It defined succession planning and why recruiters can and should play a role in a modern, world-class succession planning program. Part one also concluded by listing a series of metrics to evaluate existing programs based on their usage and design.

In part two, the focus will shift away from discussing what makes a great program to covering metrics that demonstrate what a great program accomplishes.

Part B: Plan Output or Success Measures

Group 3 – Output measures of plan success

The best plans have goals (and measures) that cover each of these areas:

1. Percentage of all management positions filled by internal candidates (this is the broadest measure of development success because it covers all management and leadership positions). A high rate of internal placement (vs. external hires) can be considered as an indication that development efforts have been successful.
2. The success rate of external hires over internal moves for plan jobs. Good development should result in a higher success rate (performance and retention) for internal moves.
3. Percentage of interviewees for plan positions whose positions are designated as ideal jobs for stretch assignments. Ideally, 100% of the interviewees for open plan positions will be “on” the succession plan.
4. Percentage of actual movers on the plan, where “movers” are the individuals who were actually transferred to or promoted into any designated plan position. Ideally, 100% of those actually selected from the interviews will come from the plan.
5. Percentage of movers without the most tenure in the job. Natural movement generally means the candidate with the most tenure will receive the nod. Effective succession planning periodically selects a “not so obvious” candidate from those being interviewed.
6. Percentage of movers from another department/business unit (again, “natural” movement generally means most positions are filled from within a department).
7. Percentage of movers who jumped a level (natural movement generally means promoting individuals “up” one level). Successful succession planning occasionally promotes individuals more than one level up.
8. Percentage of “on plan” movers who get promoted again (if a promoted individual is promoted again within three years, that can be considered as an indication that the first promotion was successful).
9. Percentage of movers placed in their targeted business cycle. Innovators are placed in departments or business units that require innovation (i.e., start up business units). On the other end of a business cycle, efficiency experts are placed in cost-cutting or commodity business units, where their skills are a better fit to the business cycle that the unit is in.
10. Percentage of job openings predicted accurately (successful plans prepare the individuals for movement at a designated time. Plans that successfully forecast openings within six months of their “projected time” are more effective than those that prepare individuals well before or way after they are needed).
11. Percentage of jobs with a defined back-fill person for sudden openings. In some plans, having “backfill” replacements are considered to be a separate plan element. Effective plans have pre-identified qualified and tested individuals that can immediately fill a sudden “unplanned” opening, without a loss in productivity.

Group 4 — Indications of plan failure

In addition to the factors that make a plan successful, there are some events that demonstrate the plan has, at least in part, failed. Indications of obvious failure include:

1. Percentage of “on plan” movers who fail during their first movement after being put on the plan (an individual who must be removed from their first placement because of a bad “fit” or performance must be considered a failure).
2. Percentage of movers who fail to stay in the “moved” position for at least two years (if someone must be removed or they voluntarily leave a position that they’ve been placed in, the placement can be considered a failure because of the obvious negative impact that it will have on business performance).
3. Percentage of individuals on the plan who fail to stay with the firm at least four years (retention rates are important, so you must consider it a failure whenever someone on the succession plan is forced out or voluntarily leaves the firm).
4. Positions filled by external hires who were not “on the plan” (if a plan has a provision for including external candidates in your succession hierarchy, consider it a major failure each time an “off plan” external hire is made).
5. Percentage of individuals who are removed from the plan. It is essential to keep the plan vibrant by periodically “dropping” those who have failed to meet their development or performance targets. However, too high of a percentage being removed each year must be considered as either a failure in selection or a failure in development.
6. Percentage of plan jobs vacant for more than 30 days. Effective succession processes fill plan openings rapidly, because the ideal candidate was successfully developed and prepared in advance. As a result, whenever a plan position remains vacant for more than 30 days or when it must be filled with an unplanned “interim” individual, it must be considered as a failure.
7. Percentage of “not promoted” finalists who leave in frustration within one year. Whenever someone on the plan is moved into a plan position, obviously you have been successful. However, if any of the other “finalists” who were “interviewed” but later rejected for a particular position leave the firm within a year, consider that promotion at least a partial failure. Turnover among second or third choices is not unusual, but it should be prevented whenever possible because of the high costs associated with losing any individual with sufficient qualifications to be considered a finalist.

Group 5 — Measures of direct business impacts

The most powerful measures are those that demonstrate a measurable impact both on leadership development and business results. The three most direct measures of business impact are:

1. Dollars saved by avoiding the added cost of outside hires. On average, external candidates for leadership positions and mission-critical roles receive a significantly higher salary than internal hires (some studies show the variance as high as 165%). Because of this cost differential, one of the most obvious advantages of effective succession planning is the cost-savings resulting from selecting a larger percentage of internal candidates.
2. Percentage increase in team performance six to 12 months after a plan employee is moved into a leadership position. Less-direct measures of successful placements might include the percentage of bonus the mover receives (compared to the average), their performance appraisal score while in the job, or their relative ranking in forced-ranking exercises.
3. The cost of avoided errors. The total dollar costs of errors that would have occurred if leadership positions were vacant too long or if they were filled by below-average leadership talent.
4. Program ROI exceeds that of other HR programs (successful plans demonstrate to cynical CFOs that their benefits and dollar impact well exceed their costs).

Final Thoughts

When times are tough, a common characteristic of “survivors” is often their ability to shift their focus toward new and developing business needs. Obviously, when budgets are tight, headcounts aren’t likely to grow, but the need for great leadership talent will actually increase (because it takes great leadership to manage under severe budget constraints).

If you want to increase your visibility and business impact, now’s the time to get involved in succession planning. Given the upcoming baby boom retirements, and limits on recruiting actual talent, the shortage of internal leadership and mission-critical talent will soon become the top HR issue.

It is not affecting employment across the board as many of the past ones have, but rather seems to be targeting specific sectors and types of work. Obviously banking and financial services, but also manufacturing and anyone in a semi-skilled job such as auto workers are especially affected. Needs are pocketed and specific. Talent shortages remain.

Yet, I have had calls from search firms looking for key sales and marketing people, and for R&D talent. Senior HR executives are in demand, especially if they have global experience. Sectors still largely unscathed by the recession – healthcare, gaming, entertainment, pharmaceuticals, and biotech – are still facing talent shortages and global competition.

The growth of global supply chains, increasing automation, and greater process efficiency means we can do more with fewer. New jobs are being created daily, but they all require education and skill beyond that of many current candidates.

This, combined with the different attitudes candidates and employees have about work and about how they live their lives, changes how we recruit and employ people.

The highly skilled, experienced, and educated will have an increasing edge in employment. And this recession should be a clarion call for an increased focus on education, training, and employment development. Everyone involved with talent will need to look at both development and acquisition as channels to meet their needs, rather than focus entirely on recruiting.

There are a number of permanent changes we will see.

Candidates Become Smarter, Warier

The first change is that many candidates will be reluctant to work under the same conditions as usual. Candidates have access to unparalleled information about a prospective employer through the Internet and its many sources. Reliance on a single firm for security has already eroded, and this recession will strengthen employees’ wariness about promises and deferred compensation. More top employees will seek employment contracts that include clauses that spell out layoff pay and benefits.

Candidates will probe positions more deeply and they will want more influence over the type of work they do. Prepare for candidates to negotiate what they will and won’t do.

Free Agency

Recessions have, in the past, increased the pool of people who decide to become free agents – contractors, consultants, and part-time workers. More people than ever are trying out life as independent workers. Many will not make it and return to the corporate fold, but they will be wiser and better prepared to abandon ship than they were before.

Many others will find they would rather work on their own than go back under the very insecure and fragile corporate umbrella. Companies will have to identify and take care of their key producers better than ever. While many firms do work hard to keep key talent, they will have to increase this effort and explore more creative ways to engage those people.

Charles Handy, a management writer and educator who has written numerous books on the organizations of the future, predicted that up to half of some company’s talent may eventually work as free agent, contracting to those firms as temporary staff, contractors, or part-timers. This will be a lasting change that is accelerated because of the recession.

Recruiters and HR staff will have to accommodate these free agents. Our internal regulations will have to be modified to make the use of contractors legal and compliant with IRS regulations and it may be necessary to lease employees, employ more employment contracts, and learn to share talent between organizations.

These changes will be fought by the legal department and more HR leaders, yet I believe companies will eventually have to embrace these ideas to be competitive.

