M in potential overtime and contract nursing costs, while filling over 3,300 registered nurse positions.

More often than not, it is the simplest things in life and in business that produce the biggest impacts. Having spent more than 30 years analyzing corporate recruiting practices and strategy, I have noticed there are some rather basic questions that, if only posed, would have a profound impact on the effectiveness of most recruiting endeavors.

Unfortunately, the questions are rarely asked, resulting in inefficient, ineffective practices.

Do not pose these questions periodically; incorporate them into your approach to build an engaging candidate experience, a more compelling offer presentation, and ultimately, a more productive hire.

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Coming up on the second weekend of the NCAA tournament, I am happy to report that I’m in first place in my pool of 35 basketball fanatics. I won two years ago and I’m looking to repeat the performance. The funny thing is that I don’t even follow the sport. My personal secret is my professional weapon: pre-project research.

Research is an oft-forgotten yet essential business tool and can save money, time, and resources. While the cost of entry for my basketball pool was only $25, the stakes are significantly higher when assessing the costs to launch a new branding campaign, career site, or national recruitment program. Small mistakes can create long-term headaches like high turnover, poor performance, or dropped conversion rates.

So before the next round of hoops begins, lets take a moment to look at some of the different kinds of research there are, and when it makes the most sense to launch yours. keep reading…

Analytics is a hot idea that will likely be topical for a decade more, much like competencies and employment brand were (and are). The best selling book on the subject is Thomas Davenport’s Competing on Analytics. The term “analytics” — if you want a really sophisticated definition — just means “let’s crunch some numbers.” One of the reasons it’s topical is that our internal systems are capturing far more numbers than ever before.

In recruiting, to the extent analytics have been used, the focus has been on internal recruiting processes. Recruiting departments want to reduce cost-of-hire and time-to-fill and thus may apply some number-crunching to find where they can make improvements. However, the big payoff comes when recruiting can affect operations by improving quality of hire. The recruiting function needs to make the effort to shift its focus from the comfortable world of its own operations and instead spend more time in partnership with the business units to see how recruiting can make a difference there.

Nowhere is analytics more important than in the recruitment of front-line workforces. Robert Yerex, chief economist at the workforce-management vendor Kronos, points out that in many industries the number of front-line workers is so large that you can easily get enough data for sophisticated analysis, and even small improvements add up to very large savings. The recruiting function is a particularly important part of HR for the front-line workforce because these workers typically don’t stay that long. The organization is counting on recruiting to get people who hit the ground running and fit sufficiently well that they don’t leave after the first few weeks. If recruiting fails at this then it creates a huge cost for the organization.

There are many ways analytics can help recruiting functions improve the quality of front-line workers (and we’re getting into details in the April 2009 issue of the Journal of Corporate Recruiting Leadership). Let’s just look at one (as shown in the graphic above as an example) to give you a flavor.

A simple analysis of retention by source of hire can show recruiting how they should aim its sourcing efforts and even lead to quantifying how much extra value one source creates compared to another due to higher retention. This analysis might completely overturn conclusions of a typical cost per hire analysis since retention can be so valuable to a company that it overwhelms the different in cost in using a particular source.

The stuff’s just now beginning to hit the fan over the incendiary comments of Rutgers University academic Richard Beatty to a conference of CFOs Monday.

Under the title “Memo to CFOs: Don’t Trust HR” CFO magazine says the professor blasted the human resources profession for working without useful analytics, and contributing so little that, in the words of the article’s author, “typical human resources activities have no relevance to an organization’s success.”

Beatty dismissed efforts at employee engagement as having “no evidence” to show it produces a meaningful return. Training to improve low performers he all but called a waste of time saying “Low turnover isn’t necessarily a good thing. Think about where you might want to disinvest.” And efforts to become an employer of choice he called “silly.”

As you might expect, HR professionals were quick to take issue with the professor’s remarks.

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As the economy tumbles, and companies right-size their recruiting departments, the bottom-half is the first to go. Under this scenario, those formerly in the relatively secure 2nd quartile are now in the bottom-half. So be wary or get better.

