In my opinion, we’ve downplayed what it really takes to be successful in our profession — recruiting, counseling, and closing top people who have multiple opportunities, and making sure our hiring manager clients don’t blow it.

To start refocusing on the right stuff, I’d like to nominate quality of hire as the metric to assess recruiting department performance, and relegate cost per hire to the second page.

I believe cost per hire is a misguided means to judge recruiting department performance. For one, it rewards the wrong things and ignores quality of candidate and quality of hire. For another, it’s far too tactical and narrowly focused. Worse, improving costs could degrade quality.

This is a strategic mistake of huge proportions that too many HR and recruiting managers miss entirely.

These problems go away if the focus is on measuring quality of hire first and quality of candidate as a subset. Even if recruiting is reluctant to take on the responsibility of maximizing quality of hire, it must be responsible for setting up a system to measure it. While important, measuring quality of hire is not straightforward.

Here are some ideas on how to get started on thinking about how to do it:

Yves Lermusi, the CEO of Checkster, believes good reference checking before (external) and after the hire (internal 360°) might be the best way to measure, monitor, and improve quality. He might be right, but from what I’ve seen, if the measure of candidate quality pre-hire is different than after the hire, you’re not measuring the same thing. Regardless, Yves’ point of measuring candidate quality post hire and monitoring are absolutely essential. So you should check out Checkster as a means to do this.

Here’s another perspective. I was speaking with a senior recruiting manager with a Fortune 100 company the other day. She told me her company conducted exhaustive post-hire performance reviews at the 90-day, 6-month, and 9-month time periods for new hires. These reviews were based on comparing the new hire’s performance against the performance objectives of the job. If the person fell short here, the review was expanded to include an in-depth competency evaluation. This approach seemed spot on to me. However, the recruiting manager told me under-performance was generally attributed to lack of understanding of real job needs before accepting the offer and problems with culture, especially with the working relationship with the hiring manager, once on the job. This strengthens the argument of measuring pre- and post-hire quality on the same performance standard.

However, some differ on this view. For example, after a recent ERE article I wrote on a related quality of hire article, someone sent me a detailed LinkedIn message describing his company’s approach to measuring the quality of their candidates by sourcing channel. It consisted of a detailed scorecard examining a set of criteria that mapped to the traditional job description. This included things like quality of the academic background, quality of the experience, depth of industry knowledge, and the like. This is probably not too bad, but I suspect that this was not the focus of the interview. But none of this gets at the issues involved in a post-hire quality assessment. For example, the person could be a fine person with all of the experience and academic requirements noted, but someone who was no longer motivated to do the type of work required, or someone whose style was not compatible with the hiring manager’s.

From a pre-hire standpoint, some might argue that the traditional competency or behavioral-based interview is a great way to measure pre-hire quality. My 30-year concern with this is that it still ignores job performance and managerial fit. Being competent to do the work doesn’t mean being motivated to do the work. Nor does competency or behavior measure a person’s ability to prioritize the work, handle too much work, work under pressure, work with different resources, work with comparable teams in similar situations, or work with a weak manager.

For me, it’s pretty easy to conclude that if you want quality of hire to become a useful measurement tool, you must start by measuring pre- and post-hire on the same basis. Further, the measurement standard you should use must be made on some comparison to real job needs. (Send me an email if you’d like a copy of a performance-based talent scorecard from my book, Hire With Your Head (Wiley, 2007).) This means candidates need to be measured before they’re hired on their ability and motivation to perform the actual work required, including fit with the hiring manager.

If pre- and post-hire quality measures are different (up or down) it means that the assessment process is flawed. So it’s important to use feedback from the post-hire quality assessment to change how candidates are assessed. I suspect that few companies do this; regardless, that’s a major reason and benefit for measuring post-hire quality. Then once pre- and post-hire quality assessment are the same and you have a good system for tracking quality of candidate and quality of hire, you can then move on to the more strategic quest of maximizing quality of hire. This includes improving your recruiting and sourcing skills in tandem, and tracking quality by sourcing channels, recruiters, and even hiring managers.

The whole point of this article is to suggest that quality of hire is a much more important measure than cost per hire in measuring recruiting department performance. While cost is important to track, it shouldn’t come at the expense of quality.

Focusing on the internal budget of the recruiting department is insignificant in comparison to the impact the thousands of people the recruiting department hires has on their company. What’s more exciting is that the tools are now available to actually measure and maximize hires, rather than just talk about it.

For a minute, assume the role of a senior executive who has just been handed a business scorecard containing performance numbers in five critical business areas. After looking at the numbers below, would the data make you cringe?

• 70% of users are dissatisfied with the process.
• 50% of customers regret their buying decision.
• 46% turnover among new buyers.
• 46% failure rate of process output selections.
• A mere 19% are unequivocal successes (less than 1:5).

It’s Time to Face the Numbers and Facts…

Almost any senior executive would be alarmed upon learning that users were dissatisfied, failure rates approached 50%, and a significant percentage of your customers regretted their decisions.

Obviously, if the numbers listed above came from an important profit-impact function (supply chain, finance, customer satisfaction), everyone would be screaming for a complete rethinking of the entire process.

Unfortunately, the above metrics represent failure in the recruiting and retention elements of the talent management function. I have encountered no other business function that more completely avoids defining and measuring process failure than talent management.

Selection decisions are often about as accurate as a coin flip.

–The Recruiting Roundtable

Talent Management Failure Metrics Are In*

Here are more details on the five numbers provided above.

This data can be taken together as a clear indicator that we might have numerous failures in talent management:

• 70% dissatisfied — 70% of the external customers (applicants) and 28% of the internal customers (hiring managers) indicate they are dissatisfied with the hiring process (Source: Staffing.org).
• 50% customer regret — 50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new job within one year (Source: Challenger, Gray)
• 46% turnover — 46% of new hires leave their jobs within the first year (Source: eBullpen, LLC) and 50% of current employees are actively seeking or are planning to seek a new job (Source: Deloitte).
• 46% failure rate — 46% of U.S. new hires must be classified as failures within their first 18 months (fired, pressured to quit, required disciplinary action, etc.) (Source: Leadership IQ). In addition, 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Source: Michael Watkins).
• Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source: Leadership IQ).

Some additional data points to consider include:

• 66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions (Source: DDI)
• 50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source: Corporate Leadership Council).
• Newly promoted executives don’t do much better (40% of newly promoted managers and executives fail within 18 months of starting a new job (Source: Manchester, Inc).
• Less than 50% are qualified — a majority of managers surveyed (59%) believe that less than half of all candidates they interviewed were qualified (Source: eBullpen, LLC).
• 65% lie on resumes — the key data source that we rely on to source and narrow down applicants contains untrue information more than half the time (Source: The Risk Advisory Group )
• Resume-sorting failures — Of all the “perfect resumes” sent out by mystery shopper candidates, only 12% were actually scheduled for interviews (Source: Hodes’ Healthcare).
• Bottom performers produce less — hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.).

* Note: I have purposely chosen publicly available sources that cite these research results. To find the material, you may use a simple Google search, but please don’t contact me for detailed references.

The samples in each case varied, but what if they were an indication of how poorly your organization’s talent-management function was performing?

Only 30% of organizations measure quality of hire, and only a handful specifically define and measure recruiting process failure. It’s time to adopt a business process management approach; start to measure successes and failures in the same way that other business processes already do.

Plan B, of course, is to ignore this warning and to continue to assume that existing processes are either error-free or on par with the Six Sigma standards of production, quality control, and customer service.

My Goal Is to Get You to Pay Attention

You can conjure up arguments about the validity of the research done by outside consulting firms, but that’s not the point. The key learning is to take a moment and ask yourself these key questions:

1. Have you clearly defined what “hiring failure” is? What failure rate is acceptable?
2. Can a process be properly designed so that so many that are involved in it do not have remorse or regrets about their decisions?
3. Is it ever acceptable to have a process where the dissatisfaction rates exceed 25%?
4. Has the time finally come where you bite the bullet and calculate the quality of hire, failure rates, and the ROI of your function?
5. Is it time to move beyond simply calculating output metrics (i.e., 22% are dissatisfied) and in addition to begin to use metrics to identify why your failures occur?

After viewing these research numbers, I hope you’ll agree it is time to rethink most talent management processes and metrics.

Do not concern yourself with the accuracy of any particular external study; their primary value is simply to stimulate you to do your own research within your own firm to find out if these problems and failures identified by others are currently occurring.

Action Steps to Consider

There are a handful of firms (DaVita quickly comes to mind) that have adopted a business process approach to their recruiting function where they clearly define and target failure.

If you’re interested in adopting this approach, here are some action steps to consider.

• Clearly define failure — include top candidates you failed to identify or attract; top candidates who dropped out early; the quality of candidates you didn’t hire; offer turndowns; good hires but bad initial placements; poor-performing new hires; legal costs; delayed time to initial productivity; dissatisfied or disillusioned candidates; frustrated hiring managers; and early turnover among new hires.
• Adopt a business process management approach — work with experts in supply chain, CRM, Six Sigma, etc., to learn about business process improvement tools and approaches.
• Shift to data-based decision-making — shift away from the approach where you assume that things are working; instead, rely on hard data to meet decisions and to continually improve every key process.
• Mystery shoppers — use mystery shoppers to identify process problems.
• Change your assessment approach — a significant portion of recruiting process errors occur because of an over-reliance on subjective tools like interviewing. A superior approach is to increase the use of validated skill assessment tools and to ask candidates to solve real problems.
• Conduct failure analysis — whenever you have a major process failure, use a failure analysis/root-cause identification approach to move beyond symptoms and to identify the real underlying causes of the failure.
• Assume failure — even when the process is made more objective, there will still be significant number of failures. Accept that fact and develop a process that allows you to identify those failures early and to minimize your losses.
• Calculate the cost of each error — work with the CFO’s office to calculate the costs and the business impacts of all major errors.
• Assume that all sub- processes are suspect — assume that bad hiring decisions are a result of poor design features in a multitude of sub-processes including job descriptions, resume sorting, interviews, reference checking, hiring manager monitoring, and onboarding.

Final Thoughts

Throughout my career, whenever I have had the opportunity, I ask recruiting and talent management leaders a simple, straightforward question:

If you hired 100 people, what percentage would turn out to be failures?

Not surprisingly, 99% of the time all I get in return is a blank look. In direct contrast, if I ask the same question on failure rates to those who lead other business functions like supply chain, production, sales, customer service center, etc., I get an immediate numerical response coupled with the costs associated with each increased percentage point of errors. It is my hope that the data referenced in this article will cause you to increase your focus on identifying failures and failure rates in each of your major sub-processes.

Study after study has confirmed the notion that many employees would have left their employers months/years ago had the option to do so been viable. The economic downturn, combined with the mortgage crisis, has forced many frustrated, disappointed, and unmotivated employees to stay put. The trend is not a new one and is consistent with past downturns.

While turnover rates are at an all-time low, they most certainly cannot be taken as an indication of a firm’s status as a desirable place to work.

Just as in years past, when job opportunities become more prevalent, employees will exercise their right to demonstrate just how much they appreciated the treatment they received throughout reductions in force, furloughs, clumsy mergers, travel freezes, and budget cuts. The level of animosity among many will render most traditional retention approaches ineffective.

Some studies indicate that as many as two-thirds of employees are ready to go. Unfortunately, few corporations are preparing today to handle the dramatic increase in voluntary terminations that will come tomorrow.

