Boom! Why We Should Blow Up the Recruiting Department and Start From Scratch

According to Ben Franklin, the definition of insanity is doing the same thing over and over again and expecting different results.

Given all of the changes that have taken place over the last 10 years, there is no evidence that corporate recruiting departments are getting better at hiring top talent. In fact, a good case can be made that things are getting worse at an accelerating rate. Some examples:

  • Our surveys indicate the quantity and quality of candidates applying to job boards is declining.
  • At Alexa.com you can see for yourself that the traffic at the major job boards declined by more than 35% this past year, on a month-to-month basis.
  • Our research indicates that the rate at which candidates are rejecting offers, accepting other offers or accepting counter-offers is increasing.
  • Labor Department demographic trends indicate the overall supply of talent is declining while the demand is increasing. The widespread gap in engineering graduates between the U.S., India and China is probably not as bad as originally thought, but it’s still an issue that needs to be addressed.
  • Our recent Hiring and Recruiting Challenges 2006 survey indicated that only 23% of users are quite satisfied with their investment in their candidate tracking systems.
  • This same survey indicated that two-thirds of corporate recruiters find serious problems with their clients’ ability to accurately assess and effectively recruit top people. Not surprisingly, two-thirds of hiring managers are not satisfied with the quality of candidates presented by their recruiters, or how fast they do it.

With a crisis mentality in mind, why not start with a blank sheet of paper and totally rebuild the corporate recruiting department from scratch? Here are some ideas to start with. Send me yours if you’d like to discuss them in an upcoming conference call.

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  1. Have the recruiting department report to the CEO. HR is a support department, not a sales or line function, so reporting to the CEO is a better fit. Shaking things up with this type of major re-org could be the catalyst required to making hiring top talent a serious business agenda item. This type of realignment is not without precedent. In the early 1980s, IT was an overhead department reporting to the CFO. It became more business-savvy and effective after the reporting was realigned.
  2. Make hiring managers responsible for hiring top people, not recruiters. If hiring top talent is #1, it should be #1 on the manager’s performance review. Here’s a quick way to get started: have managers rank each team member on a 1-10 scale. Then grade managers on the overall quality of their team members, their turnover rates, and the quality of the personal development plan they have for each team member. Then give managers full responsibility for hiring, including a budget, and allow them to select the recruiter they want to use for help, even if the recruiter is outside the company. This change is probably more important then changing the recruiting department reporting structure.
  3. Disenfranchise your managers. The right to vote on candidate competency should only be given to those managers who have demonstrated that they are both accurate and unbiased. Even better, implement a two-step selection process using the interview as the data collection step only. Have the actual voting take place later in a separate meeting, with the team sharing information and reaching consensus across all job factors. This type of evidence-based decision-making process is how most other business decisions are made. Why should hiring be any different?
  4. Don’t post your internal job descriptions. If top performers aren’t wowed by your online job descriptions, you’re not going to hire any. Consider how many top people you now turn off and lose with your current descriptions. To solve this problem, make your hiring managers responsible for describing the compelling reasons why top people should consider these openings. Lead with this information, add the challenges, then put the skills required and the requisition number at the bottom. And don’t quantify the skills (years, etc.). You want just enough experience to do the work required. This will excite the high-potential employees.
  5. Change the compensation structure for corporate recruiters. Recruiting is not about posting ads or generating names or sending resumes to hiring managers. It’s about getting top people hired. Recruiters should be compensated on results, not activity. A small base, around $35,000 a year, is more than sufficient if it’s combined with a realistic commission that gives the person a chance to earn at least $125,000 based on the quality of their hires and the number of placements made.
  6. Don’t hire agency recruiters for corporate recruiting positions. Here’s why: first, top agency recruiters won’t take corporate jobs because the pay is not enough. From what I’ve seen, most of those who take these jobs don’t want the pressure of making placements. Second, corporate recruiting is not the same as agency recruiting. The best agency recruiters are an independent breed, and it’s hard to force these types into a corporate model with different tools and resources and more requisitions to handle. It seems far better to take some aggressive, trainable sales-type people who are excited about doing recruiting your way, in your culture, with your resources, and meeting your needs.
  7. Throw away your applicant tracking system and start over. If your applicant tracking system isn’t improving your efficiency or the quality of your candidates, you need to completely overhaul your recruiting and hiring processes. Drive this process reengineering effort based on what it takes to consistently hire top people, not what it takes to manage data. Then validate the process before you automate it. Automating bad processes (doing bad things faster) was the first costly “no-no” learned when computers were first introduced into business in the 1950s. Somehow, HR missed this class.
  8. Don’t listen to anyone who is a PhD unless it’s in chemical engineering. The reason I like chemical engineers is that most are trained in stage-gate methodology. This requires them to look at any new solutions across all dimensions of success, including the financial and business ones, in a logical and sequential fashion. Too many PhDs are so engaged in their defined field of expertise that they overlook downstream and secondary consequences. This is an example of the “Can’t see the forest for the trees” problem.
  9. Everybody can’t hire the top 10%, so stop taking the advice of the so-called experts, especially us ERE columnists. The reason I have a problem with our advice is that some of it is downright wrong. But worse, even if everyone followed the right stuff, all you would get is average results. Doing exactly the opposite of what we suggest actually might give you a competitive edge. But then you can’t tell anyone. The moral here is become an early adopter. Try everything, get good at it, track your progress, and as soon as diminishing returns set in, start doing something different. You’ll never become a market leader if you’re doing what everyone else is doing.
  10. Stop using behavioral interviewing and competency models. I can’t find any evidence that these tools have helped companies hire better people. I’m not sure they’ve even eliminated hiring mistakes. For example, if you Google “behavioral interviewing,” you get 15.4 million responses ? and 90% of the first 100 or so are articles showing candidates how to prepare for a behavioral interview. Why not ask the proponents of these tools to justify them on an ROI basis using actual cost savings and the actual number of better hires made as the basis for the impact analysis? Now when they do this study, make sure they take into account the number of top candidates driven away because they felt the interview was clinical. Also, take into account the fact that more managers use the behavioral interview to eliminate the people they don’t like but use their own standards to hire people they do like. Then also consider why so many competency models for different companies and different positions are exactly the same. The real problem with these tools is that they were developed pre-Internet with the underlying assumption that candidate supply exceeds demand. Even if they were effective under this assumption, they are now easily gamed by astute candidates and the supply of top candidates was never enough.

The U.S. is losing its competitive position in the world economy. One way to counter this is to convert the recruiting function into a performance-driven line operation. Incremental changes won’t cut it. These are just stopgap measures at best. A major overhaul is required. Based on progress over the past 10 years, it’s clear that the recruiting function has not kept up with the times or the technology available. One small example: if you don’t have the reporting in place now to know how well or badly you’re performing today, you’re guaranteed to have bigger problems tomorrow.

Boom.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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