Why They Hate Recruiting

For all staffing directors that lament that they can’t get a strategic seat at the table, Keith Hammonds of Fast Company magazine has an answer for them: “HR people are, for most practical purposes, neither strategic nor leaders.” It’s time to consider recruiting’s role in why companies hate their HR departments – and if leaving HR for good is the answer.

It’s quite fashionable these days to bash HR departments for all of their failings. Last year, Fast Company magazine infamously took this to an extreme, pasting the headline “Why We Hate HR” on their front cover. The shock and outrage from the inflammatory tone of the piece continues to this day (60% of readers “hated it” according to Hammonds), yet there has been widespread support for the points he brings up (91% of people polled during a recent online interview with Hammonds generally agreed with him). Hammonds’s silver lining here is that “HR is the corporate function with the greatest potential – the key driver, in theory of business performance. In a knowledge economy, companies that have the best talent win.”

One look at the New York Times article (registration required) on Microsoft and Google’s grapple for supremacy confirms that talent has driven corporate performance since the beginning of the industrial age. Yet, what constrains the function from getting respected in most organizations is a focus on being good at “administrivia,” and not “the more important strategic role of raising the reputational and intellectual capital of the company.”

Secede or Die?

Most of the bigger complaints in the article are aimed at the people who manage issues like pay, benefits, training, performance management, and retirement. Does that mean recruiting is really just guilty by association? Not exactly. Some of the same criticisms could apply to many recruiting departments as well: using efficiency-focused, rather than value-focused, metrics that demonstrate business impact; restrictive bureaucracy, often driven by fear of legal repercussions and compliance; a focus on activities versus outcomes; and a push for short-term cost efficiency over longer-term value. Yet, in many other cases cited in the article, recruiting is merely guilty by association.

In fact, several recruiting leaders I’ve spoken with are as frustrated with HR as the rest of their company – the policies, the restrictions, and the myopic thinking. What was surprising to me was that, among the talk of employee engagement, benefits, and mentoring programs, recruiting was rarely even mentioned in the article. So here’s a radical thought. Instead of being HR’s red-headed stepchild that’s locked away in the basement (only to see the HR team take all the credit for the big accomplishments of your team), it’s time for truly strategic talent management departments to secede from HR. To stop sitting at the “people-people” table and start sitting with the “businesspeople.” To take the initiative and show the business impact of effective employer branding, referrals, strategic sourcing, and talent-supply-chain management. To think and act like a profit center, not a cost center. And, to report directly to the CEO or vice president of corporate strategy, not the VP of HR. As the HR outsourcing tide continues to rise and swallow anything in its path, secession may be the best possible option for recruiting and talent management – perhaps the only functions in HR that a company should not fully outsource if it wants to maintain a competitive advantage in a knowledge-based economy.

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The HR Death Spiral

As part of the HR silo, it is inevitable that recruiting will be vulnerable to HR outsourcing initiatives. Today, many companies (94% of them, according to a Hewitt Associates survey of large employers) are already examining how to reduce the administrative costs of HR by outsourcing administrative-heavy functions like compensation, benefits, and retirement. It’s still somewhat rare that recruiting falls under that same axe – partially due to the poor product offerings in this area from HRO vendors (who often repackage their same broken internal recruiting processes and tools), and at times to a realization that staffing is in fact a very strategic business function that is best done by in-house experts in each organization. But the writing is on the wall.

According to the same study, by 2008 many organizations plan to expand outsourcing initiatives to cover other HR activities like learning and development, health and welfare, global mobility, and, yes, recruiting. The real rub, however, is that companies that want to get strategic about talent are starting to hire businesspeople from outside the staffing world to run departments. This is a growing trend I have seen across the country. Other organizations have gone the other way, bringing in HR managers with little to no recruiting background to run staffing as part of a rotational program.

To avoid any of the above fates, I highly suggest you read Kevin Wheeler’s recent article, “Will Your In-House Recruiting Be Outsourced?” and John Sullivan’s excellent profile of Valero Energy (both of which fall into the “I really wish I’d written that” category). Both are excellent reminders of the type of thinking that will be needed for recruiting to become a vital business partner inside a company. It is unfortunate, but I have yet to see a convincing case study of a company systematically tying recruiting initiatives to increased revenue and profit, although I am hopeful that several exist. You will be forever judged by your current accomplishments, not by your potential. By becoming an inseparable part of your company’s business strategy, your job is likely secure. If you’re limited in your ambitions by ineffective or even hated HR leadership, it’s time to build your secession plan.

