In his book, Only the Paranoid Survive, Intel’s Andrew Grove describes the importance of “strategic inflection points” as both historical and mind-changing. Strategic inflection points are events that fundamentally alter the nature of a business or profoundly change the rules of the game. The introduction of the PC was one of these. So was the Internet. Cell phones with email, PDA and camera functions are probably another, especially when you add virtual keyboards and screens. According to Grove, “An inflection point occurs where the old strategic picture dissolves and gives way to the new, allowing the business to ascend to new heights. However, if you don’t navigate your way through an inflection point, you go through a peak and after the peak the business declines. Put another way, a strategic inflection point is when the balance of forces shifts from the old structure, from the old ways of doing business and the old ways of competing, to the new.” Grove calls these strategic inflection points a “10X” change. “To manage a business in the face of a ’10X’ change is very, very difficult,” he says. “The business responds differently to managerial actions than it did before. We have lost control and don’t know how to regain it. Eventually, a new equilibrium in the industry will be reached. Some businesses will be stronger, others will be weaker.” Job boards and the Internet were forecast to be a strategic inflection point for the HR department. Using them, companies would be able to find top people for any position quickly, easily, and inexpensively. As things turned out, the promise was overblown. Six Sigma is the current promise. While it offers a “5X” change for accounting, distribution, manufacturing, and other process-intensive activities, it won’t have the same impact on people-intensive activities like hiring. Previous HR hopes for a 10X change have also failed to pan out. Consider behavioral interviewing, the promise of 20 years ago. While important, it certainly didn’t reduce hiring mistakes by too much. Applicant tracking systems promised to tame the Internet, but as it turned out they needed to be tamed themselves. What’s next? Why can’t hiring have it’s own strategic inflection point? What about Hiring 2.0? In essence, why not take everything we know about hiring, put it into an ordered and integrated system, and then add feedback process controls to track performance? The result would be a business process for hiring top talent. If possible, hiring top people like clockwork would certainly represent a strategic inflection point for the HR department. The business impact would be profound, at least a 10X change. Imagine being able to hire top people for every open position. Company performance would soar. Even modest success implementing Hiring 2.0 would give HR the right to enter the executive board room as a true strategic partner. No longer would HR be considered a stepchild looking for a mission. Hiring top people for every position would become the mission. I believe Hiring 2.0 is possible. It has been done, even by companies who are not employers of choice. During 2004, I’ll use this column to describe what it takes to make hiring top talent a systematic business process. Case studies will be presented. If you feel your company has figured out how to make hiring top people a systematic business process, send me the details (email@example.com.) We’ll include you in some of our “best practices” examples. From what I’ve seen, here are some of the big issues that need to be considered in order to get to Hiring 2.0:
- A dramatic change in the types and methods used to source top talent. The best people don’t find new jobs the same way that typical candidates do. How this is addressed will become increasingly important during the current economic recovery and as longer-term shifts in the labor markets begin to occur.
- A radical upgrade in the performance and efficiency of IT systems supporting the recruiting process. Great systems are the backbone of an efficient hiring process. Unfortunately, most systems available today were designed to handle the wrong problem: the overload of resumes from unqualified candidates. While these systems are now becoming more efficient at this task, most have lost sight of the real challenge: helping recruiters find and hire more top talent.
- Significantly increase every recruiter’s ability to work with, coach and influence hiring managers. Recruiters need to be viewed as partners in the hiring process, not vendors.
- Move from a reactive to a proactive mindset at every process step. Here’s an analogy to consider. Factories that need to fill unanticipated orders are the most inefficient, the most costly, and have the lowest quality. Yet even poorly run factories have learned to forecast needs, organize resources and track progress with startling improvements in performance. Recruiting departments should take a lesson from U.S. manufacturing companies who had trouble competing on an international basis in the 1980s. Better planning is a key part of this. So is tracking performance when activity occurs, not afterwards.
- Profoundly increase each recruiter’s ability to recruit top talent. Many recruiters would still rather plow through resumes of unqualified candidates, rather than pick up the phone and call a strong non-active candidate. Unfortunately for them, 75% of the best people need to be called. This figure increases during recoveries and labor shortages.