Values Rule

Gen Y candidates, in particular, but all employees to a growing degree, are seeking companies that hold values high and make and keep commitments to their employees and their families. They seek environmentally sensitive, charitable, and ethical firms.

Gen Y is the tip of a spear followed by the even more morally and environmentally committed Gen M. They will have even higher expectations than the Baby Boomers ever did. While shareholder value will always be a core concern of the management team, they will also have to understand how important employees feel that values are and how close a scrutiny they will give every corporate action and statement.

Recruiters have to understand the values of the firms they work for and find better ways to match people to those values. They will have to also convince the management of firms that what they DO is just as important as what they say and that this emerging candidate pool focuses on actions almost entirely.

Flexible Work Arrangements

Employees now want to work where they want. The Internet has made it possible for most services and knowledge workers to be located far away from the physical center of their company.

Designers, call-center staff, sales people, some HR folks, and most anyone who works with information, writing, or data can effectively work wherever they wish. Only a handful of people – those whose work requires their hands or eyes on the work being produced – will need to physically be present. Even jobs we cannot yet imagine being remote, such as that of a diagnostic physician, may soon be possible using instruments and video from anywhere.

Recruiters will need to encourage flexible work arrangements and lobby with hiring managers to make these arrangements normal.

Recruiting will be more challenging and those recruiters who like to “fill positions” will find themselves looking for other kinds of work. Recruiters will need to be proactive, great influences, technically savvy, and adaptable to emerging work trends.

Most firms strike a balance between buying and growing, although little if any strategic planning guides their decision. However, during tight economic times when recruiting budgets are severely restricted or even frozen, the emphasis almost always shifts dramatically toward “growing talent.”

If you are a recruiter or recruiting manager and you want to increase your impact on the business, a downturn is a signal that you should begin to focus on succession planning.

Why?

Tight economic times do not change the management demands for most organizations; in fact, decisions made during such periods will have a dramatic effect on how organizations can recover when the economy turns. So ensuring that the organization doesn’t have any critical holes in their bench for both leadership and mission-critical roles is a vital concern.

It is not uncommon for every employee to be asked to “do a little more” during hard times, which makes this a great time to develop talent using on-the-job projects. By speeding up “internal movement” and leveraging stretch assignments, managers can ensure that the right leadership and mission-critical talent is developed and ready to assume key roles that either open up as a result of turnover, retirement, or business growth.

If you see a slowdown coming in hiring volume, now’s the time to shift your focus toward succession planning.

What is Succession Planning?

Organizations use succession planning to help mitigate the risk of a vacancy occurring in key management and leadership roles that could impact the organization’s ability to perform.

In more strategic organizations, the scope of succession planning is expanded to include high-impact and mission-critical roles throughout the organization.

The activity looks at talent within (and in a few rare cases outside the organization) that can be developed to step into key roles on a timeline consistent with an anticipated vacancy. In essence, it looks to develop key players who can sit on the bench until needed. Positions with two or more possible replacements in development are considered to have a strong “bench strength,” while those with only one or none have little or no bench strength.

Why Tap Recruiters for Succession Planning?

While development for roles covered by the succession plan can include traditional training, more and more organizations are adopting a development approach that relies heavily on coordinating the acquisition of new skills or capabilities via rotations through roles that enable on-the-job learning and mastery of those key skills.

As product lifecycles have gotten shorter, so too has the timeframe with which organizations can develop talent. A few years ago, a manager in development may have had to sit in a role for 48 months in order to experience a full product cycle, but today that experience may only require a 10-14 month stint.

Given the changes in workforce demographics, global competition, mergers and acquisition volume, and technology, the act of developing through rapid redeployment has become a profoundly popular topic among senior leaders.

Recruiters spend their days identifying talent ready to assume roles that provide similar or greater responsibility, often finding talent overlooked or neglected by their own organizations.

Because many organizations have managers who fail to develop their talent, or hold back employees ready for more, it makes sense to let recruiters turn their attention inwards, identifying people who can and will assume greater roles externally if not tapped internally soon. (Before you dismiss this case as not applying to your firm, remember that study after study identifies bad managers and lack of challenge/opportunity as the number one and number two reason people leave a job.)

The Critical Goals of Succession Planning

No program can be successful unless everyone involved clearly understands the desired goals and outputs of the program. The six strategic goals of succession planning include:

1. No business problems caused by a lack of leadership/mission critical talent. The goal is to assure the attainment of business goals because the right talent has been identified, rapidly developed and placed in the right job exactly when needed.
2. To identify talent gaps. To identify possible future talent shortages and gaps by comparing “what we have now” to “what we will need.”
3. Identify individuals with potential. To identify the individuals within the organization that have the highest probability of successfully becoming future leaders or key contributors in mission critical roles within the firm. The best plans identify individuals that would not fall in the “immediate vicinity” of the targeted leadership job when viewing the firm’s organizational chart.
4. Speed up development. To define the best series of jobs or “development paths” through the organization that results in the maximum learning and development speed for each of the targeted potential leaders.
5. Minimize leader turnover and frustration. To increase performance and retention rates among developing leaders because of the way they are treated as part of the succession plan.
6. Discourage the hoarding of leadership talent. To set up a series of metrics and rewards that discourage managers from hoarding top talent and instead, speed its development.

Unfortunately Most Succession Plans Are Weak

Succession planning in most organizations is a joke, existing as little more than an organizational chart identifying potential vertical moves into leadership roles. (More often than not, when actual moves do occur, rarely is the plan even consulted.)

People noted on the plan will almost always go through a leadership development program designed and delivered by corporate trainers that may or may not involve some simulation or case study work. This type of program is common, often coordinated in an ad-hoc way, rarely produces world-class results, and most certainly does not live up to the evolving expectations of senior leaders in leading-edge companies.

Succession planning programs under-perform because they are not designed or managed as systems. A system takes inputs, runs them through a series of processes, and produces a predicted output.

One of the best ways to design a succession plan (or any strategic HR process) is to begin the design process starting at the backend, identifying each of the desirable outputs of the process. Generally, there is an output or success measure for each of the stated program goals. The logic behind this “backward” process is simple: you need to design your succession planning program and its key elements not in isolation, but instead by tying program features directly to the desired program outputs.

By clearly defining the desirable outputs, you let everyone know the key purposes of the process, as well as how success will be measured.

Checklist for Assessing Your Succession Plan Using Metrics

Succession plan effectiveness measures can be broken into two basic parts and five groups. The first part covers usage and design, while the second part covers output or success measures.

Part A Operational Measures

Group 1 — Usage factors:
The target audiences for a succession plan are those managers who are responsible for making promotion and lateral transfer decisions for leadership jobs that are covered by the plan. A succession plan can’t be successful if it’s not distributed, read, and actually utilized by managers who make such decisions. Some manager-usage metrics to consider include:

• It is a written plan (if a plan isn’t written, it can’t be distributed).
• Percentage of the target managers who have received a copy of the plan.
• Percentage of targeted managers who have actually read the plan.
• Average satisfaction rate among users. (Low satisfaction rates can lead to low usage among hiring managers. Low satisfaction among plan employees can lead to having other employees be reluctant to be placed on the plan.)
• Percentage of managers actually using the plan for “movement” decisions (the plan cannot be considered successful unless it is actually used by most managers to determine which individual should be promoted or transferred into a particular leadership position).
• Percentage of all movement decisions in which the plan was utilized (this is similar to the last measure, except it covers the percentage of movement decisions in which the plan was used as a guide).

Group 2 — Assessing whether your plan contains key design features:

You automatically limit the capabilities of any succession plan when you omit some of the essential design features mentioned here:

• Focuses not only on promotions but also on progression and movement for development purposes (calling it a “progression plan” is more appropriate because some movement options in the plan should include stretch project assignments, lateral transfers, and job rotations).
• Each participant has a written individualized development, challenge, and learning plan. (Individual plans allow the employee to self-guide their own progress).
• Uses multiple sources in selecting individuals for inclusion in the plan. (This increases the likelihood that a “less obvious” candidate will be included in the plan).
• People on the plan are told they are on it. This transparency also allows excluded individuals to challenge their omission.
• The plan provides direct rewards and recognizes managers who support the plan. Rewards and promotions for managers should be based on their record of successfully developing individuals that are eventually included on the plan. Managers should also be rewarded for having their current direct reports placed on the plan, as well as for periodically releasing and not “hoarding” their employees on the plan.
• The plan includes an element to “retain” and improve individuals who remain on the plan but who have not been periodically moved or promoted.
• It includes a “Right Job” movement element. (Right Job movement means that the plan not only speeds up the movement into jobs but it also ensures that the position includes the appropriate or “right” elements that fit the candidates development needs (i.e., right manager, right motivators, right time, right team, etc.)
• It includes external candidates to spur competition (having external candidates included in the succession plan can put pressure on developing employees to improve beyond normal expectations).