With this sobering news in mind, I offer those of you in all quartiles this short, 10-point personal evaluation guide. While some of them are a bit crazy, they’re based on comparing your performance to the best in the business. It will tell you quickly whether you’re in the top 25% and how to stay there.

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Here’s what companies are offering in severance pay, according to a study by Right Management.

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Most recruiters will say that making quality hires is their top priority, but they often fail to back up those claims by accepting accountability for the post-hire performance of the candidates they source. Recruiters cite limited authority over hiring decisions or training and supervision as barriers to accountability; meanwhile, managers say recruiters should be accountable for quality because they control the slate. To break the stalemate, recruiters must embrace each manager’s business objectives as their own and recognize both their accountability and authority for hiring top performers.

At Advanced Technology Services, Jim Hefti, VP of HR, took time-to-fill off the table, while holding the company’s recruiters accountable for first year employee turnover. He also gave the recruiters the authority to reject a candidate at any stage of the hiring process. How did the company’s managers react?

“They don’t like it, but they’ve learned to accept it,” says Hefti. “Our first year employee retention rate has improved by 3% to 5% and time-to-fill actually improved when we stopped focusing on the number of candidates we were submitting and started focusing on submitting quality candidates.”

It was just as difficult for recruiters to embrace their new responsibilities, according to Holly Mosack, ATS recruiting manager, but she says recruiters diligently educated managers that quality hires result from sound hiring processes, not massive quantities of interviews, and they persevered through the first six months. Then, both groups saw their first glimpse of improved first year turnover statistics, and they haven’t looked back.

Hefti also installed a talent management structure that makes performance management the joint responsibility of HR and managers. New hire performance is evaluated at 90 days. An HR talent manager gets involved if a new hire is not meeting or is not projected to meet performance expectations. Every time a new hire quits, or fails to meet his or her performance goals, recruiters, managers, and talent managers meet jointly to review what happened and make adjustments in hiring profiles, training, or supervision.

Managers’ satisfaction with the recruiting department is measured through a separate annual survey, because Hefti focuses on tangible measures and accountability that drive the company toward its business goals.

By Dr. John Sullivan and Master Burnett

On Wednesday, November 12, 2008, more than 900 members of the ERE community converged online for a webinar led by ERE author, Dr. John Sullivan. The webinar focused on updating your employee referral program. The popularity of the topic during a time when many staffing organizations are facing tough situations speaks to the immense role employee referral programs now play in the modern staffing function.

While several questions were fielded throughout the interactive webinar, participants submitted more than 70 questions on issues relating to program design, program operations, reward trends, and impact on organizational diversity.

To drive better understanding of world-class employee referral program practices and support continuous improvement of a sourcing channel that has become the dominant source of quality hires for many organizations, our response to the questions submitted throughout the webinar will be featured in five separate articles this week. (Where possible, similar questions were combined to reduce duplication.) The first five questions are included below, and there are 38 questions total.

Our responses to the questions proposed draw upon our advisory experience with more than 200 global organizations, an in-depth research study detailing the practices of more than 240 organizations, and an end-user research study that examined the experience of more than 7,400 employees and their respective referrals from 28 different organizations. More detailed guidance on program design can be found in a Design Workbook written by Dr. John Sullivan and available at drjohnsullivan.com.

Those interested in truly developing a world-class program may also want to check out these past ERE articles:
Operating Referral Programs on a Limited Budget
Upgrading or Reenergizing Your Employee Referral Program
Employee Referral Program Killers
Budgeting for a World-Class Employee Referral Program
Metrics for Improving Employee Referral Program Effectiveness

ERE Community Q&A

The questions proposed during the webinar covered a great many aspects of operating an employee referral program including:

• World-Class Program Design and Features
• Program Reward/Bonus Trends
• Diversity Impact
• Using Technology to Support the Employee Referral Program
• Specific Program Mentioned During the Webinar

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The most-used recruiting metrics, from a new study by The Newman Group, in conjunction with ERE, of 500 recruiting and staffing professionals of varying company size.