While few organizations completely decimated their staffing functions, the majority have cut back to the point where capability has been negatively impacted. Strategic programs that deliver retention have been cut, and in most cases, no one is held accountable for retention solutions. It might seem outrageous, but unless you consider the phrase “let’s keep them all” to be a retention strategy, it’s a fact that most HR and recruiting executives can not even list common retention strategies, let along devise their own.

Retention Is One of the Most Poorly Managed Goals in HR

It’s hard to argue that retaining key employees isn’t a high-value activity, and I can’t say that I have ever visited an organization that would argue otherwise. In fact, most HR leaders and recruiters talk a lot about the importance of retaining the very best employees that the organization has invested so much time, money, and development resources in. Unfortunately, talk is where most HR organizations end when it comes to formalizing retention efforts.

Among organizations that force-rank satisfaction with HR deliverables, retention often ranks high in importance but extremely low in execution. In fact, it’s often lower than compensation and benefits, if you can imagine that!

Its perennial position at the bottom of the list qualifies it as the most poorly managed staffing activity. However, its position at the bottom should come as no surprise, since few organizations can identify who’s in charge of it, what is the strategy, and how retention efforts are measured and evaluated.

These three factors are the reason behind most organizations’ poor retention performance:

Reason #1 — Who is in charge of retention?

In many organizations the answer to this very basic question is no one! Rarely does the organization’s design for the HR function include a role(s) charged with designing, developing, and executing retention programs. When such a role does exist, rarely is it positioned at level with enough resources and power to make a difference (i.e., Senior Director or VP).

When it comes to organizational design, nothing says “low importance” more than lack of budget or executive-level leadership at the helm. Some might argue that all are responsible for retention, but merely listing it as one among many responsibilities essentially guarantees a mediocre enterprise-scale effort.

While great managers may assume ownership of retention activities in their group, because there is no clear support organization, their approaches will largely be ad hoc in nature and inconsistently leveraged, opening the door for anyone disgruntled to scream discrimination!

Reason #2 — The real costs of key employee turnover are not reported.

Retention metrics in most organizations begin and end with overall turnover by period. Absent are metrics that measure the business impact of turnover and specific goals to mitigate predicted impact. If your retention function doesn’t measure and report these five key metrics, chances are your efforts are under-managed:

• The cost of turnover. Reporting a percentage turnover rate seldom excites executives, but converting that turnover rate to a dollar impact on business performance can establish the visibility on talent issues needed to transform a good recruiting function into a great one.
• Top performer/key employee turnover. Often called regrettable turnover, this measure prioritizes the jobs and individuals based on the degree to which their leaving hurts the firm.
• Competitor win/loss ratio. This metric is simply the ratio of the number of top performers you have successfully recruited away from a competitor compared to the number of top performers who voluntarily terminated to join a competitor. If a top performer quitting goes directly to a competing firm (vs. retiring), it raises the costs because it hurts the firm while aiding a competitor.
• Preventable turnover. If turnover is occurring for silly or preventable reasons, the percentage of cases where that is true needs to be reported and fixed.
• Percentage of “at risk” employees. The best firms proactively identify high-priority individuals who present a high risk of leaving during the next one or two years. Reporting the percentage of target individuals at risk alerts managers helping them put into place proactive programs attacking retention issues before they get out of hand.

Reason #3 — What is the name of your retention strategy?

The economic impact of losing 10% of the workforce each year in a major corporation amounts to tens of millions of dollars. With that amount of money and disruption involved, retention is clearly a strategic issue. To develop a competitive advantage around a strategic issue requires a strategy that is measurably superior to that of your competitors.

Unfortunately, it’s rare for organizations to develop a formal retention strategy. To make matters worse, most HR executives don’t even know the common retention strategies in use that they could adopt.

Before launching into a comprehensive list of common retention strategies, note that all retention strategies fall into one of three categories and usually contain five common elements.

The Five Common Elements of a Retention Strategy

1. Goals of the strategy. This element identifies the goals and specific results the strategy should produce.
2. Prioritization process. This element specifies the methodology that will be employed to determine which (if any) employees should receive priority treatment.
3. Identifying turnover causes. This element specifies the methodology that will be employed to identify the primary factors that “cause” employees to leave.
4. Retention solutions. This element contains a catalog of proven counter measures or solutions that can be employed by managers to halt or reverse a trend of turnover categorized by common cause.
5. Success measures. This last element covers the process for selecting retention metrics and reporting the results.

The Three Categories of Common Recruiting Strategies

Retention strategies usually fall into one of three categories, but world-class organizations often employ a hybrid approach that uses different strategies for different groups within the organization based on their role in achieving wildly important organizational goals. The three common categories include:

• Laissez-faire approaches. This group contains decentralized retention strategies that rely almost exclusively on operating managers to solve the retention problem.
• Comprehensive approaches. These approaches attempt to retain all employees by improving the treatment, pay, or benefits of all employees. These approaches are also called “peanut butter” strategies because they attempt to spread the improved treatment evenly across all employees.
• Targeted or personalized approaches. This category concentrates retention efforts on high-priority individuals and jobs and then customizes the treatment as much as possible in order to fit the individual needs of the targeted employee.

Next week, part two will continue with the top 15 retention strategies in use today.

Note: If you have corporate experience operating a retention function, I welcome your comments on critical factors that can make it more/less effective. In addition, if you have questions that you would like answered on corporate retention strategies, please post them in the article comments section following this article.

However, if you view recruiting as a marketing and sales job (as I and many strategic recruiting leaders do), knowing what channels brought the prospect to the organization and what messages led to conversion (talented individual > applicant > candidate > hire) are by far the most critical bits of data the function can collect. Without this information, it’s extremely difficult to scientifically budget for sourcing or build strategic sourcing systems capable of impacting organizational performance.

Luckily, however, there is a simple approach that ensures much more accurate and helpful information that doesn’t rely on transaction-minded recruiters documenting the source of hire.

If you rely on weak sources, chances are you’ll get weak results.

Why Source of Hire Data is Almost Always Wrong

There are numerous reasons why corporate efforts to capture accurate source of hire data are almost always doomed to failure. Some of those reasons include:

• Recruiters don’t care — not all recruiters are involved in selecting the sourcing tools they will have access to or even using them in general, so coding applicants is an activity that realizes little apparent direct benefit. Even recruiters who do source or play a role in their organizations’ sourcing strategy tend to be overconfident that they already know which sources work and don’t need data to inform them. Other recruiters are just old-school and will use the same sources over and over no matter what. Unless recruiters are made aware of how identifying source of hire accurately is critical to their success, no one is going to spend a lot of time on capturing it accurately.
• Conflict of interest — while some recruiters may care about scientifically validating which sources produce which results, the truth is that capturing data that makes the recruiting function more efficient is seen by some as identifying ways to make line recruiters less necessary.
• Not asking in a systematic way — most corporate recruiting processes are relatively flexible and give the recruiter a lot of leeway in determining source of hire. It’s rare to find a process that forces recruiters to specifically ask candidates which source most influenced their decision to apply. In other cases, the way the question is posed to candidates is so inconsistent that it dooms the reliability of the answer.
• Not segmenting clouds the data — many organizations that do collect source of hire data do so in such a way that the value of the data becomes so diluted it is virtually useless. For instance, can you segment your source of hire data by manager perception of candidate quality (used to validate their assumptions) or by post-hire performance rating? Knowing how top and bottom performers approach the organization is much more valuable than knowing the most common source, or how the average employee is found. Further, knowing how sourcing effectiveness varies by job family or region is essential.
• Technology forces bad choices — many corporations use applicant tracking systems to capture the source of hire data at the time of application. Although this is a good concept in theory, studies show that asking prior to hire doesn’t always yield the accurate answer, but rather the answer the applicant thinks might result in the best result. When recruiters enter applicants who have come via internal channels or who have been direct sourced, they tend to choose the first source in the drop-down list available. Few systems send validating questions periodically to confirm applicant data downstream, so errors in the front of the process produce bad data at the end of the process.
• Forcing a single source — it is common for active candidates to use any and all sources available to apply to an organization, while passive candidates may first be exposed to an opportunity via one channel, but ultimately apply via another. Few data-gathering approaches identify how the opportunity was first encountered, what channels influenced a decision, and what channel ultimately produced the application.

Perception Isn’t Always Reality

Periodically testing assumptions or perceptions is key to being a good leader. In 2007, we surveyed more than 15,000 hiring transactions, comparing the pre-hire documented source of hire to results from a post-hire candidate experience survey. The results were shocking, even for those of us who tend to be cynical. Only 26% of the time did the post-hire result match the pre-hire entry.

Further, the variances were much higher with certain sources than others. While recruiters and recent hires generally agreed on the percentage that resulted from employee referral and events, they radically disagreed on the percentage that resulted from the corporate career site, job boards, and even third-party recruiting partners. In the 2007 study, only 12% of new hires attributed the corporate career site as their source of introduction, while the pre-hire data attributed the career site with 57% of hires.

Gathering Valid Sourcing Data the Quick, Cheap, and Easy Way

Sales and marketing professionals have for years used a simple solution to accurately identify the “real reason” why people make the decisions they do. They ask after the decision has been made.

After a product has been purchased or a job offer accepted, the prospect has no reason to lie. The answer will not influence the process. Telling a salesperson that you only came to their dealership because you are interested in a car that only they have in inventory is a fact that could impact the dealer’s willingness to negotiate.

Shifting data collection to follow completion of a transaction removes any value of manipulation.

Additional Reasons Why Asking Post-Hire Is a Superior Approach

• As new employees, new hires may respond more thoroughly to questions out of a newfound sense of obligation to help out the new employer.
• Post-hire collection instruments can be built to collect smaller fragments of data over time as part of the onboarding process, allowing for both better collection activities and validation efforts.
• You’re only capturing data from the highest-quality applicants; in other words, those you actually hired.
• The risk-adverse worried about privacy issues might be more than willing to provide this type of information post-hire once they are made aware that the information will be used exclusively to help recruit high-quality teammates for them to work with in the future.

Action Steps to Implement a Post-Hire Source Identification Process

Consider the following tips when designing and implementing a post-hire source capture process:

• Ask during onboarding — while recruiting doesn’t always own onboarding, recruiting should be permitted to use the onboarding process to collect information from new hires. Ideally, a recruiter can ask the questions and probe for more information in person, but surveys work almost as well. Work with the onboarding team to ensure that the source of hire questions are always completed. If recruiting does not own the onboarding process, using secret shoppers to occasionally test that recruiting-prescribed activities are being completed as desired is advised.
• Email a questionnaire — if an onboarding option is not available, send a questionnaire or survey invitation via email to the individual before they start (because they are new, they are likely to spend some time on it).
• Ask when the candidate accepts — because recruiters administer the selection and offer presentation phases of the recruiting lifecycle, a possible alternative is to include an acceptance criteria survey in the actual offer acceptance process. After thanking them for their acceptance, ask for their help in improving the process of identifying future top-quality candidates like them.
• Educate the new hire — the first thing you want to do is educate the new hire about the importance of the process and how capturing the right sources will result in them eventually working along-side some other great hires. Educate them about the different factors that you’re most interested in; company awareness factors (employer branding factors) and how they learned more about the company/opportunity; what specific sources made them aware there was a current job opening; and what factors triggered their decision to actually apply.
• Ask the right questions — after “when you ask” and “who you ask,” the next most critical factor in getting useful data is what you ask. The following are the minimal questions I recommend. You shouldn’t limit respondents to one answer, but rather allow them to choose all that contributed to their decision to apply. Consider providing them with a detailed list of answers to choose from, based on the sources used and past new-hire answers along with a few blanks. When multiple factors are identified, ask them to rank them in descending order of the importance.