This concludes part one of this series. In the next part, the focus will shift away from metrics relating to program operations to more strategic measures of succession planning output or success.

So as ERE Expo keynote speaker and ESPN analyst Steve Lavin warmed up the crowd at Expo on Thursday morning, it was unclear how his theories on people management — on really building a solid team — were applicable to his audience.

Lavin started the game slowly, but as he shared his passion and outlook on choosing the right people, his passion became palpable. He’s not talking ATS, he’s not talking ROI, and he’s certainly not talking time-to-fill metrics.

But what Lavin knows – and knows well – is sticking to a core belief system and applying motivating tips to help you create your own winning, successful teams. Here are traits of winning people for a winning team:

• Eternal learners. Pick candidates who have the following traits: an appetite for knowledge; a natural curiosity (”If you’re not naturally curious, practice it and raise your level of consciousness; listening is a skill!”); a thirst for finding a better way; and avid readers.
• Passion. Pick candidates with enthusiasm, zest, and zeal. He quotes Ralph Waldo Emerson on soul: “When it breathes through intellect, it is genius; when it breathes through will, it is virtue. When it flows through affection, it is love.”
• Bounce back. People who achieve at the highest level have resiliency. Find applicants who can overcome any obstacle.
• Mentors. Lavin had a dream to coach college basketball, so he put pen to paper and wrote to “the Jeffersons, Franklins, Lincolns – the founding fathers of basketball. There is something about receiving the snail-mail letter with a nice stamp. I have every letter I have received from John Wooden over the years!” As you refine your thinking, writing, and speaking, he suggests it will improve the effectiveness in your vision and getting others to buy into that vision.
• Physical. At some point, he says, start on that path of good health, even if it’s incremental and 10 minutes a day, then 20 minutes. “Physical health will impact everything else. The physical has to be there!” he says. Encourage this in yourself and in your team.
• Gratitude. Give thanks every day of the week, he advises. “If you have gratitude, you have grace and perspective. Humor and humility also come out of grace,” he adds.

Our part in this is developing a new method of assessing Managerial Fit when hiring from the outside. We all know that the development skills of the manager are critical in ensuring a new employee’s performance, so this might be something useful to consider whether you’re a recruiter or hiring manager.

In this same vein, using the concept of Managerial Fit and Situational Leadership might also be something to consider if your company is increasing its emphasis on internal mobility. It could help increase the number of top-performing current employees transferred into significantly different roles.

The concept behind Blanchard and Hershey’s leadership model is that the manager needs to adapt their style based on the current skills and developmental needs of the subordinate. The model categorizes management styles into these four levels:

• S1 – Directing: providing specific guidance for the task with direct and immediate follow-up. This is useful technique for a subordinate who has little skills in the area of need and lacks confidence.
• S2 – Coaching: providing an appropriate level of training and follow-up, but giving the subordinate some latitude in getting the job done. This is a very interactive two-way approach which is also useful where the subordinate needs external motivation to complete the task as well as some training.
• S3 – Participating: the manager assigns the tasks, provides some direction, but leaves how the task is done up to the subordinate. This technique is appropriate for a skilled person who might need some support and guidance in getting the job done.
• S4 – Delegating: in this case the manager assigns the tasks with the expectation that the subordinate will get it done with little follow-up. This is an appropriate technique to use when the person handling the tasks is fully competent and highly motivated.

The Situational Leadership model defines the developmental needs of subordinates into four broad categories based on competence, confidence, and motivation to do the work.

As you’ll see, these classifications are very-task oriented, so a person might vary in ability and motivation from strong to weak across all job needs. This requires a successful manager to adapt to the subordinate’s needs given the specific task.

This is critically important from a hiring perspective, since many candidates are hired without a clear understanding of real job needs.

Here’s a quick description of the four development levels of the subordinate:

• D1 – Low Competence, but High Motivation. The person wants to do the work, but requires significant direction and training. An S-1 Directing style of management is best for this type of person.
• D2 – Some Competence, but Lacks Motivation. The person can do the work, but needs external support to complete it successfully. An S-2 Coaching management style is appropriate here.
• D3 – High Competence, Variable Commitment. The person can do the work, and is highly motivated to do most of it. An S-3 Participating Style is best here, with the manager providing support for tasks the subordinate doesn’t find satisfying or where the person lacks confidence.
• D4 – High Competency, High Motivation. An S-4 Delegating is required here. The manager needs to provide minimal direction and follow-up. These people are the ideal hires for critical tasks where time is of the essence or where training is not available. However, too much direction and follow-up can be demotivating to the person, so the manager’s style is an important consideration when hiring someone at this level.

In some form, lack of Managerial Fit is often cited as the primary reason why new hires underperform. This is primarily due to the fact that most interviewers emphasize skills, behaviors, and generic competencies rather than motivation and specific competency to do the work. The Situational Leadership model offers a means to address this huge void.

Measuring manager fit can be relatively easy to assess if a performance profile is used when taking the assignment rather than a traditional skills and experience-based job description. A performance profile defines the top six to eight performance objectives required with the tasks classified into levels of importance.

For example, a critical task for a product manager might be to complete the product design spec with engineering and marketing within 90 days after starting. A less critical task might be to upgrade the product launch process within six to nine months. By categorizing tasks this way, candidates can then be assessed based on a competence, confidence, and motivation scale by task. Managers can then determine if their management style fits with the candidate’s development needs.

At the extremes an S-1 Directing style is a terrible fit if the candidate is an extremely competent and motivated D-4. Equally bad is the combination of an S-4 Delegating Style with a D-1 candidate who, while highly motivated, still needs lots of training and support.

Rather than describe each combination, here’s the 1-5 ranking scale we’re starting to use to better assess managerial fit:

• Level 1 – Bad Fit: on the critical tasks the candidate’s development needs are inconsistent with the manager’s situational leadership style or time needs are too pressing.
• Level 2 – Adequate Fit: the new employee is competent and motivated on some of the critical tasks and the manager is capable of supporting the new employee on the others.
• Level 3 – Good Fit: the new employee is competent and motivated on most of the critical tasks at a D-3 or D-4 level and the manager is capable of properly supporting the employee on all of the other and less critical tasks.
• Level 4 – Very Good Fit: there is a great match between the new employee’s developmental needs on all of the critical and non-critical tasks and the manager’s preferred situational leadership style.
• Level 5 – Perfect Fit: not only is there a great match between the new employee’s developmental needs and the manager’s situational leadership style, but the fit enhances the capabilities of both from a team standpoint.

Download our sample 10-Factor Candidate Assessment template as a starting point and incorporate Managerial Fit as one of the 10 factors. Here are a few ideas on how you might want to begin assessing managerial fit:

1. Complete a performance profile for the job and classify each objective as absolutely critical, somewhat critical, and less-critical.
2. Determine the manager’s preferred or dominant manager situational leadership style for each task and if there is time for much training or coaching. If not, you’ll need to hire someone who can deliver the results with limited management direction. This is a critical issue, so don’t minimize this point.
3. During the interview, get detailed examples of something comparable the candidate has accomplished for each critical task. This allows you to determine the developmental needs of the candidate for each task. Our two-question Performance-based Interview has been designed with this task focus in mind.
4. Be very careful about hiring someone to work for a manager who is heavy on the Directing and Coaching style. Highly competent and self-motivated people are turned-off when given too much direction.
5. Assess managerial fit using the above 1-5 ranking scale.

As a recruiter, I would expect my candidates to be a D3 or D4 on each critical task, unless the job allowed for sufficient training and coaching. In this case I would offset experience and high motivation with high potential and high motivation. I’d be OK recommending someone who was less motivated if the tasks were not critical to ultimate job success.

I’ve used this model in the past to walk away from certain assignments where I knew the lack of managerial fit was a recipe for failure. In this case it had to do with working with very dominant entrepreneurial leaders who were looking for top performers, but weren’t willing to give them the latitude to succeed. This is one of the reasons small companies never become big until the founder leaves.

