This the final article in my series profiling the benchmark recruiting best practices and strategies of the Valero Energy Corporation. After a lengthy study, I have found it to be the most business-like recruiting function, and one of the best overall in the world. Their comprehensive utilization of a “talent pipeline” model, which was borrowed from a business supply-chain approach, is truly revolutionary. This final part of the case study covers a profile of their leader, weaknesses that still need to be addressed, and my own conclusions.
Dan Hilbert, Manager of Recruiting
When you meet Dan Hilbert, manager of recruiting at Valero, you see right away that he is someone who thinks differently from the typical recruiting professional. Among the many things that prepared him for his current role were four years of Jesuit training, an all-male high school education, MBA training, a stint as a CEO, and Marine training (probably not coincidentally, Michael Homula, the best practice leader of the world-class recruiting department at FirstMerit bank, received West Point training to prepare him for his current role). I asked for Dan’s thoughts on a number of issues affecting his job and his recruiting organization. Here’s some of what he had to say:
What are your strengths?
“Confidence. I thrive in high-exposure, high-pressure, ultra-high-expectation projects. That’s why I love to build a department from scratch under tight timelines and high objectives, to turnaround underperforming departments, and to implement new mission-critical systems and processes. I cannot stand to finish second. I am driven to do anything it takes to help my company be first in its industry.”
What are your weaknesses?
“Patience, or lack thereof. Under-estimating the power of bureaucracies. Forgetting how often many business leaders lack respect for HR. Delegating critical projects. I am getting better here, slowly. I find myself wanting to automate just about everything, and I have worked myself out of multiple jobs by automating my processes.”
Who do you learn from?
“John Higham, one of the founders of Sun Microsystems who ended up at Tivoli. He’s one of the smartest men I ever met. He said that everything was going to supply chains, and I listened, bookmarked it mentally, and then pulled it out when I got to Valero.”
Have you outsourced, or are you planning to?
“We use RPO (recruitment process outsourcing) on an as-needed, temporary basis depending on workflow. We use RPO for assistance in candidate acquisition and screening. With our metrics, we assess our internal recruiting cost, speed, efficiency, and quality versus all other labor suppliers. If Valero ever chooses to outsource on a more permanent basis, we will know exactly what should be outsourced and will have the monthly metrics to measure SLAs (i.e. performance on service level agreements).”
Have you had any bad experiences with vendors that don’t jive with your processes and approaches? “You have touched on area ‘near’ to me. I’ve found that very few vendors have any real understanding of the needs, challenges, and problems faced by corporate recruiters. I’ve also discovered that a surprisingly high number have little technical understanding of how their products actually work. The staff augmentation and sourcing vendors come to mind quickly here. A few of the ATS vendors have savvy sales personnel, and this distinguishes them quickly. We interviewed 11 ATS vendors. The reps from HRSmart, Authoria, and Recruitmax were clearly in a separate class. “Staff augmentation and sourcing vendors’ sales personnel seldom ‘get it’ when I try to explain that we are actually using more sophisticated mining tools and posting processes than the vendor is offering. For those vendors who offer valuable services, the vendor personnel are often lacking in conversations about integration. They don’t understand that a disparate, non-integrated system is counterproductive to any supply chain — or for that matter, just about any high-production system. Vendors usually have little understanding of how difficult it is to train existing personnel in new technology. They often sell cosmic features and functions, but miss the fact that if their products are not easy to learn and use, the chance of adoption is near nil and the investment would be a waste.”
Any interesting vendor stories?
“I called one major vendor to speak to a sales rep about their ATS two years ago. After a 20-minute conversation, the sales rep decided that without getting Valero’s retail business, our company was too small for them to even consider. At the time we were Fortune 55. I was stunned. A week later I called and had the exact same conversation with a second salesperson. Ironically enough, now that we are Fortune 15, a month doesn’t go by when their salesperson doesn’t call us. In terms of staff augmentation vendors, we were referred to Novotus out of Austin. Mike Mayeux has built a superb, multi-faceted product suite. My guess is that Mike has created a standard-setting model here. The key is that they deliver.”
The Future of Recruiting According to Dan
Dan Hilbert also shared many of his views about recruiting and the future of recruiting. I find his projections to be 90% in line with my own (he underestimates the importance of brand, events, and employer referrals, in my opinion). Here are some of his profound insights on:
Weaknesses and Challenges Facing Valero
Although they do many excellent things at Valero, there is always room for improvement. After completing my research and looking at my model for world-class recruiting, I have identified some areas where the Valero could still use some significant improvement. They include:
Some of the other possible failures and lessons to be learned (these answers came from both interviews and observation):
Conclusion: Simply the Best I’m fortunate in that I get to visit, advise, or talk to senior recruiting managers at literally hundreds of companies. I also have the honor of serving on several “best in class” HR and recruiting awards panels. All that activity exposes me to the very best, the mediocre, and the very worst in recruiting. Given that background and exposure, I do not take lightly my evaluation of the recruiting practices at Valero Energy. The Valero recruiting team is simply the best in the world at what they do, which is to treat recruiting as a business process. Dozens of authors and hundreds of consultants use the term “talent pipeline” with reckless abandon, but Valero is literally the only company that has managed the process like a true business supply chain. Perhaps it was easier for them because their business operation literally includes “oil pipelines,” but that doesn’t explain why other companies that are well known for having their own business pipelines — like Wal-Mart, Dell, FedEx, Southwest Airlines, Google, Toyota, and Starbucks — haven’t also progressed to this next level. Many areas of recruiting are highly competitive, but when it comes to operating recruiting as a business process, there are few firms to compare Valero to. Certainly both professional and college sports teams have utilized this pipeline model for years
It is important to note that what FirstMerit is planning and some aspects of Microsoft’s workforce planning are in the same league, but few others have even chosen this route. Unfortunately, I fully expect that trend to continue. In fact, most people when exposed to the “business of recruiting” methodology dismiss it out of hand. They give a variety of reasons, but it is clear to me that there is one primary reason that people reject or even fear this approach: recruiters and directors of recruiting enjoy treating recruiting as an art. They like managing based on opinions, gut reactions, and traditions, and they even seem to enjoy following the “fat of the month.” They don’t want data, facts, or business practices that are commonly accepted throughout the business world to intervene or interfere in how they manage recruiting.
That’s certainly okay with me, but given the fact that the business world has, at an amazing speed, globalized, adopted technology, and implemented metrics, Six Sigma, and business process improvement software and approaches in literally every other business function, maintaining that HR or recruiting is an “art” is likely to mean continued budget cuts, a continued lack of respect, and eventually being outsourced or even eliminated as a function. Like it or not, managing based on feelings, opinions and gut reactions is no longer acceptable in any part of any major corporation — and recruiting will be no exception. Yes, the future recruiting is right here, right now, whether you want to accept that fact or not — and it can be seen at Valero Energy.
