Real Upside From an Inglorious Downturn: 2009, 2010, and Beyond

Feb 2, 2010

Spring 2010 conference-logoOne of the things I hear often, in many places I go, is that people tend to describe the downturn and the potential of the upturn in extreme terms. The downturn has been “all bad” and there’s “nothing good that’s come of it.” Similarly, when others talk about the upturn and 2010 (and beyond), I hear a lot unbridled enthusiasm and optimism.

To me, the truth lies somewhere in between.

Let’s face it: 2009 was certainly not a good year for business and talent acquisition, and we’re all glad it’s over. Conversely, we’re seeing signs of a rebound and there’s little doubt that 2010 will be better than 2009. But will we have a huge rebound in 2010? Probably not. Nonetheless, through all this, there have been many positive things to come from talent acquisition, and there’s every reason to hold real hope for the future.

But first, let’s look at 2009. There’s no question the downturn was difficult and a “game changer” for recruiters. Not only are there many fewer recruiters than before, but those who left likely won’t be returning. The reason for this is we won’t need as many as before. Why? Among many other things, because HR generalists have become much more sophisticated about recruiting.

You heard me right. I’ll say it again: HR generalists have become much more sophisticated about recruiting.

“But wait, Jeremy,” you say, “in the past, haven’t you talked about how HR generalists were slightly inept at recruiting?”

I have, but alas, things have changed … and I am more wrong about that now than ever. Since then, generalists have been forced to pick up the slack. They’ve learned to be better project managers and are more open to hiring additional resources, such as outsourced providers, search firms, etc. And because they’re closer to the business than their former recruiter brethren/sistren, as the economy continues to improve, companies won’t need as many recruiting specialists (and those recruiting jobs that do return won’t pay as much).

I have spent some time talking to some key recruiting leaders to get their perspective on these phenomena. Whether or not these developments are good for recruiting is debatable. However, what is clear is that the following things recruiters and recruiting leaders have had to do in 2009 to survive, in fact, will help them prosper as the recovery continues:

  • Recruiters Are Using More Skills and Building the Skills They Have. According to Ginny Eagle, former director, talent acquisition, T-Mobile USA, “As requisition volumes shrank, I downsized accordingly. This caused us to ask recruiters to expand to other functional areas and stretch themselves a bit. We also took advantage of the lull to build on our foundation. Essentially, we focused on the four pillars of a corporate recruiting function: process & policy; organizational structure and alignment to the business; technology; and metrics. We used this time to strengthen each of the four foundational pieces.” Brad Warga, vice president, talent and employee engagement, Harrah’s Entertainment added, “We made some tough decisions in order to control our destiny in 2009. Despite the initial pain of downsizing, we’ve witnessed more innovation this year than any year in my tenure with the company. This economy has truly made us better and we hope to preserve the controls we put in place as we return to growth.”
  • Greater Adoption of Talent Acquisition Functions in Europe. Companies and divisions with operations in Europe have seen a greater adoption of the talent acquisition and recruiting functions. For instance, in 2009, Coc- Cola Enterprises streamlined its processes and used technology tools globally to achieve cost savings. In addition, CCE implemented a European Talent Acquisition function, which improved service to hiring managers and reduced costs (in the past, it primarily used agencies to recruit teams).
  • Upgrading of Talent. In 2009, companies were also able to take advantage of the downturn to clean their “talent houses” by terminating under-performing employees. This enabled them to clear space to upgrade talent and make some strategic hiring decisions. According to some corporate leaders, the biggest change in 2009 related to the business downturn was the opportunity to speed up performance management and upgrade talent. Some organizations incentivized executives to see the opportunity to go after talent from the other industries (especially those hit hard by the downturn, such as automotive and financial services) and make some strategic hiring decisions. These organizations continue to capitalize on the employer market by using their performance management process to free up space for upgraded talent.
  • Increase Brand/”Talent” Market Share. Warga continues, “We knew the importance of continuity with our key business schools, and while many companies scaled back significantly, we decided to take market share. Through innovative low-cost efforts we have improved our presence on campus and continue to hire students into our leadership development pipeline with the confidence that we will absorb them into our business. Maintaining this continuity took some convincing on the part of executive recruiting.” This strategy will pay off in droves when the economy rebounds. Campuses and students remember companies that were their fair weather friends, and those who stayed through the downturn will benefit.
  • Focus on Talent Acquisition/Employee Morale. According to T-Mobile’s Ginny Eagle, “We had to determine a different way to recognize and motivate people. Budgets were cut and we weren’t able to do the things that have always been available. We took a very personal approach to help the team feel a sense of community. Recruiters are very social and this is important to them. I spent a lot of time walking the floor and chatting with people.”

