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?

One of the few certainties in life is that companies inevitably go through cycles of growth and downturns. Most business professionals understand these cycles and thus prepare for them. It’s hard to find a CFO, an investor, or these days a real estate agent who doesn’t plan ahead for these cycles.

Unfortunately, few individuals in HR can be considered as well-prepared for these cycles. For some reason, HR professionals tend to be optimists who instead constantly talk about the need to be prepared for the upturns.

The Downturn is Coming, But When?

Many HR individuals I’ve met do not even like to discuss the topic of economic downturns. I presume this avoidance is based on the premise that even “talking” about them somehow will make them happen.

Unfortunately, the consequences of not discussing or preparing for downturns might mean that the disruption to the company will be that much worse. An economic downturn or recession will occur. The only question that remains to be answered is when.

This inevitability means that there are few downsides to developing a downturn plan, even if it ends up sitting on the shelf for a while. Just like death and taxes, it’s always a wise idea to have a plan in place so that HR can minimize negative impacts, not to mention come across as effective, forward-looking, and strategic.

The Three Essential Components of Any Downturn Plan

Any great workforce “downturn” plan has three essential components. The key measures you should plan include preparing a forecast, preparing action steps, and convincing managers with solid data.

Prepare a Forecast

There are several things that HR can do to develop a forecast that adequately warns managers about an upcoming downturn, including:

• Benchmarking. Identify firms that are the first to be impacted by a downturn. Look for hiring slowdowns, hiring freezes, pay freezes, and layoffs at other firms that, in the past, have been impacted by an economic downturn long before your firm has had to act.
• Looking for internal indicators. Look at internal indicators like sales forecasts, budgets, revenues, production forecasts, and strategic business plans for indications that your own executives are preparing for a slowdown.
• Looking at people management indicators. Look for internal projected reductions in headcount and hiring but also examine “headcount fat.” Headcount fat is simply when you have a surplus of employees based on your firm’s revenue per employee ratio target. Simply put, if historically your revenue per employee has averaged $100,000 and your CFO’s forecast of next year’s revenue will be $1 million, then having 10 employees will put you on target, while having 11 employees will mean that you will have one surplus employee (indicating headcount fat). The exception to this rule is organizations undertaking significant development efforts that affect the current employee count, but produce no immediate revenue.
• Looking for economic precursors. Do your research to see whether, in the past, there are economic precursors or predictors that indicate an upcoming downturn for your firm or industry. These economic precursors or warning signs might be changes in interest rates, unemployment rates, currency fluctuations, disposable income, and tax rates.

Prepare Action Steps

The second component of planning for a downturn requires you to prepare action steps or plans to handle each of the major workforce problems that you have forecasted. Some of the HR action steps might include:

• Conducting a “mock” layoff. Many in HR literally squawk when I suggest this action. I guess the pain associated with past layoffs have left a negative imprint on their brain, but once again, preparing for something doesn’t “cause” it to actually happen. In a mock layoff, you go through the organizational chart with individual managers and you jointly identify which positions would most likely be reduced if you were to have a layoff of 1%, 5%, or 10%. If you like, identify the specific employees in those jobs who are most likely to be laid off, should layoffs occur. Those individuals can be put on a contract basis, put on performance management, or if you’re bold, warned individually that their job is at risk. This could minimize any surprises.
• Increasing your contingency workforce. Because contingency workers can be more easily released, putting a percentage of your new hires (or even current employees) on a contract basis will give you more flexibility in the case of a downturn. The contingency workforce percentage should at least equal the most-likely layoff percentage. The targeted employees and jobs should obviously be primarily in the job families and business units identified during your “mock” layoff.
• Releasing bottom performers. If your organization routinely lacks the courage to release (fire) bottom performers, that attitude should change when an economic downturn occurs. Action steps might include increasing the number of individuals on performance management or outright releasing poor performers at the beginning of any downturn. Another option is to “swap” employees, which means that you actively look for replacements for these poor performers and only when you have clearly found a superior candidate do you actually replace them.
• Trying “if, then” scenarios. By far, the best way to prepare managers for potential problems is to force them to participate in “if, then” or “what if?” scenarios. Key managers would be asked to prepare “if, then” plans designed to handle each of the people management problems that would most likely occur as a result of the downturn. Ideally, the managers would also be required to present and defend their plans to an assessment team.
• Assessing headcount fat. In addition to forecasting potential headcount fat, there needs to be an action plan to continually identify the specific jobs and business units where there is a surplus of employees, once a downturn begins.
• Planning for labor arbitrage. Because labor costs become a major issue during a downturn, HR needs to develop action plans that allow the firm to “shift” work rapidly to areas where the labor costs are lower. This focus on getting the lowest-cost labor, while maintaining quality, might mean geographically shifting the work, outsourcing the work, or replacing work done by people with machines and technology.
• Developing retention plans. If your forecast indicates that the downturn will affect your company alone, include action steps to handle the likely increase in turnover among your top performers as they invariably migrate to other “non-struggling” companies. On the other hand, if you forecast a broad downturn, you can relax your retention efforts because fewer individuals leave a secure job during a broad economic downturn.
• Developing productivity improvement plans. Because increased productivity and a higher return on investment are always key issues during tough economic times, an obvious area for an action plan is for HR to develop action steps for increasing employee productivity. This plan might include changing incentives, increasing non-monetary motivators, improving training, or even redeploying key workers to areas within the firm where they can have a larger business impact.
• Making fast recovery plans. Because all downturns eventually end, the very best firms accurately forecast the end of the downturn. In addition, HR develops talent-management plans that allow the organization to rapidly “scale-up” and recover, just as the downturn is ending.

