The Top 25 Benchmark Firms In Recruiting and Talent Management

The very best companies in recruiting are constantly striving to improve everything they do through continuous learning. One of the best learning tools at their disposal is benchmarking, which often provides learning that can be applied immediately. Unfortunately, unlike many other professions, there is no standard measure as to what makes a recruiting function world class, which might provide a list of which firms are benchmark worthy (for benchmarking to be truly beneficial, all parties involved must be able to learn from each other). As a corporate advisor over the years, I have been privileged with the opportunity to both assist organizations in auditing their recruiting function and serving as a judge in various best-in-class awards programs (including ERE’s). What follows is a list of firms that I consider to be among the top 25 in recruiting and talent management. Note: This list references firms that are large by most standards. The absence of smaller sized firms does not mean that they do not possess best practices, or that they are not benchmark worthy; it only implies that they are less known. If you are looking to learn from any of the companies listed here it is important that you realize that great recruiting practices don’t always permeate every unit of a large corporation. In addition, some of these firms may deny the existence of or refuse to talk about their very best practices because they realize the tremendous economic value and competitive advantage they provide the firm. Companies like General Electric, Microsoft and Wal-Mart are notorious about keeping their best practices a secret, but I find that even they will share if you have a best practice to trade. It’s also important to note that given the large number of mergers, acquisitions, and corporate restructurings taking place in recent years impacting the recruiting budget, it doesn’t take long for best practice firms to slip into mediocrity (Cisco Systems, HP, and Charles Schwab all come to mind). The Top Ten

1. First Merit Bank. Some may find it hard to believe that the most strategic and innovative approach to recruiting isn’t found inside one of America’s most recognized companies, but rather from this bank headquartered in Ohio. Their approach and structure are so innovative that they literally take your breath away. In addition to a great referral program, they are the best in understanding how recruiting can adopt successful approaches such as data mining, customer relationship management, competitive intelligence, niche market targeting, and assessment metrics from other business functions. Forget Cisco, this is the benchmark firm that recruiters should be talking about.
2. General Electric. Long recognized as “the” benchmark firm when it comes to building a performance culture, GE wins hands down as having the best overall talent management strategy. They prioritize jobs and focus on “game changers.” Their employer-of-choice brand is second to none and they are among the leaders (along with Home Depot) in recruiting from the military.
3. Microsoft. Giving GE a run for their money as best in talent management is Microsoft. They excel at workforce planning, redeployment, utilizing analytics, and leveraging the internet. They are also truly world class when it comes to the effective use of contingent workers (you should check out their strategy for leveraging retiring baby-boomers; it is second to none). Microsoft was also ranked #57 on Fortune Magazine’s 2005 100 Best Companies to Work for in America.
4. Wachovia Corporation. This hands-down leader in diversity recruiting is also well versed in utilizing metrics and running a fee-for-service recruiting model capable of actually generating revenue by selling excess recruiting capacity to other organizations. Their recruiting strategy is world-class in a relatively conservative industry.
5. Starbucks. Given the “less than glamorous” nature of the retail industry, the approach taken by this coffee giant to employment branding and becoming an employer of choice is phenomenal. They also excel at high-volume hiring. Starbucks was ranked #11 on Fortune Magazine’s 2005 100 Best Companies to Work for in America.
6. Marriott International. This hotel giant was one of the earliest adopters of employment branding, and one of the few companies to maintain a dedicated focus on the art. While they still excel in employment branding, their diversity recruiting and work with the disadvantaged are world class by any standard. Marriott was ranked #63 on Fortune Magazine’s 2005 100 Best Companies to Work for in America.
7. Southwest Airlines. The clear winner for innovation in recruiting, this company not only excels in selection but also scores huge in branding with the launch of its own TV show (Airline). Every employee periodically receives productivity and financial reports so they can act more like owners.
8. Booz Allen Hamilton. The things that set this professional services firm apart from the competition comprise a laundry list of “must have” programs for professional-level talent. Their “comeback kids” program (for corporate alumni), career mobility team (for redeployment), and referral program are all extraordinarily innovative. In addition to these programs, they also excel at employment branding. BAH was ranked #75 on Fortune Magazine’s 2005 100 Best Companies to Work for in America.
9. Valero Energy. Managing in a place “run by CPAs” requires extraordinary metrics, and Valero comes through with the best metrics in recruiting, bar none. Their use of regression analysis for workforce forecasting is truly best in class. In addition, they have development metrics that demonstrate the relationship between recruiting effectiveness and stock price per share, and they have created a sourcing channel report that demonstrates the ROI in the effectiveness of their best sourcing channels. Valero was ranked #23 on Fortune Magazine’s 2005 100 Best Companies to Work for in America.
10. T-Mobile. Excellent work in nearly every aspect of recruiting, T-Mobile is a stand out in both the usage of metrics and online candidate assessment. In 2004, T-Mobile set out to demonstrate the business impact of recruiting and succeeded beyond expectations. With a largely tech-savvy target audience, they also excel at innovation in Internet recruiting.