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Some reflections on the HR Tech Conference in Chicago that ended Friday:

• Talent management technology will be to the next five years what the ATS was to the last;
• Recruiters need to engage with line supervisors on a regular basis, and not just when a req comes through, because you will be measured on how well your hires do;
• For the same reason, recruiters need to play as big a role in the selection of HRMS tools as every other HR division;
• All HR professionals must become more proactive in identifying and implementing tools to help workers better engage with each other and the company and, for that matter, with their peers in the wide world.

The need for HR to take a more aggressive role was made so very clear in a conversation I had with a bank personnel officer on the last day of the conference.

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Why should a recruiter care about talent management programs? If you don’t have a good answer, consider this: the talent those systems help a company manage is talent you had a hand in bringing on board.

With the increasing awareness of CEOs and HR executives that quality of hire is part of the evaluation equation for recruiting programs, how those hires are performing is a metric no recruiter can afford to ignore.

“When recruiters can be measured on quality, some recruiters will simply be better than others at bringing in high impact, more productive, and longer tenured employees,” said Dave Lefkow, CEO of consultant talentspark and a veteran recruiter, in an article more than three years ago.

Comprehensive talent management systems do more, of course, than assess and track employee performance. Coupled with succession planning modules, they can make identifying promising internal talent a snap and in doing so encourage internal recruitment. The more sophisticated of these systems can also flag employees who are at risk of leaving, spot talent shortages and replacement gaps, suggest and track training, and lots more.

If your company doesn’t have a talent management system now, it could very soon. The market for these is growing strongly as if in inverse proportion to the U.S. economy. Authoria (profile; site) had a 93 percent growth in bookings for the first half of this year over last. Pleateau, whose recent release of its Plateau Talent Management 5.8 Service Pack 5 prompted this article, reported 2007 revenues that were 58 percent higher than the previous year. The 450 attendees at its user conference last week was the largest turnout in the company’s history.

During a demo of the new release Frank Leff, Plateau’s Pre-Sales Product Consultant, observed that companies can easily assign fields to individual employee profiles, identifying such things as source of hire, recruiter who had the req, and whatever else might be useful. He, and Dennis Gullotti, Director of Product Marketing, showed how easily a recruiter could find in-house talent before having to go outside the company.

But as we watched the demo unfold, we saw how easy it would be to identify the recruiters whose hires were making the biggest impact. Plateau’s competency comparison, intended to identify potential successors and assist with skills gap analysis, could also be used as a quality-of-hire metric.

Is that happening? Absolutely, Gullotti told us. People are “coming out of the talent management silo,” he said. As systems like Plateau’s are increasingly linked to other enterprise software, “We,” he said, meaning HR as a whole, “are connecting the recruiting silo to the performance silo to the other systems.”

That’s closing the feedback loop that will inevitably make quality of hire as important and common a metric to be weighed as time and cost to hire are now.

In the quest for quality hires, talent acquisition leaders often spend considerable time extracting DNA from the company’s top performers in hopes of cloning the outstanding workers. After reviewing performance goals and synthesizing multiple data inputs, line managers and recruiters collaborate to craft tightly honed hiring profiles for each position. Next, it’s up to the recruiter to source the candidates, which is a critical step in the process, because sourcing plays a vital role in achieving quality of hire (a topic explored in depth in the October Journal of Corporate Recruiting Leadership).

Targeted sourcing is the second step in hiring top performers, as shown in this chart (click to enlarge) illustrating the complete quality of hire process, from Taleo Research.

Most recruiters instinctively return to the same source when searching for candidates, because historically the source has produced a quick response from a large number of prospects with the required skills. But a deeper dive into employee turnover statistics and performance ratings might result in some surprises about the quality of the candidates secured through each source, according to Andrew Carges, vice president of worldwide talent acquisition for Success Factors.