Convince Managers with Solid Data

The third and final component of preparing an economic downturn plan is developing a process that provides data, arguments, and information to managers that are so compelling and convincing, they follow your prescribed action plans precisely when you ask. Some of the action steps that I recommend for convincing managers include:

• Showing the correlation. Look at historical events and calculate the connection or correlation between business success and following the prescribed downturn plan. If managers clearly see that their business performance bonus will be negatively impacted if they mishandle downturn related people management problems, they are more likely to follow your lead.
• Converting people management impacts into dollars. Quite often, telling managers about talent management problems using “words” alone (like higher turnover, lower morale, or decreased engagement scores) has little impact on their behavior. Managers live in a world where everything is quantified in dollars and cents. As a result, it’s important that you work with the CFO’s office to convert all “people management impacts” into the actual dollar impact that they have on sales, revenue, and profit.
• Integrating metrics into standard reports. Distributing workforce plans or reports independently almost guarantees that they will be ignored. If you want managers to pay attention, you need to integrate your key workforce planning metrics and recommendations into standard business and financial reports, so that they see your workforce planning information at the same time and right alongside other important business information.
• Getting a champion. Work closely with a few influential managers to ensure that your downturn plan meets their needs. In addition, encourage them to be “champions” of your plan and to spread the word among their colleagues about its relevance and impact.

Final Thoughts

Competency studies have demonstrated that a comprehensive knowledge of business is more critical to HR success than a knowledge of HR practices. For example, to be successful in HR, you need to be well-read in economics and business trends. But it’s not enough just to react to these trends as they occur.

Instead, you need to have the capability of looking forward and accurately forecasting upcoming downturns. You then need to prepare action plans that are so effective that managers follow them to the letter.

There is, however, one additional requirement if you are to be successful in preparing your organization for these inevitable economic downturns. You need courage to take on the “Pollyanna’s” in HR and to talk openly about the need to actively plan for the upcoming layoffs, hiring freezes, and budget cuts. The time to act is now.

The Business Week cover story, “The Future of Work,” for their August 20 edition is must reading for all recruiting and HR leaders. The basic theme of the series of articles focuses on the impact of technology, globalization, demographics, and the relationship between employees and their employers over the next five to 15 years.

Here are the 10 ideas that stood out for me after reading the 22 articles and filtering them through my own perspective:

