Of late, given the decrease in open positions, the candidate pipeline subject has resurfaced again as a hot topic among many recruitment leaders and hiring managers.

I’ve heard comments like:

“Now is the time to fill the pipeline for future hiring needs.”

“Since the recruiters have extra time, let’s have them build candidate pipelines.”

These comments are being made at companies throughout the country.

What I find most interesting is a growing frustration and disconnect between recruiters and hiring managers regarding this subject.

Additionally, while in theory recruiters with fewer requisitions should have more time to “pipeline candidates,” in most organizations, this is not happening.

Why is this the case? The frustration and lack of candidate pipeline development is a result of:

1. Managers’ unrealistic expectations regarding candidate pipelines.
2. Undefined, unrealistic expectations regarding the time it takes to create pipelines and develop a candidate relationship management program.

Regarding the first point, recruiters and hiring managers have different definitions for “developing candidate pipelines.”

If you ask most hiring managers what the definition is, most will say:

“A ready pool of pre-screened applicants interested in working for our organization. When an opening comes up, we call them up, bring them in for an interview and if we like them, hire them.”

My (and I think most recruiters’) definition is:

“A pipeline/network of talented professionals (active and/or passive job seekers, pre-screened or not) that you regularly communicate with regarding opportunities with your organization. A pipeline of candidates, that when an opening comes up, you can immediately contact and engage in discussions about the opportunity and/or to network.”

To maintain a pool of pre-screened, job seekers ready to join our organization with little more than a two-week notice (managers’ definition) is not achievable or realistic.

We need to educate managers of this fact and the potential difference in the definitions.

First of all, taking into consideration that most of these so-called “ready in the wings” applicants would be active seekers, the probability that they would remain interested and available for an opportunity with your organization (before taking another) is very low.

Second, let’s assume you have 50% attrition of this pipeline on a monthly basis (i.e., 50% take another position and/or lose interest in your position/organization). The amount of time required to keep the pipeline stocked with candidates would be very inefficient and most likely be cost-prohibitive.

This concept proposed by managers would be comparable to a grocer acquiring perishable food, only to lose 50% of it before they can sell it! It’s probably not smart business!

Most recruiters (and hiring managers) underestimate the time required to develop candidate pipelines. And relatively few recruiters have calculated the amount of time it takes to identify, contact, and maintain relationships with quality professionals.

To help you quantify the time required, let’s dissect the process:

• First you to need to find qualified applicants who meet the position specifications (and we all know quality talent is not sitting out on job boards or applying to our postings). This might include performing primary (phone-based) and Internet research to identify potential prospects.
• You then need to verify that they are potential candidates and validate they are good at what they do (typically phone and/or referral based).
• Once identified and validated, you need to make contact with them, engaging in discussion to understand their current situation, what would motivate them to move, etc.
• Once you have established a connection/relationship, you need to create and maintain an ongoing relationship management campaign to stay connected with them.

Of course using your centers of influence (hiring managers, employees), and using technology (including social networking sites) can reduce the time required to build and maintain pipelines, but I haven’t found anyone who has built strong candidate pipelines (as I defined above) who doesn’t dedicate a 5-10+ hours a week to this activity (pending type of recruit, # of job categories you recruit for, etc.).

Are you (or your recruiters) spending this amount of time per week on this task? Do you have a sourcing team dedicated to this task?

So what is a solution to the candidate pipeline dilemma?

1. Educate hiring managers regarding candidate pipelines, and make sure your definition of a candidate pipeline is the same as theirs.
2. Educate the hiring managers regarding the process of developing candidate pipelines.
3. Make sure the hiring managers and employees are engaged in the process: Who do they know in the market who are top performers that we should connect with? Who are the top performers at our competitors? Once we identify potential prospects, run the names by staff members to capture positive/negative intelligence about them.
4. Do a pure time study to quantify the amount of time it takes to: a) identify applicants; b) verify skills/quality; c) maintain contact with them and build relationships
5. Develop a data-driven strategy to develop candidate pipelines based on customer demand (time and tools required).

While these ideas outlined probably seem fairly simple and straightforward, you will be amazed at the results of implementing them.

(Editor’s note: Sometimes we see great blog posts on ERE.net, and when we do, we publish them here with the permission of their authors. This post was originally on David’s blog.)

As you review these positions, find out if there is a person or persons in the organization who could take that individual’s position should it become vacant. Document who could fill the void, and/or make note if there is no one who could fill the position, should it become vacant. You might also make note of any imminent retirements in any key positions over the next few years as well. Once complete, you will have a clear understanding of which positions you need to plan recruiting for and when that recruiting might be coming online. Make this a subset of your strategic workforce plan.

After you complete this top talent succession planning exercise, compute the following ratio:

Numerator: the number of top-tier positions with at least one fully qualified person who is ready to take the place of the incumbent.

Denominator: the total number of top-tier positions assessed.

This is what Jac Fitz-enz refers to as the “human capital readiness level.” According to Fitz-enz, “this is the percentage of key positions with at least one fully qualified (competent) person ready to take over now. Applying the readiness criterion to key positions yields a picture of what he calls the organization’s “general human capital health.”

As you make plans for succession over time, your ratio will go down. Track and measure this and share with your executives. This is a highly strategic exercise and of great value to your organization. Planning our workforce for the future, especially our key leadership positions, are the most important outcomes recruiting leaders can deliver to our organizations.

Most people in recruiting and talent management are just so busy that they don’t have time to step back and build programs or marshal line managers to participate in programs that successfully let them see the “big picture.”

As a result, many organizations are just starting to emerge from another painful cycle of rapid hiring followed by large-scale layoffs.

I call this phenomena the “war for talent” followed by the “war on talent.” Unfortunately, many organizations can look back at their history and see that for decades they have been repeating the same cycle over and over.

This “war for talent/war on talent” is unnecessary and expensive. In my view, it’s time to forever break that cycle through more effective workforce planning.

The topic of workforce planning is hot these days (it will be a major topic at the fall ERE Expo) because more and more executives have started openly discussing their desire not to repeat the painful “war for talent/war on talent” cycle. This binge and purge is extremely expensive, and it damages the firm’s employer brand image, stock performance, and innovation capability.

If you’re going to end this vicious cycle, focus both time and resources on workforce planning and in particular, upturn planning. While news reports may have left you thinking things are not getting much better, many organizations report that they are anticipating 200%-plus growth in requisition volume compared to last year by Q3 end.

If you work in talent management and you were surprised by the last economic downturn, don’t reaffirm your lack of competence by being surprised by the next upturn. Even the most pessimistic economists predict an upturn; the only question is when. Regardless of when it occurs, the upturn will provide talent management leaders an opportunity to make the talent management function look good.

By developing a turnaround plan and having your processes in order so that when the upturn does occur, your firm will be poised to act quickly and take advantage of the talent opportunities available.

Workforce Planning Defined

“Workforce planning is an integrated and forward-looking process and set of action plans that are designed to predict what will likely happen with regards to talent supply/demand in the organization and what prescribed actions will be required by managers to avoid or mitigate people problems, take advantage of talent opportunities, and to improve the ‘talent pipeline,’ so that the firm will have the necessary ‘people capabilities’ to meet your business goals and to build a competitive advantage over other firms.”

The workforce planning process for specifically addressing the economic turnaround is often referred to as a “explode out of the box” turnaround plan.

10 Talent and Workforce Planning Opportunities

No manager wants to be blindsided by the future, so the foundation element of any decent workforce planning effort is forecasting. However, take a broad view of forecasting, looking beyond the availability and demand for labor to identify highly probable upcoming talent problems and opportunities as well. Accurately forecasting upcoming problems and opportunities gives managers ample time to prepare solutions for problems and to build the business case for taking advantage of talent opportunities.

Most professionals involved in workforce planning successfully identify upcoming problems, but few take the time to identify and prepare for upcoming opportunities. Great businesspeople are always seeking out new opportunities, so realize that when the economy turns around and corporate revenues increase making investment dollars available, some outstanding opportunities will present themselves.

The top 10 talent opportunities that will occur just as the turnaround begins are:

1. A broad talent pool. Hiring during times of layoffs can be problematic because some firms use small scale layoffs to release their “deadwood” (problem employees.) However, after sustained periods of economic decline, many organizations will have ceased operations entirely, forcing even the most qualified and strong performers into the labor market. The end result is the talent pool that will be available in the first few months of the turnaround will be very deep. The key is to plan ahead and have a process is ready, so that you can act quickly.
2. Expanded active candidate opportunities. If you’re in the recruiting function and have no responsibilities for retention at your own firm, understand that as a turnaround begins, the number of currently employed people actively looking for a job will increase dramatically. For example, one recent study by Adecco revealed that an amazing 71% of currently employed workers under 30 and 54% of all workers will actively seek to find a new employer when the upturn begins. This means that in addition to the robust unemployed talent pool there also be a huge number of employed people who will be seeking to leave firms that have treated them poorly during the recession. Employees are not stupid; the never-ending round of furloughs, travel freezes, budget freezes, and layoffs have left a lasting impression about how their current firm values employees. This means that if you have predefined and targeted these individuals, you will have an opportunity to hire some truly amazing talent away from your competitors.
3. Employee/contingent/technology arbitrage opportunities. Arbitrage is a common term in business for taking advantage of value differentials, but it’s a term that’s not frequently used in talent management. Many in talent management and HR are painfully consistent, staunch defenders of an “employee-first” or “people-first” approach to providing labor. Maybe it’s because the word “human” occurs in the title of the function (human resources), but the time has come to stop proposing a single solution (i.e., employees) to fill all labor or work needs. Proposing an “employee-only” approach is an outdated 20th-century concept that needs to be buried. For example, if a manager needs a certain amount of work done (for example, programming) the typical HR answer is “hire a new employee as a programmer.” But there are many other options for getting the programming work done. Some of those include hiring a contingent worker just for the time when the programming is needed. Another option would be to outsource the programming work. A third, but increasingly important, option that needs to be part of the decision-making mix is the choice of having the work done by technology. Rather than using people in every case, HR needs to learn how to add to its range of options the direct substitution of software and hardware for people. Car manufacturers like Toyota have long ago added “buy a robot” as an alternative to hiring new employees. Major accounting firms have also learned to buy software as a viable alternative to hiring more CPAs. This turnaround is an opportune time for HR and talent management to expand their thinking and their processes to include contingent workers, outsourced partners, and automation as additional labor options. I call this approach employee /contingent/technology arbitrage and before the turnaround gets under way, talent management must systematically review every job family in order to identify where technology or contingent labor is a better choice than hiring a new employee. Of course, such an approach requires HR to work closely with procurement, IT, and production to ensure that everyone is aware of the advantages and disadvantages of each of the individual contingent worker/outsource/hardware/software options.
4. Global “testing” opportunities. Economic history shows us that economic upturns don’t occur uniformly around the world. Obviously talent management managers can take advantage of these variations to recruit heavily in economic regions that remained depressed. These variations also provide you with some great opportunities to test new talent approaches in the countries whose economies turnaround first. You can use these countries as beta test sites to improve your recently initiated but often to this point unmeasured new ventures into social network recruiting, live video interviews, workforce planning, and retention efforts.
5. Employer brand-building opportunities. If your firm is one of the many that have had your “talent failures” (including layoffs, pay cuts, promotional freezes, etc.) publicized online and in the media, now is your opportunity to begin rebuilding your external image. Act fast to begin to spread the word in the media and on the Internet about the positive things that your firm is doing after you lift your heart and freeze. The fact is that after years of bad stories, the media is hungry for positive people-management practices talk about.
6. Opportunities to rekindle innovation. Reduced corporate revenues have meant massive budget cuts and overworked staff. However, the demand for innovative products hasn’t decreased at all, so additional hiring and budget will provide an opportunity for your company’s innovative employees to shift from “risk avoidance mode” back into innovation mode. Talent management can facilitate this increased emphasis on innovation by refocusing its development, metrics, and rewards programs to emphasize innovation over cost-containment. Change your employees’ mindset and increase their willingness to take risks, and talent management can play a major role in that adjustment.
7. Hiring manager “re-education.” During hiring freezes, it’s obvious that managers do very little, if any, hiring. As a result, they forget a lot about the right and wrong way to approach recruiting. Managers need to be updated or even retrained when hiring freezes are lifted. Look upon this “lull” as an opportunity to provide data and business arguments to convince them to increase their focus on recruiting. Educate them about the changing expectations of the workforce and the new technologies available in recruiting.
8. Talent “alert” opportunities. Almost all of recruiting is geared to respond to an open requisition. This reactive approach is extremely limiting in that it only informs managers of the availability of talent when a requisition is open. This ignores the fact that some managers would purposely begin hiring solely on the basis that highly desirable but seldom available top talent is available. For example, if you managed a golf team and currently had no slots open but learned that Tiger Woods was looking to change teams, wouldn’t you want to be notified? This proactive process is called a “talent opportunity alert” and it should be part of everyone’s turnaround plan.
9. The opportunity to avoid over-optimism. Many workforce forecasts and predictions are inaccurate because they almost invariably predict steady uninterrupted growth once the economic turnaround begins. Although everyone might be tired of the downturn, it would be a mistake to assume that there won’t be “ticks” or short spurts of growth followed by contraction. HR’s tendency to be overly rosy or optimistic needs to be tempered with the reality that both up and downturns will likely become more frequent in the future.
10. The opportunity to correctly identify when the turnaround begins. Rather than relying on strategic plans, budgets, or sales forecasts to let you know the precise time when the turnaround has begun, you should consider developing your own process. The easiest and most effective way of predicting within a month of when the turnaround will begin is to use the precursor or leading-indicator approach. This process identifies past economic turnaround patterns in your industry and firm and then uses these leading indicators or precursors as predictors of when your firm can expect growth, and to some degree how much growth. The premise is simple — study past turnarounds in order to identify which internal business functions or competitor firms most accurately predict the time of an economic turnaround. If you find a pattern where for example, your finance department always gets it right or firm X always begins its turnaround at the right time, you can then use their present actions as indicators of the coming turnaround.