Email me directly (lou@adlerconcepts.com) if you’d like to participate in a few trials on using Situational Leadership and Managerial Fit as the basis for better assessing competency. This is an important management development area that can be used not only for new hires, but also for increasing the success rate for employees transferred internally.

I have been noodling for quite some time over the work/life balance movement. I call it a movement because it really was not even something anyone mentioned or thought about when I entered the workforce in the 1970s. It has come about over the past 15 years and has swept corporate America and the world.

I can’t think of any organization that has not had to change policies or at least address its employees on the issue of work/life balance. Perhaps it emerged because more Gen X employees moved into leadership positions and were more aware of the precariousness of employment and about how quickly corporate can swing from breakneck hiring to layoffs.

But whatever the causes, the issues involved are core to whether people accept offers, stay with an organization, or decide to work for themselves.

Over the past few weeks most recruiters have had to spend some time thinking about their own employment situation and assessing its relative security, engagement, and continuity. They have also had to deal with reluctant candidates, uncertain retirees, and fearful employees. How we think about work is fundamental to almost everything else we do.

The work/life balance movement is based on set of assumptions that aren’t questioned very often, yet are very strange from the perspective of a Baby Boomer such as myself or from that of anyone who has studied or thought about the history of work.

If I were to state the assumptions that underlie the work/life balance movement, they would go something like this: Work is something we do for money, is generally not very enjoyable, and interferes with more important things like family. Work, therefore, should be regulated and time with our families should be mandatory. The work/life balance cause assumes a more or less digital world: work is on or off, family is on or off.

Yet, for centuries work and life were co-joined. Men toiled in fields, small shops, bazaars, and at home without paychecks, labor laws, or a day off. Women and men often shared skills and children were almost always part of the working and life equation as soon as they were old enough.

Work might not have been fun in our modern sense, but it was a family activity and it was the fabric of life. Most people chose to do something they liked, or at least something that provided them food and shelter and employed members of their family. Even learning was a family activity and fathers and sons often co-invented things or passed their knowledge to each succeeding generation.

The modern separation mindset is new and is a result of the physical isolation of work in factories and offices. It is the result of physical and mental separation from family. It is the result of over specialization to the point where your spouse cannot understand what work you do.

Yet I see that the Gen Y folks, the Millennials, seem to have an intuitive understanding that you should seek out work you care about. They are rejecting the work/life notions, much to the chagrin of their elder Gen X colleagues. Gen Y tends to look for work they are passionate about and then they tend to work in ways foreign to Gen X. They take any sense of balance away and may work for days without a stop or not work much at all for some time. They try to choose meaningful and interesting work and embrace it with a passion only seen once in a while with Gen X or Baby Boomers.

In order to most effectively deal with the questions this economic turmoil raises, be able to answer these questions:

Question #1: If I am able to make an adequate living doing whatever I am now doing, what does your organization offer me beyond that?

You should have a clear understanding of the contributions employees can make to society or to fulfilling an employee’s long term career goals. Every recruiter should encourage the organization to commit to funding and supporting social and environmental improvements and activities. Google, for example, allows employees paid time to work for charitable organizations on a regular basis.

Question #2: Can you accommodate my preferred work style?

Many younger employees and also many Gen X and Baby Boomer workers are asking for flexible working schedules and telecommuting opportunities. These will be core benefits offered by successful organizations over the next decade. Without these you will find it very hard to hire and retain your most productive and valuable people. As soon as any competitor offers them an opportunity for these, they will leave you.

Question #3: What opportunities are there for me to fulfill my life ambitions here?

Work is no longer all about the employee doing things only for the organization. It is also about what the organization is doing for the individual. Some corporations offer employees college programs in areas that have nothing to do with work. For example, some pay for things like nursing school or law school while the employee is doing some totally different type of work.

Others offer cross-functional movement and provide the training and coaching needed to make the person successful. And they make this a significant part of the employment experience, not just a perk for the privileged few.

This is the out-of-the-box stuff that will keep the best people, at least for awhile, and improve the productivity and engagement of everyone.

I am not the only one predicting that it will be increasingly difficult to convince younger people to work for large corporations unless they have more input to the type of work and the conditions they work under. As work returns slowly to individuals, entrepreneurs, small shops, and small organizations, we will see more and more integration between work and life. More spouses will work together and more children will be part of that work. The days of specialization, physical separation, and mental isolation are ending, I think and hope. We have traversed across a century of change to return to where we started.

The effect of long-term hiring freezes is particularly damaging to the recruiting function, because “no hiring” generally means that a majority of recruiters will be laid off. Historically, budgets for recruiting have been cut so low that the function is literally decimated, making it rather difficult for companies to resurrect a decent function when the economy swings up.

Many executives think that the decision to institute some sort of resource freeze is one that helps the organization because it contains costs; however, the opposite is more often the case.

Poorly thought-out freezes that impact talent acquisition and other talent-management activities may actually harm the organization by:

• Driving increases or vacancies in revenue producing/impacting roles that decrease revenues beyond any cost savings.
• Driving increases in employee burnout/turnover.
• Missing out on new talent opportunities (i.e., not be able to hire a superstar that becomes available).
• Decreasing an organization’s capability/capacity to innovate.
• Damaging the employer brand making hiring more difficult when the economy returns.

Rather than waiting for the inevitable announcement of a freeze, recruiters need to be proactive and preempt any such silliness long before it occurs by making the business case for leveraging this time to re-architect the talent acquisition function, upgrade its strategic programs, and trade up the talent population while salaries and vendor costs can be negotiated down significantly.

(Incidentally, you can tell when a hiring freeze is imminent because they are almost always preceded by the infamous “paper clip memo” from the CFO, which limits the purchase of office supplies, magazine subscriptions, and travel).

Because every organization is unique, there is no one magic way to structure the business case, but I have put together a list of arguments that you can select from:

A) Negative impacts on revenue and costs
Obviously, not expanding your staff or keeping open positions vacant can save payroll dollars in the short term. However, such savings may actually present a false reality because freezes have many other unintended consequences that CFOs often fail to account for:

1. Lost revenue. Across-the-board hiring freezes mean that critical revenue-generating and revenue-impact positions go unfilled. Obviously, when there is no one in a revenue-generating position, there is a lost opportunity to generate revenue every day that the position remains vacant.
2. Customer impacts. Frozen budgets and understaffing can stretch your employees. This means that other employees must now do double duty because replacements can’t be hired. This may also impact quality and send a message to your customers that your firm is slipping as constrained employees sidestep process elements and cut corners. Both can negatively impact your product brand and future sales.
3. A limit on growth. Within most large firms, even during tough times some businesses units are growing, while others are shrinking. By freezing hiring “across the board,” you negatively impact your rapid growth and top revenue generating divisions. This limits their ability to continue to grow. In global firms, some regions are likely to be growing despite the downturn and an overall freeze will threaten your competitive position.
4. Headcount replacements are expensive. In the end, few hiring freezes actually end up saving money because budgeted headcount employees are often just replaced with consultants, temps, interns, and other “off the book” spending. In some cases, these alternative consultants and workers are actually more expensive than regular employees, leading to a situation where overall “labor costs” don’t go down at all. Facing employee shortages, some managers increase the use of overtime in order to get the work done, but at time and a half, this solution is relatively expensive.

B) Retention impacts

1. Frustrated employee turnover. Freezing resources means stagnation, and when opportunities are limited, they are likely to seek employment elsewhere. Freezing pay, promotions, travel, and/or training can also limit employee growth and learning, which will also increase turnover, if not immediately, at the first sign of opportunity.
2. It encourages your competitors. Hiring freezes are visible to outsiders on your website and the news of their existence spreads rapidly. These freezes send a message to your competitors that you are “weak” and struggling. This may cause them to increase their efforts to recruit away your employees and more often than not, your customers.
3. Freezing deadwood. Unfortunately, not being able to fill vacant positions causes managers to slow down or even cease their efforts to get rid of their deadwood employees. “Carrying” these low performers leads to lower productivity overall, but also weakens your managers by not forcing them to confront low performers. It gives managers an excuse not to make tough people decisions, which may also eventually weaken their decision making in product areas also.
4. Freezes frustrate “idle” recruiters. The best recruiters you are able to keep on your staff will invariably get rusty during hiring freezes. Having idle recruiters is a waste of money but it can also foster turnover among your recruiters who love action.