1. Find Jobs for People, Not People for Jobs. This is a paradigm shift of major proportions. Stop thinking that jobs need to be, or should be, filled requisition by requisition. This is quickly becoming pass?. Instead, build pools of prospects by functions (e.g., product marketers, financial analysts, sales managers) and contact these people as opportunities become available. You’ll be able to attract a bigger pool of top talent by marketing career opportunities and challenges rather than emphasizing skills and experiences.
2. Retention is More Important than Hiring. Workforce mobility is on the rise as the barriers to exit and entry employees continue to fall. Hiring a great person who doesn’t work out, or leaves within a year or two is a loss of major proportions. In order to retain top performers a formal career plan needs to be developed based on what motivates the person to grow, excel and contribute. This also means selecting people based on a broader criteria than industry experience, technical competency, personality and intuition. The special needs of woman also need to be specifically addressed as they represent a growing and important part of the workforce. This means developing alternative career paths and providing a means to stay connected to women as they temporarily leave the workforce to raise families.
3. Succession Planning is More Important than Workforce Planning. As turnover rises and the independent contractor-model grows, there will be fewer qualified mid-managers available for promotion into senior and executive management positions. While self-management is an important trait, as organizations get flatter, strong mid-managers are still needed to build and develop the teams and ensure that projects are completed and performance objectives are met. Aggressive action needs to be taken now to develop and groom more managers for future senior level roles.
4. Workforce Planning and Just-in-Time Hiring are More Important than Ever. The workforce of the future will consist of a core of full-time employees supplemented with a flexible group of contractors and consultants. This will require strong workforce planning in combination with a well-developed pool of prospects to ensure that the right people are available exactly when needed. This flexibility will be essential to quickly adjust to changes in business conditions.
5. Devalue Experience. Hire on Potential. Train on Skills. While true today and for a variety of reasons (workforce mobility, demographics, changing attitudes) the supply of fully qualified people will continue to shrink as demand increases. To offset this trend it will be far better to hire people with the potential to quickly take on more responsibility in combination with more formal training to ensure their success. This is also a great recruiting pitch and one of the best ways to improve on-the-job performance and increase retention.
6. Think Consumer Marketing, Systemization, Technology, and Scalability. Great systems and processes will be needed to manage workforces that are in a state of constant change. In most cases, today’s career-focused technology is outdated and cumbersome. Career websites are not user-friendly, they are difficult to find, and are cumbersome to navigate. Corporate career and hiring systems need to emulate the best consumer marketing sites (http://www.disney.com/ and http://www.ted.com/ are prototypes of the career site of the future), be candidate-friendly (think Amazon.com techniques for finding jobs and making recommendations), and be search-engine optimized for candidates Googling for jobs.
7. Don’t Build a Corporate Recruiting Department Based on Third-Party Recruiting Practices. Corporate recruiting is not the same as third-party recruiting. Corporate recruiters handle many assignments and deal with many different managers. Third-party recruiters handle fewer assignments and spend more time with each candidate. To address this fundamental difference, base the corporate recruiting model on targeting the best active and less-active candidates using advanced consumer marketing consumer concepts, advanced technology to manage data, and consistent processes to get them hired. The external recruiter model needs to be referral-based targeting passive and semi-passive candidates using advanced networking concepts.
8. Hire and Train for the New Competencies. The world of work is changing. Companies will need to adapt to the new realities of hiring and developing people who are able to work on a variety of international teams while dealing with constant change. To be successful in this environment, people will need to be flexible, multi-talented, multi-functional, adaptable, self-managed, self-motivated, work well in multicultural and multigenerational teams, and be able to step up to leadership roles one day and become great followers the next. Few people will have the experience in all of these roles, so the key to success in hiring will be to look for the capacity to handle these new types of roles.
9. Convert Managers into Triple A Coaches. Selecting and developing people will be more important than ever. Proactively pushing these people to move on to bigger and more responsible positions will be the key to increasing internal mobility, improving on-the-job performance, and reducing turnover.
10. Make It About the People. As the talent gap widens, those companies that can hire and keep the best will prosper. With workforce mobility on the rise the emphasis on retention is as important as selection and hiring. The Great Place to Work Institute offers a good definition of the importance of developing a people culture: At the heart of our definition of a great place to work - a place where employees “trust the people they work for, have pride in what they do, and enjoy the people they work with.” Creating this type of culture seems to be a prerequisite for building a workforce of the future.

This is a lot to absorb, and building the workforce of tomorrow certainly can’t be done alone or just by those in recruiting. Based on these predictions, here’s some specific advice you might want to consider:

• Corporate recruiters need to become consumer marketing experts using all of the tools and techniques available to attract the best people who do look online.
• Third-party recruiters need to become subject matter experts using the latest technologies and the phone to develop deep networks of the best people in their specialties. (Corporations will gladly pay fees for hard-to-find top talent.)
• Corporate recruiting managers need to build and develop teams of recruiters all using the latest technologies and proven best practices.
• HR and recruiting executives need to convince their corporate executives to make the selection, development, and retention of top talent your company’s number-one strategic objective.

Building the workforce of tomorrow will require vision, strategy, leadership, and courage. My concern is that these traits are in short supply.

Most of us have read about upcoming workforce trends like decreasing employee loyalty, differing generational expectations, and the impending retirement of the baby boom generation, but surprisingly few organizational leaders are fully aware of how those issues will impact them.

Several of the organizations I have worked with in recent years have discovered aspects of their business that could lose more than 70% of their workforce in the next three years alone.

The time to read about trends is over. Now is the time to act, to develop, or to update your workforce plan to ensure that it accurately forecasts and triggers appropriate action. Nothing could be more strategic than looking at the big picture and developing action plans that prepare your organization for the future.

Recruiting Is Backward Looking

I challenge you to find a single recruiting report that doesn’t report “history” (what happened last year). Telling managers how many people they hired last year, their time to fill, or their cost per hire might be interesting, but they cannot do anything about the past. Instead, talent management needs to focus efforts on the future, where preventive action could make a significant difference in recruiting and retention results.

Recruiting Is Mired In Fighting Fires

Most recruiting functions are so busy handling day-to-day activities and emergencies that they forget to spend the necessary time preventing the fires from occurring in the first place.

Allocate a portion of your resources toward forecasting and developing a strategic workforce planning effort. Organizational leaders need to understand that the recruiting function must be funded adequately, even in times when requisition loads are small, to allow the function to plan, design, and develop programs to support projected levels of recruiting in good times.

