Quality, Cost, or Compliance — What Drives Your Company’s Hiring Process?

I recently reread Michael Gerber’s business best seller The eMyth and found that many of the principles he suggests for growing a business apply directly to the corporate recruiting department. You might want to follow some of his advice if any of your recruiting processes are not working as efficiently as you’d like. One reviewer had this to say about the book, which pretty much sums it up:

For turning businesses around, or getting them off on the right foot, Gerber suggests looking at franchises as a model. In comparison to the dismal rate of ordinary small-business startups, 75% of franchises succeed at five years. The product of franchise companies is a business model, not food, hotel rooms, etc. In order to meet this level of success, franchise companies have clear operations manuals, procedures, consistent sales approaches — every detail of running the business is specified.

Performance-based hiring QCC process, click to enlarge

By way of analogy, I’m going to suggest that most corporate recruiting departments are not nearly efficient as possible, primarily due to a lack of consistent processes at every step. Essentially, every recruiter and hiring manager can pretty much do whatever they want as long as they make their numbers or don’t violate the law. In this article, I’d like to introduce an eMyth-like approach you might find useful.

Build Your Hiring Process to Maximize Quality, Minimize Cost/Time, and Ensure Compliance

The model shown in the diagram has been designed with three primary objectives in mind: maximize quality of hire, minimize cost and time to fill, and ensure compliance (QCC).

These are all competing objectives and a lot of give and take is necessary to have a shot at success. However, without balance across these three objectives, you’ll wind up with an approach that emphasizes one over the other, and frustrates everyone. (We’re holding a public webcast on Wednesday, March 23 through LinkedIn, if you’d like to learn more on this topic.)

While there are probably other ways to reach the same end result, this QCC model offers a good benchmark to compare to your company’s existing hiring process.

The model itself consists of four distinct and separate phases, with multiple process sub-steps within each phase. Here’s a quick summary:

Organization and Planning

A lot of important stuff needs to be done long before you start looking for candidates. Some of this includes developing a compensation strategy, creating an in-depth diversity hiring plan, and validating the overall process for compliance. If you don’t do these things before you start looking for people, you’ll wide-up doing a lot of backtracking and wasting time correcting mistakes, rather than looking for good people.

As you begin the process of looking for people to fill open jobs, I’d suggest getting away from a req-based process mindset. Too many companies build their processes around the idea of getting a job requisition approved, and then design the pre- and post-steps. This is indicative of a compliance-driven process, and, as a result, important issues are often overlooked or misapplied. For example, initiatives designed to gather followers, implementing Web 2.0 social media concepts, or just expanding your employee referral programs are all compromised when you’re forced to conform to some underlying req-based process built into your ATS. Even the OFCCP reporting is different for building pools of prospects without a req opened vs. the same process with the req opened.

Worse, a compliance-driven process ignores the fact that only desperate top people look at skills-based job descriptions to decide whether to engage with a company, compare opportunities, or accept an offer. Under a Q-driven process, no one would have even considered the idea of using a traditional job description for posting purposes. Now we waste energy figuring out ways to overcome their uselessness.

Targeted and Segmented Sourcing

“One size doesn’t fit all” should be your mantra for QCC-based sourcing. This requires that specific sourcing plans need to be developed for each class of job, addressing issues like supply/demand, the selecting of specific sourcing channels, how to best use Web 2.0 and social media, and the selection of the best tools and technologies. To manage the cost vs. quality directive, this needs to be a flexible model driven by a dashboard, tracking candidate quality and flow, switching to a more costly channel only when needed.

At the opposite end of this type of flexible and balanced process, is the blunderbuss, brute-force model. This is where you post boring ads everywhere, don’t track much, overwork and undertrain the recruiting team, disengage the hiring managers, make everyone apply, and filter resumes using some type on nonsensical knockout questions. This model can actually work if your employer brand is so strong that high-quality candidate supply far exceeds demand.

Evidence-based Interviewing and Assessment

Assessing candidates affects both whom you hire and whom you don’t. Over 30 years of debriefing hiring managers and tracking subsequent performance, it’s apparent that the cause of most interview mistakes fall into a few big causal factor buckets:

Lack of objectivity
Over-reliance on skills and experience vs. ability to do the work
Lack of understanding of real job needs by everyone who has a vote
Superficial assessments due to an unstructured and unorganized process
The use of a yes/no voting system instead of evidence

From a self-preservation standpoint I created some tools to minimize these problems. First, the use of multiple techniques to increase objectivity. Second, the use of performance profiles instead of job descriptions to define the actual work the person needs to do. Third, the modification of traditional behavioral interviewing, having interviewers focus on obtaining detailed examples of comparable accomplishments described in the performance profile. Fourth, organization of the interview using an evidence-based scorecard. (Hire With Your Head describes this process or email me for more details.)

Structuring the interview process is as important as structuring the interview.

Career-based Recruiting and Closing

Despite solid pre-planning, development of a strong 3-4 person candidate slate, and an accurate evidence-based assessment system, you’re far from being done. You still need to get the person to accept your offer without blowing your comp budget. This in fact might be the hardest part of the whole process: recruiting a top person, who is probably not looking, and if he or she is, will always receive a better financial package somewhere else.

Over the years we developed some core recruiting principles to address this issue:

When taking the assignment, have the hiring manager clearly describe the employee value proposition, and lead with this in your recruitment advertising and verbal conversations.
During the interview, look for gaps in the person’s background that the open position fills in. This includes things like the size of the team, the challenges involved, the breadth and depth of the responsibility, the growth rate of the company, and the company leadership, especially the hiring manager.
Make sure the candidate is making his or her decision to evaluate the job or compare multiple opportunities from a long-term career perspective. Then persist if you believe your opening is the best, but back off if it’s not.

Not only can’t you allow hiring managers to exclude good candidates for the wrong reasons, you can’t let good candidates walk away from good opportunities without a fight, even if you don’t have a big budget. This is what recruiting is all about. You won’t always win, but you always have to try.

Summary and Next Steps

Surprisingly, except for recruiting, every other business function, from accounting to engineering to sales to operations, is driven by validated business processes that are continuously updated and improved. Recruiting processes, on the other hand vary widely by company, department, hiring manager, and the recruiters involved. In a slow economy, this problem is masked by the apparent ease in finding qualified candidates.

At the corporate level, there is a great deal of emphasis applied to improving specific steps within the overall process, primarily sourcing and interviewing, but little effort applied in developing an overriding QCC-driven process. This could be due to a lack of understanding of the value of integrated systems, the difficulty in engaging hiring managers, or lack of executive-level support. Regardless, to paraphrase Michael Gerber’s theme in The E-Myth: as a leader, it’s more important to work on your department, than in it. Otherwise, you’ll find it impossible to get better, worrying too much about the trees, instead of the forest.

(Author’s Note: email me if you’d like a copy of this model for review purposes. I’ll have copies of this available at the ERE 2011 Expo in San Diego, if you’d like to review it then.)