Making the Business Case to Shareholders — It’s Never Happened Before!

Any experienced businessperson knows that no one is more important in a public corporation than the shareholders, who are, in fact, the owners of the corporation. Not the CEO, not the CFO, not even the Board of Directors are as important as the shareholders. In the past, recruiting often fell on the other end of the power spectrum from the shareholders. But that’s what makes this event that I am about to reveal so exciting and even symptomatic of how far recruiting has come in the last 10 years. Recruiting, at least in this case, has now clearly taken its place in the hierarchy of powerful corporate players. This Has Never Happened Before, I Promise Have you ever wondered what it was like to be the very first person to do something astounding? Can you imagine the feeling of being…

  • The first person to land on the moon?
  • The first European to discover America?
  • The first director of recruiting to speak at the shareholders’ meeting of a $10 billion company on the impact of recruiting on the firm’s profitability and success?

Think about it for a moment. Have you ever even heard of a recruiting department being invited by the CEO to present to the shareholders’ annual meeting at any company, no less at a $10 billion bank? Typically, recruiters don’t even get the time off to attend the meeting, let alone be a primary speaker at it. I’ve been practicing and studying recruiting for over 30 years and, as far as I can tell, this is a first. A shareholders’ meeting is the highest profile of all corporate events. Not only are the shareholders there, but also in attendance are the entire senior executive staff, the board of directors, and all of the key financial analysts for the industry. Because all these important people are in attendance, nothing sends a clear message about the importance of any business function than being asked by the CEO to present in front of them. This landmark event occurred on April 20, 2005, at FirstMerit Corporation’s annual shareholder meeting (FirstMerit is a large regional bank headquartered in Akron, Ohio). Most of the agenda was quite traditional, with the CEO making comments about important banking issues like revenue growth, risk management, credit quality, and productivity. But then, towards the end of the executive team’s presentations, came Michael Homula, the talent acquisition manager and a relative rookie among the senior executives. I’ve written about FirstMerit’s incredible recruiting strategy and approach before, in my recent benchmark recruiting function article, where I declared them the best recruiting organization on the planet. This latest honor and recognition not only further supports that designation, but it also shows that they have raised the bar even higher with this presentation. Michael’s presentation educated shareholders about the new war for talent and the coming talent skills shortage, which will impact all corporations. Michael also outlined the need for an integrated talent management strategy that emphasized forecasting and workforce planning. But perhaps the most important element of his presentation was where he highlighted the tens of millions of dollars in economic value that great recruiting added to the bank’s performance as a result of rapid and effective hiring, which both cut costs while simultaneously raised revenues. By making “the ultimate business case” to the owners, recruiting was demonstrating its status as one of the premier business functions in the bank. The Next Frontier for Recruiting: Internal Marketing Now before you dismiss this landmark event as something irrelevant to you, think of the shareholders presentation not as a PR event but rather as a demonstration of the effectiveness of recruiting. In fact, the presentation became the ultimate business case for recruiting. If you or your recruiting department are one of the many that are constantly struggling to obtain resources and recognition, there is a lesson to be learned here. Rather than just working hard, and even producing great results, recruiting needs to go the next step, which is to formally market and sell its successes. When adding to your department’s recruiting goals the one critical element that is often left out is making sure that senior management understands (in dollar terms) the tremendous economic impact of recruiting. By recognizing the importance of internal marketing, you learn the same lessons that supply chain, Six Sigma, and CRM learned when they elevated their game to the strategic level. If you’re tired of being the underdog and want to raise corporate recruiting to the same status that recruiting gets in professional sports and entertainment, you need to get mentioned in the different mechanisms or channels that corporations have for spreading the word about strategic functions and successes. Start this process by thinking about how large corporations communicate their successes. Whether you are evaluating the success of HR, recruiting, finance, marketing, or any other function, there is almost universal agreement among experts that the ways that a corporation designates and reports its strategic successes are limited to six areas. They include:

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  • Being mentioned in the shareholders meeting
  • Being mentioned in the annual report to the shareholders
  • Being mentioned in a presentation to the board of directors
  • being mentioned in quarterly financial analyst calls
  • Having your results included as part of the CEO’s and senior managers’ bonus formula
  • Being included as a line item in key quarterly financial reports

Instead of hoping that good work will automatically be recognized, recruiting needs to accept its responsibility, and even obligation, to brag about accomplishments and impacts. More and more corporations are realizing that its important for recruiting to brag externally by building its employment brand, but very few directors of recruiting realize that it is equally important for recruiting to market and brag internally. Once you accept that role, you will soon realize that each of these six channels of recognition must become the target of every director of recruiting and chief talent officer on the planet. Unfortunately, only a handful of recruiting executives anywhere have received even one of these strategic recognitions. By failing to appear in one of these channels, it means that either your activities are not strategic or that you have failed to measure and market your activities to the level where the CEO deems them as significant enough to expose to these important constituencies. Action Steps Once recruiting management designates internal recognition in one of the strategic channels as one of its primary goals, the next step is to develop a plan to reach that goal. Start by analyzing which other business functions have been included in each of these channels. Next, make a list of the common critical factors or characteristics that are essential in order to be included in each channel. Quite often those critical inclusion factors include reporting results in dollars, providing the firm with a competitive advantage, demonstrating the direct impact of work on business unit success, and being first in the industry in implementing innovative programs and processes. The next step involves changing your attitude and shifting towards a much more aggressive ?guerrilla” approach to recruiting. Then commit the budget resources and time to update your recruiting strategies, tools, rewards, and metrics, so that your recruiting approach actually matches your new aggressive attitude. These shifts are required in order for recruiting to actually produce the strategic results in each of the different inclusion categories. The final two steps involve first developing a marketing plan that assures your programs and results have the characteristics that make them worthy of mention in these channels, and second, building strong relationships with the key gatekeepers of each of these six channels, to ensure that you and your results are actually mentioned and included. Then, just sit back and relax, as you and your recruiting team become heroes to senior executives and shareholders alike.

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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1 Comment on “Making the Business Case to Shareholders — It’s Never Happened Before!

  1. You said it first but I’m saying it second, Dr. Sullivan:

    ‘I’m tired of being the underdog and I’m not going to take it anymore!’ As Steve Levy suggests we all get up off our lazy butts and take it to the streets, I’m happy to throw open my shuttered windows and shout.

    Now what is it we have to offer in real live DOLLAR savings so these corporate types understand and will invite us to speak at their next shareholder meetings? I’m going to offer my savings – I hope others will too! In my case, for $1800, an HR department can put 50 on-target real-life summaries of individuals into their stream of savings for their future hiring needs. These 50 names will, in all likelihood:
    produce 1 immedate hire!
    produce 2-3 more hires over the next six months!
    produce 4-5 hires over the entire first year!
    produce 6-10 hires over two years!

    For $1800 original cost? What CFO wouldn’t do backflips over that? If CEOs got this message?
    Katie, bar that door…

    Thanks for saying it first Dr. Sullivan!

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