Understanding Traditional Workforce Planning Efforts

Over 90% of the workforce plans that I come across are merely mundane statistics. Many of these plans end up gathering dust on shelves because they don’t drive action. Do not stop when you develop workforce forecasts; instead, put together a workforce action plan. A workforce action plan is different in that it drives managers and recruiters to “act differently” and identifies how to respond to changes in the business environment. Plans that don’t drive actions are a waste of effort and unfortunately, that’s what invariably happens.

The Business World Has Changed

It’s an unforgiving world for those who don’t plan. In the rapidly changing world of business and technology, a failure to plan and anticipate can spell disaster. Business managers and recruiters no longer live in a world of isolated companies and markets.

In a global economy, when a major player stumbles, there is always another ready to instantly move in and seize the opportunity. Whenever an organization comes out with an innovative product or service, it’s copied so fast that it’s hard to make a profit over a long period time off of any new innovation. In past decades, companies could make errors and later catch up. In the 21st century, there isn’t time to catch-up.

Workforce Planning Adds Significant Capabilities

There are many outputs that result from excellent workforce action planning. Some of the most significant ones include:

• No delays. To ensure that the firm can meet production goals by having the right number of people.
• The right skills. To increase product development speed because the firm has the brightest people with the “right” skills.
• Rapid replacement. To be capable of rapidly re-filling positions that become vacant due to “sudden turnover,” so that production doesn’t miss a beat.
• Lower turnover rates. Because employees move rapidly throughout the organization and are continually being developed, they are less likely to have low morale or to leave.
• Low labor cost. The capability of rapidly reducing labor costs without the need for large-scale layoffs of permanent employees.
• No layoffs. Opportunity to avoid the need for layoffs by managing headcount to prevent a “surplus” of talent.
• Employee development. To be able to ramp up projects rapidly because the firm has already developed its internal talent so that there is a sufficient amount available when necessary.
• Early warnings. Managers will get warning “alerts? so that they can plan ahead for replacements for upcoming retirements and turnover.
• Take advantage of opportunities. Talent management resources are managed more efficiently so that the firm has the available resources to take advantage of talent “opportunities” like poaching from a weakened competitor or hiring exceptional talent during tough economic times.

Two Primary Elements in the Workforce Action Plan

1. The workforce forecast. In this phase you forecast or project increases or decreases in company growth and the corresponding impact that that growth rate has on talent needs. Most forecasts also include estimates of future vacancies (due to turnover), transfers, promotions, and the relative “availability” of internal and external talent to meet future needs.
2. The workforce action plan. This element of the plan is the largest part. It outlines what specific actions need be taken in each of the different HR areas that relate to talent management. Action plans are developed to attract, retain, redeploy, and develop the talent we need to meet the forecasted needs.

Events to Forecast or Anticipate

It doesn’t take a rocket scientist to realize that the world of business is changing and that anticipating what types of events may occur is essential. Some of the events that recruiting needs to anticipate and have plans to handle appear in newspaper headlines almost everyday. They include:

• Major growth in consumer demand.
• Labor shortages, surpluses, and opportunities.
• Competitor actions including growth and layoffs.
• Economic, social, legal, or political factors that can impact your business or talent management.
• A shift in production to new regions.
• Terrorism and other physical disasters that impact your ability to do work.
• Stock market downturns that impact your ability to raise capital.
• Mergers and acquisitions at your firm or in your industry.

Three Action Areas

In order to prevent upcoming problems, develop a specific action plan on how to handle each problem. I divide these potential actions into three different “action areas,” including:

1. Eliminate the surprises. Talent management needs to limit the stressful “trauma” related to being surprised. A workforce action plan has the capability of providing managers with a long-term forecast of potential positive and negative events so that they have plenty of time to prepare for them.
2. Identify “just around the corner” problems right before they occur. If you have an early warning process, it is much easier to minimize any damage. Talent management must develop a similar system to warn managers immediately, long before the problems and opportunities that you forecasted actually begin occurring.
3. Take advantage of opportunities. Most workforce planning is focused on solving or preventing problems, but organizations must also plan to take advantage of an opportunity. Positive opportunities might be chances to hire individuals who are normally not in the job market, or opportunities to “ramp up hiring” because the competitor with a superior employment brand has just instituted a hiring freeze (meaning you will have no competition).

Workforce Planning Has a High ROI

Anticipating and developing action plans for events, rather than reacting to them, is difficult. But being strategic is, by definition, more difficult than being a tactical player. The rewards related to anticipating events are significantly higher than just reacting to them, so enduring a complicated or difficult process is worth it.

Remember, accurately predicting who and why a team will win (or lose) the Super Bowl or the World Cup will get a lot more attention than congratulating the winner the day after the game.

Last Words

With the Internet age and huge meta-databases, there is an abundance of data and information that makes forecasting future events much easier. I recommend that top management work with the business strategic planning functions, as well as product development and budgeting, to get some help in identifying what events are likely to occur both within and outside of the organization.