Recommended Questions:

1. Which source made you aware of our company as a desirable place to work?
2. What factors about our company or opportunity best got your attention?
3. Which source or factor made you aware that we had a current job opening in your field?
4. What factor or source convinced you to take action and apply for a job?
5. Were there any sources that provided information that discouraged you from considering our firm or applying for a job? If yes, what were those negative factors?
6. What were the key factors that convinced you to accept this job and what aspects or factors of the hiring process had no value or discouraged you?
7. Who else is exceptional at your previous firm that we should consider hiring?

Note: other powerful recruiting questions that you should be asking can be found here.

• Improving the accuracy of your current system — if you choose not to adopt a post-hire approach or if you decide to run tandem data capturing processes pre and post hire, it is still important to improve your current data capture process. Run a validation study that collects post-hire data for a limited time and compare the data received from the traditional approach to that collected. If both processes produce similar results, there’s no reason to change your approach. If you continue letting recruiters enter the data, spot check or use a random validation study to periodically check the accuracy rate of their entries. One recruiter throwing bad data into the system can throw off all of the results. Merely knowing that there is a chance that entries will be checked periodically will drive most recruiters to improve their accuracy. Adding a reward for accuracy will further improve results.

Leveraging Source of Hire Data

Collecting data and doing nothing with it should be a cardinal sin in a corporate setting.

Recruiting leaders need to develop a formal process at least twice a year to review sourcing data and adjust sourcing processes accordingly. Adjustments should include dropping bad sources, modifying recruiter training, shifting budget allocations, and determining the impact of sourcing changes on new-hire retention rates and job performance.

Final Thoughts

There are some in the recruiting profession who look down on sourcers and the sourcing function as something that’s necessary but not mission-critical. In contrast, there is nothing more important than great employer branding and placing the right message in the right communication channel to drive the desired action by the right people.

If you recruit basketball players for an NBA team from elementary schools, you’ll never win a single game, but if in contrast, you recruit exclusively at NBA All-Star games, no matter how bad the rest of your recruiting processes, you will have some great hires. I go by the axiom that “great sourcing is everything.” If you believe so too, you will act immediately to eliminate actions that lead to unreliable sourcing data. Using a post-hire source capturing approach is cheap, quick, and much more accurate than pre-hire source identification. It’s a slam-dunk.

As always, if you have tried this approach and want to make others aware of your success, or have questions/suggestions you would like others to focus on with regards to improving the process, please post them to the comments section following this article.

Having related business units working closely together, rather than operating as independent silos, almost always increases efficiency, reduces errors, and improves overall results.

There’s no better example of what integration can accomplish than the modern-day supply-chain organization, which used to operate as four independent functions (purchasing; inventory management; warehousing; and shipping).

The integration of these functions into a single function with cross-activity analytics and shared goals turned an “overhead function” into a profit center at companies like Wal-Mart, Toyota, and Dell. The customer-service function also demonstrated the value of integration when it created single points of contact for customers using “customer contact centers” capable of addressing a wide range of customer needs from technical support to warranty registration and billing inquiries.

The result of all these innovations was a dramatic increase in customer satisfaction and loyalty/retention. City governments also strive to increase capacity, reduce errors, and save scarce resources when they closely coordinate police, fire, ambulance, and hospital services for handling emergencies.

When executives contemplate what function would benefit the most from breaking down silos and driving integration next, talent acquisition is almost always on their list. Given that numerous organizations are currently engaged in process reengineering efforts and that the budgeting cycle for 2010 is just around the corner, what better time could there be to start integration efforts?

While recruiting continues, requisition loads per recruiter are down and non-essential programs are on hold in many organizations.

Despite the temporary relief from massive requisition loads, executives are crying out for strategic moves and the application of new technologies seen by nearly everyone as relevant to talent acquisition. Growth of social networks and past experience with employee referral programs have led several executives in high-growth Fortune 200 firms to question whether traditional talent acquisition functions even make sense anymore.

One progressive CFO worked with talent acquisition leaders to develop a finance function-specific ERP with aggressive features that produced 80%+ of the function’s hires last year.

The Definition of Integrated Talent Acquisition

Integrated talent acquisition is an organizational design strategy whose primary goal is to break down barriers between like activities and bring economies of scale and quality management to the function.

It emphasizes the coordination of efforts, increased sharing of information, and group communications across several functions to increase speed, quality, and to reduce costs. The coordinated functions often include a mix of corporate functions including HR, finance, operations, business development, and outsourced service providers. In some cases, when the business itself is largely dependent upon the organization’s ability to acquire, develop, motivate, and retain talent, organizations have fully integrated activities across all functional boundaries into a single seamless process with accountability, shared analytics, and shared rewards.

Talent Acquisition Is Mostly Uncoordinated

It’s hard to make a strong argument against integration because working more closely together is so obviously a good thing, but that doesn’t make it common!

All too often, HR leaders are selected who rose to power vertically through a single function, most often training and development or HR operations, but occasionally talent acquisition.

The bias of said leaders creates a highly political environment where survival pretty much depends on “building your own empire” and masking reality to prevent easy replacement.

(I’ve even heard HR referred to as “Balkanized” – which is certainly not a compliment.)

It’s rare to find a talent acquisition function that’s truly integrated. In most cases, the “sub-functions” of talent management operate as semi-autonomous units, while in other more extreme cases the sub-functions operate as completely independent silos. I can’t begin to tell you how often I am met with blank stares when I ask talent acquisition professionals in companies with a formal talent management function to tell me what the function does!

You can quickly tell whether talent acquisition functions are currently integrated by simply looking for the signs of close integration, which include shared metrics, interdependent rewards, cross-departmental rotations, cross-functional teams, and periodic joint meetings.

Problems Caused By Lack of Coordination

Few talent-acquisition functions are closely integrated. Some of the problems caused by this lack of integration include:

• Lost during handoffs. With independent functions all handling a small piece of what it takes to find, court, hire, and onboard a new hire, it is very plausible that candidates may be inadvertently “lost” when they move from one phase of the process into another (for example, when finalists are handed off to a background vendor, some may be lost at either end of the transfer process).
• No way to identify the origin of errors. When a macro level process is broken up into many smaller pieces, each owned by someone else, identifying the source of errors or delays in the overall process is nearly impossible. An example might focus on delays in time to fill. Without an integrated process, shared analytics, and single-point accountability, determining which sub-process (sourcing, assessment, background verification, or offer generation/presentation) produced a delay could be impossible.
• Mixed terminology. As candidates are passed off between sub-functions, they are confused with different terminology and confusing acronyms, not to mention differing levels of service and an array of contacts.
• Lack of understanding or knowledge. Because one function doesn’t trust or even know what goes on within another function, certain activities may be needlessly repeated, increasing recruiting costs and time to hire. Other activities may unknowingly contradict with each other. (For example, references may be called more than once, or two business units may make totally different offers to the same candidate).
• Sabotage. It’s not unusual for some sub-functions to actually despise or even “hate” other talent-management functions. Some individuals can try to proactively hurt or sabotage other functions, while others just try to make them look bad (so that their function looks relatively better).

Talent Acquisition Activities That Should Be Coordinated/Integrated

There are many arguments that can be made for including or excluding talent-acquisition activities from the integration process.

The following list represents those activities that, at a bare minimum, should be coordinated (more formal criteria comes later in this article):

• Employer branding
• Workforce planning and forecasting
• Requisition management
• Experienced recruiting
• College recruiting
• Compensation (offer generation)
• Background verification (reference checking)
• Employment marketing
• Internal movement and job-posting programs
• Relocation
• Onboarding
• Retention and performance management

What Are the Keys to Integration?

If you are going to coordinate related activities, there are certain impactful things to “encourage” the different functions to work more closely together:

1. Joint reporting relationships. When you integrate, all the functions report directly to the same manager. When you coordinate, the reporting lines may be advisory or a dotted-line relationship.
2. Cross-training. Individuals are cross-trained to do multiple jobs. In addition, this training allows them to be redeployed for either short- or long-term assignments in other areas of talent acquisition or HR. Webinars and training sessions from every function in the overall process are available to all.
3. Shared communications. Shared newsletters, memos, and websites allow every function to know what’s happening in other related functions.
4. Cross-functional teams. Requiring inter-related teams to form cross-functional management and problem-solving teams can dramatically improve the workflow. Jointly funded projects can also improve cooperation.
5. Build influence skills. A great deal of HR work is now done by individuals who do not report directly to you … so the ability to influence others becomes critical. As a result, team leaders need to be trained in how to influence individuals who can’t be “forced” to cooperate.
6. Joint meetings. Periodic joint meetings (in-person and virtual) improve mutual understanding and increase the number of discussions about problems created by “other” sub-functions.
7. Inter-departmental rotations. Periodically rotating talent among interdependent departments improves communications, understanding, and cooperation. The rotations can be short-term or permanent.
8. Shared rewards. Performance rewards tied to the success of related functions can dramatically increase cooperation. For example, part of one function’s bonus pool is tied to offer acceptance rates so there is an incentive to provide reasonable offers to the recruiting function.
9. Common metrics. If all related functions in the hiring process are measured on their contribution to “time to fill,” they are all likely to focus on it and to work together with others to improve the overall metric. An integrated error reporting system would ensure that process errors could be assigned to the appropriate owner of that step in the process. Survey a sample of hiring managers and new hires to get their experience of what process parts were integrated and which ones were disjointed.
10. Wiki best-practice sharing. Providing in-house wikis that allow individuals from different functions to help build a shared talent-acquisition knowledge base helps increase ownership in talent acquisition by all. It also leverages the power of the crowd to ensure processes consistent with goals from every perspective. Individuals should be recognized and rewarded for facilitating the sharing of best practices between the different functions.
11. Shared forecasting and planning. When related units share forecasts and plans, they are much more likely to see the same upcoming problems and opportunities.
12. Shared database. Requiring the different sub-functions to use (and add to) the same database can dramatically improve understanding and information flow. Requiring all sub-functions to shift to databased decision-making can also improve quality and consistency.

Indicators That Disparate Functions Should Be Integrated

Integrating every function can actually be counterproductive, in that you can end up with a large, unwieldy bureaucracy. Instead, you should carefully select, using predetermined criteria, which activities should be closely integrated. There are several criteria that, when present, indicate that related sub-functions should be integrated.