Final Thoughts

Some of the most successful people in business got to where they are because they developed processes that allowed them to routinely “turn lemons into lemonade.” Unfortunately, many in talent management get so distracted or even suffer “corporate depression” during economic downturns that they fail to see the sun coming up over the horizon.

Downturns are never pleasant, but exploding out of the box after them can be exhilarating and exciting. Great turnaround strategies don’t just occur on their own, they require that serious talent and resources be put into workforce planning.

If you need more help, see me in Florida at ERE where everyone will be focusing on the future.

As you put the list together, consider these assumptions:

1. The trough of the economic downturn was reached in April 2009.
2. Job losses continued through October 2009, but at a declining rate, with job gains finally turning positive in November 2009, at around 20,000 or so.
3. The unemployment rate peaked at 9.7% in September 2009 and although still at 8.5% in January 2010, it is forecasted to drop to 7.0% by June 2010.
4. The number of searches on Google with the words “jobs” (e.g., “jobs nurses Seattle”) peaked at 7.3mm/day in April and has been declining by an average of 10%/month since then, but started inching up again in October 2009.
5. An article by Lou Adler on ERE in November 2009 suggested that this pickup was due to people who are fully employed but now getting itchy to leave. He contends that the pent-up demand for a new job is finally being seen and that this is a new group of people entering the job market. Note: this will be unexpected for unprepared companies.
6. Hiring for critical positions will begin in earnest three to four months before a general improvement in the jobless rate is seen. This will be exacerbated by an increase in voluntary turnover.

These assumptions are pretty realistic. The question is, are you ready for this scenario? If you are, here are some of the things you’ve probably been doing over the past six months:

1. You’ve developed and implemented a sourcing strategy that emphasizes how top talent looks for new career opportunities, rather than how average people look for new jobs. This is a huge shift in thinking that required some understand and significant selling to your executive and entire hiring manager team.
2. As part of your shift to a top talent hiring strategy, you’ve created a decision matrix based on how these top people compare and select job opportunities and have built this into your sourcing and recruiting process.
3. You developed a rolling workforce planning system highlighting your hiring needs for all critical positions, including a tracking system to identify potential turnover problems.
4. You’ve developed a multi-pronged sourcing strategy, including increased reliance on your employee referral program, more Web 2.0 channels, the grouping of similar jobs into talent hubs, and the use of niche boards instead of major boards coupled with an emphasis on search engine marketing and consumer marketing concepts. Part of this is the wholesale elimination of using traditional job descriptions as the basis for advertising purposes and incorporating messaging that ties directly to what top people are looking for.
5. You’ve put together a succession planning process to tap into some upcoming stars to deal with the anticipated turnover or whenever unexpected promotional opportunities arise.
6. You developed a means to tap into employee satisfaction to ensure you’re not caught unaware by an upsurge in turnover. As part of this, you created a new retention program to minimize the possibility of any business disruption.
7. You’ve started training and rebuilding your existing recruiting team including lining up enough contractors and full-time recruiters to handle the hiring increase. You’ve even developed a short list of retained and contingency recruiters to handle some of your real critical positions and given them some insight on possible positions that will need filling.
8. You’ve set up programs with your hiring managers to fast-track any top performers you identify before reqs have been formally approved. As part of this, and the expected hiring increase, your managers are now trained in using tools like the two-question performance-based interview to assess and recruit top performers.
9. New analytics program have been installed to track in real time recruiter productivity and effectiveness, sourcing channel effectiveness, candidate quality, quality vs. cost, and hiring manager recruiting performance.
10. Not only have you now using the LinkedIn and ZoomInfo premium packages, but your recruiters know how to call everyone they find and get at least two to three top referrals on every call. After just a few months, you’ve fully realized that these tools offer connections to the best people on the planet, not just sources of names.
11. You’ve assessed your technology and have started a major upgrading effort to ensure that you can track quickly prospects, you’ve installed a robust CRM system, you have everyone using the new analytics program, hiring managers are fully versed on using the process, and you can create new talent hubs in days. Bottom line: you’ve used the slowdown to convert your technology from just a data management and reporting tool into a full-fledged productivity improvement system.
12. You’re now building a huge pre-qualified prospect database with a drip marketing program already in operation. You know this is working since it’s growing in size by 5%-10% per month. Much of this build-up is driven by new employee referrals, Twitter feeds, pushed advertising to appropriate blogs and social networks, and an increased focus on getting prospects for future openings rather than finding candidates for current openings. This is another huge strategic shift in thinking for you and your company.

If you’ve done your job as a recruiting leader, the hiring challenges you’re facing in January 2010 are significant but manageable. In the past six months, you’ve probably done everything listed, and more. Here’s a reasonable recovery checklist to get started, but feel free to email me if you’d like the latest version.

Now back to today. If you want this story to be yours, you need to start this stuff right away. And if you haven’t yet started implementing most of the things listed, there’s not enough time to make it.

Consider, while the unemployment rate won’t start declining until late 2010, the demand for the best talent will start increasing three to four months earlier, driven by both business needs coupled with a modest increase in turnover. This means you’ll start feeling the heat by late summer 2009. Anecdotally, we’re already hearing the best third-party recruiters are now – in May — getting more assignments. This is clear evidence that the market for top people is starting to recover a bit right now.

The key to being ready is being more strategic than tactical. The strategic issues involved include a shift to thinking about how the best search for new opportunities, the conversion of technology into a business system, and the idea that building a top prospect database driven will replace posting requisitions as the primary means to fill positions.

If you’re ready for it, January 2010 will be an exciting time.

That’s data from the Bersin & Associates’ Workforce Planning survey (which a lot of people from ERE took earlier this year). Sixty-seven organizations, mainly in the U.S. and Canada, responded. Bersin partnered with the Newman Group.

The majority of workforce planning processes are owned by individual business leaders, and thus disjointed from recruiting and even HR. At many organizations, such as T-Mobile, talent acquisition directors expressed a strong demand for workforce planning, but the responsibility to lead this program lay with the benefactors of the data, the business unit leaders.

Workforce planning needs to be an integral part of the overall staffing and recruiting organization. In this capacity, talent acquisition should not only create interest around the topic; it should help drive the process.

In order to gain a seat at the table, talent acquisition needs to share in the level of ownership and accountability for workforce planning.

In strategic workforce planning processes (something I’m writing about in the June Journal of Corporate Recruiting Leadership), 43% of workforce planning efforts are conducted by recruiting and staffing. As a result, 64% are able to better plan recruiting and staffing needs. Companies that implement consistent workforce planning processes throughout their entire organization rely heavily on their talent acquisition departments.

They take a different approach and involve recruiting: 53% of these organizations indicated that workforce planning is conducted by recruiting and staffing. One key driver for workforce planning is to link recruitment, development, and training decisions to organizational goals. Without involvement and support from talent acquisition departments, organizations will not achieve this goal.

You’ll get much more detail there, but I wanted to whet your tastebuds with this sample paradigm for a workforce plan.

I. Workforce Analysis
a. Organization’s vision and strategy
b. Comprehensive internal employee analysis of core workforce
c. Analysis of labor market relative to your organization’s core workforce
d. Recruitment patterns
e. Turnover patters
f. Retirement patterns

II. Labor Projections
a. Forecast of anticipated core workforce needs
b. Demand of core workforce in the broader market — competition
c. Alignment to organization’s strategic plan

III. Gap Analysis
a. Documented disparity between where your organization is and where your organization needs to be over time (5 years, 10 years, 15 years)
b. By core workforce job category
c. Aggregate hiring needs

IV. Close the Gap (talent management)
a. Succession plan
b. Workforce development plan — training and education of staff; partnership with community education and training institutions
c. Retention plan
d. Recruitment plan
e. Compensation and benefits strategies that target the core workforce (total rewards)

But do you have a plan that will enable you to explode out of box immediately as the downturn ends?

If you don’t have a feasible recruiting turnaround plan, you may be hurting your organization.

Research shows that the majority of recruiting organizations don’t have a documented recruiting strategy, let alone one specifically developed to deal with a recovery of the macro-economy. While one could argue that it’s difficult to plan when you don’t know exactly when things will improve, such an excuse is just that, an excuse.

Scenario planning, or a what-if analysis, prepares you to handle the turnaround no matter when it occurs.

As a recruiting manager, ask yourself — before one of your senior executives asks you first:

“What exactly needs to be done in advance so that when the time comes, the recruiting function has the capacity and capability to dramatically ramp up recruiting?”

Benefits of Having an “Explode Out of the Box” Strategy

Whether the turnaround in your industry comes this year or next, it’s critical that you have an operational plan and strategy to prepare for it when it does come.

The reasons why it’s critical for you to develop this “explode out of the box” strategy include:

• Competitive advantage. During economic recoveries, organizations that can react quickly can pick up market share from competitors not quite as agile. This is especially true if your organization isn’t the largest or the most well-known in your industry.
• “Right time” advantages. The key is to “ramp up” recruiting at the “right time,” rather than being too early or too late. If you start active recruiting too early, you’ll leave a large number of recruits waiting in limbo before you can take action. If you start too late, you’ll miss out on the first movers (i.e., forward-looking talent who is among the first to be willing to assume the risk of a new position and firm).
• Free time. Although your budgets might be lean and hiring may be frozen, this “lull” is a great time to rethink your past approach. Once the frenzy of new hiring begins, there will be little time to think strategically and to develop a workable plan. This lull time will also allow you to identify new and emerging tools (mobile phones, Twitter, social networks, talent communities, etc.) and to adapt them to your company’s needs.
• Recruiter availability. If you plan accurately and act quickly, you’ll have your pick of the top available recruiters. Having a well-designed plan might, by itself, attract some of the best recruiters who have been frustrated when they had to operate in an ad-hoc environment.
• Lower costs. If you plan in advance, you will be able to attract some of the best recruiters at relatively low salaries. In addition, you might be able to secure low-cost deals with vendors before increased demand drives up their prices and limits implementation availability.
• Training and education. It is certainly true that hiring managers and some of your recruiters might be a little rusty. A great plan will allow you to improve your training and education processes so that everyone “gets up-to-speed” precisely at the right time.
• It’s a global competition. If your company is one of the many that has a global reach, it’s likely that the talent wars will heat up in certain geographic regions (or product areas) long before an overall turnaround occurs. If your plan includes elements that allow you to “explode out of the box” in these hot areas, you can help your company much sooner. You can also use these micro-targeted areas as a testing ground for your new plan.
• Strategic image. By being forward-looking, you might improve recruiting’s image as a strategic function.

