Boom! Why We Should Blow Up the Recruiting Department and Start From Scratch

According to Ben Franklin, the definition of insanity is doing the same thing over and over again and expecting different results.

Given all of the changes that have taken place over the last 10 years, there is no evidence that corporate recruiting departments are getting better at hiring top talent. In fact, a good case can be made that things are getting worse at an accelerating rate. Some examples:

  • Our surveys indicate the quantity and quality of candidates applying to job boards is declining.
  • At Alexa.com you can see for yourself that the traffic at the major job boards declined by more than 35% this past year, on a month-to-month basis.
  • Our research indicates that the rate at which candidates are rejecting offers, accepting other offers or accepting counter-offers is increasing.
  • Labor Department demographic trends indicate the overall supply of talent is declining while the demand is increasing. The widespread gap in engineering graduates between the U.S., India and China is probably not as bad as originally thought, but it’s still an issue that needs to be addressed.
  • Our recent Hiring and Recruiting Challenges 2006 survey indicated that only 23% of users are quite satisfied with their investment in their candidate tracking systems.
  • This same survey indicated that two-thirds of corporate recruiters find serious problems with their clients’ ability to accurately assess and effectively recruit top people. Not surprisingly, two-thirds of hiring managers are not satisfied with the quality of candidates presented by their recruiters, or how fast they do it.

With a crisis mentality in mind, why not start with a blank sheet of paper and totally rebuild the corporate recruiting department from scratch? Here are some ideas to start with. Send me yours if you’d like to discuss them in an upcoming conference call.

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  1. Have the recruiting department report to the CEO. HR is a support department, not a sales or line function, so reporting to the CEO is a better fit. Shaking things up with this type of major re-org could be the catalyst required to making hiring top talent a serious business agenda item. This type of realignment is not without precedent. In the early 1980s, IT was an overhead department reporting to the CFO. It became more business-savvy and effective after the reporting was realigned.
  2. Make hiring managers responsible for hiring top people, not recruiters. If hiring top talent is #1, it should be #1 on the manager’s performance review. Here’s a quick way to get started: have managers rank each team member on a 1-10 scale. Then grade managers on the overall quality of their team members, their turnover rates, and the quality of the personal development plan they have for each team member. Then give managers full responsibility for hiring, including a budget, and allow them to select the recruiter they want to use for help, even if the recruiter is outside the company. This change is probably more important then changing the recruiting department reporting structure.
  3. Disenfranchise your managers. The right to vote on candidate competency should only be given to those managers who have demonstrated that they are both accurate and unbiased. Even better, implement a two-step selection process using the interview as the data collection step only. Have the actual voting take place later in a separate meeting, with the team sharing information and reaching consensus across all job factors. This type of evidence-based decision-making process is how most other business decisions are made. Why should hiring be any different?
  4. Don’t post your internal job descriptions. If top performers aren’t wowed by your online job descriptions, you’re not going to hire any. Consider how many top people you now turn off and lose with your current descriptions. To solve this problem, make your hiring managers responsible for describing the compelling reasons why top people should consider these openings. Lead with this information, add the challenges, then put the skills required and the requisition number at the bottom. And don’t quantify the skills (years, etc.). You want just enough experience to do the work required. This will excite the high-potential employees.
  5. Change the compensation structure for corporate recruiters. Recruiting is not about posting ads or generating names or sending resumes to hiring managers. It’s about getting top people hired. Recruiters should be compensated on results, not activity. A small base, around $35,000 a year, is more than sufficient if it’s combined with a realistic commission that gives the person a chance to earn at least $125,000 based on the quality of their hires and the number of placements made.
  6. Don’t hire agency recruiters for corporate recruiting positions. Here’s why: first, top agency recruiters won’t take corporate jobs because the pay is not enough. From what I’ve seen, most of those who take these jobs don’t want the pressure of making placements. Second, corporate recruiting is not the same as agency recruiting. The best agency recruiters are an independent breed, and it’s hard to force these types into a corporate model with different tools and resources and more requisitions to handle. It seems far better to take some aggressive, trainable sales-type people who are excited about doing recruiting your way, in your culture, with your resources, and meeting your needs.
  7. Throw away your applicant tracking system and start over. If your applicant tracking system isn’t improving your efficiency or the quality of your candidates, you need to completely overhaul your recruiting and hiring processes. Drive this process reengineering effort based on what it takes to consistently hire top people, not what it takes to manage data. Then validate the process before you automate it. Automating bad processes (doing bad things faster) was the first costly “no-no” learned when computers were first introduced into business in the 1950s. Somehow, HR missed this class.
  8. Don’t listen to anyone who is a PhD unless it’s in chemical engineering. The reason I like chemical engineers is that most are trained in stage-gate methodology. This requires them to look at any new solutions across all dimensions of success, including the financial and business ones, in a logical and sequential fashion. Too many PhDs are so engaged in their defined field of expertise that they overlook downstream and secondary consequences. This is an example of the “Can’t see the forest for the trees” problem.
  9. Everybody can’t hire the top 10%, so stop taking the advice of the so-called experts, especially us ERE columnists. The reason I have a problem with our advice is that some of it is downright wrong. But worse, even if everyone followed the right stuff, all you would get is average results. Doing exactly the opposite of what we suggest actually might give you a competitive edge. But then you can’t tell anyone. The moral here is become an early adopter. Try everything, get good at it, track your progress, and as soon as diminishing returns set in, start doing something different. You’ll never become a market leader if you’re doing what everyone else is doing.
  10. Stop using behavioral interviewing and competency models. I can’t find any evidence that these tools have helped companies hire better people. I’m not sure they’ve even eliminated hiring mistakes. For example, if you Google “behavioral interviewing,” you get 15.4 million responses ? and 90% of the first 100 or so are articles showing candidates how to prepare for a behavioral interview. Why not ask the proponents of these tools to justify them on an ROI basis using actual cost savings and the actual number of better hires made as the basis for the impact analysis? Now when they do this study, make sure they take into account the number of top candidates driven away because they felt the interview was clinical. Also, take into account the fact that more managers use the behavioral interview to eliminate the people they don’t like but use their own standards to hire people they do like. Then also consider why so many competency models for different companies and different positions are exactly the same. The real problem with these tools is that they were developed pre-Internet with the underlying assumption that candidate supply exceeds demand. Even if they were effective under this assumption, they are now easily gamed by astute candidates and the supply of top candidates was never enough.