Top management must then develop a compelling case for action and an “action plan” that makes it easy for managers to know exactly what steps they must take to prevent a problem or take advantage of a talent opportunity. There is no better time to begin than today.

In Part 1 of this article, I outlined the first six of 13 key factors that differentiate great workforce planning efforts from mediocre workforce planning efforts. Here are the remaining seven points to note.

Factor #7

Demonstrate the likelihood that your recommended actions will actually work.

In addition to designating an action plan for each forecasted issue, workforce-planning efforts also need to assign a “probability of success” to any action plans or program recommend to mitigate the issue. For example, if you recommend a leadership-development program, tell managers upfront that leadership-development programs have a “56% chance of meeting their stated goals.” Unfortunately, most workforce planning efforts simply identify the issues and leave managers on their own in driving solution development. Program-success probabilities should not be complete guesstimates; base the figure on past experiences or sound benchmark data.

Factor #8

Demonstrate that forecasts and plans take into account the changing business environment.

Unfortunately, 95% of the workforce planning efforts that I’ve come across are “static” and internally focused. By static, I mean that these workforce plans fail to take into account likely changes in the business environment that will invariably impact both the accuracy of your forecasts and the likelihood of success for response plans. Senior managers know they live in a dynamic business environment; it is critical to state your assumptions upfront about likely changes in critical environmental factors (i.e., changing interest rates, unemployment rates, social trends, foreign-exchange rates).

For example, “if immigration restrictions were eased, 49% of our talent shortfall for software engineers could be filled by hiring from other countries.” You don’t have to be 100% accurate; simply demonstrate that you are taking into account that such environmental factors may change.

Factor #9

Demonstrate that forecasts and workforce plans take into account actions and responses by your competitors.

A related factor that keeps most workforce plans from becoming great is that most workforce plans assume that product and talent competitors won’t change. Senior executives already know that when they change prices, products, and locations, competitors will invariably react and respond to those changes. In the same light, if you want to demonstrate your business acumen, include forecasts of what your competitors are likely to do after you take action (i.e., increased college hiring, instituted an employment-branding program, moved operations to India).

Factor #10

Provide “real-time” alerts when immediate workforce problems occur.

Everyone knows that strategic workforce planning is a long-term effort. As a result, even the best workforce plans forecast general workforce problems. Unfortunately, at some point in time, “general” workforce problems become “actual” workforce problems or opportunities. Develop a short-term process to give individual managers a “heads-up” when they are facing an immediate problem or opportunity.

Factor #11

Integrate routine business processes.

An almost universal problem faced by workforce planners is that once they have completed their forecasts and presented to senior management, interest fades fast. For example, if you forecast at the beginning of the year “senior leadership retirement rates are likely to be 23%,” that number and the retirement issue are likely to be forgotten quickly.

However, if every major monthly, quarterly, and yearly business and financial report contained integrated workforce planning metrics and their dollar consequences, two things are likely to happen. First, managers will realize that workforce planning is not a separate issue to be addressed only once a year. Second, when they see the dollar impact alongside their other business results, they will learn to constantly monitor both workforce-planning problems and the dollar impact of their solutions.

Factor #12

Ensure that your workforce plan addresses each of the major talent-management problems that your firm is likely to face.

Almost all workforce plans are too narrow in scope. This means that they only attempt to forecast and propose solutions to a few of the many possible workforce problems that are likely facing their organization. In fact, most organizations I run across narrow their scope to the very minimum (succession planning for executives and headcount forecasts). In contrast, truly great workforce planning efforts attempt to forecast and resolve each of the nine major workforce planning problems including:

1. Not enough workforce productivity. Dollar of output per dollar of employee costs.
2. Surprise workforce issues. No forecasts, warning or alerts about upcoming talent problems and opportunities.
3. Too few employees. Need to recruit and retain more employees.
4. Too many employees. Need to release “surplus” employees.
5. Wrong employees. Some individual employees are obsolete and can’t be fixed.
6. Wrong skills. Employees have insufficient skills or the wrong skills and competencies.
7. Wrong seat. Employees need to be moved internally to a more appropriate job, manager, or business unit.
8. Not enough innovation. Insufficient quality or volume of innovation from our employees.
9. Sudden vacancies and missed opportunities. Insufficient reaction to sudden turnover or external talent opportunities.

Factor #13

Integrate and coordinate HR functional efforts.

The final factor that separates world-class workforce planning from the “average” effort is that workforce planning is not an isolated element within HR. To maximize its impact, workforce planning must “influence” every other major talent function so that instead of being “silo’d,” they work together as an integrated unit. The best way to ensure an integrated effort is first to demonstrate to each HR function the consequences of a silo’d effort and then to integrate individual HR functional metrics and rewards so that each HR function realizes that it cannot succeed individually, unless the whole workforce planning effort succeeds.