Those criteria include:

1. Customer expectations. The first criteria for determining when functions should be integrated is whether the customer or user expects “a continuous process.” For example, when asked, hiring managers universally agreed that the requisition, recruiting, hiring, and onboarding processes should all be integrated. Candidates would also agree that it’s frustrating to be continually “handed off” to a different function throughout the process of becoming an employee. What this means is that whenever the customer expects “a seamless process,” senior managers need to work to provide that integrated process.
2. Significant “handoff” errors. When poorly coordinated functions “handoff” a user to the next step or function in the process, there is a markedly increased chance of errors occurring during the transition. If errors are costly, the inter-functional communication must be nearly perfect (like at the handoff point between the recruiter and the compensation offer specialist, where miscommunication can lead to extremely low offers that have no chance of acceptance). Independent functions with different terminologies and unique acronyms can dramatically increase misunderstandings. Formal integration certainly improves communications and makes handoffs smoother because a single manager oversees the inter-related functions.
3. Significant inter-dependencies. If the output of any particular sub-function is highly dependent on the quality of the inputs from the function that precedes them in the process, they are dependent. For example, sourcers depend heavily on accurate position descriptions that outline all criteria that will be used to screen candidates.
4. The need for simultaneous operations. When related operations are “linear” (meaning that a follow-up step doesn’t begin until the previous step is completed), there is less need for integration. However, when you want to minimize “slack time” and keep your workforce fully occupied, it’s critical that several functions operate simultaneously. For example, when you’re processing the firing of one employee, you can begin sourcing a replacement. Obviously, it’s hard to manage overlapping, simultaneous operations without close coordination.
5. The need for speed. In any case where speed is essential for process success, coordination can certainly help to identify roadblocks and unnecessary delays. Wherever speed and responsiveness are important (as they are in hiring), at the very least, a coordinated effort is necessary.
6. The need for cost efficiencies. Operating numerous independent sub-functions is simply more expensive because each must have its own manager, metrics, and policies. Overall process costs also increase when two functions unknowingly repeat the same task because of poor communication. If you want administrative cost-savings, eliminate duplication and overlap through integration and coordination.
7. Physical separation. If the interdependent functions are physically located away from each other, the distance will cause less-natural interaction. The reduced frequency of interactions among employees means that lower levels of trust and understanding develop among the employees of these separate functions. Obviously, effective coordination and integration can help to prevent any “us vs. them” mentality from developing.
8. Shared technology. Whenever two separate functions share the same database or software, integration ensures more consistent data-entry and database maintenance.

Final Thoughts

The concepts of coordination and integration have a proven track-record. Merely spending a few hours with managers of the supply-chain or customer-service function can get you all the insights and tools that you need. Yet some will fight because of their insecurities or political agendas.

The best way to overcome resistance is to identify the biggest complainers and whiners; keep the ones who put the good of the organization ahead of their own private agendas. After integrating talent management, don’t stop there.

Work with the rest of HR to integrate the three primary areas (buy talent, build talent, and increasing productivity) so that all aspects of talent management and the business act as one.

EE = (1-N) X (R/P)

Where:

EE = Effectiveness of Engagement, expressed as a percentage

Engagement, in this context, means getting ready access to employees’ networks, regardless of the mechanism for doing so. Virtually 100% of employees have social networks and connect to them using different means (networking sites are not the only way to do so), but only a certain proportion of employees may be willing to give an employer access, by either making the contacts available or agreeing to forward job postings to them.

N = The proportion (%) of employee networks that an employer or recruiter has engaged with.
R = The average number of qualified referrals received per month per employee
P = The average number of postings accepted by employees to their networks per month

So if an employer is engaged with 10% (N) of employees’ social networks, and on average each employee accepts 3 (P) postings per month, and produces 2 (R) qualified referrals:

EE = (1-10%) X (2/3) = 60%

If the same results are achieved by engaging with 50% of employee networks, EE = 33%

Engagement is more effective the larger the number of qualified referrals received for the same proportion of employee networks an employer is engaged with. However, this is not a bottomless pit. Research shows that beyond a certain threshold of postings, the volume of qualified referrals starts to flatten out and even reduce.

Reality Meets Hype

All that’s being claimed about the potential of social networks as sourcing tools hinges on being able to increase N. But engagement takes time and effort and there are no shortcuts, which is why many of the claims being made about how social networks can revolutionize recruiting border on the ludicrous.

Take the buzz around Twitter as an example. Originally conceived as an answer to the prayers of narcissists and stalkers — okay, “to support the idea that people should enjoy an ‘always on virtual omnipresence’” — it’s now being touted as a critical tool for recruiters interested in social networking. The conventional wisdom is contradicted by a recent study from Harvard that shows it to be just a broadcast mechanism. Ninety-percent of tweets are generated by 10% of users. Across all Twitter, users the median number of lifetime tweets is one!

Social networking is about communities, where there’s sharing of information, give and take, etc. for the members to stay connected with each other. Twitter is a one-way street — there’s no evidence to show that it supports social networking. A recent interview with Twitter cofounder Biz Stone has him talking about companies using Twitter to sell pies, warm cookies, and respond to customer service requests. There’s no social networking going on here, unless the pie eaters are sitting around the same table.

Some would claim that having a broadcast mechanism is precisely the point. A recruiter can broadcast jobs. That requires candidates to follow them or the employer. In which case, just how is this different than an e-mail alert? Job postings don’t have the same shelf life as warm cookies, and a quick response usually doesn’t alter the outcome.

Increasing N

Research on communities by the Pew Foundation and others shows that engagement requires starting in and participating in conversations. The main reasons people share are:

• To help someone who would benefit (81%)
• To give back, after benefiting from sharing (42%)
• To show enthusiasm (39%)
• To show dissatisfaction (19%)

Interestingly, only 5% of people share to be seen as experts.

However, to state the obvious, starting and participating in a conversation requires having something interesting to say that the community cares about. An excellent example of this is Elevenmoms on Wal-Mart’s website. They have 20 moms blogging here. The blog is focused on a specific demographic with a very clear mandate of the type of community it supports. Try engaging with that one if you’re not a mom. The point being, in case it still isn’t clear, is that increasing N takes a lot of focused effort. As a recruiter involved in social networking, you need to figure out the engagement profile of your audience:

1. Where do they interact (or not interact)?
2. What topics get them excited?
3. What do they share?

Technology is the least useful thing here. Using Twitter is not going to help much, as the usage patterns show. There isn’t a person on the face of the planet who has enough interesting things to say on a regular basis that they deserve to be followed. Any pronouncements people make, including what they have to say about their place of work or jobs, can always be searched for the few nuggets of useful information buried in the mountains of drivel. To increase N focus on a few communities you can engage with and forget toys like Twitter. Face it, unless your last name is Spacey or Kutcher you’re not likely to have much of a following. And even if you get some, they won’t stay: Nielsen Media estimates that 60% of Twitter users stop using it after a month.

Recently, Fifth Third Bank created a simpler, single metric to represent Recruiting Operations: the Recruiting Stock Price. I’m delving in-depth into that metric in two places: 1) the Fall ERE Expo and 2) in the September Journal of Corporate Recruiting Leadership. But I wanted to give this wide audience a preview.

A Single View of the End-to-End Process

For us, our customers specified that the following were important to them:

• Overall satisfaction with the recruiting process
• 90-day retention rates
• Recruiter efficiency measures
• Diverse candidate pools
• Time-to-fill
• Number-of-fills
• Cost-per-hire

These are fairly typical metrics that many companies currently measure. The key to success though is not just measuring these, but understanding how they relate to the customer experience and how they relate to one another.

Knowing the customers’ needs and how important they are is a huge accomplishment, although it’s not the final piece of the puzzle. We must now determine what level of performance the customer expects for each need. Is filling an open requisition in 30 days sufficient, or do they need it in 15 days? Does it vary by type of position?

For each we will need to know the level of acceptable performance — or the spec limit. For example, our customer satisfaction measures are done on a scale of 1.0 to 5.0. The threshold or spec limit for all of these measures is 4.0. Anything below a 4.0 is not meeting customer needs, whereas anything above 4.0 is exceeding customer needs. If we didn’t know the spec limit we would have no way of evaluating the customer’s feedback. If we received a 3.0 on a survey and we didn’t have a defined spec limit then, as recruiting leaders, we might interpret this as acceptable. In our mind a score of a 1.0 or a 2.0 would certainly be below customer expectations but a 3.0 “seems” decent when in fact, anything below 4.0 is not acceptable. Knowing and understanding the spec limits — the minimum acceptable performance — is another critical component of realizing how we are performing and where we need to focus our efforts.

This gets included on a two-part scorecard. The first is a scorecard that is segmented by our recruiting regions. This shows the detailed performance of every metric for each region with the ability to see infinite detail for all measures within each region. The second version is segmented by individual recruiter. Each measure for every recruiter is included, as is a stack-ranking of all recruiters across the company.

Both versions are public knowledge and available to anyone in recruiting. Both versions also include the ability to drill down and see performance in greater detail.

We show the overall health of the recruiting process summed up with a single chart. At first glance, it’s quite simplistic. The green line represents customer needs. Anything greater than zero (above the green line) indicates that the recruiting organization is exceeding customer needs. Anything less than zero shows that customer needs are not being met.

Beginning with the Recruiting Stock Price in March, by drilling-down we can see that both Quality and Delivery measures were above customer needs, while cost did not meet customer needs. Further diving into cost shows that the recruiting organization was under budget; however, the cost per hire was much too high. Additional analysis revealed that cost per hire was above spec because overall hiring volume was down versus the plan. The resulting action was that we were able to use several recruiters on other projects across the bank until hiring volume picked back up two months later.

Prior to the Recruiting Stock Price, response plans were relatively unused in human resources at Fifth Third Bank. Knowing what actions we would take should certain situations arise was something we practiced very little. For each of our key process drivers — our customer needs — we have thresholds that are even stricter than the customer spec limits. Here, we want to take action and make changes prior to missing a customer spec limit, so acting early and often is critical.

For example, our customer satisfaction measures are on a scale of 1.0 to 5.0 with a customer spec limit of 4.0. In our response plan, we set a threshold of 4.1. For any individual recruiting region, we do further data analysis and provide coaching, make process changes, etc. every time a satisfaction measure drops to 4.1 or lower. By taking action before we drop below 4.0, we increase the likelihood that we can catch problem areas and fix them before it impacts the customer’s ability to manage their business.

Having accurate measures is a huge step toward improving the overall performance of our recruiting process. However, it doesn’t matter how good the measures are if we don’t do anything with them. Fancy graphics and colorful charts by themselves do very little. We must take these measurements and take action.

After taking a whirlwind tour through some of the things OrcaEyes can do, I have no hesitancy in admitting that “I’m not smarter than those 4th graders.”

Of course the significance of those reports was lost on the kids. Hilbert just wanted to make sure the navigation was easy to use and the red-yellow-green alert system easy to understand. And they are.

But it’s those reports that make the $200k a 20,000-employee firm can spend on OrcaEyes seem like a bargain.

Before I get into how, here’s a bit about the what, as in just what is OrcaEyes? Hilbert describes it as HR System Management Software. You can think of it as ERP for HR. Either way, the system provides an overarching view of how human capital impacts the enterprise. It does this by connecting to a company’s existing business systems — hooking into finance, sales, operations, supply chain, or an ERP (if there is one), the HRIS, HRMS, and whatever others may be there.

OrcaEyes crunches the data it extracts from these systems and combines it — for certain uses, like recruiting and salary setting — with data Hilbert obtains from such external sources as the U.S. Bureau of Labor Statistics, Census, and private data providers. Thus, in an instant, literally, an HR recruiter and a division VP can tell the cost in lost business for staffing shortages in the North Sea unit of Exult Energy’s refining and petrochemical division.

I thought that was nice information to have, but no special feat since any CFO can do revenue averages per year-end headcount. But as every CFO and line manager knows, being down one position doesn’t translate into a direct or immediate loss of revenue. Depending on the size of the unit, other workers will pick up the load.

Here’s where the magic of OrcaEyes comes in. The system is too smart to simply say you’re in danger of losing $1 million in revenue just because that’s the average. Nope. It knows, because you’ve told it during the setup, that losing one worker for a short period will have a minimal impact. But as the number of vacancies increases and the vacancy time lengthens, the bigger the effect and more bars on the OrcaEyes report turn red.

This is also a modeling program, not just a “what is” program. So OrcaEyes knows that besides the current vacancy, the attrition rate is such that there’s a high probability of losing more employees in the unit soon. And retirements will add a few more. Now OrcaEyes can tell you what the impact of all those things occurring — or some of them — will be.