Carges says that he found first-year turnover was high for employees sourced through agencies, during his experience at SuccessFactors and in his previous roles as a talent leader. A closer review as to why those employees left revealed that many had a history of job-hopping, and he concluded that employees represented by recruiters were frequently hunting for new opportunities and had easy access to other positions. Now he evaluates source effectiveness and its impact on quality of hire.

“To drive quality of hire, compare the employee’s first-year performance rating to their hiring source and the cost of hire,” says Carges. “It’s something every company can do to evaluate the effectiveness of the hiring source in delivering top performers and value.”

(See the example of hiring-source analysis provided by SuccessFactors.)

Managers frequently request candidates with previous industry experience because they believe it’s a predictor of on-the-job success. That hiring criteria often limits the sources recruiters can tap to find experienced prospects. A review of the employees’ actual performance ratings and the competencies possessed by top performers might be the first step in shifting the hiring paradigm, which in turn opens the door for new sources of hire.

At R.L. Polk & Co., a review of the company’s top performers revealed that previous industry experience had little correlation to job performance, according to Jay Marshall, manager of talent acquisition. In fact, the requirement accelerated the cost of hire because candidates came from a boutique industry and often had to be enticed with higher salaries.

And at the same time, industry dynamics were changing, forcing employees into more business-facing roles that required different skills. As Marshall dug a bit deeper into what was really making employees successful, an entirely new profile began to emerge.

“When I looked at the behavior behind the performance, it was driven by teamwork,” says Marshall. “The bottom line is that it really altered what we were looking for, and now we look for team players with strong business acumen. That opened up many new candidate sources, and our average cost of hire has dropped $10,000 in the last 24 months.”

Today, Marshall says he no longer worries about how long it takes his team to hire new employees or how much a new hire costs, because by focusing on quality of hire, he has improved all the recruiting metrics at Polk.

Last month, DoubleStar conducted a survey to determine the current state of recruiting practices in a cross-section of organizations. The survey was sent to recruiting leaders and decision makers in mid- to large-sized organizations across all industries. The results are not a summary of best practices but a snapshot of current actual practices as they exist today.

The findings (full report available) are interesting. For example:

• 95% of organizations are operating without a dedicated sourcing function. Further, 28% of organizations reported that their recruiters are performing all of the sourcing.
• 44% of organizations are engaged in some level of recruitment outsourcing. However, 82% of these organizations outsource less than 25% of their total positions.
• The biggest impediments to recruitment success are the ability to find quality candidates and process delays caused by hiring managers.
• Only 21% of organizations are using Web 2.0 tools for recruiting, with only 1% considering themselves experts. LinkedIn and industry-specific sites were reported as being the most effective.
• The most commonly tracked recruiting metrics are time-to-fill, time-to-start, first-year turnover, manager satisfaction, and cost-per-hire. Few organizations reported tracking more sophisticated measures.

The survey’s overall results show that recruiting is a function in transition from older practices to more modern ones.

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Stephen Lowisz, author of Six Good Metrics, isn’t fond of some of the most common measures of recruiting success. He talks about one company that’s doing it differently; how to measure whether recruiters are “just passing paper”; and the “biggest buzz” right now in recruiting metrics.

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Cost has always been central to recruiting. One of the most popular (though not the most useful) metrics is cost-per-hire.

But demonstrating the value of recruiting is difficult. The reasons are simple enough — recruiting costs are tangible; the benefits less so. It takes time for new hires to become productive, and their contributions are difficult to measure with any precision. Furthermore, it is impossible to attribute an employee’s performance to the recruiter’s skill at getting the right fit, in the right place and time. Consequently, tying recruiting results to cost is nearly impossible. Few even try. So recruiting managers usually find themselves under pressure to “manage” costs better — which usually means do more with less. Some companies have just given up trying and handed over their recruiting to an RPO vendor.

RPO has its own issues, but one benefit of RPO may just be that recruiting managers begin to understand costs, and how to manage them to their advantage. I don’t mean “manage” as in “limit” (although that’s a very fine thing), I mean structuring costs to maximize flexibility, leverage in-house expertise, and limit cutbacks during down cycles. This is the “manage” they teach in B-school.

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