You won’t read it in the newspaper, but it’s a fact that the New York Yankees were the world champions of recruiting long before they were declared the world champions of Major League Baseball.
The Yankees are perennial winners (many call them a dynasty) not because of their superior equipment, IT processes, or their financial or marketing prowess, but rather their extraordinary recruiting and talent management strategy.
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If you are a corporate recruiter, you might think that it’s silly to learn lessons or emulate practices from professional sports, but you would be wrong. Ignoring the many valuable lessons the sports industry provides could cost your organization millions! While sports analogies are not loved by all in HR, it’s hard to find a CEO who doesn’t like them or who has not used them in their memoires.
All leading organizations strive to learn and improve by benchmarking against other organizations in and outside their industry.
The New York Yankees, like Sony, Disney, Apple, the Los Angeles Lakers, and GE (NBC), are a corporation that produces an entertainment product. They book revenue by selling a wide range of products and services that extend far beyond the playing field. As a corporation, the Yankees operate under the watchful eye of shareholders, unions, customers, and regulators.
In my experience, the key resistance factor that keeps corporate recruiting leaders from applying sports lessons is not whether they would work, but rather a lack of courage or aggressiveness.
The most common excuse offered is that the scale of recruiting solutions employed by professional sports simple doesn’t align with that possible in your typical organization. While it is true that even the smallest Fortune 500 company dwarfs the Yankees with regard to employee count, most organizations are organized into organizational units much more on par, making the application of approaches at the unit level more than feasible.
If you expect to generate a quantum increases in performance, seek out successful practices in places where few others would think to look. Then, you must have the courage to adopt some approaches that, at least initially, will make some in HR cringe.
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16 Lessons That Corporate Recruiting Leaders Can Learn From the Yankees
Listed below are numerous recruiting and talent-management approaches used by perennially successful sports franchises. These ideas are relevant and have been applied by leading talent management organizations:
- Make the business case for great recruiting — the Yankees have built the strongest business case for great recruiting anywhere! Almost everyone agrees they have an abundance of extraordinary talent in literally every position. They routinely have the highest player salary expense of any MLB team. But the team owners are willing to pay such extravagant amounts because player personnel executives have successfully made the business case demonstrating a huge ROI in attracting the very best players. Although it’s expensive to recruit and retain top talent, the Yankees have calculated that the benefits far outweigh the costs. In fact, they have learned a valuable lesson which is that the most costly mistake that a team can make is to “save money” by placing an average player in a key position.
- Recruit top talent away from competitors — while many teams try to build their talent pool by recruiting and developing entry-level talent, the Yankees have learned the value of tracking and then recruiting away the top talent from other firms. Rather than seeking out “hidden talent,” they instead continuously identify obvious top performers on other teams and directly recruit them away (we call it poaching). Direct poaching has an added advantage in that it helps your team immediately, while simultaneously hurting your competitor.
- Stars attract other stars — The Yankees have learned that working alongside other star players and having a significant chance at winning a championship are at least as important as money is in attracting top performers. Corporations should also focus on attracting noteworthy talent because they are a key attraction factor for top performers with many career choices. Firms should also publicly boast about their successes so that they build up their external image as a winner and an industry leader.
- Prioritize your positions — an important lesson to learn is that all positions do not have an equal impact. In reality that means that a starting pitcher or the cleanup hitter might be five times more impactful on the team’s winning percentage than a right fielder, a first baseman, or the batboy. Corporations need to realize that if they can’t recruit the best for every position, they need to focus recruiting resources on the 20% or less of that can be classified as high-impact openings.
- Prioritize individuals — a related lesson to learn is that top performers need to be prioritized and treated differently. Top performers might produce five times more than the average player, so as a result, they are given more playing time, are put in critical games, and sometimes they are even shifted into the most critical positions. For corporate recruiting leaders, this means that first of all they need to focus their recruiting resources on top-performing departments and managers. It also means that they must shift their best recruiters to priority candidates and also to change their recruiting approach and temperament dramatically when they encounter a star candidate. It’s a mistake for corporate HR to even attempt to treat all employees the same.
- Identify their decision criteria — in sports, the relative bargaining power of top talent is immense. If you don’t realize upfront that the power has shifted toward them, you won’t win many recruiting battles. The Yankees have learned that it’s not enough to simply plan to attract the very best, you need to institute a sales approach where you identify and then meet each of the factors that cause the top player to accept a job. It’s equally important for corporations to stop acting arrogantly, as if they possess all of the power in the hiring relationship. At least for talent that is in high demand, they need to realize that the candidate is the one who holds most of the power. This requires corporations to develop a more candidate-friendly recruiting experience and in addition, a formal process to identify and then to completely meet each one of a top performer’s job acceptance criteria.
