I Learned All That I Needed to Know About Recruiting From the New York Yankees

cards_tYou won’t read it in the newspaper, but it’s a fact that the New York Yankees were the world champions of recruiting long before they were declared the world champions of Major League Baseball.

The Yankees are perennial winners (many call them a dynasty) not because of their superior equipment, IT processes, or their financial or marketing prowess, but rather their extraordinary recruiting and talent management strategy.

Discover How to Learn From Other Industries

If you are a corporate recruiter, you might think that it’s silly to learn lessons or emulate practices from professional sports, but you would be wrong. Ignoring the many valuable lessons the sports industry provides could cost your organization millions! While sports analogies are not loved by all in HR, it’s hard to find a CEO who doesn’t like them or who has not used them in their memoires.

All leading organizations strive to learn and improve by benchmarking against other organizations in and outside their industry.

The New York Yankees, like Sony, Disney, Apple, the Los Angeles Lakers, and GE (NBC), are a corporation that produces an entertainment product. They book revenue by selling a wide range of products and services that extend far beyond the playing field. As a corporation, the Yankees operate under the watchful eye of shareholders, unions, customers, and regulators.

In my experience, the key resistance factor that keeps corporate recruiting leaders from applying sports lessons is not whether they would work, but rather a lack of courage or aggressiveness.

The most common excuse offered is that the scale of recruiting solutions employed by professional sports simple doesn’t align with that possible in your typical organization. While it is true that even the smallest Fortune 500 company dwarfs the Yankees with regard to employee count, most organizations are organized into organizational units much more on par, making the application of approaches at the unit level more than feasible.

If you expect to generate a quantum increases in performance, seek out successful practices in places where few others would think to look. Then, you must have the courage to adopt some approaches that, at least initially, will make some in HR cringe.

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16 Lessons That Corporate Recruiting Leaders Can Learn From the Yankees

Listed below are numerous recruiting and talent-management approaches used by perennially successful sports franchises. These ideas are relevant and have been applied by leading talent management organizations:

