Open Letter to the CEO and CHRO: You’re Disconnected On Talent Priorities.

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May 17, 2017

Dear Mr/s CEO and CHRO,

I needed to send you this important note after reading all those McKinsey and Gartner “What are the CEO’s priorities?” survey results for the last few years. You have also read and probably participated in them as well.

In the last five years those survey results state that identifying, attracting, developing, and retaining talent is consistently in your top three priorities. The problem is though, based off hundreds of conversations I’ve had with CEOs, CHROs, and heads of recruiting over the last few years, there seems to be a disconnect with what you say is important versus what your own organization displays as important.

I know you are busy, so let me give you seven key things that you and your company should be doing, if you are not already, to get your business better aligned to what you say is a ongoing priority.

These are not prioritized in order of importance, as it would be foolish to do so without better understanding your business.

No 1. Tie identification, attraction, development and retention to your hiring managers and business leader’s goals, performance, and compensation.

When you look at your own organization, some of these priorities might be universal across the enterprise. Other priorities might be more specific to some of your business units; those, for example, with retention challenges.

Demand and expect monthly scorecards aligned to these priorities from HR and recruiting with the correct KPIs in place that help raise awareness and move the needle on these.

Saying identification, attraction, development, and retention in your quarterly company update on your people objects is great, but showing that you have measures of accountability and can show progress sends a better message. If it really is as important as these surveys state, then you should tie talent objectives to your executive’s compensation and performance plans.

Some leaders like sticks. I personally think more people are motivated by carrots.

No 2. Re: speed, cost, and quality. Just pick quality, please.

You have probably heard the old saying that of speed, cost, and quality, pick any two, as you can’t effectively do all three at once. If you really say identifying, attracting, and retaining talent is a priority, then everything should pivot around quality, be tied to quality, and measured against quality.

If you don’t, then in my experience it’s going to impact speed and cost anyway. There are dozens upon dozens or reasons why quality must be the key focus:

  • More people involved in interviews than you need (time+cost).
  • More canceled requisitions than you should (time+cost).
  • Lost opportunity cost of roles remaining open because of a lack of quality job criteria; process, role responsibilities, and expectations have not been properly established: combing multiple roles into one job; out of touch with market compensation; hiring managers wanting to see more candidates than they need and then ultimately lose out on the best ones previously seen.

I will give you one related business story of how not making quality part of your recruitment/business process is going to literately cost you millions anyway.

When I previously modeled up the financials related to attrition in an organization, a 4 percent positive shift in attrition added 36 million back to the bottom line of that company.

When we dug into this deeper, we found a direct correlation of focusing on the quality success criteria of evaluating the difference between exceptional versus average performance (a candidate’s competencies and behaviors) and how things actually got done in our organization (culture). We also did analysis on exit interviews and the reasons why top-performing people were leaving voluntarily in the first 12 months of employment. There was a clear disconnect with what the hiring managers and recruiters promised about the role and opportunities versus what the actual role and company culture was.

In addition to the hard dollar attrition cost, the downstream impact is if your recruiting team and hiring managers are spending up to 50 percent of their time focused on back-filling roles, then how do you expect them to be proactively identifying talent tied to your growth strategy?

No 3. You have more recruiters in your organization than you know. Engage them.

Let me tell you a story that I had with a CEO when I was getting hired as the global head of talent acquisition. During the interview, I asked him how many recruiters he believed he had in his company. His response: “Well, globally, we have well over 100.” My response was, no you don’t. He looked at me quite puzzled. I said you have nearly 20,000 employees. It took him a couple of seconds but he then smiled and responded, “Well, I guess you are right Rob.”

If employee referrals are not your No. 1 source of candidates at your company, then you are doing something wrong. Many articles and studies have shown that employee referrals are consistently the best quality of hire you can make. If you are not getting 40-50 percent of your hires this way, then you’re going to continually be challenged solving for identification, attraction, and even retention of top talent.

No 4. You must have a consistent structured interviewing and assessment framework that clearly identifies a top performer versus an average one.

Related to point No. 2, while you have your hiring managers and people involved in interviewing asking silly questions about “What’s your greatest strength?” or “Why should we hire you?” or even sillier questions like “Why are manhole covers round?” questions, then you are doomed to mediocrity at best.

Invest in not only a consistent operational structured interview process that assesses key success criteria of top performers, but also invest in training your people how to interview correctly. There is more to interviewing that one-hour mandatory HR training videos on legal dos and don’ts.

No 5. Diversity is not a quota.

Yes, we need more women in leadership roles. Yes, we need to hire more veterans. Yes, we need to hire more diverse employees, but if you’re doing this to just meet targets to show the world what a great company you are, then you’re missing the point.

It’s not about targets. If you have diverse customers (and you do) then you need diverse employees who understand what comes with diversity of opinions, thought, and innovation. Make identifying, attracting, developing, and retaining diverse talent a priority.

No 6. Your employee brand is not a slogan.

You also need to be transparent and clear with candidates, your employees, and the world, what your employment brand is. Too many people during the interview process are sold a false bill of goods on the promise of a glossy marketing-spun employee brand only to become disgruntled once they find out what it really is like to work at your company.

If you’re going to attract talent and fix attrition, it starts with being clear, consistent, and honest with people. People aren’t perfect and either are companies, so why have your employee brand disconnected from this reality?

No 7. Invest in identification and attraction of talent.

Currently 2-3 percent of your total spend goes toward the recruiting budget. I get that recruiting is a cost center sitting inside the HR cost center. I’m not suggesting we need to turn it into a profit center as that is another letter for another day, but if you say that identifying and attracting the best talent is a top priority, then you might want to think about increasing your recruiting budget up some.

You’re going to be hard pressed getting your recruiters to be proactive at identifying and attracting the top talent who are not looking, if you currently have most of them working on 50+ positions at once supporting dozens and dozens of different hiring managers. I will leave you with this related story:

A previous CHRO came to me one day and said, I’m getting great feedback from the executive team on our internal executive recruiter who is finding and assessing great leadership talent. They love the high-touch experience this executive recruiter brings with proactive market and industry insights, along with a comprehensive assessment of the candidates they submit. The candidates love him as well, given he keeps them regularly informed and provides great added-value information on the company and executive team.

I responded with, “that is great to hear and exactly why we hired him.”

The CHRO then paused and said, “Rob, can we replicate this model with the rest of recruiting function to support the entire company?”

I said, “Sure, but you do understand that currently the executive recruiter works on about six roles at a time while our recruiters average closer to 30 at a time? So, we can replicate the executive recruiter value, but are you OK if the cost per hire basically doubles and we have potentially three times as many recruiters as we currently do today to achieve this outcome?”

I’m sure you can guess with what the CHRO responded with next.

Mr/s CEO and CHRO, thank you for taking the time to read my letter.

–Rob McIntosh

Principal Advisor and Founder, Intelligent Talent Advisors

P.S. I hope someone in your recruiting or HR organization had the Kahunas to send you this letter 🙂

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