C) Missing out on talent opportunities

1. Exceptional talent. Across-the-board hiring freezes mean that when a few exceptional individuals like “Tiger Woods” enter the talent market, you will not be able to consider them. As a result, you’ll miss out on exceptional talent who could really make an impact. If your firm doesn’t capture this exceptional talent, other firms will.
2. Off-cycle recruiting. During tough economic times, both the amount and the quality of available talent will greatly exceed the available talent during boom times. Because during lean times, few firms are hiring, there is minimal competition. Together this means that a firm can now successfully attract experienced and college hires that their weak employment brand, pay rates or location wouldn’t normally allow.
3. Weakened recruiting capability. Extended hiring freezes invariably weaken the recruiting function. This loss of recruiting capability can impact the business because the remaining recruiting staff won’t have the ability to successfully recruit and land “in demand” candidates for the few positions that do become open.

D) Reduced innovation and technological capability

1. Reduced innovation. Budget freezes in particular can rob your innovators of the resources that they need to innovate, just as hiring freezes prevent you from recruiting new innovators. As a result, the rate of process and product innovation may decrease significantly during hiring freeze. In addition, freezing promotions and pay increases may limit your innovators motivation and willingness to be creative.
2. Impacts on technology. Because technology is constantly evolving and improving, hiring and budget freezes will directly limit your ability to attract new technologists and the needed new technologies.

E) Additional negative impacts of freezes

1. Employment brand impact. It signals a stoppage in a firm’s growth, which can impact your firm’s employment brand as a great place to work. This can make future recruiting more difficult and expensive.
2. Stock price impact. A freeze sends a message to analysts, customers, suppliers, and employees that your firm is not in a growth mode. Long or frequent “pauses” in recruiting may also send a stronger message that the company is in trouble, which could further hurt the stock price, which is likely lower anyway as a result of the weak economy.
3. Recovery time. Hiring freezes often mean that the recruiting function will be decimated. The function cannot be rebuilt overnight after the freezes are lifted. Many managers wrongfully assume that recruiting is a pure production function, one which you can put money into today and get results out tomorrow. While recruiting truly is a production function, it often requires significant ramp-up time, which many organizations fail to plan for. Refilling the “talent pipeline” with candidates after a freeze might take months, which can end up making the freeze last even longer than intended. In addition, “exploding out of the box” when the economy improves will also be more difficult.
4. Excessive early spending. Anticipating freezes often encourages hiring managers to hire “a bunch” of people early (whether they are needed or not). They do this in order to avoid “losing” the positions later in the year when hiring and budget freezes are generally introduced. In the same light, rumors of possible freezes can make managers and HR paranoid and to do “immediate panic” hiring the moment they hear a rumor about an upcoming freeze. They might also make rush decisions during a current hiring process, in order to complete it prior to the institution of a forthcoming hiring freeze.
5. Lower referral rates. Freezes may cause employees to hesitate before making referrals. They are hesitant partly because budget, promotion and pay freezes make the organization a less desirable place to work but also because a freeze may make their efforts fruitless because it diminishes the chances that their referrals will soon be hired.
6. More time spent on administration. Most across-the-board freezes are really not true freezes. Top managers almost always leave “exceptions” open. As a result, they don’t really “stop” hiring, they just slow requisition approvals and make them more painful to get approved. A large amount of a managers (and HR’s) time is wasted “getting around” these freezes and justifying “exceptions.” It can also give managers a bad taste for hiring of any kind, which may result in managers not devoting much time to the hiring process once the regular hiring process returns.

Action Steps

Rather than instituting across-the-board freezes, educate managers about the different options they have for cutting costs and increasing revenues:

• Focus on budget dollars. When it is important to slow down expenditures, it is often better to do it through budget control (controlling dollars) rather than through a hiring freeze or headcount tracking. In addition, always look at the revenue impacts whenever costs are cut.
• Increase internal movement. Managers need to increase the impact of their current employees by developing plans to transfer people internally from low return areas to those with higher return.
• Use incentives. Managers should consider offering short-term incentives to employees for increasing productivity or for reducing costs. Employees are often better equipped to judge where costs can be cut with minimal impact on productivity.
• Prioritize positions. If a manager decides to use a hiring freeze, they should limit the freeze to pre-identified non-key positions. Otherwise, a vacancy in a critical job can cause a significant loss in revenue and negate the projected cost savings from the hiring freeze.
• Demand metrics. If freezes are used, track metrics to determine whether overall costs are actually reduced by the freeze.
• Performance management. Managers should be encouraged to periodically fire low performing employees first, before seeking replacements.
• Rapid growth divisions. These critical regions or business units should be exempt from across-the-board freezes.
• Continuous churn. The new realities of talent management and business are that the old pattern of resource freezes and then layoffs needs to be broken. In a global economy, where firms need to be fast and agile, the new model is for firms to simultaneously hire and release workers in different areas. Smart managers must learn to continually add workers in areas of growth and innovation, while continually redeploying or releasing workers in areas of low ROI.

Final Thoughts

Any review of history will reveal that the majority of wealth in modern civilizations is more often than not created during times of significant economic crisis.

Opportunities abound for those organizations that are truly strategic, but as we all know, lots of people talk about being strategic but few really are. Now is the time for talent management to step up and proactively re-engineer antiquated practices and programs, and to embed talent management activities throughout core business processes while the organization can accommodate change.

If you wait until things are moving fast once again, you won’t have time to be strategic; you’ll be too busy catching up!

The deal leaves intact Authoria’s management team including founder and CEO Tod Loofbourrow, who said that the acquisition “brings us an investor well matched to the size of the market opportunity before us.” Bedford will inject an additional $8 million in working capital to accelerate Authoria’s expansion.

The price is half the $128 million that Taleo (profile; site)  paid for Vurv (profile; site) just six months ago. Both companies had similar staffing levels, but Vurv’s 2007 revenues were around $40 million, while Hoover’s, the business reporting service, estimated Authoria saw about $17 million that year.

Vurv was probably also in better financial shape. Since being founded in 1997 Authoria raised some $100 million in venture capital, including $58 million raised by Hire.com, a company Authoria acquired in 2005. It evidently also had some debt, since Loofbourrow pointedly notes in the announcement that “Bedford Funding will provide us with a debt-free capital structure.”

Jason Corsello, writing in his blog, The Human Capitalist, called the deal a recapitalization observing that existing investors shareholders, which include senior management, as well as the VC firms, would probably only receive “only a fraction of the investment and value.”

Even so, he is encouraged about the company’s prospects for the long term saying it “creates a much cleaner structure for the company to really attack the market as the first vendor that can truly bring together talent acquisition/recruiting with the rest of the talent management suite.”

On September 16, 2008, Carly Fiorina (the former CEO of HP and McCain supporter) made the statement that none of the president or VP candidates had the experience to be the CEO of a major corporation. The McCain team wasn’t too pleased with her remarks, and she’s been taken off the tour.

However, her dilemma raises an important question: Are the skills and abilities to run an international, multi-unit corporation comparable to those needed to run the U.S. government?

The answer to this becomes quite clear once you prepare a performance profile for each job.

For background, a performance profile is not a job description listing skills, abilities, and experience requirements. Instead, it describes the performance expectations for the job, describing what the person must do to be successful. It’s filled with action verbs like build, create, develop, initiate, solve, design, etc., not passive verbs and statements like “have” and “be responsible for.”

For example, a performance profile for a sales rep selling plumbing products in Peoria might state “achieve and sustain the monthly quota 90 days after successfully completing the sales training program.” The job description for this same job would state something like, “must have 3-5 years b-to-b plumbing parts industry experience.”

As I have ranted on these pages many times before, the continued use of traditional job descriptions is the primary reason companies can’t find enough top people to fill critical hiring needs. Everyone agrees that skills and experience don’t predict future performance. This is the core problem with job descriptions.

Past behavior doesn’t predict future performance, either, if the person is doing different work. This is the problem with behavioral interviewing. The use of behavioral interviewing in combination with traditional job descriptions only makes sense when the person is doing essentially the same work in the same culture with a similar supervisor.

A performance profile overcomes all of these impediments by emphasizing the performance expectations of the job and the environment, not the skills required to do it. The assessment involves comparing the candidate’s actual accomplishments to these requirements.

There are typically 6-8 key performance objectives for any job, whether it’s entry-level or executive management. Once completed, a performance profile can be turned into a compelling ad describing the projects, challenges, and opportunities.

