Santa’s Workshop Affected by Tight Labor Market

What a year it’s been! Every company has been affected in some way by the tight labor market and the growth of small companies focused on the emerging technologies. Even Santa Claus has felt the crunch for the first time in hundreds of years. It’s been a challenging and exhausting year for Santa and thanks to the great recruiting communities on the web. Even up in the North Pole Santa has been able to stay abreast of the changing needs of companies and has been able to thwart what could have been a potentially disastrous 1999 Christmas. It all started just after the New Year in 1999. It had been a banner year for Santa and everyone reaped the benefits. Bonuses were quite lucrative. Beginning February 1, after the annual post holiday shutdown, Santa noticed that the elves were all a “buzz.” Apparently they were receiving e-mails and voice mails from the emerging online toy companies like toytime.com, etoys.com, and toysmart.com. They all wanted to hire the elves away from Santa. Offering lucrative signing bonuses, generous stock options, flexible work hours, car allowances, and other great perks — not to mention location, Santa ran the risk of losing his best elves. He recognized that, faced with such lucrative offers, their loyalty would only take them so far. Turnover rates were beginning to creep up. For Santa, historical rates had been less than 5%. Now they were doubled. While 10% is low by Silicon Valley standards, this trend was very unnerving for Santa. Even Santa was approached by an executive search firm, who asked him to consider heading up one of these dotcom companies. Mrs. Claus, feeling some of her rheumatism from the cold almost convinced him to consider the opportunity — as warmer climates were looking more and more appealing to her. Fortunately he wasn’t enticed. However, it did make him realize that recruiting and retention had to be top on his list for 1999. He didn’t wait a moment. After going online and reading as much information as he could about current trends in recruiting, Santa focused on 10 key improvements in his recruiting processes. Much of his insight came from the ERE forums and articles by regular Daily contributors like Professor John Sullivan, Kevin Wheeler, and Jennifer Hicks. Here is Santa’s top 10:

  1. Hired a top notch Talent manager. Recruiting had always been one of the many roles of the HR representatives along with compensation, benefits, EEOC, company events, 401K admin, etc… Santa recognized that the recruiting function needed dedicated support. After posting his recruiting (talent manager) position on technicalrecruiter.com, jobs4hr, and the SHRM site, Santa was able to hire an incredibly talented recruiting manager. The managers role was both recruiting and retention as Santa views these as equally important. The manager hired a staff of 4 to support the recruiting/retention functions.
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  3. Advertised on the Internet. Santa shifted some of his print budget to the Internet, with the help of the new “Talent Team” was able to post his positions on a variety of sites including: general job boards, local boards (www.northpole.com, www.santa.com, www.santaclaus.com, www.kriskringle.com), targeted technical job boards, association sites, online portals and online trade publications.
  4. Improved the Career Section of his website. He made sure that his site included the following:
    • Hot Careers button prominently placed on the homepage.
    • Easy to use jobs database.
    • A section on the company culture.
    • Meet the employees section with profiles of specific elves, their contributions and roles in the company
    • Benefits section.
    • Easy resume submission instructions and a profile builder for those candidates who don’t have a resume.
    • Recruiting calendar – listing the recruiting events throughout the year.
    • Communicate with an elf section: allows potential candidates to talk with other elves about their experiences.
  5. Implemented a web-based candidate tracking system. Santa’s primary concerns are quality of hire and cycle time. He wanted to be able to route the candidates through the system as fast as possible. A web-based candidate tracking system allows all of his Talent Team and the hiring elves to communicate very easily, in one central location, from anywhere in the world regarding candidate status. He recognizes that the best candidates take jobs very quickly and did not want to lose top talent because of internal processing bottlenecks.
  6. Trained all of his hiring managers on interviewing skills. It’s great that the Talent Team knows how to interview, but the hiring elves are the most critical piece of the decision making process. Santa brought in an expert on interviewing skills and trained the managers on conducting technical interviews and behavioral interviews. The managers went through hours of role playing as a coaching tool.
  7. Implemented an Employee Referral Program. Taking his cue from the ERE mailing list, Santa implemented an employee referral program that included the following:
    • The stipend is only $500/hire (Santa learned from his reading that success is more dependent on communication of and commitment to the program than on $$$).
    • The program is heavily promoted within the organization with employees continually encouraged to participate.
    • There is an additional quarterly prize drawing for people who have submitted candidate referrals and another for those that have resulted in hires.
    • Easy to use Intranet submittal form.
    • Commitment to contacting each referral within 48 hours of submission with feedback given to the submitter.
  8. Implemented a 48 hour turnaround rule on all candidates. From the time a Talent Team forwards a resume to a hiring manager, the hiring manager has 48 hours to make a decision on the candidate and must provide feedback into the web-based candidate tracking system.
  9. Actively mining the Internet for “passive job seekers.” The Talent Team dedicated one of its team members to actively sourcing the Internet for passive job seekers. They focus on researching ISPs, homepages, competitive companies, etc… to find high potential candidates that may not currently be looking for a job.
  10. Santa improved the benefits offered to employees.
    • Santa provided training classes (or financial aid for elves who want to further their education) for elves who wanted to move into different areas of the company. Along these lines he also instituted a plan to promote heavily from within the organization.
    • Implemented a flexible work schedule so employees could fulfill their company obligations while working a schedule that met their personal needs. (In the winter some employees work 7-11 am and then 4-8 pm so they can enjoy the few hours of daylight at the North Pole).
    • Eliminated the “elf uniform” as a requirement for all employees. Only employees working on production lines that require certain dress for safety reasons still have a dress code.
    • Provides on-site day care. The results are two-fold. Santa now has a built in “focus group” to test his toys and the parents are able to defray some of their child care costs.
  11. Started an “alumni” group in order to stay in touch with elves who have left the company in the hopes of luring them back. Santa holds no grudges and welcomes back valued employees.

The results: Santa stemmed turnover from 10% down to 6.5%. His cost per hire dropped by 28%. The hiring process has become more efficient. The quality of the hire is better because the managers are more effective interviewers and decisions are made faster. Employee referrals went up from 35% to 55%. The cycle time to hire has dropped from 50 days to 20 days. While Santa still has work to do on his recruiting effectiveness, it appears that he is on his way for a great start to the new millennium. Christmas 1999 should come off without a hitch. Happy Holidays and all the best for the New Year!

Karen Osofsky (karen.o@tiburongroup.com) is a co-founder of TiburonGroup.com, an e-recruiting consulting firm that provides outsourced recruiting solutions to rapidly growing companies and new ventures. The firm provides a broad range of recruiting consulting, sourcing, screening, and strategy development services to help companies manage the front-end recruiting process. Tiburon Group is a Certified AIRS Solutions Partner.

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