If Hiring Is #1, Workforce Planning Must Be #2

The following are the results of a survey taken by over 100 hiring managers and 200 recruiters. How would you have answered the questions? After you read the results, you’ll be asked to determine what year the survey was taken. “The State of Hiring” Survey

87% of managers believed hiring top people was #1 in terms of importance.

79% of respondents indicated that their companies did little to make sure hiring was #1, even though they talked about it a lot.
84% of recruiters thought that hiring managers weren’t willing to spend enough time to review the job description.
76% of recruiters indicated that most of their hiring managers could use some form of interviewing training.
93% of recruiters indicated that more than half of the time hiring managers selected not the best person to be hired, but the person they liked the most.
75% of hiring managers felt that the recruiters working with them (inside and outside) could do a better job of taking the job description and assessing candidates.
87% of hiring managers did not think they were seeing the best candidates available.
81% of the hiring managers indicated that only one-third of the people they hired performed as well as expected, one-third fell short, and one-third shouldn’t have been hired.

In your opinion, does this survey reflect what’s happening now at your company? When do you think the survey was actually taken? 1957

1974

1988

1999

2004 This is a trick question. This survey* was taken each of these years, with surprisingly pretty much the same results. Peter Drucker, in fact, published information back in 1957 which indicated that, when he queried hiring managers, only a third of the people hired were considered good hires, one-third were marginal, and one-third were outright mistakes. Based on this batting average, not much has changed over the last 45 years. This is despite the Internet, job boards, applicant tracking systems, behavioral interviews, and competency models. The only consistency I’ve observed over these years is that there are always a few demanding hiring managers who refuse to hire anyone other than superior candidates. Converting this “high standards” concept into a systematic process, however, has proved elusive. Why is hiring top people still more a result of the efforts of a few strong hiring managers and a few strong recruiters? Why hasn’t hiring efficiency improved much despite all of the new innovations and much effort by many talented and hard working people? I’d like to suggest that it’s a result of failures in a few key areas. These include: lack of executive commitment, designing hiring systems around the needs of top candidates rather than top employees, overvaluing presentation rather than performance, and using skills-based and subjective job descriptions that preclude the best people from being considered ó including more diverse and internal candidates. All of these are contributing factors, and space is too short to use this forum to adequately explore them in more depth. What there is space enough for is to raise the idea that a key part of the solution is the importance of workforce planning. In my opinion, if hiring is #1, then workforce planning must be #2. I reached this conclusion many years ago. My first management position was as budgeting manager for a multi-billion dollar OEM automotive component manufacturing company. We had 14 plants around the world and a corporate staff of over 700 people ó including engineering, R&D, IT (data processing at the time), accounting, sales and marketing. At that time, every one of these plants and every department had to put together a rigorous budget, including a comprehensive manpower plan which listed every position in the department with an estimate for turnover, internal transfers and new hires. This manpower plan was as important as the capital plan and the expense budget. Managers had to justify every person on their staff as rigorously as any $100,000 expenditure. From this we created a workforce plan that was used by the HR department to set their hiring programs for the coming year. Detailed planning like this was a natural part of every line function. The workforce plan is a powerful tool that can improve every aspect of HR/recruiting department effectiveness. Unfortunately, it seems to have been lost in the rush for high-tech or easy solutions. Yet how could anyone expect hiring to be #1 unless a plan was created to get there? The workforce plan is to HR/recruiting what the sales forecast is to the sales department, the product plan to marketing and engineering, or the production plan to manufacturing. The use of a workforce plan provides the HR/recruiting department the ability to organize scarce resources to meet important business objectives. Without a hiring plan, HR/recruiting is forced into a reactive mode with never enough time to do it right. Here are some of the key benefits of workforce planning:

Ties business strategy directly to hiring needs. Once a one-year quarterly workforce plan is prepared, positions can be categorized based on their importance to the business strategy. It’s important to identify as early as possible those game-breaker and critical positions that drive business success. This gives HR/recruiting all the time it needs to find these important positions before having to make compromises or use outside resources.
Determines needs and organizes resources. Forward-looking planning is an essential component of good management. Recruiting teams can be built and organized to best meet the needs identified in the workforce plan. The strongest recruiters can then be assigned to handle critical positions, and less-experienced recruiters can handle the support positions.
Expands sourcing channels to include less active candidates. It’s difficult to take full advantage of all available sourcing channels when planning starts only when a requisition is approved. This forces the need to find only active candidates who are ready to start immediately. A few extra months allows for a more proactive employee referral program, where strong leads can be developed and nurtured and then turned into great candidates. Forward planning provides the time needed to target those stronger and less active candidates, who also require more time to evaluate new career opportunities.
Improves candidate quality. Typically, as hiring needs increase and time shortens, managers become desperate and standards fall. A workforce plan not only gives the recruiting team the time to find better candidates, it also gives the hiring manager the added time needed to remain selective.
Reduces time to fill. Anticipating hiring needs allows for just-in-time hiring. For example, if you know you need to hire 20 salespeople to handle the new Kansas City office in 120 days, you can begin interviews on the day the requisitions are approved, not 30 days later. This is what every retail store, restaurant, and hotel does when planning to open a new location. Strangely, time to fill declines when you have more time to fill.
Reduces cost per hire. Lack of planning is a prime contributor to cost increases in any process. When time pressures increase, shortcuts are taken, additional untrained people are brought in, and more costly methods and less efficient tools are used. It’s a known fact that costs decline when planning increases, since all options are considered.
Saves on outside search fees. Outside search firms earn their fees because they have the time to find top people through aggressive networking. The primary reason outside recruiters are used is to find these less active top candidates. A workforce plan affords the corporate HR/recruiting department the same opportunity.

A one-year rolling quarterly forecast of hiring needs is a primary planning tool. It’s the prerequisite to making hiring top people a predictable business process. Tracking changes to these forecasts provides even more insight for the HR/recruiting department. For example, when the next 90-day forecast is prepared for the next four quarters, you’re able to compare forecast-to-forecast changes for future quarters. Tracking these changes is a leading indicator for shifts in your business. This information allows HR/recruiting to modify its planning and quickly realign resources in time to make sure that all of the company’s hiring needs are met in a timely fashion. This ongoing, forward-looking information gives the HR/recruiting department real insight into the company’s operations at all levels. Planning like this isn’t just an academic exercise. It is a way to systematically collect information that the HR/recruiting department needs to make hiring #1. This is what planning is really about ó and it’s how you convert the HR/recruiting department from a staff to a line function. In the process, hiring top people will really become #1. To get there, workforce planning must be #2.

*These are not actual survey results, but estimates of various surveys conducted over the past 30 years.