As part of this, the requirements to apply are changed from having identical skills and experience to having achieved some type of comparable performance. This instantly opens up the candidate pool to more diverse candidates, more high-potential candidates, and more top performers who have achieved similar results in related industries and fields.

It takes about an hour discussion with a hiring manager to ferret out the key performance objectives for most jobs. To get a sense of this process, ask your hiring manager client the following questions when taking your next search assignment for a manager or executive position:

1. Why would a top person want this job? What makes it a good short- and long-term career move?
2. What are some of the big challenges the person taking this job is likely to face?
3. What are some of the specific projects the person will be working on?
4. What will success look like after six months? What about 12 months?
5. What are the big technical issues the person needs to address?
6. Describe the team and some of the challenges the person might face in dealing with the team or rebuilding it.
7. What are some of the critical problems the person will face right away that need to be resolved?
8. Are there any process issues that need to be improved or redesigned?
9. Are there any long-term strategic issues that need to be addressed?
10. Describe the culture and environment of the organization. Does this need to be changed or modified in some way to put the organization on a long-term path to success?

The idea here is to develop a list of 6-8 performance objectives put in some type of priority order that describe on-the-job success. Candidates are then interviewed and assessed against this benchmark by asking them to describe a series of comparable accomplishments. (Note: if you use my two-question performance-based interview you’ll be able to accurately assess any candidate’s ability to accomplish these tasks.)

Now let’s get back to Carly’s dilemma regarding the presidential candidates’ ability to run a corporation. Let’s start by examining the following pretty high-level view of a performance profile for a CEO for a large multi-national firm.

1. Evaluate the current operating plans for all units and ensure they’re on track and that the reporting systems are in place to ensure real-time visibility into business performance.
2. Establish programs to determine if the executive teams at all units, including corporate and group headquarters, are fully able to handle the company’s current business opportunities and overall growth plans.
3. Ensure that the overall strategic path of each group/division is appropriate and established.
4. Identify critical weaknesses in every unit that could affect short- and long-term operating performance and implement immediate corrective actions.
5. Fully understand the company’s financial strengths and weaknesses and lead the establishment of programs and controls to meet government, legal, and investor needs.
6. Lead the negotiation of big buy/sell global mega-deals that affect company strategy and direction.
7. Lead the integration of disparate business units to achieve economies of scale.
8. Deal with the conflict between the need to balance short-term financial performance with long-term growth.

There are probably a lot more, but you get an idea of the complexities needed to be the CEO of a large publicly traded company that’s operating on an international scale. (As a separate task, you might want to rank your current CEO on these measures.)

From my perspective, it’s pretty clear that the current crop of Presidential candidates are not qualified to be CEOs; the jobs are just too different. In my opinion, Carly was 100% right on this point, and should not have been chastised for it. The media clearly doesn’t understand these differences in roles, either, since they’re the ones who misunderstood both the comments and the underlying issues.

A U.S. President isn’t directly involved in understanding markets, products, distribution, manufacturing, accounting, IT, performance reporting, and running a business for profit. The president might be tangentially involved in the budgeting, financing, trade, organizational management, tax, compliance, and some of the diplomatic issues involved in operating on a world stage, but it’s a stretch to think they’re the same.

One could argue that there are some other overlaps, but it seems to me the differences between a corporate CEO and the U.S. President are far greater than the similarities. Of course, a person qualified to be a corporate CEO wouldn’t necessarily be qualified to be the President, either. While the intellectual, organizational and the complexities of the problems faced are comparable, how decisions are made and executed are fundamentally different. (Here’s a companion article describing a performance profile for the U.S. President. You can judge for yourself which candidate is most qualified, and even if your current CEO could handle the job.)

Despite all of this, the idea of putting a performance profile together before interviewing candidates is one sure way to make better hiring decisions. This is true whether you’re hiring a U.S. President, corporate CEO, or entry-level accountant.

Preparing a performance profile, however, requires the active involvement of the hiring manager, often the biggest stumbling block of them all.

For some illogical reason, most fight the idea of clarifying job expectations before hiring someone using the “I don’t have the time” excuse. Yet they’ll spend hours after a hire is made over-managing their newest staff member hoping for average performance. Once you overcome this hurdle, don’t be surprised that you’re finding and hiring more top performers than you thought possible.

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

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

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

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

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

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

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

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

Workstream issued a press release today saying it had appealed the latest delisting order. That gives the company some breathing room while NASDAQ reviews the matter. Workstream could avoid delisting by filing its annual report, Form 10-K, as required by the Securities and Exchange Commission. Workstream is required to file 90 days after the end of its fiscal year on May 31.

Why the report has not been filed was not explained in the press release and company CFO Jay Markell could not be reached.

Company officials reported in July that Workstream’s fourth quarter ended in the black, the first time that has happened in the company’s history as a publicly held corporation. It reported an EBITDA of $516,000 for the fourth quarter ended May 3 compared to an EBITDA of ($4.5 million) for the previous quarter and ($1.3 million) for the fourth quarter last year. Only sketchy numbers were released then, however, with the company explaining there was some sort of analysis underway of its accounting for goodwill.

Nevertheless, delisting is almost inevitable for the company. In November 2007 the company was notified that it would be delisted by the NASDAQ exchange because its stock price had fallen below the $1 a share minimum. The company got an automatic extension to Nov. 17th., but with the stock trading around 16 cents a share for the last few months, Workstream will be dropped by NASDAQ. That will make it difficult for its shareholders to sell their stock. When they do, generally through private transactions, fees will be higher than when the shares are traded through an exchange.

Earlier this year, Workstream was courted by payroll processor Empagio, which made a bid to acquire the company. Though unsolicted, Workstream and its board endorsed the merger, which would have created a new company with Workstream shareholders owning 25 percent. The deal eventually fell through.

Besides its software business, concentrated in on-demand compensation, performance and talent management in its TalentCenter 7.0 released last year, Workstream also owns 6FigureJobs.com and Allen and Associates, a candidate focused career management firm.

Whenever I mentioned his name, many would respond, “Oh, John! He’s always helped me out when I had a problem.” Or, “He’s one of the best-connected people I know in the company. If you need something, he’ll know where to go to get it.”

He was smart, helpful, and connected, and that’s the formula we all preach about how to succeed.

Yet, John languished in a dead-end job that was 80% clerical. He was passed over for promotions and new opportunities because everyone assumed he was happy where he was and he never sought new positions. He did not manage up well, nor did he want to. He was hoping that he might be recognized for his skills and abilities.

While some might say he lacked ambition, what John really suffered from was a lack of self-confidence and an equal lack of encouragement. I worked with him and his boss, and we eventually found a position with more responsibility where he thrived. He sought out mentors from his network and he learned the key elements of the job in weeks. In the past, whenever we hired an outsider person for this type of job it took months for them to fully understand the intricacies of the job and who to go to for advice.

We have all known people like John. In fact, our organizations are filled with people with talent, skills, and connections who may lack the self-motivation or confidence to try something new. Many are pushed down by managers who use these employees to bolster their own weaknesses and others, like John, choose to not move.

But in times of change, economic downturns, or mergers, knowing who your best people are can affect product development, profits, and sales. Many times, this hidden talent is your lifeline to success versus failure. The challenge we all face is how do you identify these people and how do you “recruit” them into new positions with significant potential risk?

Here are some ways to find these people and some strategies for convincing them to make the move.

Simply Ask is Method One

Ask every hiring manager you work with to name their two or three best employees who are also the longest serving. Their recommendations may uncover some great talent. Combine that with active listening and I believe you will find many more talented people than you expected.

That is actually how I discovered John. His manager kept telling me that John would handle this or answer this question, and because John had been with him for so long, he knew all the ins and outs. This set off my radar and I made it a point to get to know John better.

Selling the Risk

Frequently, people like John are afraid to move because they are so deeply skilled at their current job that change is uncomfortable. They are afraid they will fail and lose their job or that they are not capable of learning the new skills required.

To sell them on a change you either have to provide training and coaching or offer them the ability to return to their old job after 30 or 60 days. This is probably the time it will take to find someone to fill the old position; anyway, so not much is lost. It is important to provide a transition step or process to ease their fears and increase the chance for success.

Why bother to do this at all? It’s very simply a matter of cost and benefit: the years that person has worked at your organization and the knowledge they have, and leveraging it to further add to the organization’s talent pool, you have saved thousands of recruiting and training dollars. No internal investment in these people is going to cost you as much as hiring an unknown person from outside.