  1. Make the business case for great recruiting — the Yankees have built the strongest business case for great recruiting anywhere! Almost everyone agrees they have an abundance of extraordinary talent in literally every position. They routinely have the highest player salary expense of any MLB team. But the team owners are willing to pay such extravagant amounts because player personnel executives have successfully made the business case demonstrating a huge ROI in attracting the very best players. Although it’s expensive to recruit and retain top talent, the Yankees have calculated that the benefits far outweigh the costs. In fact, they have learned a valuable lesson which is that the most costly mistake that a team can make is to “save money” by placing an average player in a key position.
  2. Recruit top talent away from competitors — while many teams try to build their talent pool by recruiting and developing entry-level talent, the Yankees have learned the value of tracking and then recruiting away the top talent from other firms. Rather than seeking out “hidden talent,” they instead continuously identify obvious top performers on other teams and directly recruit them away (we call it poaching). Direct poaching has an added advantage in that it helps your team immediately, while simultaneously hurting your competitor.
  3. Stars attract other stars — The Yankees have learned that working alongside other star players and having a significant chance at winning a championship are at least as important as money is in attracting top performers. Corporations should also focus on attracting noteworthy talent because they are a key attraction factor for top performers with many career choices. Firms should also publicly boast about their successes so that they build up their external image as a winner and an industry leader.
  4. Prioritize your positions — an important lesson to learn is that all positions do not have an equal impact. In reality that means that a starting pitcher or the cleanup hitter might be five times more impactful on the team’s winning percentage than a right fielder, a first baseman, or the batboy. Corporations need to realize that if they can’t recruit the best for every position, they need to focus recruiting resources on the 20% or less of that can be classified as high-impact openings.
  5. Prioritize individuals — a related lesson to learn is that top performers need to be prioritized and treated differently. Top performers might produce five times more than the average player, so as a result, they are given more playing time, are put in critical games, and sometimes they are even shifted into the most critical positions. For corporate recruiting leaders, this means that first of all they need to focus their recruiting resources on top-performing departments and managers. It also means that they must shift their best recruiters to priority candidates and also to change their recruiting approach and temperament dramatically when they encounter a star candidate. It’s a mistake for corporate HR to even attempt to treat all employees the same.
  6. Identify their decision criteria — in sports, the relative bargaining power of top talent is immense. If you don’t realize upfront that the power has shifted toward them, you won’t win many recruiting battles. The Yankees have learned that it’s not enough to simply plan to attract the very best, you need to institute a sales approach where you identify and then meet each of the factors that cause the top player to accept a job. It’s equally important for corporations to stop acting arrogantly, as if they possess all of the power in the hiring relationship. At least for talent that is in high demand, they need to realize that the candidate is the one who holds most of the power. This requires corporations to develop a more candidate-friendly recruiting experience and in addition, a formal process to identify and then to completely meet each one of a top performer’s job acceptance criteria.
  7. Global recruiting is required — if you look at the significant percentage of Yankee players who come from Japan, the Caribbean, and Latin and South America, you would realize almost immediately that it’s a mistake to recruit exclusively in your backyard. Corporate recruiting leaders must learn they can’t just recruit locally; maybe as much as 50% of your talent must be global.
  8. Recruit team players — over the long run, you can not win unless everyone works together. In addition to raw performance, every individual must demonstrate the capability of working alongside with and developing others on the team.
  9. Hire them, so your competitor can’t — rather than hiring just enough to fill your needs, follow the Yankee approach, which is to occasionally hire top talent just to prevent your competitors from having it. The goal is to get an “unfair” talent market share.
  10. Recruit rather than train — no one would even attempt to argue that Alex Rodriguez became a star as a result of classroom training offered by the Yankees. In fact, rather than taking the risky approach of relying on training to develop skills, the Yankees almost exclusively recruits individuals who are already fully trained, proven performers who only need minimal guidance and coaching in order to excel.
  11. Performance over loyalty — the Yankees are notorious for attracting the best, but they are equally famous for heartlessly dropping those who fail to live up to the required performance levels. The best organizations make it clear to all that they put current performance first and thus they use a what-have-you-done-for-me-lately? approach (in lieu of rewarding loyalty or tenure). Assume upfront that a certain percentage of new hires and employees will fail to produce. This approach requires that you have a quality of hire measure and then a strong performance tracking system. In addition, have the courage to admit when you’ve made a hiring mistake so that you can quickly swap your mistakes for new outstanding recruits.
  12. Lose your tolerance for hiring mistakes — if there is a differentiator between sports recruiting and corporate recruiting, it would be the fact that in sports, every talent decision is highly visible. Unlike corporations, if you make a significant recruiting or retention mistake, it will be made visible and amplified by countless newspaper headlines, sports talk shows, and bloggers. The visibility of their personnel errors forces them to develop recruiting processes that are significantly more precise and error-free than their corporate counterparts. Becoming more precise, more data-driven, and recognizing failures early on are also excellent goals for corporate recruiting leaders.
  13. Continuous workforce planning is needed — even before the Yankees won the World Series this year, they already began the process of workforce planning for next year. The process includes internally identifying surplus or duplicate talent, potential voluntary turnover, and individuals whose performance is declining. External planning requires identifying and courting desirable external talent at other teams for vacancies or to swap for current players in order to improve the overall performance at a particular position.
  14. Continuous recruiting is required — even though the down economy has affected revenues at the Yankees, the recruiting effort hasn’t been impacted at all. The lesson to be learned is that recruiting needs to be a continuous process that is independent of the short-term revenue fluctuations. Organizations must adopt a long-term funding model that allows an increase in recruiting when top quality talent is available. The recruiting process for key jobs must also start a year or two ahead of when you actually must-have the talent in order to build relationships and to more accurately assess the talent. If top talent unexpectedly becomes available, you must have a “speed hiring” process so that you can hire it immediately, even if you don’t have an open position.
  15. It’s not the location — many corporations argue that they can’t recruit the best because of their physical location. Yes, the Yankees are located in New York, but so are the New York Mets, a team that stinks almost every year. In fact, both Pittsburgh and Philadelphia won sports championships last year in spite of not being located in a most-desirable city. The key lesson is that if you have great players, great managers, and a great product, you can attract the best to any location.
  16. Great managers are also needed — the Yankees are equally as willing to recruit great managers because they realize that top talent can only get you close to a championship. They realize that if you want to win continuously, you need a great manager to integrate and manage the egos that many top performers develop.