Conclusion

In more than 30 years of practicing HR, I have seen workforce-planning efforts come and go, but I have never seen them rise to the level of popularity they now enjoy. When established with the right resources and the right authority, workforce-planning efforts become the glue that unites all of the silo’d HR functions to power a true talent-management approach.

I have seen workforce-planning efforts save organizations millions, but I have also seen them accomplish nothing. The 13 factors I’ve presented are critical success factors that have distinguished the efforts of companies that demonstrated an impact versus those that have not.

If you are lucky enough to work in an organization that is developing a workforce-planning capability, support it, contribute to it, and leverage it. It may just make you a corporate hero.

Editor’s note: Part two of this article will run tomorrow.

Few would argue that workforce planning is not a hot topic these days. Just five short years ago, it was nearly impossible to find a titled role for workforce planning in corporate America. Yet today, more than 54% of the Fortune 100 have dedicated FTEs to the activity.

Even more impressive is the fact that the growth in the application of workforce planning is not just a U.S. phenomenon. Around the world, it is becoming a highly visible strategic activity.

The rise in popularity for workforce planning is no surprise given the highly visible issue surrounding the impending retirement of the baby boom generation, the globalization of work, increasing turnover rates, changing workforce ideals, and increased competition for recruiting top talent capable of delivering innovation. While the mandate for workforce planning is strong and supported by senior leadership, execution has, in most cases, been weak.

Like many analysis and planning activities in HR, most of the work being executed isn’t translating into actions that demonstrate a significant business impact. Based on previous observations, I’ve noticed 13 key factors that differentiate great workforce planning efforts from mediocre workforce planning efforts. I’ll give you the first six today and the next seven tomorrow.

Factor #1

Communicate the probability of specific business objectives not being met as a result of workforce issues.

Both senior executives and operating managers are results-oriented people. Each year they are given specific business objectives and targets. Managers think about these business objectives constantly, because their bonus and career growth depend upon them meeting their objectives.

Failing to tie workforce-planning efforts to specific objectives and initiatives limits the visibility managers will give them on a day-to-day basis, which is required to drive action. Successful workforce planners abandon the HR speak and the use of generalities, and draw a line in the sand indicating what specific objectives will likely be impacted and the workforce drivers behind the issue that must be addressed within a specific time frame.

Instead, focus on product time to market, market share, customer service, product innovation, sales, revenue, and profit. If you don’t know your organization’s major business objectives by unit, work with leadership to identify them.

If you can’t do that, work with compensation to identify each of the senior managers’ bonus criteria, because they almost always directly reflect most of the firm’s major business goals and objectives.

Factor #2

Quantify the dollar consequences of workforce issues that affect organizational productivity or innovation capability.

Most who develop workforce plans report upcoming problems using HR terminology to describe “HR problems,” including headcount needed, skill shortages, or leadership shortages. Unfortunately, these HR problems, although perceived as being important, rarely drive senior management or line managers to take action.

The primary reason why these HR problems don’t generate concern or action is that the impact of them is rarely enumerated in terms that senior leaders and managers understand: money! Everyone in senior management would agree that the “language of business” is money, so grab managers’ attention by translating whatever dire consequences or opportunities you forecast into dollar impacts.

For example, convert predicted gaps between workforce supply and demand into business-objective oriented impacts, such as a delay in time to market of 35 days. Be sure to translate this into a negative dollar impact if no action, or the wrong action, is taken.

In another example, let’s say an analysis reveals that a shortage of product-development professionals will delay the initial development of a new product by 90 days. Working with the marketing and sales functions, it is determined that the delay will have real business impact of $21.9 million and an opportunity cost of $54 million. Working with line management, it is identified that the problem can be 95% mitigated through a combination of contingent staffing ($892,800); outsource components ($1,348,600); and overtime ($223,200). In this example, the proposed solution mitigates 95% of a $79.5 million dollar business problem at a cost of $2,464,600.

Companies such as Valero Energy, AIMCO, and HealthEast have all excelled in demonstrating the dollar consequences of acting in response to workforce planning data.

Factor #3

Assign a “probability of occurrence” to forecasted talent-management problems and opportunities.

Telling executives that something “might” occur generally does little to spur action, because executives who live in a competitive world are inundated with threats on a routine basis. It’s much like forecasting a hurricane. If you say that a hurricane might hit, you’ll generate some minor interest. However, if you change your forecast to say there is a 99% chance that a hurricane will hit, literally everyone will pay attention because the probability is so high.

Assign a “probability of occurrence” to each forecasted impact. Rather than saying, “There will be a shortage of nurses to cover the third shift,” forecast that there is a “97% probability that the hospital will be unable to maintain a nurse-to-patient ratio required by current state law, thereby reducing the number of beds that can be occupied by 21%. This reduction in the maximum patient load will result in a decrease in revenues of approximately $1.033 million per day as long as the staffing issue persists.”