Elements of an Effective “Explode Out of the Box” Recruiting Plan

If you’ve been a manager in recruiting for any significant period, you’ve already been through one or more up-and-down cycles. I’ve been through a half-dozen of them and from my experience, it is relatively easy to identify the elements that must be upgraded following a prolonged downturn. The key elements of a great turnaround plan include:

• Strategic goals. Revisit your current recruiting goals and make them more business-like. That means narrowing your goals and making them more focused on business impacts. These goals should include ramping up from little activity to maximum capability in 30 to 60 days; prioritizing jobs based on their business impact; hiring more top performers and innovators; improving the employer brand; and making managers more effective at hiring while reducing the time they must devote to it. Whatever goals you develop, make sure they are strategic and measurable.
• Strategic metrics. Shift the recruiting department’s focus away from operational metrics and toward business-impact metrics. You will need a metric for each strategic goal that you have set. Focus on these six strategic business-impact metrics: Quality of hire; innovation from new-hires; revenue loss due to position vacancies; the cost of new-hire turnover; diversity in management positions; and employer brand impact (you can’t attract the very best without a consciously developed and effective brand image).
• Executive buy in. Because recruiting doesn’t operate in a vacuum, recruiting leaders must realize that their plan needs to be developed with input from HR, executives, and hiring managers. Of all the executives, the CFO and COO are the most important because they control requisition freezes and recruiting budgets. The CFO must also be involved in developing the process to calculate the potential revenue loss that could result if the recruiting function is not adequately prepared with an “explode out of the box” plan.
• Prioritize positions. When hiring is “unfrozen,” it unfortunately often follows an illogical pattern. In some cases, the number of “low business impact” positions that are opened up may exceed the number of mission-critical openings. If this happens, it’s imperative that you have already prioritized business units and positions to ensure that you focus the most resources and your best recruiters on the high-impact positions. If you do this in advance and make it well-known, politics and loud “whining” will have less of an impact on your efforts.
• Competitive analysis. A critical part of the plan is to analyze your “talent competitors.” This includes forecasting when they are likely to ramp up, which jobs are likely to initially focus on identifying, and what tools they are likely to use.
• A timetable. An effective plan includes a timeline with key milestones and accountabilities. As a result, everyone knows “what to do” and “when to do it” after the “explode out of the box” recruiting plan is activated.
• Prepared managers. Even though recruiting designs the hiring process, it is a fact that managers do the actual hiring. If you expect your managers to be more effective at hiring, include an element that demonstrates the dollar impact of weak hiring. Once you get their attention, you need a process and support material that painlessly educates them about best practices among hiring managers; they will have their own “turnaround” issues in addition to recruiting, so begin this effort before the turnaround begins.
• Identify precursors to a turnaround. Part of your turnaround plan should be examining past turnarounds in order to identify warning signs which would allow recruiting to more accurately predict when hiring within your firm is most likely to open up. Work with the CFO and COO to identify those early warning signs.
• Identify applicants’ expectations. Any economic downturn can have a measurable impact on the expectations of potential applicants. It’s a mistake to assume that their expectations and their “decision criteria” for selecting a job have remained the same. Instead, survey a sample of the most desirable potential applicants to identify their current wants, needs, and expectations.
• Retention. Include a retention component in your plan because as the economy opens up, you are likely to experience as much as 50% increase in employee turnover as a result of your competitor’s expanded recruiting efforts. This means that you need to identify the specific employees that are most “at risk” of leaving. Then you must develop both a retention and a “blocking” strategy to directly counter your competitor’s recruiting and branding efforts.
• Rebuild your brand. There is no more powerful recruiting tool than building your external employer brand image. Under this plan, your branding efforts should be an ongoing process that “virally” spreads your message by having your managers and your best employees talk about the aspects that make your firm a great place to work. Develop plans to spread your message on the Internet, as well as at professional conferences and in the media.
• Re-energize your referral program. There is no more effective way of rapidly ramping up your recruiting capability than by convincing your employees to become 24/7 “talent scouts” as part of your employee referral program. The best referral programs focus on proactively seeking out top performers for referrals and on educating their employees on how and where to identify the best. The best also change the focus away from monetary rewards and toward reinforcing your employee’s critical role in helping to “build the team,” so that both they and their colleagues have a continuous opportunity to work alongside the very best.
• Build a talent pool. After branding and referrals, the next most powerful tool for preparing for an upturn is to build a talent pool for key positions. This means pre-identifying potential applicants and building relationships with them, so that when a position opens up, you already have a list of names of individuals that are both qualified and interested in your firm.
• Your recruiters and tools. Develop the capability of rapidly increasing the number of recruiters you have available. This element of the plan might include options for utilizing contract recruiters, outsourcing options, the use of agencies, and finally, by getting other HR professionals within your firm to contribute a few hours per week to the recruiting effort. In addition, the plans should be “scalable” to meet the different levels of recruiting volume that you might face. You will also need to “up-skill” your recruiters, so that they know how to utilize the many emerging Web 2.0 and marketing based recruiting tools. You might also need to plan for “new” positions within the recruiting function, including experts in building talent communities, metrics/analytics, employer branding, social networking, and mobile phone recruiting.
• Recruiting territory. The current mobility of the U.S. population is the lowest that it has been in 60 years. As the turnaround begins, more individuals will be willing and able to physically move to get a great job. As a result, your plan should expand the geographic scope of your recruiting beyond what is currently feasible.
• Budget and resources. There is a significant time lag between when recruiting has to dramatically increase its capabilities and the point in time where the CFO gets around to fully funding those recruiting activities. So include numerous cheap and no-cost options for branding, sourcing, screening, and making convincing offers. Part of the plan should include leveraging other people’s time, so that your firm’s employees and managers can initially pick up some of the recruiting load (i.e., employer referrals, social networking, recruiting at professional events, and boomerang hires).

Final Thoughts

The current lull in recruiting activity is a great opportunity to develop an “explode out of the box” recruiting plan that gives you the capability to ramp-up recruiting from nearly zero to extremely high levels almost overnight. It’s inevitable that you will need this type of plan, so the only remaining question is when is the best time to develop it?

In my experience, if you wait until the day when requisitions begin to be unfrozen, it will be too late to do an adequate job. Also, don’t wait until you have sufficient budget resources to hire a consultant to help you; just having a plan will build you instant credibility within HR and among senior managers. If you develop a really effective plan, you will actually prevent a great deal of stress on both yourself and your recruiting team because you will be well prepared for any problems that might occur during the turnaround.

I’ve outlined the key elements that you need to include in the plan, so the next step is up to you. The time to act is now!

HR has the opportunity to shine or be replaced by some other function as it is asked to ensure the availability of and quality of talent. Recruiters are central to that effort and many changes are underfoot.

Recruiting as a profession is challenged to embrace a broader scope of work and to take responsibility for more sophisticated and complex talent analysis and development.

There are several approaches to developing a sustainable talent management process and philosophy. Some of these mirror the methods used by manufacturing, finance, and other corporate functions that have undergone transformations over the past decades.

We can all learn from each other and draw inferences where they are appropriate.

Ask New Questions

What people policies will lead to a sustainable workforce model over economic cycles and changes in skills?

This is the central issue that must be solved.

Binging and purging people is a zero-sum game; neither you, the employees, the candidates, nor the organization gain anything. What each gets are anger, frustration, and fear.

Shift Your Thinking

Instead of thinking about your job as filling requisitions, or sourcing candidates, or screening people, think of it as providing talent guidance to management. Recruiters can help managers achieve their business goals by helping them determine what combination of skills and experience will make it easier for them to achieve their business goals.

You can push back on hiring managers who seem to be asking for talent that is not right for the direction the organization is headed. You will also need knowledge of the talent market and be able to speak intelligently about the availability of certain kinds of talent with numbers and facts.

Having the right frame of mind is the most important aspect of change. It will not be easy to begin thinking like a solutions provider rather than a “slot filler,” but as long as that is your goal and you periodically assess whether you are moving in the right direction, you will succeed.

Focus on Skills You and the Hiring Managers Determine Are Critical

To quantitatively improve candidate quality and overall performance, a solutions provider needs to be able to define every position in terms of critical competencies and skills that have been verified as necessary to accomplish the tasks of that position.

Ask hiring managers to define the skills they need to hire, not the degrees and experience levels they think are appropriate. While degrees and experience may add depth to the final decision, skills and abilities ultimately make the most difference.

Other ways to improve the sophistication and effectiveness of talent planning is to add more thoughtful analysis to the process.

For example, use modeling techniques to determine whether it is more efficient to hire a replacement for a position or to train someone internally. The decision is made on data, not on the opinions of HR or managers. Finance has developed models to help guide investment decisions, and over the next few years, HR will be developing similar models for talent planning.

Some possible areas for investigation and research include:

• Calculating the impact one person or a team of people has on profits based on a skills profile versus another person or team with a different profile.
• Looking at the attributes of successful performers and relating your findings to the recruitment assessment and development processes.
• Using search techniques to scan emails for employees’ thoughts about the organization and to hunt for clues to engagement and reasons why people might be looking for new positions.

Use Four Strategic Levers Wisely

Each HR function has what I call four levers to use that will have an effect on talent and define the talent strategy. These are the levers of attraction, competence, commitment, and performance.

We have overused the attraction lever for a decade or more as organizations convinced themselves that they needed more people with narrower skills. Recruiting became the darling of HR and has now suffered a significant blow as the other levers rise in importance.

The competence lever focuses on development of people and on increasing the capabilities of the current workforce. It is the lever being pulled the hardest right now, although the performance lever is also critical.

The performance lever defines success and focuses teams and individuals on accomplishing business results. As desired results are better defined, performance can be more finely measured and improved. We need much better ways to quantify performance and isolate elements of it from other influences.

The commitment lever contains the HR favorites of engagement and retention. People stay with an organization because it does two things: (1) it provides them with interesting, exciting at times, and meaningful work; and (2) it removes barriers to development, cross-training, internal transfers, and so on.

In other words, engagement is not about pay, the boss’s mood, the furniture, or the work/life balance. It is much simpler — it is about treating people as if they mattered, as if their opinions are important, and as if they were able to make their own decisions about what they can do.

The next 10 years will be marked by the increasing use of quantitative tools and methods in HR and recruiting. Many will be imported from other disciplines that have already been shaken to the core, such as manufacturing and finance.

It will be the era when we begin to quantitatively define how many people are needed to meet business needs, which work can be outsourced or given to consultants, and what needs to be done internally for well-defined reasons.

We will be moving to a disciplined, deeper understanding of work and how it gets accomplished, and what a sustainable workforce looks like.

For many in corporate staffing, contingent labor management is an unpleasant activity often relegated to the lowest-cost outsourced service provider the organization could find, mainly because no one internally wanted to deal with it.

The work is largely considered mundane, process-oriented, and as a necessary overhead cost that provides little or no value.

If you work now or have worked in an organization that views contingent labor management this way, you work or have worked in an organization that has no clue about the future of strategic talent management!

Contingent Labor Taking Over?

Unless you are new to the workforce, chances are you have noticed a significant increase in the percentage of people working around you who are not employees of your organization. Sure, in the past there was the occasional temp who stepped in while someone was on family leave or covered activities during high-volume work periods, but today many organizations are awash with contingent labor of many types.