That’s but one example of what this data-based analytics program can do. Even though OrcaEyes has only just recently come out of the incubator, there are plenty of other examples of its value from the 10 Fortune list companies that have been testing it now for several months.

I asked Hilbert for a sampler and here’s what he sent:

• A global manufacturing company discovered that when overtime for operators, maintenance, and skill trade workers exceeds 12.5 hours for three weeks, accidents increase by 105 percent. When the company added staffing to reduce the OT, the savings from fewer accidents came to $370 million in just two quarters;
• A retail company discovered there is a correlation between store clerk overtime and theft and customer complaints. When OT begins to exceed an average of 11.8 hours for three consecutive  weeks, thefts increased by 41 percent and customer service complaints increased 52 percent. The retailer loses one customer for every 2.6 complaints.
• That a manager with poor ratings by their staff affects bottom line performance is not an “Aha” moment. But just how much? Hilbert tell us that a retailer found store sales revenue dropped by 1.2- 1.8 percent for each 10 points below a 75 percent manager approval rating.

OrcaEyes, says Hilbert, provides “just about every metric you can imagine.” And many you might not have thought of.  Another example: Our mythical oil company Exult Energy needs chemical engineers. Where in the U.S. are prospects the best for finding engineers who are most likely to come to work for Exult? Would you believe Bay City, Michigan?

OrcaEyes was born out of Hilbert’s years with the much lauded Valero Energy. He was Global Planning and Talent Lead for the fast-growing oil company, landing the job with almost no direct HR experience, but a broad business knowledge from having CEO’d tech firms. During his four years at Valero Hilbert won award after award for his programs, including five from ERE alone.

It was during those years he came to appreciate the integration of HR and business purpose and metrics. In the process, he turned Valero into a poster child for data-driven recruitment. Dr. John Sullivan, a recruiting thought leader, industry consultant, and proponent of scientific recruiting, wrote of Hilbert and Valero:

“its primary differentiator is that the company takes a business-like, almost scientific, approach to recruiting. Most recruiting departments treat recruiting as an art. Valero, in direct contrast, utilizes and directly borrows from other successful business systems like supply chain, IT, Six Sigma, and process reengineering to craft a function whose performance can be measured (and improved) down to the minutest degree.”

Some two years in the making and months in the testing, OrcaEyes is Hilbert’s effort to bring the same principles and discipline he used to transform Valero’s recruiting to the rest of the world.

Because of its price tag and the system’s hunger for business data, OrcaEyes is clearly not a tool every company can afford or can use. But if you get a chance to do an OrcaEyes demo, do it just for the chance to see what recruiting will be like in the future.

And to ask Hilbert how he came up with the name of the company. (Hint: He didn’t. A marketing acquaintance did. And it has something to do with the fact that orcas — killer whales, as they are often known — don’t ever completely sleep and have sonar vision, just like the program.  And it’s a name people don’t forget.)

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.

(As HR leaders change, not all opt to retain programs installed by their predecessors no matter how successful the programs may have been. As a result, some of the programs mentioned here may no longer be in operation.)

• Proactive intraplacement. This best practice increases the speed and accuracy of internal movement by assigning a team of recruiters to recruit for key roles using only the existing employee population as their talent pool. The key to this concepts success is that it identifies individuals who might not move on their own, or might not be visible to traditional succession planning processes for any number of reasons, including talent hoarding by managers. The goal of this type of program is to move top talent from areas of lower return to areas of higher return, ultimately improving the performance of the entire enterprise. Firms that have used this approach include Booz Allen and Microsoft.
• Redeployment. The business needs of organizations change on a regular basis. As a result, have a permanent process that works to redeploy valuable talent from areas of the business being discontinued to other ongoing areas throughout the enterprise. The concept of rapid redeployment has been honed to near perfection by the U.S. Army and Marine Corps. Other firms like Intel have developed redeployment processes that allow not only “surplus” talent to be effectively redeployed, but that also allow great hires who prove unproductive in the initial roles to find a more suitable role internally.
• Movement related to business cycle. Most large organizations have business units in various life cycle stages from seed to exit. In the first few years of this century, Microsoft used a model partly attributed to the work of Clayton Christensen that helped to ensure that talent most appropriate for a particular stage of business life didn’t get stuck in a unit that had progressed beyond that stage. In other words, it didn’t keep developers capable of bringing next-generation products to market stuck in irrelevant business units. This type of rotation program helps ensure that talented individuals never need to search for work more relevant to their skills and desires outside the organization by making sure they are deployed to business units and projects with work in the right life cycle stage.
• Competition for employees. While every firm competes externally for talent, a few have brought the same level of competition inside, allowing managers to openly recruit from within the firm or to have a bid or “draft” process. National Oilwell Varco developed such a process for college hires, where after a one-year initial placement, the hires’ next placement was determined by an internal draft for talent.
• Right job placement. Firms like Motorola, Valero, and Microsoft have in the past developed an internal movement process that I call “right job” movement. The premise is simple…you can’t have a successful rotation into a job if the employee and manager are not a proper fit. An “A-level” top performer can’t be expected to work well with a “C-level” manager. Other “right job” placement factors include whether the employee and the job “match” with regards to innovation, available motivators, the strength of coworkers, and the track record of the team.
• Involve your recruiters in retention. It’s quite common for firms to hire a great individual but to place them in the wrong job. The best firms extend onboarding for a period of up to six months in order to ensure that the initial placement of the new-hire is maximizing their output. Other firms like Intuit, Valero, and Memorial Care Health have developed programs that keep the initial recruiter tied to the new-hire for up to six months in order to ensure that top performers don’t leave the firm as a result of a bad initial job placement. Placements that are not working out can be remedied a majority of the time by rotating the individual into a similar role with a different manager.
• Interest and skills inventories. Numerous firms use “skills” inventories for use in identifying individuals who could fill a vacant slot with the right skill set. However, the best firms expand their inventory to include employee interests in order to be able to identify individuals for rotations who are interested, but not necessarily highly skilled in a job or project where training or development can increase the skill level in a relatively short period of time. IT Consulting giant EDS has leveraged this approach and found that adding this dimension helped entice employees to keep their skill profiles more current.
• Return ticket for internal transfers that don’t work out. One of the primary reasons individuals who could deliver more to the organization opt out of development rotations that follow a non-standard path is fear of failure. They fear that, should the job change, be too dramatic, or too much of a stretch, they may lose seniority, friendships, and “ding” their career with the organization. To counter these issues, Becton Dickinson created a program called “take a risk” that enabled top performers to opt into a rotation that would develop them in a new function (i.e., marketing to finance or operations to IT). Top performers making the switch were provided a six-month period in which to master the new role. If they or their manager felt that the change wasn’t working out, they could rotate back into their previous role with no negative impact on their career.

Benchmark Firms to Learn From

Whether you are developing or improving your internal movement program, it’s important to study the successes and failures of other firms. The following is a list of firms that have at one time been recognized publicly for excellence in internal movement or job rotation programs:

• GE
• Becton Dickinson
• Booz Allen
• Microsoft
• Google
• HP
• Eli Lilly
• General Mills
• IBM
• Intel
• National Oilwell Varco
• U.S. military (rapid deployment forces)
• EDS
• Aviall
• U.S. Census Bureau
• Henkel
• Air Products
• RJR Nabisco
• Motorola
• American Greetings Corporation
• Mobile Valero Energy
• Intuit

Metrics for Assessing Internal Movement Activities

All effective programs rely heavily on metrics in order to continually improve. Rather than overdoing metrics, it’s best to use a small number of powerful metrics. The key is to tie your metrics to program goals. You need to have a success measure for each major goal that you set, so before you begin selecting metrics, go back and make a list your program’s goals.

Some metrics to consider include:

• Goal: improving employee performance. The percentage increase in the actual performance, forced-ranking placement, or performance-appraisal ratings of those who complete rotations versus those who don’t.
• Goal: to increase promotion speed. The percentage increase in promotion rates of those who complete rotations versus those who don’t (alternative: the percentage of promoted employees who had a rotation during the last three years).
• Goal: high participation rates. The average percentage of employees, managers, and departments that participate in the rotation program each year.
• Goal: to have satisfied rotatees. The average percentage who rate the experience as “very effective” or above when asked, “How effective was your rotation in improving knowledge, skills, contacts, and performance?”
• Goal: to have satisfied managers. The average percentage of home and sponsoring managers who rate their experience as “very satisfying” or above when asked in a survey.
• Goal: to retain rotatees. The average percentage of rotatees who remain with the firm for at least three years following a rotation compared to the retention rate of non-participants.
• Goal: to increase diversity participation. The average percentage of diverse rotatees compared to the percent who are diverse in the entire employee population.

Other Measures Related to Quality

• Quality of the participants. The average quality of rotation participants as judged by their average performance appraisal scores, bonus percentages, position levels, or 360° appraisal scores.
• Correlation with business success. The statistical correlation between the percentage of employees in a business unit of that participate in the program and the percentage of the business units goals that were successfully met.
• Succession plan participants. The number (or percentage) of people who are on the corporate succession plan who participated in a job or project rotation.
• Leadership development plan participants. The number (or percentage) of people who are part of the corporate leadership development plan who participated in a job or project rotation.
• Superior results. The percentage of program participants who rate on-the-job rotations as superior to other leadership and training options.
• Ratio of internal hires. The percentage of all open positions filled internally (versus external hiring) as an indication of the preparation levels provided by all development programs.
• Cross-business rotations. The percentage of all rotations and project assignments that occurred between different business units or geographic regions.

Other Measures Related to Volume

• Number of hours. The total number of hours that program participants spent on their projects and in their rotations during this program year.
• Number of stops. The total number of “stops” or job placements that program participants passed through during the program year.

Other Measures Related to Process Effectiveness

• Failure rate. The percentage of participants who dropped out or are removed from the program.
• Time to fill. The average number of days it takes to fill an internal transfer, job rotation, or project assignment.
• Rotation “stop” quality. The average number of rotation stops that individuals must complete before they received a promotion.
• Postponed placements. The percentage of individuals who apply for a rotation that are not placed during the program year.
• “Non-obvious” choices. The percentage of all individuals selected for a job, rotation, or assignment who were “non-obvious” choices (not a direct report on the organizational chart of the supervising manager).
• Remote projects. The percentage of rotations, jobs, and assignments that can be completed remotely.
• Complaints. The percentage of participants who filed a complaint about the process.

Other Measures Related to Process Cost

• Cost per participant. The total program budget divided by the number of disciplines this year.
• Program ROI. The dollar value of the program’s benefits and results compared to the total program costs.

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.

The different program variations presented here are categorized into four groups including 1) “whole job” rotations; 2) location-based rotations; 3) time-based rotations; and 4) less-common rotations.

“Whole Job” Rotations

This category includes rotations where the individuals in the rotation literally change their job title (these are often semi-permanent placements):

• Skill-based job rotations. A planned process where regular employees are moved through jobs in the same job family and business unit in order to build skills, knowledge, and capabilities of individuals.
• Leadership-development based job rotations. A planned process where high-potential individuals are rotated through jobs in different functions, business units, or regions in order to build their decision-making and leadership skills. The process is also used as part of succession planning to assess the capabilities of developing leaders.
• Redeployment. A formal process for internally moving entire teams or large numbers of employees from areas of low return to areas of higher return.
• Job-posting systems. A formal, organization-wide process designed to objectively select internal employees for transfers or promotions to vacant jobs. Sometimes also called “job bid” processes.
• Team leader rotations. A planned process for rotating different employees in a team for a fixed duration into the leader or manager role. The goals can include leadership development, understanding the complexities of management, or simply “sharing the load” in situations where the management role is not a desirable career move.
• Two in a box. An assessment and development process where a potential leader is rotated into an existing management job where they jointly share responsibilities on a medium-term basis with the current position holder.
• “Gear down” rotations. Where an employee decides to rotate down to a lower-level job in order to have more free time or less stress.