Final Thoughts

Have you ever noticed that in the sports world, recruiters are treated as heroes? They have huge budgets, and their managers spend a great deal of time and resources on the continuous identification and recruiting of top talent. Everyone on the team knows who recruited Michael Jordan, Kobe Bryant, or A-Rod.

In sharp contrast, the typical corporate recruiter is rarely respected and woefully under-resourced.

I hope that the recent recession has taught every recruiter that getting a significant increase in budget, or respect, will require that you dramatically improve both your business case and your observable and measurable business impact.

You can’t reasonably expect more than a 5% to 10% improvement if you limit your benchmarking and copying to the firms that are similar to yourself. A dramatic improvement in results might require you to examine practices that are dramatically different than your current ones. In short, if you want to have a “major-league impact” you might need to study the recruiting practices of the major leagues!

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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14 Comments on “I Learned All That I Needed to Know About Recruiting From the New York Yankees

  1. The NY Yankee model.
    Spend as much as it takes to put on the best team on the field money can buy to win a championship, even if it means running the business at a loss in the red. Yankees spent roughly $205 million in payroll in 2009 compared to the next high spending teams Mets at %135 Million, Cubs $125 Million, Red Sox $120 Million.

    How many sports owners, corporation, or recruiters have deep enough pockets to hire people/place people while operating at a net loss?

    Certainly the Steinbrenners can, and George often said over the years he’d do so in order to try to win a championship every single year.

    Titles are great, however, how long can most stay in business losing money?

    Just my two cents.

    Bill

  2. Your 1st point – “They routinely have the highest player salary expense of any MLB team.”

    And without that one thing they would not be playing in October. All your points are well taken but if the Yankees didn’t have the deep pockets to overpay and outbid everyone else they would still come up empty. And this wealth of talent hadn’t won a WS for 9 years (since their last run of 4 in the late 90’s and 2000) and it was 20 years prior to that (1978). Hardly the kind of consistent performance a company wants.

    All of the other points are valid but if you can’t “buy the talent” by outbiding everyone else (see bullet #2 and #6), you have to get the best “available” talent that is in your range. Also,high pay does not necessarily mean top performance (look at the million dollar execs running failing banks).

  3. Another nail has been hit smack on the head by Dr. Sullivan. The clarity of recruiting purpose and process is easy to see and their relationships to productive outcomes are unmistakable.

    But when you recruit way up at the level where only the devil may care, mistakes are understood, expected, and felt with relatively less pain. The consequences of poor hiring decisions are shared by hundreds of very wealthy folks and the poor productivity of the errant hire is publicly documented by thousands of statisticians and reporters.

    Throw into the mix the legal monopoly that is professional sports, the salary caps, the TV markets (aka, locations), the law firms (affectionately called “Agents”), and the sub-businesses (aka, players unions) and you have a surreal soup not seen in any other enterprise. And did I mention the performance bonuses, options, free-agency, marketing deals, and promotional events? This mess makes GE look like a lemonade stand.

    While I appreciate the aggressive nature of the approach, the swagger in the execution, and the responsibility for the outcomes, somehow the analogy to the real world doesn’t translate well for me.

  4. While I agree with your points, John, I have a lot more respect for the talent acquisition skills of the Minnesota Twins and Tampa Bay Rays. When you have a LOT less money and you manage to put together a winning team, now THAT’s recruiting!

  5. Bill Josephson,I feel bad that you honestly believe the sad hackneyed old story about buying the championship. I did not think that anyone actually bought that silliness anymore. As an example, if that were true, how do you account for all of the years they did NOT win the championship. (Like the last 9 for example.)

    If it were actually true and you can buy a championship, those teams without the money need to figure a way to refinance, leverage or whatever it took to get the money to compete. (Over charging the fans is a good place to start.) Remember that these are not so much baseball teams as businesses and under capitalized ventures tend to fail more often than adequately capitalized ventures.

  6. Jim,
    You responded to Bill J’s comments with the following point:

    Bill’s comment:
    “They routinely have the highest player salary expense of any MLB team.”

    Jim S Response:
    “And without that one thing they would not be playing in October.”