You may sit next to a temporary worker, a medium- or long-term contractor, an outsourced service provider, a consultant, a worker on loan from a strategic partner, an onsite representative from a vendor, a virtual worker (automation), or be connected to an offshored worker via collaborative technologies.

In just 20 years, the percentage of work allocated to contingent labor on average has grown from 6% in 1989 to more than 27% in 2009.

According to another study just completed in January by the Aberdeen Group, a majority of employers identified that their use of contingent labor would increase moderately in the next two years (1:10 employers are prepared for significant growth in the utilization of contingent workers).

[The Aberdeen Report on Contract Labor Management is available free to individuals who register for access thanks to report sponsorship by Peopleclick and Allegis Group. If you would like to download your free copy, click here.]

Like it or not, contingent labor now plays a significant role in providing both organizational capacity and capability. Given statistics regarding the desires of incoming generations and the changing nature of work itself, it’s entirely possible that in the very near future a majority of all work done in your organization will be done by contingent labor.

True Labor Cost, Possibly the Most Unknown Statistic in HR

Contingent labor includes many different types of labor, and many organizations admit they do not know, nor do they have any way to identify, true labor costs.

While it is widely accepted that on-average labor costs equal 60% of an organization’s variable expenses, it’s entirely possible that unknown spend on alternate forms of labor could significantly alter that percentage.

World-Class Contingent Labor Management Essential to Strategic Talent Management

It shouldn’t require much to convince you that given the increasing role contingent labor plays in the organization, it is essential for organizations to build a world-class contingent labor management framework in order to drive strategic talent management.

If you see your organization as a complex living organism, would you trust a doctor who said you can ignore 27% of your internal systems and remain healthy? Hopefully not!

Organizations need to get out in front of this issue and recognize the need for a holistic workforce strategy that incorporates all forms of labor available to the organization and coordinates the activities of programs and processes that acquire, develop, motivate, and retain that labor.

Uses of Contingent Labor

During the 1970s, contingent labor popped up as a stop-gap solution to mitigate the impact of a position vacancy.

Today, however, contingent labor is not a temporary fix to a temporary problem; it’s a permanent mechanism that provides flexibility in how talent is deployed.

Some of the major ways your organization should plan to use contingent labor include:

• As an economic buffer. Many organizations today are in the midst of a battle to contain labor costs. They are employing reduction-in-force mechanisms that carry significant costs such as layoffs, furloughs, alternative work schedules, etc. While such mechanisms can cut costs, the long-term impacts generally end up costing organizations more than the labor-savings produced, particularly when a downturn is short-lived and resources must be re-recruited within a year of being let go. The contingent labor force, on the other hand, can flex up and down in size, often with little or no impact on variable cost. Strategic talent management organizations should leverage contingent labor to create a workforce buffer to economic oscillations.
• As a training/development resource. The research powerhouse Gartner pointed out a long time ago that the most expensive talent resources in the future would be those resources that have extreme knowledge in a special field, or that possess enough versatility to be deployed across several traditional stand-alone roles. Strategic talent management organizations should leverage contingent labor with extreme knowledge in special fields as training or development resources. Hiring such individuals for short periods and structuring knowledge transfer goals into their engagement agreement is a great way to provide a lasting augmentation to your organizational capability while containing long-term costs. This development methodology provides existing employees with on-the-job learning opportunities, day-to-day coaching/mentoring, and improved skill mastery/retention probability.
• To augment capability for a short-time (seasonal). Many organizations today need access to specialized labor for short durations. For example, an HR organization may need routine access to a web developer to build out web applications to power recruiting campaigns, but not require access full time. Whenever new requisitions for labor are being drafted, organizations should evaluate if the volume of ongoing work is sufficient to hire full-time resources, or if a contract worker should be procured either as a periodic service provider or short-term development resource.
• To support cost-containment efforts. Global competition has placed extreme pressure on product and service pricing, which has increased visibility on all variable costs that go into producing goods and services. No variable cost is more visible than labor costs, so it’s no wonder that contingent labor pools have popped up that enable organizations to accomplish low-margin activities at significant lower cost. If your organization has component work that must be delivered in order to enable your goods and services, but that would erode profit margins if completed using traditional labor, then your organization should evaluate contingent labor options.

Elements of a World-Class Contingent Labor Management Solution

Managing contingent labor in a world-class way really comes down to making sure that your talent management systems optimize the capability and capacity of the labor force to accomplish your organization’s objectives at the lowest possible cost.

It’s about identifying when contingent labor sources can and should be used in place of traditional labor, what sources of contingent labor provide the best value, and how to manage the life-cycle of contingent labor engagement to maximize ROI.

The major elements of a world-class contingent labor-management solution include:

• A comprehensive labor strategy. This should identify the mission-criticality of roles in the organization, the parameters that limit suitability of labor types, and the projected financial impact of various scenarios such as extended vacancies, bad hires, labor cost increases, etc.
• An optimal labor type assessment. With a strategy developed that identifies the criticality of positions in the organization and the parameters that limit what labor types can accomplish the work to be completed, an assessment is needed to determine what labor type and source of labor would produce the optimal ROI. This element essentially creates a universal work order for labor that can be handed off to procurement specialists.
• A holistic labor procurement system. One of the key benefits of a world-class solution is extreme visibility into true labor cost. To enable this, organizations must create a single point of control for the sourcing of all labor, regardless of type. The holistic labor procurement system is charged with maintaining an index of possible service providers, initiating sourcing activities, managing the engagement process, and coordinating with other systems for the onboarding, deployment, performance evaluation, and offboarding of contingent labor.
• A holistic engagement/development system. The business environment changes rapidly. Skills of extreme value today may become commodities tomorrow. Compensation factors may go from being highly prized to being utterly worthless overnight. To ensure that contingent labor resources are engaged and capable of delivering the quality and volume of work needed, a system must be contracted to periodically assess the resources interest in deployment options, desired terms of engagement, availability, and suitability/readiness for deployment.
• A holistic knowledge management system. It is essential that the organization develop a system that enables capture and ongoing access to knowledge or work developed during the engagement. This system could include tools to enable social interaction between resources (social networking), document capture, communication capture, context sensitive search tools, etc.
• A holistic performance management system. Organizations must invest in tools that enable a periodic snapshot of performance — at the onset, midpoint, and completion of the project at the very least. In recent years, a number of technology products and services have popped up to enable such evaluation, but organizations could also build a solution quickly using basic e-survey tools.
• A holistic talent-relationship management system. As the percentage of work deployed to contingent labor increases, so too will the volume of resources organizations need to remain in contact with. Staying on top of all of the communication timelines and delivering customized messaging in response to various triggers is a complex task. Luckily, customer service organizations long ago developed customer relationship management methodologies, many of which are now supported by automated technology solutions that can be easily borrowed and adapted to create talent relationship management systems.
• Advanced workforce management analytics. No world-class solution would be complete without a process and set of measure to periodically evaluate and report out on the performance of the solution relevant to the goals for the solution. Organizations must draft comprehensive metrics to assess their utilization of contingent labor and ensure that all component systems in the solutions are capturing the data needed to power the metrics.

Final Thoughts

Like a fast-paced chess game, strategic talent management is about making sure the right resources with the right capabilities is in the right place at the right time to capture the competition.

The fact that many organizations have developed their talent management tools and program in functional silos and continue to ignore vast populations of the labor force is a sad statement about the true capability of our profession to deliver truly strategic work.

Contingent labor management is already a mission-critical activity, one that will only continue to increase in the years to come. Now is the time to evaluate your approach, rip out the archaic systems you currently have in place, and deploy a new set of talent management practices that pay homage to the current environment.

Free Webcast on Contract Labor Management
Join Dr. John Sullivan on Tuesday, March 17 at 1pm EST for an interactive discussion on Aberdeen’s latest research report, entitled Contract Labor Management: Superior Workforce Strategies for a Demanding Market. This informative webcast will dive into the characteristics of innovative contingent workforce management solutions developed by best-in-class organizations in response to global business practice and economic pressures. It will feature examples of emerging best practices and discuss how staffing industry technology and service providers are working to support them and expand talent management capabilities. John will be joined by Ginny Gomez, SVP, Product Management & Marketing, Peopleclick, Inc., and Jay Lash, Executive Director, Human Capital Solutions & Product Development, Allegis Group Services, Inc. To learn more and register for the event, please click here.

All you have to do is read the paper on a regular basis to see that many firms and their respective HR departments are struggling to find ways to reduce labor costs. Rather than implementing sound and well-established workforce-reduction plans, HR and talent managers appear to be making it up as they go, all in an attempt to avoid layoffs.

More often than not, they are utilizing ineffective and often damaging approaches like furloughs, pay cuts, and voluntary buyouts. After years of clamoring to get a seat at the table, many HR departments are demonstrating why they shouldn’t have a seat; they struggle to deal with a predictable and reoccurring problem, economic downturns, and the related need to dramatically cut labor costs.

At least to me, the lack of a long-established plan of action at most firms is an unnecessary embarrassment when it should be a significant opportunity to stand and deliver.

Déjà vu All Over Again

The lame reaction by HR departments around the world wouldn’t be nearly as embarrassing if it weren’t for the cyclical nature of the economy and the fact that organizations have faced downturns every few years since the emergence of civilization, most recently in 2001 and 1994.

Organizations are challenged to grow quickly during upswings and reduce labor costs during downswings, yet most in HR seem utterly “shocked” at the challenge before them. This time around, unfortunately, organizations are proving that despite lots of practice, they are no better equipped to handle the problem than they were the last time it occurred.

It’s almost like those in HR feel exempt from learning from history. Shame on those in HR who are so busy with day-to-day activities they can’t learn lessons from their mistakes. Even a struggling sophomore in economics knows that the economy is cyclical and that ignoring or pretending that it simply isn’t so is a prescription for disaster.

When business is good, senior executives expect HR professionals to be ready with a plan to hire and develop more people so that the organization is capable of meeting its growing obligations. When revenues decline, executives expect HR to have a plan to painlessly cut labor costs, again to right-size the organization to its obligations.

Executives expect all business functions to be able to adjust their expenditures with the changing business cycle. Can you imagine a store manager at Macy’s not realizing that there is an established retail holiday cycle where employees are added for the busy season but then “released” when consumer demand subsides? Ignorance of this business cycle would get any retail manager fired on the spot.

Similar cycles occur at ski resorts, amusement parks, and ice cream parlors. In fact, this “hire and then release” cycle occurs in every industry, the only difference is that instead of the down cycle occurring at the same time each year, it instead occurs in five-, seven-, or 10-year intervals. Just because they don’t occur at the exact same time every year is not an acceptable excuse for being unprepared.

Don’t You Dare Use the ‘L’ Word (Layoffs)

It seems to me that only Pollyannas or naïve individuals should be “caught with their pants down” without a plan for how to lower labor costs as business revenues decline, but isn’t that exactly the problem with many HR functions? They are so focused on day-to-day operations and are so “positively oriented” that frequently they don’t even want to think about the periodic need to conduct layoffs.

Other managers throughout the business routinely face up to the fact that they must periodically reduce costs. Managers of product inventory know it, production managers know it, even call center and shipping managers know it.

Because the total cost of employees is often 60% of all variable costs within an organization, it should never come as a surprise that the firm’s largest single expense item would be first on the chopping block when revenues decrease.

It seems like some HR departments try things almost at random (like hiring freezes, voluntary buyouts, and employee furloughs), even though these “stopgap” methods almost always fail to prevent the ultimate HR failure: large-scale public layoffs that dramatically damage the firm’s employer brand image.

When HR is pushed by the CFO’s office to reduce labor costs, more times than not, they react emotionally rather than logically, which is a poor substitution for collecting data and figuring out the best ways to cut labor costs without negatively impacting productivity.

HR needs to stop developing an “ad hoc” cost-reduction program every seven years, only to immediately abandon it after its first use; instead, a permanent process that provides for the real-time adjustment of labor costs and overall staffing levels is needed.