Factor #4

Forecast a specific time element for when problems and opportunities will likely occur.

Unfortunately, even forecasting the probability of a problem occurring will not guarantee that managers will take action. Using the hurricane example, if you forecast a 100% chance that a hurricane will hit but do not provide a timeline, you fail to establish the immediacy of the issue, thereby reducing the likelihood of action.

Forecasting what quarter an issue is likely to occur is ok in some organizations, but if you really want to be world class, forecast the occurrence of the issue down to a month. For example, if you forecast that there is a 99% chance that your head of marketing and sales will retire during the first quarter of 2008, I guarantee you senior managers will pay attention to your workforce plan’s solution to the impending retirement.

Factor #5

Specify where within the business the problem or opportunity will likely occur.

If you fail to establish the specific location of an issue, managers might assume the problem does not apply to them. If you want to guarantee that key individual managers pay attention to the problems you forecast, specify which regions, business units, functions, managers, and jobs that your forecasted issue will directly impact.

Factor #6

List specific action plans for each high-probability or high-consequence issue forecasted.

One of the key failure factors for most workforce planning efforts is that while they identify probable workforce issues, no one is held accountable or empowered for developing solutions. Because workforce-planning professionals are rarely empowered to develop recruiting solutions, development solutions, or outsourcing activities, most efforts present data but no action plan to mitigate an identified issue. Great workforce planning efforts must present solutions in tandem with the problems and have established authority to coordinate or procure solutions in conjunction with business leaders impacted by the issue.

In tomorrow’s conclusion to this article, look for the remaining seven factors that differentiate great efforts from mediocre efforts.

Hewlett-Packard, Charles Schwab, and IBM have had a relatively easy time recruiting top talent over the years. They have had candidates eagerly seeking them out, even in times when the economy was booming and other firms were struggling to fill key positions.

Some would say this was because of their reputation as great companies to work for or because of their good career potential and solid benefits.

Although certainly a part of their attractiveness, perhaps there is another more compelling reason for such success.

More than anything else was a factor that very few noticed: each had adopted a recruiting strategy that included their local communities.

Hewlett-Packard has had education and community outreach programs for decades, and IBM is well-known in the communities where it is located as a generous sponsor of events and supporter of education and other community programs.

Both also hire extensively from the local community and from local colleges. Schwab worked with local high schools to encourage students already somewhat interested in finance and investment to pursue those interests. Schwab offered part-time jobs, internships, and college tuition and then reaped the results of those investments by hiring the graduates.

Many Federated divisions may have also offered programs of these types, and it would be useful for you to investigate whether your division has a program like this that you could tap into.

Community outreach includes programs that support high schools, colleges, and universities, as well as other programs that may offer support or training to the homeless, single mothers, battered women, or the elderly.

These programs are sometimes partially funded by local or state governments or even by the federal government. But they all rely on other sources of money, volunteer labor, and services.

Recruiters can and should consider these oft-neglected programs to slowly build a pipeline of talent. Here are some ideas on how to go about putting such a program into place:

1. Work with senior management to show them the value and benefit of these programs. There are many exemplary stories of how firms have found and hired all sorts of people as a result of working with community groups and educational institutions. Check to see whether your own division may have done some of this. Lay out a business case for your program and estimate what kinds of talent you will be most likely able to develop and then hire over time. Many organizations already have community outreach programs, but they are rarely linked to recruiting at all. Rather, they are regarded as donations or simply as a way to maintain community relations. What is different about combining recruiting with community outreach is the ability to build a superior workforce, with great loyalty and low turnover, at a small cost.
2. Take a long-term approach. Much like a farmer who plants seeds, waters, and fertilizes a large crop, it may take you several years of continuous investment before you will start “harvesting” the talent that you have helped to create. The upside is that once you begin to harvest you will be ale to do so almost continuously because every year there is a new crop.
3. Make sure the support you provide is continuous. Nothing is more damaging of community outreach programs than sporadic support and interest. These programs need water and fertilizer all the time and if you stop the support for a while, you may find that the crop has withered. IBM and others have had success because they have created a culture and an internal environment where some level of support is always provided. There may be years when more support is given, but no matter what, a base level is always maintained. To be most successful at maintaining support, keep your effort focused and narrow. Be sure you are supporting groups that will produce people you really need and will want to hire. And build internal support at the highest levels. Include senior management in recruiting cycles and keep them well-informed about how successful you are.
4. Decide what talent you will need and where to locate that talent. If you are an engineering firm, consider the talent from a high school physics or math class. Check out the engineering schools at local colleges and universities. If you are a retailer like Federated, talent is all around you. There are high school students who are interested in sales, management, accounting, fashion, design, marketing, and a host of other areas that could benefit you. Likewise, the local colleges are also likely to be full of potential talent. Many single mothers and battered women have good skills and can be trained to meet your needs. Schwab trained Welfare-to-Work women to work in their call centers and also trained college students who were majoring in finance or marketing to do the same. Many of these people went on to bigger jobs within the company. Find programs that you can work well with and that have the kinds of talent you need or, at least, the types of people you can develop.
5. Don?t expect that those you hire will be highly productive from day one. Ongoing education and training is a necessity. Community outreach recruiting cannot flourish unless your organization is willing to commit some resources to training people when they come on-board and throughout their careers. Successful organizations know that short, practical training programs for those who come from community programs are essential to getting the best from them. No matter what you have invested in the program itself, a few more dollars focused on helping them make the adjustment from “outside” to “inside” will accelerate their assimilation and productivity. It provides confidence and motivates action. IBM, Cisco, and HP have put together programs that are targeted at giving people they bring in from external programs the key skills they need to get the job done. Cisco has trained music majors to be HTML programmers; IBM has put numbers of people with liberal arts degrees through programmer training, and given them jobs where they can build on those skills. Federated can expand existing programs or invest the time and energy in creating new ones.