Dave Lefkow is currently the CEO of talentspark (www.talentsparkconsulting.com), a consulting firm that helps companies use technology to gain a competitive advantage for talent, and a regular contributor to ERE on human capital, technology, and branding related subjects. He is also an international speaker on human capital trends and best practices, having spoken in countries as close as Canada and as far away as Malaysia and Australia. His consulting work has spanned a wide variety of industries and recruiting challenges with companies like Starbucks, Boeing, HP, Microsoft, Expedia, Washington Mutual, Nike and Swedish Medical Center.

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10 Comments on “Why They Hate Recruiting

  1. I have usually advocated the ‘separation of church and state’ metaphorically speaking. Part of the problem between HR and talent recruitment is that many HR departments tend to utilize recruitment personnel as a resource to help them comply with such funtions as on-boarding, orientation, and regulatory issues such as EEO, leaving precious little time for, gee, things like recruitment. To add insult to injury, HR has learned, for better or for worse, to view personnel within a prism of liability, rather than talent. In other words, the primary functions of HR stem from mitigation of liability (how can we prevent liability from human nature?), rather than bubbling up from the promise of human resources as vital talent (how can the best talent help the organization?). The result is ‘analysis-paralysis’, and at best, less- than- enthusiastic support from the movers and shakers of the company.

  2. Very thought provoking article. As a human resources professional with extensive experience in both recruiting teams and as a Generalist Business Partner I have had the opportunity to report up through an HR organization as well as up through a Recruiting Vice President for several world class organizations.

    At the end of the day, if your leadership does not understand how human capital provides competitive advantage, if they do not get talent or do not understand the impact a strong human resources team can bring, it is irrelevant if recruiting branches off or reports up through HR.

    What does matter is whether or not you have the right Human Resources or Recruiting Talent. The best understand the business, provide strategic, innovative solutions to complex business issues and have the ability to implement both in the short and long term.

    I find it disturbing that the answer to poor HR is to form another department rather than challening the leadership to respond if the HR department is not performing.

    Either model can work, neither will work with the poor recruiting or HR talent.

  3. Teresa – Great comments!

    I completely agree that it does all come down to talent (HR, recruiting and otherwise) and the executive team’s willingness to recognize the real value of maximizing the organization’s talent as a whole.

    I’m not saying that forming a different department is the answer to all that ails. But I do believe that recruiting often does not get the chance to help leadership understand how human capital provides a competitive advantage because they are seen as the mute half-brother of a department that is often not able to effectively make this case.

    In these cases, secession from HR/the formation of a separate department would be a very appealing option.

  4. Senior executives are basically simple-minded. Your tenure is based on making big money, saving big money, or costing big money.

    It is easy for any HR department to determine to which category it belongs by answering a few questions:

    1) Does it follow the 1978 Uniform Guidelines?
    2) Does it use structured interview techniques that are based on a professional job analysis?
    3) Does it use a multi-trait, multi-method selection and promotion system?
    4) Does it validate the use of any and all tests for its own positions?
    5) Does it avoid using training tests in hiring?
    6) Does it only use tests that adhere to the 1999 Standards for Educational and Psychological Testing?
    7) Does it monitor each hiring step for adverse impact and act to minimize it?
    8) Has it divided job titles into job families, determined family-appropriate competencies, and use that information to hire, train, and appraise?
    9) Has it calculated the cost of low productivity and turnover on a person-by-person basis and acted to minimize it?
    10) Has it linked hiring, training and appraisal activities directly to the organizaitional mission?

    Any score less than 100% wastes training dollars, hires the wrong people, rejects the right ones, promotes incompetents, increases turnover, encourages litigation, and leads to too many people doing too little work.

    Before you say, ‘Piffle!’, experts estimate these errors cost 20% to 50% of base payroll annually.

    As I said, HR’s value to an organization is pretty simple; make big money, save big money, or cost big money.

    Choose wisely, Grasshopper.

  5. Hi Dave great article and one which I agree with. I like you was at the recent Kennedy Conference and during the final panel session made the observation that after 25 years operating in the Global recruitment industry with the issues of Branding, Candidate Management Relationship, Talent Pool Management(Database Structure and content) the jobseeker recognised as being a ’employment consumer’ we are moving into the relm of Marketing. In Europe we see new titles being created such as Employee Relationship Brand Manager.

    Should Recruiting become a funtion of marketing?. I suspect not, even through many of the skill sets, learning requirements and possibly supporting technologies may reside there.