There are only three effective solutions that enable rapid labor cost containment:

• A fixed contingent workforce percentage program. Where workforce headcount growth and labor cost reductions are both handled through the use of a fixed percentage of labor cost being allocated to contingent labor. This approach uses a combination of variable cost outsourcing contracts and the hiring or releasing of temporary or contract workers to meet the required change in labor costs (Google and Microsoft are benchmark firms).
• A continuous reduction plan. Under this approach, surplus labor (usually bottom performers and those with obsolete skills) are proactively released each quarter (Cisco is a benchmark firm).
• A SWAP process. This approach is designed to continually improve your talent pool without changing headcount. Using the SWAP approach, bottom performers and those with skills that are no longer needed, are replaced whenever a high potential recruit is found. The net result is an overall increase in productivity and skills with no net increase in headcount (Slide is a benchmark firm here).

All of these approaches provide an organization with the capability to adjust the capability of the organization while containing labor costs.

The Four-Petal Shamrock Workforce Management Strategy

The most effective workforce management strategy is known as the shamrock approach where a portion or group of the workforce is represented by one of four petals:

• The first petal (permanent employees with good performance and current skills) reflects jobs and individuals who would not usually be reduced in a normal downturn.
• A second petal represents a group of contingent workers who could be easily released when labor costs need to be cut.
• The third petal represents work that would be outsourced under flexible cost contracts.
• The last petal would reflect the SWAP program and individuals who would be replaced whenever a high-potential recruit came along.

HR Should Identify Warning Signs

There is a relatively simple, two-part process that allows HR to identify precursors or warning signs that would alert HR leaders before they need to reduce labor costs:

1. Identify first-action firms. In every industry, there are repeatable historical patterns where certain firms act first to either reduce labor costs or to increase hiring. Here is an example to illustrate the approach. If you look back to 2001 and 1994, you might find that computer-chip equipment manufacturer that we will call Firm X was a “first action” firm. Meaning that they began to reduce labor costs months before their competitor, Firm Y. Several months later, you, their customer (Firm Z), followed suit by cutting labor costs. If Firm X acted immediately after their orders decreased by 20%, your company, Firm Z, can now use that pattern of first- and second-acting firms as well as the precursor (20% cut in orders) as early warning signs about when your firm might need to act to reduce labor costs. Changes in key economic indicators like unemployment rates, interest rates, or consumer spending rates might also serve as precursors or warning signs.
2. Identify the ideal labor cost to revenue ratio. If, for every $60,000 in labor costs, there should be $100,000 in revenue (a 6-to-10 ratio), you know that when the ratio reaches 8 to 10, it’s time to reduce your labor costs. In the opposite direction, when the ratio reaches 4 to 10, you know it’s time to consider new hiring. Alternative ratios include your average revenue per employee and the percentage of all variable costs that are spent on all of the various types of labor.

Other Action Steps

Pre-identify jobs that are likely to be protected, even during slow growth periods. By working with managers, you can identify jobs that should not be reduced, even when revenues drop. These “protected” jobs might include product development and sales. Individuals in these jobs should be informed of their relative job security in order to avoid unnecessary anxiety.

Conversely, there are jobs that are almost always reduced or declared “surplus” whenever revenues and workloads decrease. Typical jobs that are likely to have surplus employees might include customer service, supply chain, and production employees. There should be an absolute requirement that a fixed percentage of these jobs that have a high potential for becoming “surplus jobs” will be filled by contingent workers that are more easily released.

Make the internal redeployment and transfer process more proactive. Not only should the process be sped up, but individuals with key skills should be proactively “moved” from low priority and low-impact jobs to roles where these employees will have a higher ROI.

One last but very important action step is to make labor cost-reduction decisions more “fact-based” and metric-driven. Whenever any labor cost-reduction program like furloughs or voluntary buyouts are administered, use metrics to assess how effective they really were in cutting overall labor costs, while documenting their impact on morale and productivity. By collecting data, you can avoid implementing expensive stopgap measures that end up causing more harm than good.

Final Thoughts

If you are an HR leader and take umbrage to this article and its characterization of HR as a group that fails to learn from history, we will just have to agree to disagree.

Any organization that tries short-term “stopgap” measures only to be forced months later to conduct large-scale public layoffs has to be classified as a workforce planning failure. A superior and more strategic approach is a permanent workforce strategy that allows you to continually “vent” or seamlessly reduce workforce costs. Contingent workforce, continuous reduction, and SWAP plans all produce less workforce disruption, gossip, bad publicity, and surprises.

It’s time to face reality. In a volatile world, the ability to expand the workforce and then later to contract it is fast becoming a required capability for all firms. In the near future, it will likely be necessary for HR to have the capability of hiring new skills and talent in some areas, while simultaneously releasing workers in low-priority areas. The ability to handle this “continuous churn” will become a key competitive advantage for firms and a primary differentiator between good and great HR departments.

Free Webcast on Contract Labor Management

Join Dr. John Sullivan on Tuesday, March 17, 2009, at 1pm ET for an interactive discussion on Aberdeen’s latest research report, entitled Contract Labor Management: Superior Workforce Strategies for a Demanding Market. This informative webcast will dive into the characteristics of innovative contingent workforce management solutions developed by best-in-class organizations in response to global business practice and economic pressures. It will feature examples of emerging best practices and discuss how staffing industry technology and service providers are working to support them and expand talent management capabilities. John will be joined by Ginny Gomez, SVP, Product Management & Marketing, Peopleclick, Inc., and Jay Lash, Executive Director, Human Capital Solutions & Product Development, Allegis Group Services, Inc. To learn more and register for the event, please click here.

The reasons are simple: with the current economy driving revenues down dramatically, many senior executives are examining how to plan ahead in order to increase their firms’ capabilities, reduce costs, and survive the economic chaos likely to continue for some time.

Organizations need an effective talent management plan that will allow them to “explode out of the box” at the first sight of economic recovery, yet one that doesn’t threaten economic sustainability in the short term.

While most in talent management are continuing to react with stale cost containment approaches developed decades ago, strategic talent managers are stepping forward with robust workforce planning solutions and new work models that account for the significant changes in both how people work and live that have occurred in the last 20 years.

If you are interested in doing more than talking about being strategic, here are some recommended action steps to help improve your organization’s workforce planning.

What the Heck is Workforce Planning?

It might seem like a simple question, but there is little to no agreement among HR and talent management professionals as to what constitutes workforce planning. To some, it’s mostly an administrative activity that reports on historical changes to headcount and forecasts likely changes based on historical trends (i.e., headcount planning).

To others, it is a more strategic effort designed to forecast talent needs, talent supply, and the ability of existing HR programs and activities to align the two.

The more strategic variant looks at both internal and external trends and predicts what will be needed to recruit, develop and redeploy “just the right amount” of talent to meet specified business needs. The definition of workforce planning I prefer is:

“Workforce planning is an integrated and forward looking process that is designed to predict (what, when, how much) will likely happen in talent management and then to provide action plans that will cause managers to act in the prescribed way. As a result of the planning process, managers will be able to avoid or mitigate people problems, take advantage of talent opportunities and to improve the “talent pipeline,” so that your organization will have the needed “people capabilities” required to meet your business goals and to build a competitive advantage over other firms.”

Goals of Workforce Planning

Once again, not everyone agrees on what workforce planning is, but generally speaking, there are eight major goals for workforce planning that everyone should agree make sense. These goals relate to an organizational capability to:

1. Reduce labor costs rapidly without negatively impacting productivity.
2. Identify and prepare leaders and managers for future openings.
3. Fill “sudden vacancies” in key roles immediately with capable talent.
4. Maintain a flexible contingent workforce.
5. Proactively move talent internally to maximize the return on talent.
6. Target retention activities on key talent.
7. Identify mechanisms to rapidly hire needed talent.
8. Increase the overall productivity of the workforce.

Key Programs within Workforce Planning

There is no standard array of programs that define every organizations’ workforce planning effort. No matter what you end up doing, your programs will largely fall into one of two areas.

The first area focuses on increasing organizational capability through talent, and common programs in each area include:

• Forecasting the future needs, talent availability, and potential talent problems.
• Succession planning and leadership development.
• Forecasted recruiting plans.
• Workforce innovation management.
• Retention planning.
• Immediate “backfill” planning (To fill sudden openings in key positions).
• Internal re-deployment and “right job” placement planning.
• Merger and acquisition integration plans.

The second area focuses on decreasing labor costs, and common programs in each area include:

• Contingency/contract labor workforce planning.
• Workforce outsource planning.
• Reduction in force planning.

Benchmark Firms

In my experience, these are the firms to study:

• Microsoft
• KLA Tencor
• Valero
• WellPoint
• U.S. Marines
• Google
• Eli Lilly
• Qualcomm
• Intel
• GE
• P&G
• Booz Allen
• Toyota
• NASA
• Starbucks

Workforce Actions That ‘Fit’ the Current Environment

The most effective workforce plans are not developed over a long period and then implemented all at once. Instead, while some plans are being developed, talent management leaders simultaneously take action to resolve immediate needs.

If your company is struggling in the current economic environment, five of the key action steps that you should consider immediately are listed below.

Action Step I – Labor cost containment/headcount reduction

I am not alone in forecasting the fact that the decrease in revenues that businesses are facing will continue for at least another year. Whether that actually happens or not, it’s always a good idea to prepare for the “worst-case scenario” and hope that your plan is not needed.

Start with position prioritization, a process that identifies which key positions, key individuals, and key skill sets will have the most business impact during the next two years. Once you prioritize, you can then focus on retention, redeployment, and development efforts on the most impactful positions.

A related step is to develop a process to effectively identify and “control” all forms of labor costs throughout the organization (that includes full-time employees, part-timers, contractors, consultants, strategic partner labor, and outsourced labor).

The next step involves developing the capability of reducing “labor costs” and headcount in the lower priority positions. That might include “mock layoffs” and designating lower priority positions as “contingent labor” positions. Other options to consider include labor wage arbitrage (moving labor to lower-cost areas) or outsourcing with contracts that allow you to rapidly reduce outsourcing costs as your needs decrease.

Action Step II – Increase the internal movement of key employees

As business needs change, it’s important to develop processes that don’t leave the internal movement of talent into the “right job” to chance (as most internal job posting system’s do). I recommend that you develop a proactive redeployment process and plan to move your top performers and highly skilled individuals out of less essential business units and into units and jobs where they can have a greater impact.

The goal is to make sure that you don’t have a “Michael Jordan” playing “baseball” within your organization, when his impact would be significantly greater if he was proactively moved into “basketball.”

The right job can be defined as having your top performers and highly skilled individuals:

• Doing what they do best;
• With the right skill set for the job and business unit;
• With the right tools, resources, and motivators;
• With the right manager; and
• With the right teammates.

Action Step III – Increase the retention of key employees

Most organizations literally “forget” about retention during tough economic times because they assume that their employees will put security over external opportunity.

Unfortunately, that would be a mistake because the seeds for foundation of top performer turnover begin long before they decide to leave the firm. “How you treat your current employees now,” will directly impact their willingness to stay later on when the economy turns around. If your firm has been using hiring freezes, pay cuts, furloughs and layoffs recently, your key employees are likely to be frustrated and overworked. It’s also true that some firms have learned to continue hiring while simultaneously releasing employees.

This “churn” means that recruiters in some industries, firms and regions are still targeting your very best.

The best retention plans first identify the things that excite and frustrate your key workers and then provide a plan for increasing their level of excitement, challenge, learning, and opportunity within the firm.

The last but most important action step is to develop a “bad manager identification program” because bad managers are the number one cause of employee turnover. [For more information on setting up a Bad Manager Identification Program, click here.]

Action Step IV – Reinvigorate your succession plan

If your firm has undergone layoffs, hiring freezes, and reductions in college hiring, you are likely setting up your organization for a future “talent pool gap.” What this means is that by failing to hire and develop talent over a period of even a few years, there simply won’t be enough available talent to fill future management leadership positions when growth begins. This will slow promotions because there just isn’t anyone internally to replace them. This will make the predicted “leadership gap” even worse.

