Four Steps to Successful Contract Relationships

Dec 19, 2005

I was recently involved in a special expertise panel exercise for the Society of Human Resource Management in which over 100 thought leaders were asked the skills that would be most valued in the HR profession in the future. Guess the most important skill: Consultative skills? Yes, they’re important, but no, not the most important. Negotiation skills? Key, but not at the top. Executive skills? Sorry. This single most important skill identified by that group was project management skills. You see, in the future — and now, actually — the great HR leaders will not just be “doing” things. The great HR leaders will be focused on strategic and other key issues of the organization, and on building great relationships. They will still be held responsible for everything they’re responsible for now; they just won’t be doing it all. Others will be doing it. That’s right, they’ll be outsourcing much of it.

The great HR executive will come to love outsourcing, if they don’t already, the way Johnny Cash loved June Carter. Like June’s affect on Johnny, it will free you up to be the great leaders you always knew you could be. Whether it’s using third-party recruiters, contract recruiters, recruitment research, outsourced resume mining, background investigations, travel and logistical providers, relocation companies, or recruitment advertising agencies — let’s face it, we’re moving toward an outsourced world. That’s not a bad thing. It enables you to focus on the core of HR and recruiting: relationships. I can hear you yelling at the computer screen, “What! That’s my value to the company. That’s what I do. If you get rid of that, I’m afraid of how vulnerable that leaves me.”

First of all, you’re wrong. Your value to the company is what you make sure gets done, not what you actually do.

Second, get over it. Outsourcing effectively still requires that you have excellent negotiation, candidate development, and other skills. The core of recruiting ó your ability to build, develop, and maintain great relationships — cannot be outsourced (domestic candidates will never respond to people calling them from overseas). That notwithstanding, you shouldn’t be spending your time doing high volume, lower value work. Others can and should do the resume trolling. And let’s be honest — as HR executives and staffing professionals, we’ve been outsourcing for years. We may not have called it that, but every time you’ve ever used a search firm, you’ve outsourced. Let’s not be afraid of it. Let’s just do it better. And in order to do it better, we need to be great project managers. Project management is what June Carter did to Johnny Cash’s life when it was going to hell. She stepped in, took charge, communicated effectively, set boundaries and expectations, and above all, didn’t feed his self-destructive behavior (how many clients do we know who are candidate addicts?). I define project management as overseeing, leveraging resources toward, and facilitating the completion of a temporary endeavor undertaken to achieve a particular aim.

Now that you’ve awakened from that boring definition, let me tell you what I think project management really is in the world of professional staffing: It’s facilitating and communicating effectively to ensure a project gets done. Thus, I break project management skills/techniques down in terms of internal versus external projects. In both cases, we need to talk about the value of utilizing a contract and “contracting” effectively. Here are some steps to ensure success:

  1. Contracting. In recruiting, we’re not in control of the results of our work, so we must contract well. Contracting well is the key to successful project management. Internally, this manifests itself in clarifying with a hiring manager who’s responsible for what in the hiring process. The recruiter plays a key role in this because he/she needs to ask the right questions, understand the answers, and insure that the information gathered is correct.
  2. Developing a blueprint/position profile. What’s needed by the staffing professional, for example, is to understand the scope of the position and the deliverables. What’s needed from the hiring manager is an honest description of the role. The ultimate goal is to get a good blueprint in the form of a position specification. The staffing manager will need to write something up and give it to the hiring manager as a reflection of what was said. This becomes easier once you build up a library of position descriptions; at that point, you can cut and paste, which is what many search firms do.
  3. Service level agreements. The key is to make sure everyone — you and the hiring manager — knows who’s responsible for what down the line. The issues to be addressed should include: Who will be in charge of scheduling candidates and candidate travel? What will recruiting coordinators do? Who will be their hosts when they arrive? Who will follow up with candidates? Who will follow up with those in the interview loop? When will the hiring manager give feedback? (Prompt feedback is essential.) And more. I have seen some use a service level agreement to clarify these issues. An SLA is an explicit contract which maps everything out formally. Whether or not that works depends upon an organization’s culture. More often, I have seen sending an email of understanding as an effective tool. It’s like an SLA, but it’s usually more comfortable for all participants and less formal. (I have a easy, sample agreement that I would be happy to provide you; if you would like one, please email me.)
  4. Working with external providers. The parameters of project management and contracting work similarly with external providers and touch upon many of the same issues. However, because they’re external, it’s even more important that we contract well with them. Many agreements provided by third-party providers don’t explicitly lay out who does what in the relationship. There are many assumptions, and with assumptions come issues. For example, companies assume third-party recruiters check references before an offer is made or that they — the recruiters — will sign off candidates. When they don’t, there’s trouble in Graceland.

If you want things done at a certain time, you need to discuss it with the external provider beforehand and put it in the contract. The key to contracting effectively is the quality of the questions you ask and the things you insist get spelled out (remember, June wouldn’t go with Johnny until she was sure he was off pills!). What you neglect to ask will only hurt you. If candidates are not signed off, they blame the company, not the outside recruiter. If a research firm only provides you with certain services for their hourly rate–because that’s what it provides everyone else ó perhaps there’s a way to pay them differently, based on results. Ask. Finally, here are the four key things you need to ask to establish an effective contracting relationship either internally and externally:

  1. What needs to be accomplished?
  2. Who is responsible for what?
  3. How will success or accomplishment be measured?
  4. When will we know the task is completed?

Overall, the things you need to do in order to contract well include asking the right questions in advance, figuring out who’s responsible for what, as well as timing and measurements/metrics. Do that, and you’ll become a great project manager. You’ll be able to use your time better and focus on strategy and relationships. You’ll see that outsourcing can be your savior and it will enable you to walk the line toward becoming a great HR executive and a thought leader of the future.

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