Before we get to the future, a little history is in order. As part of the marketing for my retained executive search practice in the mid-1990s, I did consulting for dozens of mid-size companies through TEC (The Executive Committee) and YPO (Young Presidents Organization).
The primary focus of this work was the development of a strategic hiring plan that allowed companies to move from a loose entrepreneurial business to a more sustainable and well-run growing company. Pulling this off always required the CEO/founder to relinquish a major portion of his authority, the addition of a number of critical senior managers, and the implementation of scalable business processes for all core functions. As part of this, the independent free-wheelers had to either leave or join the team.
There is an obvious parallel here with how some corporate recruiting departments have transitioned into top-performing and highly productive business functions and others haven’t. Some more history: in the mid-1990s, corporate recruiting departments came into being. This started with the hiring of a few contract recruiters followed by expansion into full departments and the hiring of specialized sourcers and end-to-end recruiters. The goal at the time was to build an in-house search capability in order to reduce what seemed an enormous amount spent on external search fees.
The promise of the Internet was the catalyst for this, with the idea that candidate quality would increase, not suffer. On this measure it doesn’t seem like too many companies succeeded. Just one example: on a recent webinar (February 2008), I asked the 200+ attendees to describe their current major hiring challenges.
Following are some of the big ones. How many of these ring true for you?
- Not enough quality candidates
- Hiring managers not responsive
- Getting top candidates just interested in interviewing is becoming more difficult
- Compensation never seems to be enough
- Too many unqualified candidates
- Counter-offers being accepted at an increasing rate
- Offers turned down more frequently
- Trouble getting candidates to relocate
- Advertising results are hit or miss
- Technology hasn’t helped improve productivity
Surprisingly, these are the same challenges recruiters faced during the dot-com boom and bust, the pre-Internet days, the Clinton years, the Bush One years, and the Reagan years. Despite all of the technological advances, actual recruiting results have changed very little in the 30 or so years I’ve been in the recruiting industry.
Yet in the same time span, launching complex products from the idea phase to market has improved five to tenfold, distribution systems have evolved from hoping your product would arrive within a week or two to tracking its exact position anywhere in the world, and knowing a company’s current financial performance has gone from having to wait two to three weeks after the close of a month to real time.
In comparison, corporate recruiting seems to be stuck in a time warp. For a variety of reasons it’s still run as an entrepreneurial organization that hasn’t yet evolved into a well-functioning, predictable, and scalable business process.
Here are some of the stumbling blocks:
- Lack of an end-to-end perspective. Hiring top performers requires the active engagement of sourcers, recruiters, hiring managers, and everyone on the interviewing team. Rarely does this team agree on actual job needs nor do they screen, interview, and evaluate candidates the same way. Each recruiter and sourcer does his or her own thing and even if a few are good, the lack of overall consistency prevents scalability. Some offers are professionally made, others are via an email or informal call. Collectively this results in too many unqualified candidates being seen, overlooking or incorrectly evaluating some fine people with many of the best opting-out somewhere along the way for preventable reasons. Common practices like this rank pretty low on the scale of efficiency when compared to a systematic business process. (Recruiting process articles.)
- Little hiring manager accountability. No matter how effective a company’s recruiting and sourcing efforts are, it’s still up to the hiring manager to make the decision. So if you don’t get your hiring managers and everyone on the hiring team involved in interviewing, assessing, impressing, and recruiting, you’re building a bridge to nowhere. While many companies have gotten better on the front-end, the back-end is still problematic. The symptoms here are obvious: lack of understanding of real job needs, inability to accurately assess competency, overselling, under-listening, lack of preparation, lack of interest, using the lack-of-time excuse, under-whelmed candidates, and high-potential candidates turned away for superficial or emotional reasons. From what I’ve seen, about 20% of all managers understand the importance of hiring top talent and will put in the extra effort needed to pull it off. Another 20% will put in the effort with some urging, and another 20% require lots of guidance and enforcement. I’m not so sure the other 40% will ever get it right. Until hiring managers are totally committed to the concept that “hiring top talent is #1” it will be an uphill battle. (Hiring manager articles.)
- Technology not effectively utilized. Actually the ATS (applicant tracking system) vendors like Taleo and Kenexa, etc., are more than qualified to develop technology that dramatically increases recruiter and hiring manager productivity. The problem is not with the vendors, it’s with the buyers: the HR and recruiting leadership community. Most are very unsophisticated when it comes to understanding and using technology. Lack of guidance on the buyer’s side has caused the vendors to expend too much effort on solving the wrong problems. This is why technology is five years behind where it should be. One minor example: candidates should not still be using pull-down menus to search for jobs. Lack of progress on the technology front is why vendors like Jobs2Web.com and Indeed.com are needed to overcome existing inadequacies in most current systems. Recruiters exacerbate the problem by fighting, rather than embracing technology. Despite current flaws, existing technology can improve productivity when used properly. (Recruiting technology articles.)
- Inadequate or inappropriate training. Just about every sales person selling a professional product or service must take and pass some type of formal training program. About 10 years ago, I was helping a major yellow page publisher hire sales people and learned that their entry-level telephone reps (a $25 thousand per year job) had to take three weeks of formal training just to learn how to take renewals. A complex system or service sale involving needs analysis and customized pricing requires significantly more training. Sales training is commonplace even when hiring experienced sales people selling similar products. Yet for recruiting, which involves career counseling, job analysis, the ability to accurately screen and assess people, market and competitive analysis, and the use of professional negotiating and closing techniques, companies leave the process to the discretion of each person hired. (Hiring manager and recruiting training articles.)
- A weak or non-existent workforce planning process. A workforce plan is to recruiting as a sales plan is to sales as a product plan is to manufacturing and as a profit plan is to finance. In our most recent annual survey completed in December 2007, only 26% of the over 700 respondents indicated their companies used a sophisticated rolling forecast of hiring needs. A formal workforce planning process is a foundational step in making hiring top talent a systematic and scalable business process. This hiring forecast provides a means to effectively allocate recruiting resources. As I learned from my earlier consulting days, lack of effective planning and forecasting was one of the core reasons entrepreneurial companies had difficulty managing their growth. (More on workforce planning.)
- Lack of effective leadership. While the above are important points to consider, the root cause of the problem is lack of leadership and direction at the HR and recruiting-management level. Someone always needs to take charge, champion the idea, create the vision and implement the solution. This requires the ability to secure and maintain executive-level commitment, the tenacity to implement complex cross-functional change despite resistance, and an understanding of the importance of strong scalable business processes, especially in the area of hiring top talent. Strong leadership is the one common characteristic I’ve observed in those companies that have successfully converted the idea that hiring top talent is not just a vision statement, but a repeatable, predictable, and scalable business process. (More on leadership.)
While implementing a business process for hiring top talent is no simple task, it’s less challenging than implementing an ERP system like SAP, or setting up a world-wide distribution system or merging two new companies together. If hiring top talent truly is a company’s #1 strategic objective, it should also be more important.