Location-Based Rotations

This category of job rotations focuses on situations where the employee physically moves to a new location:

• Strategic partner job rotation. Rotations where employees are assigned to work on a medium-term basis at one of the firm’s strategic partners, joint ventures, newly acquired organization, or major customers in order to benchmark, learn, develop new products, and build relationships. Rotating individuals through university teaching and research assignments are another variation under this model.
• Geographic job rotations. Rotations between different geographic regions or countries in order to build relationships and to develop understanding between diverse regions.
• Virtual rotations. Rotations where the individual is moved into a virtual job where they work remotely. These rotations can be for motivation/retention purposes or to develop remote communications and management skills.

Time-Based Rotations

This category covers the types of rotations that have a short- or medium-term duration:

• Project rotations. A series of temporary assignments or projects where an individual maintains their current job while taking on additional stretch assignments to build their capabilities. The rotation can be full- or part-time, and it generally lasts until the project is completed. Both stretch goals and stretch assignments generally fall under this category. In matrix or project-based organizations, these rotations are continuous.
• Stretch assignments. Short-term development assignments that are part of a long-term development plan; stretch means they significantly increase current skills, add new skills, or increase the goals/ results by between 10% and 25%.
• Part-time job rotations. Also known as partial job rotations, under this plan individuals work for a fixed period during the week (i.e., half a day) in another position while maintaining their current job title, location, and pay level.
• Cross-functional rotations. Planned short- to medium-term rotations where employees move between related or interdependent functions. A typical variation is an “overhead to line” rotation where an individual moves from non-mission-critical or overhead functions like HR, finance, and supply chain into a critical business unit (i.e., product development). Similar rotations can also occur between research and production. Although less common, the rotations can go in reverse order.
• “Understanding the customer” rotations. Planned short-term rotations that occur between any function into sales and/or customer-service roles in order to increase an employee’s understanding of the customer and their needs.
• Multi-stop job rotations. As part of summer, six month, or one-year tours, where multiple short-term “stops” in different functions are planned in advance. This process is commonly used for interns and new college hires in order to increase their exposure, excitement, and skill levels. A multi-stop rotation requires a plan that specifies what will be learned at each stop and how the “handoff” between stops will be handled.
• Variable duration. Under most job-rotation programs, the duration of the rotation is predetermined. Under this process, the length of the “stop” is determined based on the performance and the interest of the rotating employee as well as the needs of the manager.
• Overload assignments. Short-term placements for short-term business “overload” needs. These overloads may be seasonal or “sudden” problems that require a quick infusion of talent. Often they involve call center, sales, or customer service overloads.
• Intern and college hire rotations. Formal rotation programs with defined periods designed specifically for college interns and recent college grads.

Less-Common Rotations

• Temp to permanent. Rotations where a temporary or contract employee is purposely placed in a position for a fixed period in order to assess their capabilities. After completion of the assignment, they are either released or made into a regular employee.
• “Fill in” rotation. Temporarily rotating an individual into a job to “fill in” as a result of a temporary position vacancy due to vacation, illness, or other short-term need.
• Fatigue-related job rotations. Job rotations that occur during a single day in order to relieve the physical fatigue or stress that can occur in life-threatening or dangerous jobs. Employees rotate to related jobs throughout the day in order to reduce errors and accidents.
• Fraud rotation. Requiring an individual in a position where fraud or theft is a possibility to rotate out for a short period. The individual is replaced with someone who has the capability of identifying irregularities. Most commonly used in accounting, investments, or finance.
• Up-out-and-up rotations. An assessment and development approach where individuals are actively encouraged at a certain position to actually leave the firm as part of a planned assessment and development process. After succeeding at another firm in the industry, they are invited back to the firm.
• Informal job rotations. Rather than being formally planned as a corporate initiative, these are rotations developed informally on an ad-hoc basis by individual managers.
• Job enrichment. Technically not an actual job rotation but instead a formal process for expanding job functions to make a job more stimulating.

As you can see, there is a wide array of rotations to consider. Before settling on which one is the most appropriate for which employee, determine your goals and pick the variation that best fits the needs of the individual and what you are trying to accomplish.

Common Problems Associated With Internal Movement Programs

When you are assessing the effectiveness of existing internal movement processes, periodically conduct an audit in order to identify typical system-wide problems.

Survey managers and employees, benchmark other firms, and use existing metrics to identify current problems:

• Performance improvement. Heavy users of the program do not improve their performance or have higher bonus, promotion, or retention rates when their performance is compared to non-participants. Departments that are heavy users of the program do not improve their business performance beyond the rates achieved by departments that do not heavily use rotations.
• Participation rates. Individual employees frequently abandon the process after one failure due to its lack of transparency or the political/subjective nature of the process. Less than 30% of your workforce ever formally participates in it. A significant percentage of managers, when given the opportunity, avoid or circumvent the process.
• Speed. The time-to-fill for internal movements and placements exceeds 50% of the average time-to-fill days for external hires because of bureaucratic processes and a lack of interest among hiring managers.
• Satisfaction. Manager and employee user and non-user satisfaction rates are not periodically assessed.
• Favoritism. There is the perception among employees that the process is subjective and that management favorites get the choice rotations and projects.
• Time away from their job. The program does not monitor the negative impact that the rotation or internal movement has on the performance of the employee’s base or original job.

Problems Related To Eligibility and Who Is Targeted

• “Non-obvious” choices. The process does not proactively seek out “non-obvious” choices (meaning they were not a direct report on the organizational chart to the supervising manager).
• Eligibility. Eligibility for movement is limited to permanent full-time employees and excludes part-timers, contractors, temps, and retirees. Poor-performing employees and those on performance-management plans are still allowed to participate. Managers that violate the program’s rules or “hoard” talent are not restricted from future participation.
• Selection criteria. The selection of which individual should be “moved” is based primarily on non-performance criteria including seniority, current job title, or subjective management preferences. Managers get top priority for selecting candidates not on business need and how they handled previous placements, but instead based on their title, business size, or political pull.
• Fit criterion. The individual and the hiring manager make their movement decisions based primarily on their own individual self-interests, rather than overall corporate needs.

Problems Related to Program Policies

• Voluntary. The process depends on the individual volunteering for movement.
• Start-up trigger. The process does not begin until a full-time permanent job opening occurs.
• Education. The process does not provide employees or managers with information on past growth and critical areas.
• Approvals. There are policies that allow managers, unions, or administrators to block or impede internal movements between business units.
• Decisions. Placement and process decisions are based on emotion or tradition rather than facts, statistics, and metrics.
• Employee involvement. Employees cannot contribute to the process by offering internal referrals or nominations of employees who should be rotated.

Internal Program Administration

• Technology. The system is not 100% paperless and managers do not have laptop or mobile phone access.
• Global. In large organizations, the process does not move people between countries.
• Rewards. Managers and employees are not measured, recognized, or rewarded for successful participation in the process.
• Policies restricting movement. There are policies that limit the timing or the number of movements that individual can make. Managers are prohibited from proactively seeking out internal talent.
• Program manager. The internal movement processes do not have an overall manager or coordinator that is accountable for program results.
• Budget. The budget is not independent, nor does it change when quality and volume goals are increased and program performance improves.
• Appeal process. There is no formal process for identifying why you are not selected for a job rotation or an appeal process if you feel that you were unjustly treated.
• Continuous improvement. The program does not utilize metrics to identify potential problems and opportunities in order to continually improve participation rates and overall workforce productivity.

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.

First of all, many candidates are reluctant to shift jobs — or even take a job when they are unemployed — unless that organization and position fit very closely with their career objectives and values. It is not about money or security. It’s about alignment with their own inner self.

Second, they are carefully looking at the interaction with the recruiter as a reflection of the organization. How I am treated and served by the recruiter is likely to be how I am treated as an employee.

And third, they are looking for work that is engaging and meaningful — not a job, but a passion.

This may sound silly or even unrealistic given the economy, but it is a real phenomena. I am not sure what is driving it. Perhaps it is the fact that Generation Y values of passion, meaningfulness, and sustainability are becoming more mainstream. Many are looking for much more than a job.

I believe this is driving a change in the skills recruiters need. A modern recruiter needs less in the way of the traditional technical skills in the mechanics of recruiting, and much more in the way of “soft” skills.

Here are five skills for recruiters. These are ones I have used before, but updated for new times. I have also inserted a simple diagram that you are free to use, modify, and add to. I am open to your opinions about what should be on this chart and your thoughts on whether this is the right set of values and skills or not.

Skill #1: Recruiters have personal values and talk about them
Do you do what you say? Do you answer their questions honestly? Are you upfront about the issues and problems they may face? Do you connect them to people who are objective about the company and the position?

Knowing yourself and what your values are about work, people, and relationships is key to being a successful recruiter. You must be authentic and convey your sincerity to candidates who will test you and probe you to see if they are really your values. Candidates can sense if your values and the organization’s are not aligned, and that disconnect will make the best candidates much harder to close.

Skill #2: Recruiters know and can explain the talent market
The competent recruiter is able to tell the hiring manager what the talent market looks like, what the supply of talent for a particular job is likely to be in her area, and how difficult it will be to find and close on candidates. This knowledge has to be data-driven and can only be collected by vast reading, lots of discussion, the intelligent use of surveys, and other data tools. They are finding web-based tools that help them mine and understand candidate trends, likes and dislikes, and they can tell you which candidates are most likely to be good employees.

Gathering and interpreting data, making correlations between competencies and success, and measuring the impact of different marketing messages is already a skill top-notch recruiters need to have.

They also know the direction the market is moving for their client or organization. Are competitors laying people off? Is the market growing, shrinking, flat? This kind of information, combined with the ability to build relationships, can make an ineffective recruiting function very powerful.

Skill #3: Recruiters build relationships
The ability to find great people and build relationships with them should be the core competence of every recruiter. This is what all great recruiters do. Recruiters within organizations need to get out of the organization and get to know people at all levels and professions who might be useful to their firm. They need to use technology to help create the initial relationship, and then they need to leverage that by using social media including Twitter, blogs, websites, and anything else that will create authentic interaction with a potential candidate.

More than half of every recruiter’s time should be used to network, build relationships, communicate, and get involved with candidates. Recruiters who can provide some career advice, listen to candidates’ concerns, and provide advice on which positions might be the best fit will be recruiters who grow and thrive in this and any economy.

Skill #4: Recruiters prove their value
Competent recruiters use metrics to put together business arguments for programs they initiate or for the systems they buy. They use facts, numbers, and results to get what they want. They have a core set of metrics that show how they add value, raise quality, improve profits, or save money.

If a CFO asks for the ROI of recruiting for a position, a really modern recruiter will have data and can help a hiring manager make a business case for that position.

Skills #5: Recruiters sell and close candidates
In the end, a recruiter is as good as the number of candidates that she can close. To do this, she needs to be good at selling candidates and hiring managers. She needs to know how to overcome objections and turn negatives into positives. She needs to offer solutions, work out compromises, and in the end make the hire happen in a way that is consistent with her values and those of the organization.

Being a modern recruiter is, in some ways, easy. It’s about treating candidates as you would like to be treated. It’s about knowing who you are and what you believe so that you can quickly know when the direction you are headed is wrong.

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?

No, it was something much more serious. I was talking with a vendor … without a representative from the Procurement department present.

