If you ask most CEOs who don’t work for a non-profit what is most important to them, they will reply, “whatever makes the company money (revenue) or whatever saves the company money (margin/profit).” The primary marching orders from most CHROs for HR and recruiting functions will be about continuous improvement to reduce cost.
I know most recruiting leaders are nodding their heads as they read that statement.
Don’t worry. This is not another dull dry article about cost per hire.
As we should all know by now, from an acquiring talent perspective, as an industry we generally focus on two other major KPIs: speed and quality — beyond just cost.
The funny thing is when you really boil down these and other major KPIs, they all relate back to money anyway. Hold on, I will explain.
Since HR/recruiting functions pretty much are viewed as a cost center by leadership (CEO/CFO), a lot of your operational improvements or strategies will always be tied to cost savings in some way. There will be times though where you can show a correlation to what your organization produces in the way of delivery or results that can show revenue gains for the company. These are harder to calculate, but definitely worth the effort given you will find that there are multiple increases above and beyond what you can show from cost savings alone.
Where I have managed to get the greatest traction and support from executives for any strategies or organizational model changes is ensuring that my presentations very clearly call this out in the first part of a presentation deck or conversation. Let’s call this the “money slide.”
I also learned very early on given direct feedback from business leaders that most executives see hundreds of presentations a year, are very busy juggling multiple major decisions, and don’t have time (or patience) for more than a few slides anyway. Additionally, I have found many an executive likes to ask lots of probing questions, and you will never really get past the first slide anyway. It blows me away when I see decks of 20+ slides trying to be presented to senior executives, but that is another article for another day. I am sure you know what I mean. 🙂
I am going to go into a little more depth with examples at a tactical level to help you connect the dots as to what I am referring to when I talk about the how and the why of the “money slide.” (Note: I personally get frustrated when I read an interesting concept or idea but no level of detail behind it).
For this example below, let’s pick on a better assessment technology as a needed investment to help improve the quality of hires.
Example: Let’s say you are looking to make a recommendation to why you need to change the way your company interviews so you can identify and assess a better quality candidate. We could put many a reason on the pros of doing this, but what you also might have found in the past that while the business case seems totally logical to you and sound when you presented it, you still struggled to get that increase in your budget or incremental investment approval for any people or technology needs. One reason is that the business case did not show the direct correlation to how it would make or save the company money.
Let me state that again: The business case did not show the direct correlation to how it would make or save the company money.
So how might this play out, keeping in mind how we want to “show them the money”?
Let’s start with needing $100,000 for a technology solution that helps assess better quality candidates as above.
First the main benefits and outcomes of doing this. Let’s pick a few different scenarios but let’s also add next to them the potential of realized gains in terms of cost savings or increased revenue next to the item:
Now let’s start to model some math on some of these scenarios. I will be conservative with the numbers so you can relate, and not say, “this does not apply to me.”
We also could combine some of these below or let them stand on their own if we wanted:
At this point I am hoping you get how you might want to use some (or all of these data points) to create the “show me the money slide.” Present your business case upfront and not on the last slide as to why investing $100,000 on an assessment solution saves or makes the company money.
In the example I gave (which happens to be a real-life example), these numbers are going to shift for your situation and you will need more than 10minutes to work out the financials. But even if you are not sure, you can still presented your case with very conservative numbers where it might only require 2-3 percent savings on something to prove the business case. Logically the bigger the decision that needs to be made, the more time you are going to spend on the business financial modeling to include any additional studies, benchmarking, or research to support your business case. I have lost count the number of times that extra hour of benchmarking and research corroborating helped cement the support from executive stakeholders on my business case.
In my example, what started off as a significant play for an improvement in “quality” also needs to be presented with a cost/profit lens IMHO. What I have found is the more successful I am at presenting the business case this way regardless if is it a technology, structural/people, or process improvement change, then quicker I have had the key executive stakeholders green light and support it.
