Dr John Sullivan Talent Management Thought Leadership
All talent leaders try to be strategic, but most fall short. And it’s not because leaders don’t get the Xs and Os of recruiting right. Instead, my research has found that many fail to reach strategic status because most recruiting leaders are not strong business leaders.
This lack of business acumen stems primarily from not coming from the business side of the enterprise or not holding a business degree. As a result, the corporate recruiting function almost universally omits numerous “business-like components” that are literally present in every other corporate strategic function.
So this article highlights ‘the top 10 strategic business-like omissions’ that, when added, will improve recruiting’s business impacts and strategic status
What Are The Key Elements Of A Business-like Function?
When you look outside of HR and recruiting, you literally find that every strategic corporate function fits what I call the “business-like model,” which means that its major decisions are data-driven.
Everything that is important is highly accountable because it is measured, quantified in dollars, widely reported, and periodically audited. To ensure that the recruiting function’s results are continually improving and ahead of your talent competitors.
When Recruiting Must Be More Strategic… Add These Business-like Components
Obviously, during times when budgets are tight and recruiting is understaffed, it’s hard to add any additional capabilities or metrics. However, because of their high rate of return, you should know that these top 10 business-like components, when added, will make your function noticeably more strategic.
Note: the recruiting actions with the highest business impacts appear early on the list.
Translate your business impacts and accomplishments into dollars – every major data-driven business function strives to impress senior executives. They do it by first reporting their business impacts; however, the best go a step further. They assign a dollar-amount estimate to each accomplishment and business impact (e.g.., each new-hire salesperson sold $1 million more). Because assigning a dollar number (i.e., its impact on revenue) to your accomplishment makes it easier for an executive to make a side-by-side comparison of the results from many diverse business functions. Of course, this may seem like a daunting task; however, I assure you that it is routinely done in sales, finance, customer service, supply chain, and revenue generation. So once you decide to assign a dollar-amount estimate to each of your accomplishments, begin by working with your CFO and the COO’s office to put together credible estimates of the dollar impact on each of your strategic recruiting results. Incidentally, not quantifying the business impacts of great hiring is puzzling to me. Because very few actions in business have a higher dollar of business impact than hiring top performers, AI professionals, and innovators.
Begin measuring the performance of your new-hires – every major corporate function measures the performance of the output/product that it produces. For example, in baseball, after six months, managers will routinely assess the performance of every new pitcher that was hired (i.e., win/loss percentage and Earned Run Average). Once you begin measuring new-hire performance, not only will you be able to assess recruiting’s business impacts, but recruiting leaders will now be able to narrow down the hiring criteria that they have been using. So that you are finally only using validated hiring criteria that directly correlate with new-hire performance.
Measure your new-hire failure rate and cost – because having a high failure rate in any corporate function is extremely embarrassing and costly. Every strategic corporate function first defines and then measures the failure rate of its output (often to the Six Sigma level). Unfortunately, the failure to measure your new-hire failure rate in recruiting often directly leads to complacency throughout the recruiting function. And that complacency wouldn’t be tolerated if your corporate executives knew that the average new-hire failure rate averages 46%. Of course, any executive fury would be raised even higher after you worked with the CFO’s office in order to place a dollar value on each of your hiring failures. Identifying each new-hire failure also makes it more likely that you will use failure analysis to identify the root causes of each failure so that a similar failure doesn’t reoccur in the future.
Prioritize and focus your hiring on the highest impact areas – when resources are limited, business leaders in every corporate function routinely prioritize their customers, products, and the tools they use in order to maximize their overall impact. Unfortunately, it is quite rare to find a recruiting function that provides priority treatment to its most impactful jobs, hiring managers, business units, and teams. Prioritization means that priority jobs go to the head of the queue, are assigned the best recruiters, and are allocated more budget resources.
Reward great hiring – it’s well known in every strategic function that things that are rewarded get done faster. Unfortunately, only 39% of companies formally reward hiring managers for producing great talent results. So if you need strategic recruiting results, measure, widely report, and reward both hiring managers and recruiters for producing great recruiting results.
When you can, recruit at the best times – currently nearly all recruiting occurs at a time when you must fill an immediate opening. And that makes sense until you realize that there are certain times of year when the recruiting competition is extremely low. So if you can delay your hiring until one of these low-competition time periods, you’ll be able to successfully recruit much higher-quality talent. The best times with lower competition are often in December and August. Anytime one of your top talent competitors has restricted hiring (like during hiring freezes and at the end of their fiscal budget year).
Build a talent pipeline – often, the most desirable candidates (those who are currently employed) take some time to build their interest and trust in a company. So many strategic recruiting functions build “a talent pipeline,” which gives prospects who don’t need a job immediately time to learn more about your company and its opportunities. As an added benefit, having a list of pre-assessed qualified candidates will allow you to source more quickly and fill some of your positions almost immediately.
Complete a competitive analysis of your recruiting competition – of course, every business function operating in a competitive environment periodically analyzes its competitors and the competitive landscape. Yet, even though recruiting is clearly an us-against-them competition, it’s a stretch to find a corporate recruiting function that periodically conducts a side-by-side competitive analysis to stay ahead of what its major talent competitors are doing now and planning to do in the future.
Add forward-looking components – unfortunately, very little in corporate recruiting is forward-looking (e.g., all of our metrics are backward-looking). This is despite the fact that every other corporate function in our fast-moving world attempts to educate its managers about what’s coming with forecasts, predictive metrics, and alerts. So, to ensure that hiring managers are not “surprised” by upcoming recruiting opportunities and problems. Make sure they have enough time to take advantage of talent opportunities and to mitigate the upcoming recruiting problems before they get out of hand.
Formalize and expand your candidate research – almost every strategic business function undertakes multiple efforts to better understand its customers and users. However, it is relatively unusual to find a formal survey process that covers each of the four important market research areas in recruiting. These include surveys to identify the top candidate attraction factors, exit interviews with top candidates who dropped out, and user satisfaction surveys, in addition to onboarding surveys that ask new hires “what worked and what didn’t” throughout the hiring process.
Final thoughts
I have found that when time is limited and budgets are reduced, recruiting leaders unfortunately begin to focus exclusively on maintaining current performance in their core recruiting areas (i.e., sourcing, screening, and interviewing).
And this narrow focus almost guarantees that they won’t be generating any improvement in recruiting’s strategic impact. And that, in my view, is a huge blunder. Because only by proving to your executives that recruiting is now more strategic and has much larger business impacts. Will these recruiting leaders ever, ironically, receive the added resources that will make it much easier for them to continually increase their business impacts.
So I urge smart recruiting leaders to closely examine the corporate functions that are clearly recognized as strategic (sales, supply chain, production, and customer service functions). In order to learn why these other functions can, for example, measure the quality of their function’s outputs to the Six Sigma level.
At the same time, the recruiting function can’t even define, let alone measure, its primary output (i.e., quality of hire). So in my view, it’s time to demand that the recruiting function and its leaders make whatever changes are necessary in order to match the “business-like model” that is practiced by so many other corporate functions.
Thank you for finding the time to read and share this article.
Notes for the reader
This is the latest article from Dr. Sullivan, who was called “the Michael Jordan of Hiring” by Fast Company.
You can subscribe to his Aggressive Talent Management newsletter (which focuses on recruiting tools, current recruiting opportunities, and recruiting trends) either here or by following him on LinkedIn.