At a more practical level, here are some of the issues that must be addressed in order to start implementing Hiring 2.0:
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- Systems. It’s relatively easy to systematize data-intensive activities like resume processing, applicant tracking, and offer processing. This is comparable to any HRIS activity. The trick is to keep the admin part manageable. This must be a primary consideration whenever selecting a system vendor, or when vendors offer upgrades. At first, worry less about features and more about ease of use. Next, make sure resumes can be ranked easily by quality and pushed to recruiters’ desk tops. If your recruiters have to hunt for people to call, then your systems need to be redesigned.
- Sourcing. Systematizing sourcing is somewhat more challenging, especially the more creative components. If your advertising, career website, and collateral material are not compelling you’ll never be able to attract top people. Get this part fixed as soon as possible. While you might want to keep your creative people in a separate walled compound, you must track the progress of their efforts on a weekly basis. Specifically, look at the quality and quantity of the responses and hire rates by each sourcing channel. As sourcing channels become less effective, instead of reviewing the resumes of more unqualified people, improve your current advertising and marketing, or expand your channels. Good metrics can tell you when you need to do this, but you can’t wait weeks to find out.
- Interviewing. Interviewing is actually easy to systematize. We’ve seen some scripted, self-paced interviews that work extremely well. The best ones neutralize the emotional aspects of interviewing by adding predictability, ease of use, and objectivity.
- Recruiting and hiring managers. Getting recruiters and hiring managers to work more closely together isn’t as tough as you might think. Most managers are fairly predictable in what they want out of their recruiters. This includes things like better job knowledge coupled with the quicker delivery of better candidates. With some training, better assessment skills and improved sourcing approaches, recruiters can quickly become real partners with their hiring manager clients.
- Recruiters and top candidates. Working one on one with top passive candidates is an important piece of the puzzle, but the real issue here is not what you might think. Top non-active candidates are fairly predictable in how they need to be approached and what they consider as they move their way through the hiring process. Recruiters can be trained to follow this map and guide top candidates along at each step in the process. The real issue is giving recruiters enough time to do this properly. This organizational issue is the one that should be considered first.
- Independent vs. interdependent activities. Seamlessly tying together all of the steps involved in the hiring process is not insignificant, but the challenge here is interdependency. This means that the steps in the hiring process must reinforce rather than contradict each other. In most hiring processes, independency has been the rule ó and the problem. For example, ads that are hard to find, are boring, or overemphasize skills at the expense of opportunity preclude the best high potential people from even applying. The inability to submit a resume as an attachment to an email is another example of how ill-designed systems eliminate the best candidates. Most hiring systems don’t adequately address the needs of top people. One way to create interdependency is to write jobs descriptions that describe what a person must do, rather than what a person must have. These performance-based job descriptions can then be used to write ads, assess true motivation, and quickly increase a recruiter’s understanding of true job needs.
Behind this move towards systematization is workforce planning, the appropriate organization of resources, and the proper use of metrics. If you don’t know who you need to hire, it’s pretty tough to systematize the process. No one can efficiently hire people in a reactive environment. Some type of forward-looking plan is essential. A 120-day rolling workforce plan, no matter how rough, can be a good first step in systematizing the hiring process. How resources and recruiters are organized is a also a critical issue that needs to be addressed. Cradle-to-grave is one way. Small teams that separate sourcing from recruiting is another. Some combination that focuses on the difficulty of the search is a third option. Regardless of how you organize your recruiting teams, you must have a resident expert who can manage all of your sourcing channels to produce the best candidates possible. You also need another expert who can optimize your systems to make them as efficient as possible. You also need a few top-notch recruiters, a.k.a. internal headhunters, who can work one-on-one with top people that are your toughest searches. To track progress, metrics must be as close to real time as possible. You need to know what happened today by tomorrow, or at least by the end of the week. Metrics are for managing, not reporting. You can’t wait until the end of the month or quarter to change sourcing channels, rebalance your recruiting teams, or rewrite your ads. The primary reason why quality has improved in every area of manufacturing is the ability to track performance as it occurs. Imagine if you had to wait until the end of the month to find out that a vital machine was producing only scrap? I started this article by discussing strategic inflection points and what it takes to make hiring top talent a business process. In my opinion, Hiring 2.0 could have a “10X change” on company performance. Implementing it could also be the step needed to earn HR a front-row seat in the board room. Isn’t it time for HR to take the step?