The best course of action is adopt your own “churn” approach to maintain some minimal level of hiring and development to minimize the possibility of any future internal talent pool gap. A related option is to implement a talent SWAP approach, where you continually “troll” for top talent and then replace bottom and average performers only when you find an exceptional replacement.

Action Step V – Prepare to “explode out of the box”

The final action step is to develop a plan that enables your firm to have sufficient talent to enable it to “explode out of the box” the minute that your firm’s revenues begin to turn around. That means retaining your very best recruiters on staff and having them focus on developing Web 2.0 recruiting tools. It’s equally important to maintain the two most-impactful recruiting programs, employee referrals, and employment branding.

Develop a “boomerang” program that tracks and maintains a relationship with the very best employees you must release. The goal is to be able to almost immediately rehire some of the proven talent that you lost.

Final Thoughts

The basic premise of workforce planning is that it’s better to be prepared than surprised. It might seem counter-intuitive to try to plan during times where uncertainty is so high, but that would be a mistake.

During times of turmoil, almost any forecasting and planning will produce higher business impacts than reacting to unforeseen events without a plan. Fortunately, if you’re personally interested in workforce planning, you’re likely to find that no one actually has the formal authority to “own it” at the present time, so you can seize the opportunity and become known as the person who can see around corners. During turbulent times, you will find that no one will be considered more valuable than someone who is not “surprised” by the future!

Free Workforce Planning Handbook: If you are interested in reading in-depth about workforce planning, I have compiled a number of articles into “The Workforce Planning Handbook,” a 240+ page electronic book which is available at no cost for evaluation purposes at www.drjohnssullivan.com. Once registered and logged in, click on “Publications,” then click on “Draft Books.” It’s free to download.

“Talent Pipelines.”

“Talent Networks.”

All of these buzzwords describe the same thing — the idea of building a community of individuals whose skills you will need before there is an immediate opening for them. The idea is to strengthen the bonds between these people and the organization so that when the need arises, it’s a simple matter of picking up the phone.

In theory, of course.

In practice, I’ve seen too many software solutions aimed at creating these “communities” turn out to be little more than databases with candidate names and contact information. I’ve seen too many companies fall in love with the idea (which is a really good one), but not put in them time necessary to implement them in a way that realized the concept’s potential.

This Tuesday, I attended a NY Recruiting & HR Network Meetup and had the pleasure of hearing Linda Paul, the Director of Team Development at Meetup talk about her work.

As background, Meetup is a software company that enables group organizers to create and manage events.  It helps people organize more than 100,000 face-to-face events each month. Its site is simple to use, and with only 58 employees the company, has developed a passionate fan following.

With such a devoted base of users, it’s not a surprise that many people want to work at Meetup. In a classic example of eating its own dogfood, Linda has developed the Working@Meetup group in order to develop relationships with potential employees.

The group currently has 424 members. Each month Linda organizes a face-to-face Meetup with 25 new people from this group at the Meetup headquarters. Those attending the Meetups get the chance to talk to current employees, get wowed by their cool office space (which is just up the block from ERE’s not-quite-as-cool digs), and get a feel for the culture of the company.

Early in the program, Meetup was getting a lot of very excited and very unqualified people signing up for the events, so it adapted. The current process prequalifies people to make sure that they are local and have skills in areas that the company needs before they can join the group.

The candidate experience is a seamless interaction with the Meetup brand; they sign up via the company’s product; get to tour the office, and meet the team. The people at Meetup get the chance to evaluate a group of prospects, develop relationships with them before they are critically needed, and leave a great impression.

Meetup found a way to run their program without expensive software, and they also did not forget that there’s no replacement for good, old-fashioned human touch.

Its program is simple, but I think it’s a great example of a company that’s done things right.

I’d love to see other examples of organizations doing this well. If you know any, let me know in the comments!

Companies such as T-Mobile and McKesson are stepping up to the plate by establishing a formal workforce planning process with a designated leader in order to achieve results. So, what exactly is workforce planning? How can it help organizations achieve these goals? And why should you care?

Workforce planning can help you strengthen and empower your role in the company by doing exactly what recruiters have been trying to do for the past 10 years: get a seat at the table. Workforce planning is a set of business processes which analyze the supply and demand of talent, ensuring that the organization has the right people in place to execute its overall business strategy. An effective workforce planning process allows you to:

• Understand current talent gaps
• Plan staffing and recruiting needs
• Help business leaders forecast revenue and operating budgets
• Drive business to partner with recruiting

Sounds simple? Don’t be fooled. Embracing the idea of workforce planning and implementing a strategic approach to your current and future workforce needs are two very different realities. Workforce planning fails when it lacks executive support, a clear methodology and business process, and the necessary tools and technology to execute the process. The workforce-planning process needs to correlate business strategies with workforce requirements. No easy task but one you should not ignore.

One important aspect to consider in workforce planning is your companies’ current level of maturity and the steps you need to take to become more strategic in your process. Mitzi Adwell of The Newman Group compares these different stages of workforce planning to driving a car. At the basic level, you are getting in your car and starting to drive with pretty clear direction of where you’re going — a staffing and headcount plan. At an intermediate level, you are looking in your rearview mirror to get a better understanding of the landscape around you (workforce analytics). At the advanced level, you are looking ahead and using your dashboard to gauge how you should proceed (strategic workforce planning with predictive modeling).

Stage One: Getting in Your Car

In the most basic level of workforce planning, companies are looking at current headcount in their organization. Some companies even take it one step further and look at forecasted vs. actual headcount in order to build staffing plans that close their talent gaps and keep them on target with their budgeted headcount. One challenge is that this level of workforce planning is often decentralized, viewing talent from the bottom up versus a top down view that prioritizes talent-sets from the most to the least critical to the business overall. This headcount analysis is performed in the individual business units and does not connect with the overall organizational business strategy.

More often than not, companies plan staffing and headcount on an “as-needed” basis when facing major external pressures or changes in workforce demographics. Volkswagen Group of America used this type of planning process when the company relocated its headquarters from Michigan to Virginia. Given that it planned to replace three-fourths of its workforce within a short timeframe, it was important to include a precise plan in short order to ensure the pipeline of talent and the timing of hires met its operating goals. Situational workforce planning like what Volkswagen did might help companies think about how to handle business plans with major talent implications. Of course the more you know and the earlier you know it, the more effective you can be at using more sophisticated means of workforce planning.

Stage Two: Looking In the Rearview Mirror

At the intermediate level, workforce planning looks at quantitative data analysis, including forecasted skills and competency needs. Companies look at a regular workforce profile with key data variables including demographic segment, compensation, turnover, and performance rating. Looking at historical trends of these variables and relationships between them helps companies to better understand their talent patterns and trends so they can incorporate that information into their talent plans going forward. Companies such as T-Mobile will rely heavily on scenario planning or “what-if” scenarios this year.

Scenario planning allows companies to prepare for different internal and external business conditions such as retirement, economic changes, and workforce demographic changes, and think through what strategies they will implement in order to overcome challenges they see through the ‘what if’ exercises.

Stage Three: Using Your Dashboard

While other levels of workforce planning inform business leaders about talent plans, a strategic workforce planning process integrates these plans with the organization’s business and financial planning. At this level, companies gain a deep understanding of their talent pipeline and how it aligns with the overall business plan of the company. Companies use technology to help map the talent needs and make more informed business decisions with cost implications.

How You Can Help Your Company?

Bersin & Associates, an industry research and advisory services company, is partnering with The Newman Group to publish a comprehensive research report on this topic. The goal of this study is to identify the current state of maturity in workforce planning processes, level of ownership, range of maturity in audiences served, processes included, and level of integration with other business planning processes.

We would love to hear from you. The survey contains 23 multiple-choice questions. Estimated completion time is 20 minutes. As a participant, you will receive a copy of the executive summary to be developed based on results of the survey and scheduled for release in March 2009. This is an opportunity to share what you know and receive great insight in return.

If you’re still considering cutbacks in your recruiting staff, think again. Recruiting top people is a repeatable sales process that’s fundamentally different than hiring average people. Instead of cutting back, replace the underperformers with people who can sell complex intangibles and services, those who can learn solution selling, and those who have demonstrated they can follow a realistic sales process including meeting quotas and being managed by the numbers.

Forget the Lone Rangers and those experienced recruiters who have not gotten significantly better over the past two years. Hiring top people is a business process, equivalent to selling your firm’s products and services. Now is the time to start implementing new training programs and changing your outdated pre-recession recruiting processes.

The amount of stimulus Obama, Bernanke, and Paulson/Geitner have already induced and are planning to induce into our economy system will jumpstart the recovery faster than can be imagined. So get ready to rumble. The best people are now sitting on the sidelines waiting for some reason to think about the future, rather than holding onto the past. (Take our annual recruiting challenges survey if you want some instant insight on what’s happening.)

Instead of minor changes and improvements, I’m going to suggest a wholesale rebuilding of your recruiting department is in order. This will give you a chance to hire the best people as soon as there is evidence the economy is changing direction. So starting with a fresh clean slate, here are three things you should be doing right now to get ready for the upcoming hiring recovery.

Set up a forward-looking workforce forecasting system. This is a quickie version of a workforce plan, but used more for predicting when hiring will come back in force, rather than a full forecast of all hiring needs. To prepare this, have your line managers forecast their hiring needs by quarter for the next 12 months for just your biggest needs. This could be all of your highest volume hires or those who are critically important to your business. Select job classes that drive your business and have some predictive power to reflect all of your job needs. Have your managers update this forecast every quarter or whenever they see a big change in upcoming requirements up or down. If you add some analytical rigor to these forecasts, rather than just rely on intuition, these changes will be meaningful and provide an early-warning signal that something big is about to happen. Most people don’t realize that forecasts are as much about improving communications throughout a company as for having reasonable numbers for planning purposes. Regardless, having a 90-day headstart on the competition will allow you to see and hire more of the best people, especially those now in the starting blocks just waiting for the gun to fire.

Create talent communities. These are talent hubs on steroids. A talent hub is a creative micro-site designed to be found by a group of people (e.g., developers, engineers, Gen Ys, retirees) who are on the margin — i.e., not actively looking, but open-minded. These people become prospects for your future opportunities, so you need to provide some incentive for them to give you basic bio data. These prospects then need to be nurtured along using some type of robust CRM (candidate/customer relationship management) system until something exciting pops up. Reporting is minimal since these people are not yet candidates for a specific job. The steroids bit has to do with the degree of automation, amount of regular contact in the form of emails and the variety of touch points, like video, RSS feeds, and chat features. (If you’d like to learn more about this, sign-up now for an upcoming free webinar on January 22, 2009 I’m hosting with Jobs2Web on this critical topic.)

Build a team of great recruiters. The best people are more discriminating. Technology can help you separate the good from the bad (one example: search on award terms), but you need to be a good recruiter to convince the best that your job is worthy of serious consideration. Without good recruiters you’ll just be hiring the above average; that’s why a serious investment in upgrading and training your recruiting team is absolutely critical. In my mind a good recruiter applies applicant control at every step in the process, understands real job needs, and uses solution selling to position each job as a career opportunity, not a compensation move. (Here’s a quick recruiter test: if candidates frequently say they’re not interested in what you have to offer anytime in the hiring process from first call to final close, you don’t have applicant control. Recruiters who use applicant control switch roles and determine if they’re interested in the candidate at these points.) Applicant control is less important and easier to maintain when you’re dealing with an average or above-average candidate, but essential when dealing with a top performer. That’s why a well-trained recruiting team is critical if you want to consistently hire the best.

The first six months of the recovery will be a free for all. If you do nothing different, you’ll find a few good people and a few above-average people. But if you make wholesale changes in how you source and upgrade the quality of your recruiting team, you’ll dramatically increase the number of top people you hire who you previously would have lost. Even better, if you set up a predictive workforce forecasting system, you’ll know 60-90 days ahead of everyone else when the recovery in your industry is ready to begin. Start now and get the best people into your prospect database. Before you know it, you’ll be hiring great people every time. However, if you wait to read about the recovery, it will be too late.