This will doubtless be remembered as a bumpy year for those of us in this profession. While finding talent in a market that has been turned upside-down represents a major challenge, it’s the secondary effects of this economic downturn that will truly test those of us in Talent Acquisition. I recently wrote about the likely increase in “executive referrals” resulting from current economic conditions. Other secondary effects could include anything from a reduced talent pool in the coming years (as families struggle to justify the return-on-investment of a college education), to an almost certain delay in the migration of the Baby Boomers to the Happy Hunting Ground of retirement.

While these effects are years away, there is another implication that you’ve probably already encountered — the increased influence of Procurement and Purchasing departments in the Recruiting function. And with so much renewed emphasis on spending, I predict you’ll see Procurement play an even greater role in the coming months.

No matter which side of the recruiting aisle you sit on (corporate or vendor), you’ve doubtless encountered Procurement departments by now. They’re the group that coordinates RFPs, negotiates prices, and even gets involved in managing vendor “performance.” It’s becoming more and more difficult to spend a single dollar on a product or service without their involvement nowadays. How are people reacting? Some enjoy leaving the “negotiating” to the experts; others feel like involving strangers interferes with trust-based vendor relations that have in many cases been built over a period of years. Regardless of your opinion, however, this model is here to stay.

How did this happen? When companies decided to get “leaner” back in the 1980s, they started buying raw materials more strategically. As a result, they began seeing huge improvements in cost-of-goods-sold as trained professionals scanned the markets for price, managed supply-chains of goods, leveraged the trade-offs between volume and price, and generally took a long-term approach to raw materials purchase. With subsequent enhancements in technology, it became even easier for companies to begin purchasing from a global market.

Another interesting change then began to take place: in addition to purchasing bulk commodities like iron ore and precious metals, Procurement departments began getting involved with large national contracts to purchase office supplies, technology, rental car contracts, and even started establishing preferred airlines for their organizations.

This was nearly always great for the company. It increased efficiency, and drove costs down. The challenge that we’ve all started encountering is that such a cold and impersonal approach can have its limits, particularly when it comes to people. Let me first state that I am completely in favor of running businesses as efficiently as possible. I support the work Procurement does, and sleep better knowing companies are paying the true market price for steel and corn oil. However, a process that was developed to purchase bulk quantities of material, ship it in container vessels, and store it for months until needed has some rather interesting implications for the acquisition of top talent.

Take my secret meeting, for example. I was talking with a trusted vendor with whom I’d worked for years. Things were pretty simple in the past — a company would have an open position, I’d ask my vendor-partner to work on the job, and they’d fill it.

Now, my fairly-straightforward relationship suddenly becomes very complicated. For example, I must first get my trusted vendor on the Approved Vendor list. In the most common scenario, the Master Service Provider determines the bill rate or the mark-up that can be charged (which usually must also cover a 2%-3% fee for them). My trusted vendor might not be able or willing to work at those rates. As such, the “approved vendor list” I ultimately end up with might consist of untried and/or undifferentiated firms who were chosen based on price alone.

The second hurdle is how to efficiently communicate with the third-party vendors who are actually recruiting for my position. Third-party vendors are often prohibited from speaking directly to me by contract; instead I must enter my requirements in the Master Vendor’s system. Questions regarding my position are asked and answered in writing. Third-party vendor phone calls are made to vendor managers, who are then supposed to capture feedback and communicate it back.

My research leads me to conclude these processes often seem cumbersome and arbitrary to vendors. Measures that are important from a traditional procurement perspective (quick turnaround times, low fees, and long contract periods) are not necessarily the same measures that create an environment for finding top niche talent, but vendors are measured only on these key metrics.

Clever vendors know where to pay their tribute. I’ve had my Procurement department inform me that they’d had extensive meetings with a job board, and were about to sign a major contract. Not only did I know nothing of the conversations, but I had rejected this particular tool months before. So why was procurement so anxious to sign? Because they’d negotiated a great rate, of course.

Procurement as a corporate function is here to stay. However, there are a few things you can do to make your relationship thrive.

Figure out who they are: Find out who comprises your Procurement department. Schedule time to meet with key leaders, and engage them before the next RFP. You have more in common with this department than anyone else; after all, you’re responsible for procuring a raw material every bit as important as printer paper. You’re responsible for procuring Talent!

Establish yourself as the decision-maker: Like any service function, Procurement wants to help you. They really do. As we’ve already seen, though, the prime measure of success is cost. And in 10 years of recruiting, I’ve never met a single hiring manager who told me that cost was the most important thing to them, and you probably haven’t either. Ultimately, you own the relationships you have with your vendors. Make sure Procurement understands that you are the decision-maker.

Find a way to work together: With the current emphasis on cost, you’re likely to see Procurement involved in nearly anything that involves paying an invoice. This year they may oversee your temporary labor contract, but next year look for them to become involved with retained searches and career fair giveaways. The point is that they have a job to do, and you do too. Invest in whatever is necessary to ensure you’re sharing information and working together.

Advocate for your customers: While learning to work together will necessarily involve compromise, never forget who you are ultimately there to represent: the job-seeker. Contracts that may seem advantageous to your company because they’ve resulted in huge rate reductions may end up costing you in the long run as vendors choose to simply not work with you, or not to send along their best candidates. I spoke with several vendors as I researched this article who said that they have been in situations where they were “asked” to accept maximum bill rates that were a third less than the amount of some candidates’ actual pay rate! While this looks great on a “vendor scorecard,” it means those companies never even get to see top candidates.

Share successes publicly: Chances are, you can learn a lot from your Procurement colleagues. And they can learn from you. Once you have that first shared victory together, be sure to publicize it. Executives love hearing how the company attracted top talent, but they love hearing how money was saved even more! Setting a public example of how to engage Procurement effectively is a great way to build your own organization’s brand as well.

Some people say good times are just around the corner; others say more bad times are ahead. In either case, companies are sure to continue using Procurement professionals to keep costs down. Learn what these colleagues do, and learn to work with them. If you do, it will mean getting the right talent into your organization at the right price. And that beats secret meetings any day of the week!

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.

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.

Questions for Candidates (Aimed at Improving Offer Acceptance)

• What criteria will you use to evaluate and rank offers you receive? When you’re targeting currently employed individuals or talent likely to receive multiple offers (I would argue that is the only talent you should be targeting), it’s important to focus your recruiting process not only on assessing the candidates skills, but also on determining the factors that will weigh heavily in their decision-making when the process is complete. By identifying the decision criteria early on, you can improve how you position the opportunity you are recruiting for by maximizing the talking points around factors you can realistically deliver and readjust expectations around those you cannot. Too many organizations push through the process only to make a generic offer according to a template that doesn’t address the candidate’s expectations.
• What three things would make this job superior to your current one? If you are truly targeting top talent, chances are a good percentage of the candidates who make it to the offer stage in your process are going to get a counteroffer from their current employer. Failing to identify what factors would make the new opportunity better than their existing opportunity is setting the stage to focus solely on money should an offer battle ensue.
• Who will you consult prior to making a final decision about an offer? Research shows that individuals generally don’t make important life decisions without consulting close friends, colleagues, or relatives. Not knowing who will have your candidate’s ear makes it nearly impossible to predict what issues the candidate’s advisors may bring up. This makes it even more difficult to provide relevant information throughout the process that arms the candidate with positive information to remedy any possible negative issues that could arise.

Questions to Ask During Onboarding and Orientation (Aimed at Improving the Recruiting Process)

• Can you list the most compelling factors that led you to accept our offer? Once the deal has been signed, candidates, now new hires, have less motivation to couch their responses to questions in an effort to improve their chances of getting what they want, in essence, they are more honest. One of the best questions you can ask during this phase of the relationship deals with identifying what about the company, the job, or the benefits was so compelling that the candidate accepted the offer. Identifying what is and is not compelling (the next question) can help you refocus how to communicate about opportunities moving forward. You can talk up the good stuff, while minimizing focus on the not so good stuff.
• Can you list your concerns and any reasons that almost led you to say no? Again, this reversal of the previous question helps you identify what elements need to be either addressed or dropped altogether from your sales approach.
• What part of the process worked the best? What part was frustrating? If you want to improve the candidate experience, identify the aspects of the recruiting process that both engaged and frustrated candidates. Use this information along with statistics about candidates dropping out of the process voluntarily to determine what steps in your process need to be refined in order to convert more talent.
• What caused you to apply for the position? If you want to identify how best to allocate your sourcing spend, you need robust metrics to tell you what messages are driving people to apply and where they came into contact with the message (i.e., the source of hire and branding points that led to interest). Many organizations attempt to collect this information via their recruiters, but the data is often corrupted by lack of adherence to source coding policies.
• What other firms did you seriously consider or receive an offer from? This question is important for two reasons. First, it helps you identify your talent competitors, which often includes organizations that do not compete directly with you on the product or service front. Second, it helps you identify offer elements from other organizations that talent of interest to you find compelling.
• Who else should we recruit from your previous employer? Truly great talent loves working alongside other great talent and generally leverages some influence over colleagues they respect and value at their previous employer. Asking this question not only helps you target future recruiting efforts, it subliminally prods the new hire to actively position the organization as a great next step when they talk to former colleagues. If they’re enthusiastic, you might also ask for their help in recruiting the top individuals via the referral program.

Questions to Ask During Onboarding (Aimed at improving the Management of New Hires)

• Why did you quit your last few jobs? If you want to reduce future turnover, learn what was frustrating enough to cause your new hire to start looking for a new job and eventually quit their previous job. Once you identify these reasons, it’s wise to make sure their current manager knows what they are and develops a plan to prevent similar issues.
• Help me understand what motivates you and what your manager could do to help you be as productive as you can be? Asking new hires early on what motivates and frustrates them can provide you with an arsenal of information a manager can use to manage workforce productivity 1:1. While it would be great if managers would accept ownership for doing this naturally, numerous studies show they don’t!
• Where would you like to be career-wise in three years? This question helps you understand early on what expectations and future job aspirations may influence on-the-job behavior and likely tenure. By identifying what timeline a candidate/new hire has in mind, you can work to make sure you deliver career advancement opportunities in line with their expectations (i.e., before they start looking for someone else to deliver them). Also, ask what they would like to learn, which can be used to structure development and retention efforts.

Questions to Ask Candidates Who Dropped Out of the Process Pre- or Post-Offer

Delaying asking these questions for a period of three months significantly increases the likelihood of hearing an honest answer. If necessary, use a third-party vendor to capture this information as former candidates will have even less motivation to lie.

• Why did you drop out of the process? For those who dropped out of your hiring process early, ask them to list the reasons why they dropped out. Frequently, you will find that your recruiting processes are too slow or too frustrating to engage top talent.
• Why did you reject our offer? Most candidates will provide an answer to this question when they turn down the offer. More often than not, that answer has to do with money. Saying it is the money is an easy out — it doesn’t require as much courage as saying the hiring manager was a jerk, the job sucks, or the company doesn’t provide the right resources to enable employees to do the job they were hired to do. Several studies that have compared offers ultimately accepted by talent who turned down other offers reveal that rarely is the money difference significant. Other studies reveal that if you delay asking the question for several months, you are more likely to get an answer that doesn’t focus on the money.

Final Thoughts

The single-most important activity recruiters can do to improve recruiting effectiveness is to gather information that helps explain why the process is working when it is, and why it is not when it isn’t. By embedding these questions in your recruiting process, you can gain the information needed to radically improve the effectiveness of your efforts.

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.

There are three kinds of research.