These programs are not easy to put together and require a commitment over time. They are not necessarily cheap, but usually result in lower recruiting costs. They give your organization an advantage by improving your reputation, strengthening your community citizenship, and by building a loyal and motivated workforce.

And perhaps most important, when talent gets even more difficult to find than it is now, you will be rewarded many times over for today’s efforts.

A few months ago I made the case in an ERE article (Hiring the Best is a Team Sport) that corporate recruiting departments should not be organized to compete with third-party recruiters.

Aside from performance-based compensation, there are a few obvious reasons supporting this philosophy:

• Corporate recruiters have too many requisitions to handle. Filling these reqs then becomes a numbers game of sending as many resumes as possible to their hiring managers in the hopes that a few stick.
• The best third-party recruiters can easily make $125,000 or more by maximizing the number of placements made. To achieve, they can cherry-pick the best assignments or push their best candidates to multiple clients (the most placeable candidate model). Corporate recruiters can’t walk away from the bad assignments.
• The best third-party recruiters are heavily networked into niche fields. The best candidates also know these recruiters are representing multiple companies. For this reason alone corporate recruiters aren’t as appealing to top candidates.

Collectively, this suggests that corporate recruiting departments should be organized to play a different game.

Last month I made the case (The Disruptors: Fundamental Changes in Technology You Need to Put on Your Radar Screen) that technology innovation is coming at a pace faster than recruiting managers can fully absorb or appreciate.

Much of this technology is enabling jobs to be pushed directly to candidates and candidates to be pushed directly to hiring managers. This process, known as disintermediation, yields profound increases in productivity.

In this article, I will link the two ideas together, making the case that corporate recruiting departments can beat outside search firms on quality, time, and cost for most searches, but not by mimicking their business model.

Instead, it will be through the optimization of technology in combination with a complete top-to-bottom reorganization. (Note: Because of the importance of this topic we’ll be hosting a free conference call in December to discuss these ideas in more depth. Email if you want to be involved.)

Here are some of the ground rules in the new playbook:

1. Reduce the number of sourcing channels used, but be great at each one. The corporate career website must be the hub for this, combined with an extremely progressive and proactive employee referral program. Great advertising that’s compelling and that can be found are the keys to wining the hiring game. Everybody is now looking, even passive candidates. To take advantage of this you need a great career website, jobs that can be found using a one-line search box (no pull-down menus), and compelling job descriptions that are irresistible to top performers. Upon an examination of the career sites on Microsoft, IBM, and Deloitte, it was evident that each had major shortcomings. Toll Brothers offers a good example of how to build a career website. (Email for more details.) If you want to maximize your employee referral program, make sure your recruiting team is contacting every employee and asking them to identify the best people they’ve worked with at each prior company. Then contact, recruit, and network with these people. Done well, these programs alone should meet 50% to 60% of your hiring needs with top performers.
2. Implement consumer marketing “best practices” to rewrite, position, and push your advertising. The core of this is eliminating the posting of traditional job descriptions and replacing them with compelling career-oriented advertising. eQuest.com provides a service that determines which boards get the best results by position. Jobs2Web.com and careermetasearch.com offer new search-engine optimization techniques to make sure your ads can be found directly from search engines. Aggregators like Indeed.com and SimplyHired.com allow candidates to search multiple boards. These are important tools you need to use to make sure that your ads can be found based on how top people look for jobs.
3. Use advanced CRM marketing techniques to extract maximum value from your resume database. Treat every resume in your database as a potential candidate or a lead to a potential candidate. You should be able to meet at least 10% to 15% of your hiring needs by effectively nurturing your resume database. This means developing a customized out-bound marketing effort that entices every person in your resume database to stay in touch with your company. If you’re not getting at least one-third of these emails read (hopefully you’re tracking this metri