(Note: make sure you participate in The Adler Group’s annual Recruiting and Hiring Challenges survey to discover some other leading hiring indicators.)

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.

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.

Yet, if you are like most of us, you probably have a sketchy picture of your employee population. I would bet that no one could tell me the exact headcount, nor could they tell me much about the skills and competencies of your workers except in general terms.

I believe that because of this inaccurate and vague picture of the workforce, American firms are caught in a vicious cycle that seems almost impossible to break. We hire like madmen when times are good, and dump thousands into the labor market when times are bad. This is an unsustainable cycle that leads to disgruntled workers, lower profits, and cynical candidates.

If we can plan and fine-tune our factory production cycles with precision, we should be able to do this with people — at least better than we do now.

An answer, however, may be forming.

At the latest Future of Talent Retreat that just ended, the concept of an employee-driven talent strategy emerged as core to the future success of organizations. The concept of a Chief Talent Officer is also gaining more popularity and strength if for no other reason than to have someone responsible for the overall supply of talent who is removed from the day-to-day operational tasks. Human resource departments are usually so consumed with tactical and operational issues that they have no time for strategy or planning.

I spoke a few weeks ago to a small group of the most senior HR executives from 15 Fortune 500 companies. The topics of their conversations were executive pay and stock options, freezing the headcount given the current economic times, and how to reformulate compensation to improve retention. Not even one of them focused on an overall talent strategy.

This reactive and administrative view that has ruled us for the past 50 years is a simple response to a very poorly understood supply and demand system. Fortunately for many firms, the labor they needed was unskilled and abundant. We all know that is no longer the case.

And let me ask you a few questions more relevant to today.

• How much is your firm planning to grow over the next five years?
• How many and what kinds of people will it need? Are these people out there? If so, where? If not, what are you going to do about it?
• Do you know who the most valuable contributors to your organizations’ success are? Do you have strategies in place to keep them?
• Do you know who your best hires were last year in terms of their contribution to your firm?
• Have you worked with management to develop an overall plan for the numbers and types of people your firm should employ? What percentage of employees should be full-time regular employees vs. temporaries, part-timers, or contractors?

I could go on.

I doubt many of us could answer these with honesty or any certainty. I am sure some of you have “guesstimates” of how many people you will need to hire due to turnover or growth. Maybe some of you even have an idea of how many of your projected hires will need to be engineers or computer scientists or some such professional. But we do not have a comprehensive picture of needs, nor do we have any kind of adequate picture of the potential supply. Most HR and recruiting functions have made an effort over the past few years to install software or improve their data gathering processes so that they have some idea of what the employee population looks like, but we are far from success.

If we are to ensure that are organizations remain competitive and are able to meet their talent needs, we need something more than we have now. What we need is a set of tools and processes that enable us to project, run “what-if” scenarios, and make financial projections. While software from companies such as Oracle and SAP are providing some if this capability, until we demand more we will not get it. These vendors have to see that there is a market for that and then it will be readily available.

In the meantime, here are some simple steps you can take to start the process of developing a talent strategy for your firm.

Step #1: Forecast likely demand.
Looking at all your internal growth projections and expected turnover, put together a picture of probable need. Break this down by occupations, skill sets, profession, or whatever makes sense. Constantly check this with line.

Step 2: Develop knowledge of likely supply.
Use whatever software tools you have, including Taleo or other talent management systems or the software from those firms I have already mentioned. Collect data on how many jobs are posted on job boards and track how quickly the jobs are filled. Use local employment data, and competitive intelligence which, when combined with your other facts, will paint a picture of likely supply. Include projected college graduates with the majors you are seeking and place a realistic guess, based on past experience, on how many experienced people you will be able to recruit from competitors and other sources. Take into account mergers and acquisitions and the excess people they may bring to your firm. Have contingency plans in place to deal with this through outplacement, internal redeployment, or development. These supply projections, when subtracted from the demand estimates, will give you an idea of how big your gap is and what kind of people you will need.

Step 3: Develop a methodology of getting at that supply or of changing the demand.
Once you have this, you can begin to propose ways to get more of the people you need. Will you put in place internal development such as Cisco and IBM and HP have done for years to supply some of the people you will need? Or will your plan be to vigorously recruit from your competition in the hopes of getting what you need?

You may also find that working to reduce demand or to change the focus of the demand will reap benefits. Why does everyone have to have an engineering degree, for example? Perhaps a technician would be adequate to do that job? There is no doubt that we have had degree inflation, and many jobs that were previously performed by high school graduates now require people with degrees. We may have to readjust this concept. And, there may be ways to simply use automation or process engineering to make it possible to do the work without more people. These are all choices that recruiters should be involved with and they are the kinds of things a talent officer would be focused on.

Step 4: Prioritize your needs and make line management aware.
Prepare a talent strategy report that contains the supply and demand data I have discussed and that outlines your proposed approach to dealing with the issues. Use facts, figures, and business-oriented examples. Ask for the resources you will need, and guarantee a certain level of result.

Step 5: Report on progress.
Develop a set of metrics and facts that you can report regularly to senior management to keep them aware of the supply and demand balance and to let them know how you are doing.

We owe it to ourselves and our organizations to ratchet up the strategic capabilities of our firms and provide senior management with the decision-making information they need. Until we do this we will remain in the cycle of panic hiring and mass layoffs. Proactive planning is the only way to get the people-cycles under control.

We should all use the pause in the hectic pace of the past few years to begin and frame the future we want when we emerge. And we will emerge. I am not sure when, of course, but within a few years we will be back at the global hiring process with renewed vigor and increased challenges.

The cry we all heard over the past five years has been that there was no time to plan, think, experiment, or implement new methods. Most of us used the methods we were comfortable with but just worked harder, longer, and faster than before. This is the opportunity to figure out how to do things differently.

Be Strategically Bold; Tactically Careful

The first step in dealing with the current situation is to sit down and plan out a 3-5 year strategic plan for the future of your recruiting function. Envision a new tomorrow where you can use the technology, processes, and learnings that have emerged over the past decade. Some of the technologies and tools include such things as social networks, blogs, wikis, and candidate relationship management tools.

The processes that have shown promise include less-restrictive internal mobility practices, real time candidate assessment, virtual job fairs and other virtual recruiting techniques, as well as more authentic candidate engagement using online communication tools.

This strategic planning process should be formal, should involve your team and other employees as well as outside people, if that is acceptable in your organization, and should be designed to force yourself and others to think outside the usual assumptions about talent and recruiting. If you have any budget, it would be wise to engage a facilitator who is experienced in this kind of activity. They can make the process robust and much more valuable.

By formulating strategies that use these tools and practices, you can emerge from our current morass with a roadmap for quickly trumping your competition.

At the same time, you need to act right now with fiscal caution and show your management that you are a responsible manager.

This means finding ways to conserve your budget by lessening the need for contingent labor, perhaps, or by reassessing your current practices and challenge why you do whatever you doing the way you do it. Try to find ways to be more efficient, without spending money. Cut back, but cut back where it will do you some good from a strategic perspective. For example, by reducing staff right now, you can position yourself to implement technology or bring in a person with a different skill set once things recover.

Your job is to balance today with several possible recruiting situations in the future.

Envision a New Workforce

The really best recruiting and talent leaders will sit down with management and have some open discussions about the desired workforce of the future.

Every recession is an opportunity to recalibrate, learn and decide on what skills and competencies are most likely to be needed as we emerge from this recession. I have lived through a few recessions now and one lesson I have learned is that out of each come new needs. As we emerged from the September 11 mini-recession, it was clear that security was the new issue and that we would need people with experience and skills not only in physical security but also in data and financial security. By anticipating these needs, recruiters could have had an edge on any competition.

Once you have even a blurry picture of the skills and competencies you may need, you can begin sourcing for these kinds of candidates and begin to populate a talent community with people whom you are getting to know and who are getting to know you.

Collaborate and Learn

Your third step is to collaborate and learn from your peers and from experts in the field. This is a golden opportunity to attend webinars, which are mostly free, catch up on the blogs you have wanted to read but didn’t have time to, and make a few phone calls to friends, colleagues, and others you may have heard of.

These calls can be partly social and partly learning experiences. Ask what they are experiencing, what they are doing to use this gift of time wisely, and what tools and practices they are considering. I have always found this kind of networking to be one of the best ways to learn about emerging trends and to get a calibration on where others are.

Everything you hear and learn can be used as part of your strategic planning process. You can get these colleagues to demonstrate what they have done and you can even experiment with many of the technologies for free or for a small amount of money. One of the best things about the past five years is how inexpensive software has become. There is really no excuse to not try blogging, wikis, or even social networking tools.

Focus on Candidate Engagement

The final step in your plan for the future is to carefully, authentically, and regularly communicate with all the best candidates you have. Experiment with tools like blogs, email, newsletters, Twitter updates – anything that might engage and stimulate the many potential candidates you should already have in your talent pools.

If you neglect them or just tell them that there are no openings now, you lose a resource that you have spent lots of time and money finding and developing. Better to be honest with them, let them know exactly what your situation is, and keep them updated regularly.

Invite the best to join you in a monthly phone call update (just like your financial people do for the analysts) or hold a quarterly webinar. Anything you do to maintain the connection with your candidates will pay itself back when times get better.

Economies will recover and the emerging world will be different and more challenging than ever. Use this precious resource of extra time wisely and well to frame the future you want.

Recruiting Ostrich Disorder is an often-fatal disease for recruiting directors, recruiters, and even VPs of HR. Symptoms include IBS (”Irritable Budget Syndrome”) which restricts the flow of required budgetary resource and RDS (Rodney Dangerfield Syndrome”) which prevents recruiting leaders and recruiters from getting the respect needed to be considered an essential strategic business resource — and the corresponding budget to cure IBS.

All hope is not lost. Inexpensive, disruptive, highly advanced and way-cool cures exist — many of these being self-administered solutions — which restore health, budget, respect, and often result in a comfortable Seat at The Table — or in the world of third-party recruiters, highly increased commissions!

What is Recruiting Ostrich Disorder (”ROD”)?

ROD is an unhealthy state of recruiting that is:

• Almost always based on hunch instead of data.
• Performed in a purely reactionary manner.
• Considered an administrative cost-center.
• Removed from the strategic planning process — even though every C-Suite officer says weekly that employees are their greatest asset.
• Exemplified by exhausted, over-worked recruiters who are near or beyond burnout from handling unrelenting, massive workloads, year-in and year-out.
• Rarely appreciated by hiring managers who usually complain about recruiting services being too slow, too costly, and too low quality.

What Causes Irritable Budget Syndrome (”IBS”) and Rodney Dangerfield Syndrome (”RDS”)?

According to recent studies conducted by the McKinsey Group, it is easy to extrapolate that both IBS and RDS are caused by business leaders lack of confidence in HR’s ability to understand the needs and requirements of the business. Unfortunately, Recruiting Ostrich Disorder (”ROD”) makes it nearly impossible for recruiters to actually see the issues facing the business and to also see successful talent acquisition solutions. Besides an occasional sand crab, it’s nearly impossible to see anything else when the head is buried in sand.

How are IBS and RDS Diagnosed?

If you possess one or more of the following symptoms, seek immediate treatment:

1. If your company is growing and your recruiting budget is flat or shrinking.
2. Your request for new recruiting technology is placed behind the request for balloons at the next company picnic.
3. All of your top external headhunters contact you on the same day with possible opportunities elsewhere.
4. If the compensation analysts start becoming nice to you and sympathetic to your salary recommendations.
5. Your boss is in charge of company policy, dress code, and company picnics.
6. HR generalists will not look you in the eyes when you ask for counseling. Since ROD means your head is buried in the sand anyway, this symptom will be very hard to change.
7. You are not invited to the annual event for pledging contributions to the company-sponsored charity of choice.

What are the Illnesses and Pains Associated with IBS and RDS?