Secondary. Secondary research already exists, and is therefore the least useful in helping you, since every project in unique. Your company, your culture, and your objectives are different from everyone else’s on your buddy list, so you can’t expect to have the same outcomes from similar projects that you launch. (Secondary research did however, account for my early success in the basketball pool.)

Quantitative. Quantitative research is often used as an independent survey tool, but it is most effective when used to validate the findings of your qualitative study. Think quantity, think survey, think slice and dice statistics. It’s much more objective since when the questions are crafted correctly, the answers are unbiased. The costs of running quantitative research surveys have come down considerably through online tools like SurveyMonkey or Zoomerang. The trick is getting the right analysis from the data. Make sure that you get a fair-size sample pool across geography and skill sets, if applicable to your project.

Qualitative: Qualitative research should be both the beginning of your discovery process as well as the launching platform for any next research steps. Bring in a small sampling of the “right” types of people and do a focus group, in-depth interview, or telephone campaign. The questions are open-ended and the answers are subjective. A trained moderator will probe to explore the deeper perceptions, opinions, and feelings about your topic. Think quality, ideas, and individual interpretation.

The costs of launching qualitative research vary, but expect a price tag of $3,000 to $5,000 per group, depending on the circumstances, and don’t make the mistake of going cheap and doing it yourself. You’ll be biased and won’t get good data from the effort.

Qualitative research using employees can help define: Internal culture; employer brand and value propositions; alignment of executive strategy with general population; and the strengths/weaknesses of your recruiting campaign among target populations.

Launching internal research using your own employees? It shouldn’t take more than two hours at the max. Get a skilled facilitator and have it off-site. The more people can rely on anonymity, the closer you’ll get to the truth.

Offer an incentive. These can range anywhere from a really nice catered lunch or dinner to $100 gift cards depending on the circumstances. If you’re doing a group with commissioned salespeople, consider that they might be losing revenue from possible missed sales.

Have a well thought-out discussion guide, but allow for the flexibility to go “off-road.” I’ve been involved in situations where from the moment the first group begins, I know I’m in for a bumpy ride. Whether there was a disconnect between assumption and reality or a significant event that shaped the course of the conversation, don’t worry if a group goes somewhere unexpected. Often that’s the precise outcome we’re hoping for because it demonstrates engagement of the attendees.

As in the adage “if it can’t be measured it can’t be managed,” research is the fundamental starting point of any new effort. For a cost of less than $20,000 and a window of 90 days, you’ll reap the benefits from new insights or a confirmation of gut instincts that ensures the successful outcome of your project.

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.

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.

Of the 11 comments posted to the article, 10 took umbrage with at least some of what Beatty said. Within hours of the article being published Gartner’s Jim Holincheck published his own take on the matter.

As Holincheck observes, there is truth in Beatty’s words. When the professor, who is a co-author of The Differentiated Workforce, says HR is “unable to provide analytics that are useful in making workforce decisions that build economic value,” Holincheck agrees. He points out, “However, it is not universal and the trend I see is that more HR organizations want to build a competence here.”

He makes several other excellent observations in his point-counterpoint, including puncturing the claim there is no correlation between employee engagement and financial results.

Like Holincheck, I found points of agreement, once I was past the professor’s hyperbole. It was a challenge, though, not to dismiss Beatty all together over his insistence that it was “silly” to want to become an employer of choice because “Everybody and their dog’s brother” will want to work for you.

I once went to work for a company that was anything but an employer of choice, and I can personally attest to how hard it was convincing people to come work there. Few top performers, including some I counted as close colleagues, would even consider the company. On the other hand, I did get plenty of average, and OK, and early career candidates.

Being an employer of choice is a definite advantage in hiring top performers.

As for the notion that training to improve performance is a misappropriation of effort, I also disagree. Holincheck himself doesn’t so much disagree as he challenges Beatty’s contention that HR is focused on low turnover as a positive metric. Smart HR people know that high turnover in highly skilled, mission-critical positions is far more dangerous than it might be in other areas. Plus, as Holincheck observes, HR professionals know to look at both involuntary and voluntary separation.

More directly, however, training the underperformer is an obligation in my view and can pay off handsomely. Or not. The trick is to be able to accurately assess whether the performance is a result of poor training, a miscast employee, or simply a lackluster, unmotivated worker. Sometimes, as in the case of a top performer who suddenly slips, the problem may be entirely external to the training and the company.

So rather than simply dismiss an underperformer out of hand, it seems to me prudent to analyze the problem and pick the right cure, which, in some cases, is indeed dismissal.

The main thrust of Prof. Beatty’s address is, however, unarguable: HR doesn’t have the metrics necessary to make economically wise workforce decisions.

What is arguable, professor, is how to develop those metrics, how to make the measurements, and how to use them.

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.

If you’re not in this double RIF-proof group, you’ll find out what you have to do to get there. For those of you doing any pre-RIF assessments, it will help you figure out who goes, who stays, and who’s worth saving. What a crazy idea! (Note: your comments are being collected on my Recruiter’s Wall blog.)

Using Adler’s Crazy Metrics as the New Recruiter Scorecard

The world of recruiting continues to evolve faster than most of us can adapt. To see where you rank in the new age of recruiting, evaluate yourself on each of these factors on a zero- to 10-point scale.

This has been designed for full-cycle recruiters and it’s based on a curve, so you need to score around 65-75 points to be in the upper quartile.

1. Voice Mail Return Percent. If you’re calling passive candidates (those not looking) you should be in the 70%-80% range here. This is worth a full 10 points. Average in the current economy is about a 20% return rate and is worth about 3 points. You only score points here if you’re calling people who are fully employed or where your personal influence is the key to getting them interested. (Note: see point 3 for how to increase your voice mail return rate.)
2. Number of Days Looking. Getting people as soon as they enter the job-hunting market is a huge competitive advantage. So start asking your active candidates how long they’ve been looking. If you’re the first recruiter or company they’ve spoken to, give yourself all 10 points, but only if you had anything to do with pulling this feat off. You get a big donut if the candidate says they’ve already accepted another offer, they’ve got other offers pending, or if they’ve been in the market for more than two weeks. Give yourself 5 points if most of your candidates found your ad in the first 5-10 days of their search. If you had nothing to do with making sure the ad was found, that it was compelling, or in causing your candidate to respond, you don’t get any of these points. Instead, give them to the person who pulled this off.
3. Referrals Per Call. To score all 10 points on this factor, you need to average 2-3 worthy referrals per call. Someone is worthy if they are highly qualified and a strong candidate for your open job, or personally knows someone who is. An average score (3 points) on this factor is about one decent referral per call. I have a personal rule that has enabled me to increase my personal productivity by 300%! It goes like this: first, don’t call anyone who will not call you back! Second, don’t call anyone who’s not a top performer. Third, only call worthy prospects. The only way to pull this is off is to get 2-3 worthy referrals on every single call you make. (Here’s a networking tips article for help on improving your score here.)
4. The Maslow vs. Money Index. Here’s an article summarizing Maslow’s hierarchy of needs. It’s must-read material for recruiters. The key point here is that good candidates don’t take new jobs primarily for the money. They take them for some combination of growth, opportunity, a chance to learn new skills, to do something important, or to increase their personal satisfaction. Unfortunately, most candidates ask “what’s the money?” early in the courting phase, putting most recruiters on the defensive. Good recruiters quickly shift the conversation to Maslow-related ideas, suggesting that the primary reason a person should select one job over another is because of the opportunity for growth and personal satisfaction it represents, not the money received. (Caution: this will only work as long as your comp is reasonably competitive.) Score all 10 points if you handle this money question smoothly all of the time, and zero points if you stumble all of the time. Give yourself 2-3 points if you can convince a fair percent of your candidates to reconsider, independent of the pay.
5. Not Interested Conversion Rate. This is the percent of candidates who initially say they are not interested in your job opening but who reconsider. You score all 10 points if you phrase your questions in such a way that everyone says they’d like to talk with you about your open opportunities. Score zero points if you walk away from most of these candidates without some type of clever rebuttal. The key to good recruiting and scoring high on this factor is applicant control. You know you have it when you — the recruiter — determine if you’re interested in the candidate, not the other way around.
6. Partner vs. Vendor Ratio. If you’re a partner with your hiring manager clients you have a better understanding of real job needs, you’re more influential, they’ll see candidates who are a bit off the mark based on your recommendation, they’ll trust your judgment, and you’ll make more placements without wasting time. A vendor-like relationship with a client puts the recruiter into a subordinate and less-influential role. The recruiter typically has less knowledge of real job requirements, the hiring manager refuses to see candidates who don’t meet the exact requirements, and the manager won’t reconsider candidates he or she has incorrectly assessed. Divide the percent of your clients who are partners by those who are vendors (Note: 50/50 is equal to one and is worth 4 points.) A good ratio here is two, meaning two-thirds of your clients treat you as a true partner, so give yourself 7-8 points for this.
7. Unsolicited Referral Rate. If you regularly get great referrals without asking for them you score high on this factor. Great recruiters are known in their niche market and top people want to connect with them. Give yourself all 10 points if at least 50% of your placements are made from these unsolicited referrals. If you get 4-5 strong unsolicited referrals each month, whether you place them or not, give yourself 5 points on this factor. You get a big zero if you don’t get any good referrals, unsolicited or not.
8. Technology Utilization Factor. Whether it’s being an ATS geek, a Web 2.0 aficionado, a search optimization fanatic, or a CRM guru, recruiting in today’s era requires significant technology expertise. If you still advocate a tech-free environment, you earn a big zero on this factor. Googling for resumes is not a big deal anymore, so you get nothing for being good at this. If you’re training others in using the latest recruiter-tech stuff take all 10 points. If no one laughs at your lack of tech-expertise, score 5 points here.
9. Advertising Efficiency. To get all 10 points on this factor, you have to make sure your ads are found and at least 50% of the people who find them click through. This means you need to use reverse engineering to select the best boards and make sure your ads are so compelling top people are intrigued enough to respond. If you just post your traditional job descriptions on boards that have not been vetted, your score is equal to the number of great people who apply — zero!
10. Gauge of Persistence. Recruiting top people is never smooth. People always have concerns. Candidates always have other offers. Managers always want to see more candidates. Pushing through these issues is at the heart of great recruiters. If you can convince most of your candidates to reconsider, get your managers to see and hire people who don’t meet the exact requirements, and are constantly pushing the process forward, regardless of the challenges, you deserve most of these 10 points. Take them all if your candidates and clients thank you for persevering. You don’t deserve any points here, if you complain about all of the challenges involved, procrastinate, or make excuses about your lack of results.

Free BONUS ADD-ON: Buyer vs. Seller Quotient

Divide the percent of the time your strong passive candidates are selling you (meaning you’re the buyer) by the amount of time you’re selling them (i.e., 50/50 is equal to one and worth 5 points). If you sell more than you buy, you get 1-2 points, and if you buy a lot more than you sell, you get 7-8 points. Good recruiting is about getting a strong candidate to sell you on why he or she is qualified for the job. They’ll only do this if they believe your job represents a strong career move for them. This is also referred to as applicant control and is a core competency of every top recruiter.

New-age recruiting is about influencing people who have multiple opportunities to consider what you have to offer. While there is more technology now available to find people, this is now the easy part. Getting on the phone, recruiting them, and networking is now the real skill involved with being a great new-age recruiter. That’s a crazy idea, isn’t it?

Right Management had International Communications Research conduct the study in 28 countries. Of the 1,524 survey responses received, 45% were from the Americas (including 456 from the United States), 34% were from Europe, and 21% were from Asia Pacific.

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.