Provide Internal Development is Method Two

Just asking may not be enough. Many organizations have offered low-risk internal development programs just to engage this type of individual. IBM and HP and many other organizations have over the years offered special training programs. These are often designed to fill some looming skill shortage in a fast, efficient, and usually successful intensive development process.

IBM used to ask managers to recommend employees who met certain basic qualifications for these programs. Then internal recruiters would explain the programs and enroll the employees with a guarantee of continued employment no matter how they did and a promotion if they did well.

Needless to say, this worked well and thousands of IBM managers, programmers, and salespeople came into their jobs through these programs.

The Benefits

Payback is huge and ongoing. Employee morale goes up and the word spreads to the street that the company takes care of people, trains them, and doesn’t spend excessive money on external recruitment when good people are under their feet.

Turnover almost disappears among those who are trained as the number of 25-40 year employees of P&G, DuPont, HP, IBM, and GE all attests.

Force Them to Appear is Method Three

The third way to find these people is to force managers to make promotions and move people up or out. General Electric may be the most famous example of this philosophy exemplified by their mantra to promote the top 10% and move the bottom 10% out.

While not everyone agrees with this, it does have its merits. It forces managers to think about who performs best and who has the skills and abilities to do more than they are currently doing. It forces these managers to convince their employees that a move is positive and it forces General Electric to have stellar employee development programs. But these programs are only as good as the criteria used for selection and the persuasive powers of the manager.

Recruiters have the responsibility of thinking about themselves as talent managers and strategists. Your job is to ensure the supply of quality talent to your organization at the lowest possible price. Finding those already inside your firm is the place to look first, not last, and developing the resources and processes to do this is becoming a critical skill for talent leaders.

Taken at face value and looking at traditional work styles and jobs, there is some validity to these stories. Human resources people, recruiters, and some business people will affirm the shortage anecdotally. But it’s hard to find real examples and real numbers.

Certainly, anyone trying to hire a surgeon in North Dakota, a Starbucks barista in Oklahoma, or a stock broker in Alaska may have to look long and hard. But if you are looking for these folks in urban areas or places with significant populations, the number of qualified applicants increases substantially.

After all, it has never been easy to attract skilled professionals to rural areas, and it has become even more difficult as people leave the country for large cities. Rural parts of the world are emptying into cities — especially those located in coastal areas or those with significant educational and cultural activities.

Richard Florida’s books on the Creative Class point out in stark numbers and colorful graphs and charts the shifts in population away from some less desirable (and often semi-rural) cities and toward others that offer the lifestyle and engaging employment desired by the emerging creative class.

Sure, thousands of baby boomers are poised to retire over the next decade or two and, yes, there are somewhat fewer young folks behind them; but is that really going to be a problem? And will the number of boomers who choose to retire reach the predicted numbers?

Studies I have seen indicate that boomers will most likely defer retirement for some time because they have not saved enough to make retirement possible or because they remain healthy and want to continue working.

We will most likely also need fewer people to reach the same productivity levels of today.

The nature of work has changed dramatically. Today only about 2% of Americans grow food or work on farms. This is truly amazing considering the amount of food produced and exported. Farms have grown much larger and are more automated. Completely automated, GPS-guided tractors cultivate fields that used to take a dozen men and several dozen horses to plow.

I was recently at a copper mine in Chile where GPS-guided ore trucks will soon obsolete the need for drivers. The widespread adoption of the Internet and its associated applications has simplified many work processes and will continue to reduce the number of people needed in many areas of the economy.

Manufacturing, too, has moved to automation or outsourcing. It was the 20th century’s economic backbone and required a huge supply of raw manpower. For the most part, workers needed to be equipped with little more than a high school education and a willingness to do hard physical labor.

But today only about 11% of workers remain employed in manufacturing and those workers are more skilled and experienced than at any other time in our history. Automation and outsourcing have replaced thousands of semiskilled jobs and the need for raw manpower has reached very close to zero.

So it is unlikely that there is any broad-based shortage of traditional talent or any need for drastic measures. Any shortages that may exist can be attributed to geographical location, the nature of the work, and the pay scale.

I am a believer that when the time is right, the solution appears. If organizations were really feeling the pain of shortages, they would have started training programs, raised wages, and lobbied educational institutions to change curricula. None of those things have happened on a wide scale.

And many of the solutions are expensive and socially or politically inconvenient. For example, as it becomes more and more difficult to find people willing to work for relatively low wages, retail stores are reducing the number of sales associates. They have installed systems that let customers do their own check out. And, without much additional trouble, they could install scanners that would use bar codes to bring up information about a product and answer customer’s questions. I think it is likely that we will see a “black box” retail establishment at some point, but no one would accept it today.

There are hundreds of other areas where automation could reduce the need for or replace humans if the costs were justifiable and it was socially acceptable.

Business has a responsibility to ensure its supply chain of talent and has gradually been putting programs into place to do this. Over the past decade there has been increased interest in internal leadership development programs, internships, and similar development activities. Companies are investing in diversity programs, training, college recruiting, and retention activities to ensure the supply chain.

The challenge for government is to find ways to partner with business to retrain and re-skill thousands of people who are no longer needed in traditional occupations. Educational systems from high school to university are not meeting the needs of our economy and make false promises to students by implying that they will be employable after graduation.

Recruiters know that neither a high school diploma nor a college degree is enough to ensure a job offer. Most occupations require extensive training and take years to master, but we have not built bridges between education and work.

For most people, figuring out how to get a job with no experience is the most significant challenge they face. This should force organizations to build bridges, which could be internships, short-term work assignments, part-time work, apprenticeships, and so forth. This means we need to lobby for changes in human resource policies and for changes in employment laws that limit their ability to build these bridges.

Our current employment system is based on the assumptions that workers need protection, are victims, are not able to work or make decisions for themselves. We need to wake up to the fact that the workers we need and want to hire are making choices every day about who to work for and why. They are opting for employers that provide training, ongoing development, personal growth opportunities, and flexibility.

The concept of a talent shortage is based on projections that assume tomorrow will look like today. It is also largely based on a mindset that arose out the manufacturing era when masses of unskilled, compliant labor was needed.

We now need fewer, but highly skilled, creative and independent people to propel us forward. This is the real talent shortage we face.

That alone surprised us, since we have this sense that most lower-level workers are in their 20s and 30s and came of age at a time when casual was already the norm.

The corker, though, is that this self-same survey had bosses saying casual attire was perfectly fine. Only 40 percent thought it hurt productivity.

Remember we said this was an unscientific survey. Conducted by FPC, a national franchise search firm, the survey had 9,105 responses collected anonymously from workers who visited the site. Researchers and pollsters can legitimately argue that it is not random and self-selecting.

Caveats aside, we would have guessed that the bosses were the ones ready to go back to suits, skirts, and ties. And though a bare majority (51 percent) of the workers said going back to formal business attire would be a step backward, our guess would have been something like 90 percent would feel that way.

Interestingly, only in chemical, biomedical, and pharmaceuticals did workers and bosses agree that casual attire hurt productivity.

“. . .we can say that Muad’Dib learned rapidly because his first training was in how to learn. And the first lesson of all was the basic trust that he could learn.      It is shocking to find how many people do not believe  they can learn, and how many more believe learning     to be difficult.”
-Frank Herbert, Dune

This quote from the well-known science fiction novel Dune underlines the difficulty many people have in learning. Learning means change, examining what we are now doing, and being open to explore what we could do differently.

Very few of us have ever learned to learn and most of us live in fear of learning. This fear has roots in embarrassment, fear of failure, fear of ridicule, our society’s worship of “book” learning over experiential learning, the desire to be like everyone else, the need to be liked, and many other needs and fears.

Children have the wonderful gift of total trust that they can, through interaction with their environment, learn. They experiment, test, challenge, and in the process, learn. Their natural curiosity and excitement over piecing together the world as they discover it is a wonderful thing to witness. Yet, somehow as we go through our formal schooling that innate belief in our own ability to learn, and most of our curiosity, is taken out of us.

Our organizations reflect this as well. Only a few are true learning organizations that invent the future and do so regularly. One that comes to mind is Apple. Perhaps fueled by Steve Jobs and his seeming less-ruthless focus on perfection, it remains youthful and exciting, even now that it is into middle age. It has programmed into itself the ability to take risks, be bold, and go where others are afraid to go.

Recruiting remains a transactional and traditional function for most of us. Not much learning, and consequently change, has taken place despite huge changes in how organizations design, manufacture, and sell their products and services.