    I respectfully disagree. If you look at the numbers, the Los Angeles Dodgers payroll is well below the Yankees (only 60% of the Yankees payroll over the past 15 years), and yet they have the second highest wins per season average over the past 50 years (85 wins per season average). Clearly the Dodgers and the Yankees represent two very different talent acquisition methodologies. As you have pointed out, the Yankees buy what they want and pay top price. They are in a market that allows them more revenue than many other teams (major market), and so they can afford more expenses because they have more revenue available. The Dodgers represent the polar opposite in terms of development versus purchase of talent and the value of loyalty (BTW, I believe you create a false dichotomy when you position it as “loyalty versus performance” – look at the pre-McCourt Dodgers). The Dodge5rs historically have been known as pioneers in international outreach (Latin America, Japan and Korea), and their farm system was (again, pre-McCourt) legendary (the Dodgers have accumulated a full 25% of national league Rookie of the Year awards, and have almost doubled the Yankees numbers).

    Although I respect the Yankees approach, their success comes at a cost (higher volatility of success), and they are tied terminally to buying because they have no internal mechanism to develop talent. And, as Bill J pointed out, not every team (or firm) can pay the price to compete with the Yankees.

    Rather than a model to be followed by by all firms generally as your article suggests, I think your points apply to a very niche market of firms that have plenty of money and aren’t trying to develop or protect a corporate culture.

  7. Howard, the Yankees spend more money than everyone else trying to buy a championship every year. It doesn’t mean they always succeed. For other teams to win they need the Yankees to have a car wreck (injuries/underperformance), be lucky enough to be healthy themselves, and catch proverbial ‘lightening in a bottle’ come playoff time.

    My point is absent a hard Baseball salary cap the Yankees are expected to win every year based on payroll. They field an average of an $8-9 million dollar player at every position. The reason they don’t win every year is ‘shit happens,’ not because they didn’t spend enough.

    Bill

  8. “I hope that the recent recession has taught every recruiter that getting a significant increase in budget, or respect, will require that you dramatically improve both your business case and your observable and measurable business impact.”

    IMHO, we recruiters DO NOT need to do this- we DO need to find or (for the lucky ones) hold on to work that will enable us to maintain a fairly middle-class standard of living for ourselves and our families in the face of 17.5% un/underemployment, with a substantial recovery likely to be some years away, if only because we have “fallen so far so fast”. Consequently, I do not find articles relating to very rich and specialized organizations or exhortations on how to be a “budget supplicant” in a large, bureaucratic, and reactionary-sounding corporate environment particularly relevant to my (and most of my recruiting colleagues’) current and near-future situation(s).

    Thank You,

    Keith Halperin keithsrj@sbcglobal.net

  9. Obviously, a corporation can’t run its recruiting like the Yankees as profitability, budgets, OFCCP and shareholder appeasement are not the same as winning and market value (though there are many similarities).

    That said, when you look at John’s 16 lessons, many could really be applied in the corporate world and with substantial benefit. 1st though, a Corporation must realize what Steinbrenner did which is that human talent is an organizations most important asset. Until then, talent acquisition (by “agent” or otherwise) will still largely be relegated to the minor leagues.

  10. Mark, I was not responding to Bill (had not seen his post yet) but to Dr. Sullivan’s first bullet point.

    And my comment about them not playing in October was that they don’t do enough of the right things to get winning teams OTHER than try to BUY the best. I also stated how this strategy has NOT worked all that well. One world series win in 9 years – not many companies can wait that long.

    I also agree with Patti and that they may be a better analogy of how those without deep pockets can still put together a winning team.

  11. Todd Raphael seems to have missed the point. It’s not that spending the most money guarantees a championship, but the team spending by far the most money trying to win the championship has the advantage and is the favorite to win every year.

    If other teams get the breaks of being healthy, no major players underperforming, they get hot at just the right time…..in other words all the stars align right for them while the Yankees have a train wreck of injuries, several underperformers, get cold at an inopportune time. It takes luck for a team to beat the Yankees and bad luck for the Yankess to lose.

    And all that Yankee luxury tax money going to Minnesota, Tampa, and Kansas City…….the owners pocket that money for themselves with no mandate to spending it to improve their teams.

    As an avid sports fan I only watch baseball if it appears the Yankees are going to lose. Otherwise, why bother wasting me time watching David annually trying to defeat Goliath? I’d rather watch football and basketball.

    Bill

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