The U.S. is losing its competitive position in the world economy. One way to counter this is to convert the recruiting function into a performance-driven line operation. Incremental changes won’t cut it. These are just stopgap measures at best. A major overhaul is required. Based on progress over the past 10 years, it’s clear that the recruiting function has not kept up with the times or the technology available. One small example: if you don’t have the reporting in place now to know how well or badly you’re performing today, you’re guaranteed to have bigger problems tomorrow.

Boom.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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6 Comments on “Boom! Why We Should Blow Up the Recruiting Department and Start From Scratch

  1. I agree with everything here except…

    ‘HR is a support department, not a sales or line function, so reporting to the CEO is a better fit.’

    I say let HR be HR right where it is now (many of its ‘services’ are being outsource as we speak)..and create a seprate group…say a Talent Management Office…that is charged with not only recruiting new talent but also talent retention. And lets even say someone at the C Level at the company owns it. I’m sure this exists now in a few places…just not in enough places.

    Much like a Project Management Office that offers project managers, systems and business analysts to ‘line managers.’ A TMO, Talent Management Office, could offer specialized recruiters (who could even work on commision)to line managers. If those ‘specialized recruiters’ are not available or are not qualified…the line manager can go external.

    Lou…I’ve met you a couple times now…you could never work in an HR Department. But…you could run a kick a** TMO.

  2. Lou great article, there is a war for talent and you are leading the revolution!

    Things to consider;

    1) you mention in ATS ‘then validate the process before you automate’ process need to be defined, validated, approved, bought into before ATS is changed. The ATS you have in place might do what you need to if you use it properly

    2) Maximize technology. Once your have your process well defined use technology to improve it. Get your IT department or hire a consultant to see where you can apply technology to save time and reduce cost. You’ll be surprised by some of the simple things you can do.

    3) training, training, training. Make sure to have training plans, certifications, and internal process/ATS training to improve your recruiters skill sets.

  3. The Corporate Recruiter model is primarily to replace using TPRs and I suspect initiated to save money. That’s why point number 5 will never be real.

    Point number 6 is an interesting one. Whilst I agree with the first part and have said so many times on ERE, there will I’m sure be some Corporate Recruiters that disagree.