Talent remains local. Competencies reflect yesterday’s needs. Sourcing is still a reactive process based on templates designed in the past. And hiring happens the same way it did 50 years ago.

If you want to be a mover and shaker in this profession, you have to learn to learn. You have to take some chances and do things differently.

Here are some slightly out-of-the-box thoughts on how you can create a learning environment and stimulate discussion and change by challenging the traditional and by boldly acting differently:

1. Hire people from the same spectrum of countries you purchase raw materials from or where you sell your products. Whatever else these employees are doing for your organization, they are also eyes and ears for product development and for sales growth. They may have fresh ideas about uses for products or have ideas for new services you can offer. And, given the talent shortages, it may be easier to find certain skills in those countries than in your own. To make this work, develop a sourcing strategy that works in multiple countries and a career site that is in multiple languages and has different recruiting messages for different countries. Encourage leadership to embrace virtual employment and let employees work in their native countries.
2. Hire people from parallel occupations. Try and expand your hiring managers to think more broadly than they do now about the kinds of people they want to hire.  Too often I find job requirements that are narrow and way too specific. These descriptions often list very specific competencies and precise skills that a candidate must have, along with a certain level of experience, to qualify for a job. In a few cases this kind of specificity may be necessary, but for the most part it is wasteful and not creative. By encouraging hiring managers to think out the box (for example, hiring music majors and training them to be programmers as Cisco and IBM have done) expands your talent pool, can lower starting salaries, and makes it more likely that some creative new concept will emerge because these people have not been trained that something cannot be done. The time to productivity curve may be longer, but the quality of thought and the morale of employees will be higher.
3. Rehire retirees or retain baby boomers. Many organizations could realize gains in product development, time-to-market, and other areas by bringing back experienced ex-employees who have retired or by hanging on to experienced boomers who are thinking about retiring. Transferring knowledge to younger workers is a major undertaking for many organizations and the best way to do this is to utilize the older worker’s experience as mentors or coaches for younger workers. By putting a few experienced employees on a project with younger workers, learning happens automatically. No time is used in classrooms or seminars. Work remains the focus with learning a significant byproduct.
4. Get rid of job titles and levels. Put people into project teams with only broad titles such as engineer, planner, statistician, marketer, and so forth. Let the team collaboratively decide who does what based on the team’s goals and desired outcomes. Hire people with broad skills and experience or with only a little experience (e.g., new college graduates). Creativity and change most often come about when there is a significant contrast or gap between people, ideas, or needs.

If you are looking for greater satisfaction and commitment to your profession, be open to learning and actively practicing it.

You practice learning by taking chances, experimenting, measuring the results against a standard, and trying again. Being open to learning and making changes is what differentiates the movers and shakers from everyone else.

They are all written by well-known authors who have explored similar topics before. But what is interesting to me is that every one of these books is centered on people, talent, and how talent will be used, organized, or deployed over the next few years.

Talent on Demand: Managing Talent in an Age of Uncertainty by Peter Cappelli

Peter Cappelli is known to ERE Expo audiences as he has spoken at the Expo and is frequently quoted in the press on talent issues. He is a professor at the Wharton School  at the University of Pennsylvania and frequently writes and speaks about talent issues.

In his recent book, Peter looks at talent as a supply-chain issue. Just as we take great care to ensure that we have a reliable source of raw material or parts for manufacturing, we need to do the same with the people who invent, design, manufacture or deliver, and sell our products and services.

He also makes a case for the value of creating (developing) the talent that you need versus the constant search for that talent. Good talent management is about balancing the recruiting of talent with development.

He covers many areas in the book, including an historical overview of the talent acquisition process and thinking that is reflected in most American organizations today. If you are a serious talent management practitioner, this is essential reading.

Groundswell: Winning in a World Transformed by Social Technologies by Charlene Li and Josh Bernoff

A second book, which directly affects all of us who make talent acquisition or development the center of our work, is about the impact Web 2.0 technologies are having on what we do. Charlene and Josh take us on a journey through the world of Web 2.0 and show us how it changing almost all aspects of our lives.

This is a book to pass on to your CEO or VP of HR so that they can begin to appreciate some emerging facts of the 21^st century: information cannot be controlled, having a presence on social networks like Facebook is important, and developing a Web 2.0 strategy is essential to success.

They have based the book on their work as researchers at Forrester. They maintain a blog based on the book and you can follow Charlene on Twitter at charleneli. I recommend you at least skim through their book and then pass it up the ladder.

Talent: Making People Your Competitive Advantage by Edward E. Lawler III

Ed Lawler has been working on how to make organizations more effective for at least the past 30 years. Back in the 1980s when I was in the corporate world, Ed was a major presence through his Center for Creative organizations as USC. He has authored or co-authored several books and is always at the edge of talent issues.

His latest book is about the bigger issue of getting organizations “re-tuned” to focus not on securing their raw materials or finances, but on ensuring that they are designed to attract great people.  As Ed says on his blog, “What differentiates Talent from other books on the subject of talent is that it is not about talent management — it is about designing and managing organizations that make talent their source of competitive advantage.”

This is a sampling of the dozen or so books that I have run across over the past few months that I think are worth your time and effort to read and think about.  Let me know what you think about any of these books or suggest one you have read.

Hope your summer is going well.

Change most often occurs when systems are stressed and have to respond in order to survive. It is at the intersection of pain, technology, and economics that new products and services arise.

At first, these changes are frightening and require both learning and daring to adopt them. But once accepted and woven into the fabric of daily routine, they become indispensible. This was the case with applicant tracking systems and career sites on the Internet. And it is still evolving.

So far this year, I see at least four major trends emerging. There are probably more than four, but these are the ones I can make sense of and that seem big enough to warrant being called trends.

The first is the economy and what it portends, and the second is the maturing of the concept of talent management as a larger and more strategic field than recruitment. The third is in some ways an outgrowth of this, an evolution of applications from discrete products to suites that contain integrated and synergistic applications. Fourth is the growth and diversification of social networks as integral and ongoing platforms for sustainable recruiting.

1. The economy will impact recruiting and change the emphasis. Obviously, not all is well in the economic picture for 2008. Energy prices and weather issues have significantly changed the employment landscape. While employment will be robust in healthcare, energy, and retirement-related sectors, manufacturing, financial services, real estate, and transportation will continue to see cutbacks or freezes. People with management skills will be in demand. Many employers are expanding college recruitment and internships as a way to bring in potentially loyal and less expensive labor and to build a talent pipeline. There will continue to be a demand for technically skilled people such as engineers and computer experts. I believe that the number of recruiters employed by an organization will decline over the next two years, forcing recruiting leaders to retain experienced and technically savvy recruiters who can leverage the Internet to expand candidate sources and be more productive. There will be growth for those who have skills in employee development, training, leadership development, succession planning, and workforce planning, along with more usual recruiting skills.
2. The concept of talent management matures. While not a new concept, it has taken more shape and achieved credibility over the past few years. Most human resources functions now are using the term and use it to encompass such areas as competency analysis, performance & compensation management, onboarding, succession planning, career planning, and learning. Many HR departments are finding that merging at least recruitment and training makes a lot of sense and the leading-edge firms are integrating many of the other elements as well under one leader. By combining recruiting, learning, onboarding, and performance management, an organization can expect to see a tighter coupling between each of those elements and that should improve employee competence and output.
3. Talent management suites arise. Again, not a new concept but better executed are the numerous talent management suites that are now available from vendors that include Taleo, Vurv, Authoria, and Virtual Edge. These often replace the individual applications that HR departments bought and struggled to integrate with each other. They fit nicely into the new talent management structures that are appearing, but require HR functions to examine how they integrate the processes and functions within the organization. The applications are most effectively deployed when there is a single person or team that can establish common processes and enforce them through the performance management process. As headcounts come under scrutiny and costs are carefully controlled, any efforts to improve efficiency and remove waste will be rewarded. These tools, along with a restructured HR function, give human resource leaders the opportunity to move into strategic corporate influence positions.
4. Social networks will continue to mature. While certainly over-hyped and poorly used at the moment, social networks will become core to good recruiting and talent management. Applicant tracking systems suffered the same over-hype and poor use until recently. Now, most recruiters know how to use an ATS well and what to expect from one; the same will happen with social networks. To ignore social networks or dismiss them would be a mistake. LinkedIn, Facebook, Myspace, and the hundreds of other sit