• Being told to recruit for a major project when you know in your gut the talent doesn’t exist in the targeted business markets — but you don’t have the data to prove it.
• Or the compensation is not enough to attract the required talent — but you don’t have the data to prove that either.
• Or the talent is outside of the targeted business markets — but you don’t have the data to discover where it exists or how to reach it.
• Or to attract top talent you need to run precise advertising and networking campaigns — but you don’t have the demographic data of the targeted talent pools in the targeted cities and regions.
• Or you have an Affirmative Action or OFCCP mandate — but don’t have the data to actually know which cities with have the largest talent pools of diversity candidates inside budgeted compensation ranges.

Living with Recruiting Ostrich Disorder in the Real World

Being a dedicated recruiting leader or recruiter, you know the pain when a business leader calls with an order for 120 experienced professionals for seven position groups in nine cities with the invariable delivery date of “yesterday.” You don’t have talent-supply data; the business leaders do not consult with you regarding talent supply availability, recruiter resource availability, recruiting costs, or timeframes. The order is in. There are no excuses. Your edict is to deliver.

Conversely, in the world of business, major capital expansion projects are postponed or canceled due to increased costs of materials. Expansion of retail outlets are delayed or canceled due to the rising cost of capital. Healthcare system growth is shelved due to increased costs of land. In the world of business, data analytic systems actually do exist that examine and proactively predict trends of the required resources for major business projects.

In the world of recruiting, until recently, those systems have not existed. Consequently, it often seemed best for recruiters, and especially recruiting leaders, to simply keep their heads buried in the sand, making blind decisions, rear first — ROD!

ROD Recovery, Wellness, and Success Begins with Visualization

1. Imagine a world where the recruiting leader, senior recruiters, and even third-party recruiters are invited to the annual strategic business planning meetings with the C-Suite.
2. Imagine a world where retail expansion plans are halted in 12 of the 50 planned cities, and expansion is now targeted for four new cities not on the original expansion list, based solely on the input of the recruiting leader, and yes, even third-party headhunters.
3. Imagine a world where the COO requires a three-year talent availability resource forecast from recruiting leadership to protect lost opportunity costs associated with planned multi-billion dollar capital expansion projects.
4. Imagine a world where the chief marketing officer requires input from the director of recruiting regarding the demographics of targeted customers for new products.
5. Imagine a comprehensive, proactive, strategic recruiting plan, approved annually by the board of directors, funded annually by the board of directors and aligned to the most valuable components of the strategic business plan.
6. Imagine a world where the legal department has no fears about liabilities from discrimination in recruiting and where diversity recruiting becomes a scientifically based strategic advantage.
7. Imagine a world where third-party recruiters can focus recruiting efforts on the exact markets with the highest available talent pools, with high probabilities of fitting the culture of your client — inside compensation guidelines.

Quit Imagining: Pull the Head Out of the Sand and Begin Living the Career of Your Dreams

This is not snake oil. It’s as real as supply chain management. The amount of valuable, relevant and available recruiting data is mind-boggling. Some of it costs a bit; much of it is free. Anybody can get it. Recruiting leaders, HR leaders, and recruiters can be armed with precise talent resource availability, cost and trend data to have C-level strategic planning conversations with data-backed forecasts on par with the forecasts brought to the table by the COO, CFO, VP of Sales, and CIO! Valuable data sources include:

1. Insurance data aggregators
2. Credit card and banking information
3. County records (the amount of valuable recruiting data that can be gathered from counties for a $5 processing fee is stunning)
4. Government databases
5. Business databases
6. Education databases

Seemingly unimaginable types of disruptively advantageous recruiting information can be found:

1. The precise size of available labor pools for talent required to fill the demands of the business for 425+ unique position groups in 475+ cities.
2. The costs of the required talent in each of the 475+ cities for each of the 425+ position groups.
3. The availability of diversity pools by ethnic race in each city for each position group.
4. The number of surgeons, dentists, lawyers, or executives in a specific city block, or zip code, or city; their average income and the number bedrooms in their houses!
5. Specific buying patterns by position, by income group and location.
6. The employment trends in each city.
7. The cities with the largest number of veterans looking for jobs.
8. Commute times and means of commute to work.
9. And much, much more…………………..

Action Plan for Ending ROD, IBS, and RDS

1. Decide whether this data will be best used as a strategic business weapon and C-level relationship building tool, or a recruiting effectiveness tool, or a means to protect your position from what can now be statistically proven to be totally unrealistic recruiting demands. If the supply does not actually exist within allowed compensation parameters, CFOs and COOs can now adjust business plans accordingly, raise compensation allotments if affordable, and increase recruiting budgets.
2. Begin exploration of the various data sources. Call the credit card, banking, and insurance data aggregators to assess costs and understand the various product offerings — there are many.
3. Explore which resources the IT department can and will provide to this effort. A limited initiative is usually too large for Microsoft Access or Excel. SQL Server, MySQL, or other enterprise class database management system will be required.
4. Understand mathematical variances and standard deviations. Apply these formulas to your system. This gains huge credibility of all reports and forecasts from the executive leadership team, especially the CFO and COO.
5. Pull your head out of the sand, dust the sand from your eyelids, let the blood now flow out of your head, sit in your chair, smile, and get ready for the recruiting career of your dreams whether that includes rising through the ranks of corporate enterprises, public organizations, third-party recruiting firms, or RPOs. No more IBS, RDS, or ROD!

The winner of the 2008 ERE Excellence Award for the Most Strategic Recruiting Technology, TruGreen, was built on similar technology. This type of work just takes pulling the head out of the sand, and seeing what data and technologies are available to reposition your services as bottom-line strategic to the business plan or mission statement.

Recruiting is not rocket science. To be a world-class recruiting organization or recruiter, only requires a handful of fairly simple, low-cost or no costs processes. Combine sound processes with a bit of technology and a handful of data-driven systems, like the cure for ROD, and the sky is the limit.

Being a great recruiter actually follows basic Cajun recipes requiring a couple pinches of digging, the hallmark of great recruiters, a dash of technology, a wee bit of sound data, and a surprisingly few number of processes. World-class is not that far away. And some is way-cool and on exhibit annually at the ERE Excellence Awards banquet.

A less-known alternative, the group targeting approach focuses on attracting a specific group of individuals who share something in common (i.e., Hispanic software engineers or fabric patent holders). Group targeting is common in political campaigns and product advertising but is rarely used effectively in corporate recruiting.

Convert Teachers Into Corporate Employees

There are several large groups of employed persons who are routinely interested in a major career change, including nurses, soldiers, and yes, teachers. However, there is no more highly qualified group of potential employees to recruit than teachers.

Before you howl about the social impact of “raiding schools” and hiring away all the teachers, remember that you can opt to limit your recruiting to retiring baby boomers, those recently laid-off, or teachers who have determined they no longer wish to teach.

There are no “hands off” groups in recruiting. It is a recruiter’s job to target everyone who is interested, qualified, and available. Yet corporate recruiters have avoided targeting teachers, which is perhaps the largest group of potential recruits simply ignored.

The Ideal Target Group of Recruiting Prospects

So take a minute and think about the fabulous opportunity that exists here. First, forget the word “teacher” for a few minutes if you can. Instead, look at this group from an objective, non-emotional perspective.

The fact is that any group of individuals with the following characteristics would be judged as an ideal recruiting target:

• Highly educated. Teachers are a highly educated group, all having at a minimum a bachelor’s degree, many hold Masters and PhDs. Many have specialties in high-demand technical areas like math, science, computer science, and communications.
• Highly competent. As a group, they have excellent communication and presentation skills. They are well-organized, good at planning (i.e., lesson plans), and tend to be highly goal-oriented. They are used to working under pressure and no one can match their skill and experience in “doing more with less.”
• Adaptable. If you are concerned that they couldn’t learn a new job at your organization, be aware that these individuals are continuous lifelong learners. They love to read and they excel at research, so they have the capability of rapidly learning whatever a new job might require.
• They don’t focus on pay. Money is clearly not the #1 motivator for these professionals, so even if your organization pays only average wages, they won’t be frustrated or quit over a few pennies. Whatever you pay, even in entry-level jobs, it will likely be a raise for them over their current earnings.
• Seeking opportunities. In teaching, there are few opportunities for promotion or learning a new profession. The abundant breadth of opportunities in a large organization would be viewed by many as “a way out” of their seniority-based system with only one career track.
• Dedicated individuals. Few would argue against the fact that they are dedicated and committed workers. Even though they love their current profession, my experience has been that they will shift that dedication to a new profession, if they must leave their current one.
• Team players. They work in an industry that emphasizes collaboration and teamwork, so they transition easily into a corporate environment that stresses the same approach to work.
• Opportune timing. Because of their relatively low incomes, they are likely to be suffering disproportionately from the current strain from increasing mortgage payments, commute costs, and food prices. Obviously, the looming threat of budget cuts and layoffs within school systems make them even more eager to seek out opportunities with more security and income potential. In families where both spouses are teachers, the odds of getting at least one of them to jump to the corporate world is now quite high.

Take a Chill Pill

Before you out-of-hand reject the notion of targeting teachers, take a step back and think about it. It’s a standard practice for school districts to specifically target corporate employees in order to get them to leave corporate life and switch to the teaching profession.

So turnabout is only natural. I am not suggesting “raiding” the school system and stripping it of every teacher, because you might only hire a handful at most from any one school.

I’m recommending a cherry-picking approach where you target the very best who might need to move on because of finances or burnout.

Teachers are intelligent individuals who are free to make up their own mind on what’s best for them. By merely targeting them and offering them opportunities, you are in no way forcing them to leave. That is their choice.

Recruiters can not “steal” from any organization because employees are not “owned” by firms. It’s also not your firm’s fault that their school system and the citizens in their community chose to underpay and under-appreciate them.

Think of yourself not as a recruiter but as a “rescuer” doing nothing more than expanding their options. Under any definition of the word, it’s not unethical to approach them and make them aware of alternative opportunities.

Will They Be Successful In The Corporate Environment?

Teachers have been leaving the teaching profession in large numbers for decades. Most leave in a haphazard manner to a variety of new careers, but now is your opportunity to develop a formal process to target them as a group. The concept of targeting educational professionals is not new; Google in particular has successfully recruited numerous top professors to join its organization. One large Las Vegas hotel has discovered that elementary school teachers make the most successful bartenders (it makes sense considering that drunks many times act like third-graders!).

There are plenty of examples of teachers successfully making the transition to corporate work. Remember, many teachers already hold second jobs during the summer, so it is likely that they already have a broad skill set. If you are still unsure of their capabilities, remember that teachers are off during the summer and during long school break periods. This gives an organization that is unsure an ideal opportunity to hire them on a short-term or contract basis to assess their potential or to build their skills.

Which Jobs?

Obviously, you’ll have to look at your own firm’s jobs to determine where they would best fit. But remember, many teachers are specialists in math, science, and computers, so they could easily fit into technical jobs.

For others, tell them they must first prove themselves in entry level professional positions like customer service jobs, customer training positions, in call centers, writing manuals, in wholesale sales jobs and obviously, in HR training and development positions.

How to Recruit Them

Identifying teachers and principals to target is quite easy because they all join an association, have a teaching license, and are listed on their school’s website. Employer referral programs are the best way to recruit them because many of your employees already know them as a result of being parents.

Identify them through university alumni groups from Colleges of Education and through ads in teaching journals. Find them at seminars and teacher conventions, as well as online social networks and discussion forums. Because teachers are a tight-knit group, once you make several aware of your interest in teachers, the word will spread virally to others.

Final Thoughts

Recruiters and recruiting managers are constantly looking for large numbers of highly qualified but “untapped” talent. Step back and take the emotion out of it; it’s easy to see why there’s no more ideal group to target than teachers.

Yes, you should limit the number you hire and be aware of the community impact. But remember, you are a recruiter, not a member of the school board. Summer is the perfect time to begin. They are readily available for interviews and you will face no competition in recruiting them. What are you waiting for?