    As for the second part of point 6, well the problem is this. A TPR is a sales job. A Corporate Recruiting function is not. It doesn’t matter how you try to disguise it or try to sell the concept.

    A good sales professional would not follow this route if they wanted to stay in sales and as already stated in the same point, the pay might just be a problem. So what do you get? A failed sales person? Great. Back to where you started.

    I’m sure there are some very succesful corporate recruiting teams out there but the answer to a failed internal model is simple. Use a good TPR.

    Think of the money you could save in overheads, staff training, implementing an expensive system, replacing the poor performers and so on.

    If the TPRs don’t perform, find another. Let HR do their job, let the hiring managers do their job and let the TPRs find the people.

    Life is simple if you want it to be. In this artificial war for talent, if the internal model is failing, why not use the best resource available to you? According to point 5, cost is no longer an issue.

    Wasn’t it once called outsourcing? I wonder if it will catch on.

  4. I was very pleased that a writer on ere finally stated the obvious ‘Everybody can’t hire the top 10% so stop taking the advice of the so-called experts, especially us ERE columnists.’ However, I think rejecting all advice is going overboard.

    Talent is the key to selecting good employees but too few writers share their method for measuring talent. If we don’t measure talent, we can’t hire for talent.

    Measuring talent is easy to do and very effective for identifying future successful employees but seldom is it free. If it were free, everyone would be measuring talent.

    How much is a good hire worth?

    How much does a bad hire cost?

    How much are you willing to spend to ensure that all new employees are good hires?

    How much are you willing to spend to ensure that no new hires are bad hires?

    If you know the cost a bad hire, you’ll know how much you should invest to avoid a bad hire.

    By the way, the cost of a bad hire far exceeds the cost to avoid a bad hire.

  5. I agree with accountability aspect of Hiring manager. I extend the agreement to saying that let the hiring manager be trained on the Hiring science too. Hiring any ways take lot of their time and of course tells about their effeciencies too. So, to be sitting in a hiring manager’s position one must have exhibited strong hiring skills( it includes technical knowledge,team building, leadership etc).

    Let them have partnerships with other dept/ out side agencies if req…but for his dept, hiring manager should act with P& L responsibility.

    Accessing common resources like job boards should be treated the way we treat other shareable resources like conference rooms,printers etc

    Recruiting and talent manageement will become a part of Project Managemeent.

    As long as they outsource to ‘others’ recruiting will not have respect….verbalising the tacit ‘I got it Outsourced hence it is a noncore aspect of our business’.

    Recruiters !!! realise it before you become redundant. what ever common sense you learnt in the name of ‘Hiring Science’, graduate your skills to become an executive search specialist or booooooom !!!

    Regards
    ISM

  6. Lou,

    Your article was very well written and I couldn’t agree with you more on every one of your points. However, there are a few points I think you should include.

    1.) Top candidates want to work for top companies. The most successful organizations from from the perspective of profitability also tend to be the most successful recruiting organizations especially for mid-senior level positions. Why? There are many reasons but chief among them is the power of the employer brand and the strategic ability of the recruiting organization to communicate the brand ‘personality’ to prospective candidates. Anyone involved with recruiting for the organization should be schooled by the resident marketing staff on public facing brand atrributes.

    2.)After the recruiting staff has been educated on how to create and communicate an employer brand, an effort should be made to educate them of the importance of marketing the organization as an employer of choice to the target audience through media seen as credible by the target audience. Media selection and messaging composition is critical to educating prospective candidates of the benefits of working for a given organization. A poorly written and positioned ad in the wrong media will always leave the recruiter with a bad taste for media so hiring managers should be required to work directly with professional media to make sure they are reaching the correct audience.

    3.) Hiring managers have grown accustomed to hiring outside headhunters for their every need. Why would anyone turn over the critical responsibility of supplying the organization with it’s life-blood – qualified hires – to someone with no real vested interest in the long term success of the organization? High price recruiting fees should be reserved as a last option as opposed to the first.

    In short, most hiring managers and recruiters are under educated on the importance of employment marketing to the target audience. Employment marketing should be a basic part of the recruiting organization’s recruiting arsenal. No, advertising is not the magic bullet solution to all recruiting needs, but it is a critical element in the success or failure of many recruiting campaigns.

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