The Other Benchmark Recruiting Functions

11. Wegmans Food Markets. Wegmans’ ranking as the best company to work for in America by Fortune Magazine in 2005 should tell you that there is more to this upscale grocer than fresh produce. Behind the long-standing reputation that has made these grocery stores tourist attractions are recruiting and talent management best practices in employment branding, workforce planning, redeployment, and alternative sourcing. Wegmans starts recruiting management in high school by bringing at-risk youth into its internship program and mentoring them towards college.
12. SAS. SAS’s employer-of-choice strategy and execution are breathtaking. They have been on 60 Minutes for excellent employee practices more often than any other firm. Their range and variety of benefits are breathtaking, resulting in an industry-leading turnover rate.
13. Corning. Corning’s use of internal recruiters as placement experts during downsizing was both innovative and effective. They also effectively utilize service-level agreements and have a Six Sigma effort in their recruiting function (most HR functions teach Six Sigma, but they don’t actually apply it to themselves).
14. Intel. Intel can be lauded for its scientific, “fact based” approach to recruiting and HR. Their workforce planning model has some excellent design features. Their culture of constructive confrontation also helps to drive an incredible rate of continual change.
15. Wal-Mart. When it comes to high-volume recruiting, nobody does it better. Wal-Mart’s TV ads highlighting their great-place-to-work status are a bold approach to proactively defending their strong employment brand.
16. WL Gore. The culture WL Gore is breathtaking. The company’s #2 overall ranking on the Fortune best-place-to-work list demonstrates how effectively they have subtly maintained world-class-employer status for many years. Fast Company magazine even selected them as the most innovative company in America.
17. The Container Store. Its #1 ranking on Fortune’s best-place-to-work list two years in a row is even more amazing given The Container Store’s miniscule centralized HR and recruiting function. They have also done some work in candidate assessment and measuring the business impact of great recruiting.
18. Google. Google’s ratio of recruiters to employees is mind-boggling. They also excel at candidate assessment and recruiting women engineers.
19. Dell. Dell excels at top management, and is one of the best at attracting great managers by widely publicizing their great management practices and approaches. They have a great management identification program and an astonishing revenue per employee that some calculate at nearly $1 million.
20. MGM Grand. MGM Grand’s commitment to branding themselves as the “best managed firm” is unique in an industry that does no employment branding. Their development of metrics and their approach to auditing the recruitment function are bold and innovative.
21. Baptist Health Care. Baptist excels at building a well-managed brand; the company ranks #6 among large companies on the Fortune best-place-to-work list. They are number one in recruiting and retention in an industry that has some of the most backward recruiters and recruiting practices on the planet.
22. PepsiCo. The leader in diversity recruiting, PepsiCo uses incentives to make diversity recruiting a standard business practice.
23. Electronic Arts. EA excels at buying firms for talent, innovative metrics, identifying targeted candidates before positions open up, and employment branding.
24. UPS. No one does college recruiting so well and on such a large number of campuses.
25. Cisco Systems. The creator of employment branding still holds its own in that area. Unfortunately, little else remains of what was once the world’s best recruiting function.

Honorable Mention Benchmark Firms Although these firms are not all Fortune 500 firms, their innovative contributions in one specific area of recruiting qualify them as benchmark standard firms.

• Donald Trump. The hands-down winner for recruiter of the century award ó for getting over a million applicants for a single job at a firm that is widely known to be something other than a great place to work.
• The New England Patriots. The second person that the owner thanked after the Patriots’ Super Bowl win was their recruiting manager. After three world championships, they still fall in the bottom third of the payroll rankings.
• The New York Yankees. Their cost per hire is ridiculously high, but they are the benchmark standard in any industry for recruiting the very best.
• The Boston Red Sox/Oakland Athletics. Both are ground breakers in scientific recruiting through their use of statistics and metrics in identifying the most impactful hires (see the book Moneyball).
• Hallmark Cards. Hallmark has done some innovative work in developing a recruitment metrics index.
• Intuit. They attract the best recruiters and visionaries on the planet, including industry giants Michael McNeal and Eric Lane.
• IBM. A long-time leader in branding, they have also developed one of the best career websites (an area where mediocre is the status quo).
• YourEncore. The group set up by Eli Lilly and Procter & Gamble to help firms take advantage of the aging workforce and the impending baby boom retirement surge is innovative by any standard.
• TopCoder. This company shows true innovation in hard skill assessment.
• DDI. DDI shows innovation in soft skill assessment.
• Eliyon. Eliyon is well on its way toward developing the ultimate model for identifying the so-called “passive” candidate on the web.
• Electronic Recruiting Exchange. ERE has provided more high quality ó and at the same time, practical ó information to more recruiters than anyone thought possible. They have done their job of recruitment education so well that it is hard to even identify who their #2 competitor is.
• Staffing.org. Staffing.org has raised recruitment metrics to the highest level of awareness in the history of recruiting.
• The Great Place To Work Institute. They are founding fathers of the benchmark process for assessing employers of choice.

Conclusion Now that you know the benchmark firms, it’s important that you realize that getting detailed information about their best practices isn’t an easy thing to do. Most of these firms realize the competitive advantage best practices provide for their organization, and as a result they’re understandably reluctant to share many details. If you plan to approach them, don’t expect to get anything for free; be prepared to trade. If you would like to come up with your own list, the best method I have found for uncovering lesser-known stars is to simply poll those recruiters whom you admire to find out what firms they admire and learn from. It is a simple approach, but one I have found wildly effective. [Note: I can not answer requests for contact names at these firms; I simply just don’t have the bandwidth to do so. Try a well-refined Google or Yahoo! search, as they will almost always generate some information on their best practices. Seminar brochures (i.e. Conference Board, ERE, Kennedy Information, IQPC, Linkage) are also excellent sources for both best practice summaries and key contact individuals. If you’d like to add to (or criticize) any firm or best practices on this list, send an email at johns@sfsu.edu.]