Finally, a key point that Ginny Eagle made: “In my opinion, the single most consistent reason for the demise of a corporate recruiting function (in 2009) is that the recruiting leader did not create an optimal environment for recruiters to be successful. No solution is better that a great in-house recruiter. The caveat is that, as recruiting leaders, we must be able to identify the great recruiters, train them effectively, and hold them accountable. This is what a great recruiter wants!”

So what about 2010? We know there won’t be a big hiring bump but rather small incremental jobs growth. As a result, there are many things that can be done during this time to prepare for the upturn:

  • Streamlining Processes. 2010 can be a year in which companies can continue to become more efficient, streamline their processes, and get their “houses in order.” For instance, in 2009, many organizations were so sensitive to adding any new costs that they created systems of “over-approving” offers and hires. This not only seriously impacted the cost of hiring (ironically) but created inefficient systems. In 2010, these processes need to be streamlined. More accountability needs to be put in the hands of hiring managers and, as a result, the process becomes more effective, is less costly, uses fewer talent acquisition resources, and makes greater use of technology. Thus whether it’s giving tools to hiring managers to help their efficiency, improving the assessment process, or setting up the interview process so that when key talent is needed, the right person can be hired, much can be improved in this area.
  • Innovation. According to Harrah’s Warga, “Despite having a smaller team, we’ve managed to focus on innovation alongside the day-to-day hiring. We’ve had to find cheaper and more efficient ways to recruit. We took the money used for advertising and used it in a couple of different areas: external awards in order to increase our brand awareness, creation of social networks (Facebook, YouTube, LinkedIn, etc), and integrated our career site with our social networks through interactive blogs and channels.”
  • Upgrading Skills of HR Generalists. Though necessity was the mother of invention with this last year, the smart companies will continue to upgrade the recruiting and project management skills of their HR generalists. This entails having HR professionals continuing to improve their project management skills (how to effectively use outside resources, such as external contractors, outsource providers, third party search firms, etc) and/or actually handling some recruitment execution on their own.
  • Using Recruitment Process Outsourcing more effectively. In the past, I haven’t been a big fan of full outsourcing because I always felt that developing an internal talent acquisition capability was key to an organization’s success. However, I now see a strong benefit to using RPO when there is a need, especially with respect to a geographic or specific expertise requirement. A talent acquisition function needs to be really good at sourcing and finding the core key job areas within their company (this is different for every organization — you need to find out what the top four or five key job areas are for your organization that are most core!) Outside of that, the savvy recruiting professional can likely add more value to his/her company by project managing effectively vs. doing everything themselves. In addition, many RPO companies are unbundling their services in unique ways. I’ve seen these companies take on just the scheduling of candidates, or the web sourcing of candidates, etc. Spend some time and learn more about this.

There are many other ways 2010 can be used to help your talent acquisition team become more efficient and better prepared for the upturn. In fact, I would love to meet you in person and spend more time talking about these issues. Please join me at the upcoming 10th Annual ERE Expo Spring 2010 in San Diego, California. I will be hosting and moderating an exciting ERE Expo General Session panel discussion entitled “Beyond The Downturn: A Panel of Survivors — Surviving the Year & Planning for the Decade,” March 16, 2010, 10:15-11:15 a.m. My panel will include Ginny Eagle, former director, talent acquisition for T-Mobile USA; Brad Warga, vice president of talent and employee engagement for Harrah’s Entertainment, as well Jason Farr, vice president, global talent acquisition, Coca-Cola Enterprises.

During our session we’ll have a direct, hard-hitting, transparent, and very interactive conversation about this topic. Not only will we be looking to get feedback from the audience, but if you have any comments or questions that you would like us to discuss during our panel discussion—feel free to shoot me an email or leave a comment here. Our goal is to be very open and talk about anything. We’ve all gone through some real challenges in 2009 and 2010 won’t solve those problems. But there’s great work to be done and I look forward to doing it with you and seeing you there.

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