- Global recruiting is required — if you look at the significant percentage of Yankee players who come from Japan, the Caribbean, and Latin and South America, you would realize almost immediately that it’s a mistake to recruit exclusively in your backyard. Corporate recruiting leaders must learn they can’t just recruit locally; maybe as much as 50% of your talent must be global.
- Recruit team players — over the long run, you can not win unless everyone works together. In addition to raw performance, every individual must demonstrate the capability of working alongside with and developing others on the team.
- Hire them, so your competitor can’t — rather than hiring just enough to fill your needs, follow the Yankee approach, which is to occasionally hire top talent just to prevent your competitors from having it. The goal is to get an “unfair” talent market share.
- Recruit rather than train — no one would even attempt to argue that Alex Rodriguez became a star as a result of classroom training offered by the Yankees. In fact, rather than taking the risky approach of relying on training to develop skills, the Yankees almost exclusively recruits individuals who are already fully trained, proven performers who only need minimal guidance and coaching in order to excel.
- Performance over loyalty — the Yankees are notorious for attracting the best, but they are equally famous for heartlessly dropping those who fail to live up to the required performance levels. The best organizations make it clear to all that they put current performance first and thus they use a what-have-you-done-for-me-lately? approach (in lieu of rewarding loyalty or tenure). Assume upfront that a certain percentage of new hires and employees will fail to produce. This approach requires that you have a quality of hire measure and then a strong performance tracking system. In addition, have the courage to admit when you’ve made a hiring mistake so that you can quickly swap your mistakes for new outstanding recruits.
- Lose your tolerance for hiring mistakes — if there is a differentiator between sports recruiting and corporate recruiting, it would be the fact that in sports, every talent decision is highly visible. Unlike corporations, if you make a significant recruiting or retention mistake, it will be made visible and amplified by countless newspaper headlines, sports talk shows, and bloggers. The visibility of their personnel errors forces them to develop recruiting processes that are significantly more precise and error-free than their corporate counterparts. Becoming more precise, more data-driven, and recognizing failures early on are also excellent goals for corporate recruiting leaders.
- Continuous workforce planning is needed — even before the Yankees won the World Series this year, they already began the process of workforce planning for next year. The process includes internally identifying surplus or duplicate talent, potential voluntary turnover, and individuals whose performance is declining. External planning requires identifying and courting desirable external talent at other teams for vacancies or to swap for current players in order to improve the overall performance at a particular position.
- Continuous recruiting is required — even though the down economy has affected revenues at the Yankees, the recruiting effort hasn’t been impacted at all. The lesson to be learned is that recruiting needs to be a continuous process that is independent of the short-term revenue fluctuations. Organizations must adopt a long-term funding model that allows an increase in recruiting when top quality talent is available. The recruiting process for key jobs must also start a year or two ahead of when you actually must-have the talent in order to build relationships and to more accurately assess the talent. If top talent unexpectedly becomes available, you must have a “speed hiring” process so that you can hire it immediately, even if you don’t have an open position.
- It’s not the location — many corporations argue that they can’t recruit the best because of their physical location. Yes, the Yankees are located in New York, but so are the New York Mets, a team that stinks almost every year. In fact, both Pittsburgh and Philadelphia won sports championships last year in spite of not being located in a most-desirable city. The key lesson is that if you have great players, great managers, and a great product, you can attract the best to any location.
- Great managers are also needed — the Yankees are equally as willing to recruit great managers because they realize that top talent can only get you close to a championship. They realize that if you want to win continuously, you need a great manager to integrate and manage the egos that many top performers develop.
Have you ever noticed that in the sports world, recruiters are treated as heroes? They have huge budgets, and their managers spend a great deal of time and resources on the continuous identification and recruiting of top talent. Everyone on the team knows who recruited Michael Jordan, Kobe Bryant, or A-Rod.
In sharp contrast, the typical corporate recruiter is rarely respected and woefully under-resourced.
I hope that the recent recession has taught every recruiter that getting a significant increase in budget, or respect, will require that you dramatically improve both your business case and your observable and measurable business impact.
You can’t reasonably expect more than a 5% to 10% improvement if you limit your benchmarking and copying to the firms that are similar to yourself. A dramatic improvement in results might require you to examine practices that are dramatically different than your current ones. In short, if you want to have a “major-league impact” you might need to study the recruiting practices of the major leagues!