    To me Recruiting is a stand alone unit, which networks/works along side HR,Marketing and Corporate Communications and ultimatly has as an end client who is the hiring manager.

    Recruiters plan,attract,manage and store whilst HR run the hiring piece.

    Sound simplistic but I know organisations who are moving towards this model.

  6. Why I LOVE Recruiting – response to article:

    I say ‘Yes, Yes, Yes ? separate your Recruiting functions from your HR department.’

    When I first started work with my present employer, a small defense contractor, the reason the Corporate Recruiting Office was separate from the HR Department was the vast physical seperation of geographic locations. The previous recruiter didn?t seem to have much HR experience as recruiting experience and the connection to the HR department was not as synergetic as could have been. Since I joined the company with my 14+ years of Human Resources background and experience, I?ve strengthened the synergy between HR and Recruiting because I understand the HR industry, laws, regulations, and requirements in the hiring process.

    Yes, managers are ‘?as frustrated with HR as the rest of their company ? the policies, the restrictions, and the myopic thinking?’ because they don?t understand what liabilities a company can incur (thousands of dollars out of the profit margin for fines and legal fees) if the company can?t prove they?ve ?toed the line? in regulatory requirements for recruiting, as well as day-to-day operations. If there is an ADA, EEOC, or OFCCP violation, one ?illegal? activity could result in a fine for the offense that can wipe out the profits for a company for one or more years (especially smaller businesses).

    The HR department should provide managers simple explanations of WHY certain steps must be taken, policies must be adhered to, and certain documentation and paperwork (as time consuming as it is) must be accomplished, which should reduce manager’s frustration.

    An experienced recruiter with five to ten years of HR management can incorporate their legal HR knowledge in teaming with hiring managers without the managers feeling the are butting heads with the HR office. This could drastically reduce the tension between the HR department and management staff in hiring issues.

    As a Recruiting Manager, I have a budget separate from HR, submit weekly metrics, and present monthly statistics to executive management. This has forced me to ‘?think and act like a profit center, not a cost center?’ so I look for the most cost effective methods of recruiting qualified candidates, even if it means daily hours of internet research, struggling through thousands of resumes yearly (by myself), and spending long hours after general business hours posting the jobs on obscure job sites just in case there is one person with a unique skill set who may see it and decide to follow-up.

    I also perform head-hunting for external clients with the blessing and a gentle push from my executive managers, which allows me to earn ?credit? against my cost center expenses to improve my ?profits? within my own department. The ROI will prove itself at the end of the first full calendar year I?ve been with the company with my penny-pinching methods that still provide quality candidates to my hiring managers (and external clientele).

    Dawn Boyer, Corporate Recruiting Manager
    Recruiter@zeltech.com

  7. I have to admit that there is a majority of us who feel this way. There is a lot of truth to this article and it is just a question of time before companies will outsource the entire HR function including staffing.

    I am always astonished as to
    how unfair the process is in evaluating new recruitment staffing companies. In other functions in a corporation companies take their time to evaluate potential suppliers in a more democratic process compared to most HR departments. Money is not the
    only deciding factor. This may to some degree explain why the wrong suppliers are chosen and why staffing costs are high. There is very little effort made to seek better service provider(recruiters) who can do the job faster, better and more efficiently. Some people out there will disagree with me on this one. I know of a fairly large staffing agency that was hired for a major Pharmaceutical Company in the States. The Pharmaceutical company greatly benefited by this excessively low staffing fee arrangement provided by this national staffing company who was losing money servicing this company. Guess what? The staffing company eventually laid off its staff and called the deal off. Is this a win?win? Certainly not when you Supplier is losing money. By the way the Pharmaceutical company has a huge turnover rate.

    There are several current issues happening right now that are disturbing and can present potential legal issues. There are companies out there hiring unqualified, inexperienced HR professionals as their internal HR. Staff. There are HR staff giving preferential treatment to friends, colleagues and relatives in terms of suppliers rather than talking and attracting Qualified Recruitment Suppliers. A major company fired their Director of HR sometime back because she had a recruitment company
    on the side and had profited from the companies database.

    There are other issues regarding hiring managers who do not feel that the HR departments are responsive to their needs and there they have to find their own staff. Some of the HR professionals act like government bureaucrates. They are overly preoccupied with compliance of policies and procedures but express little concern in addressing the needs of the frustated manager or director who is stuck doing the jobs of 2 to 3 people and waits 6 months to a year until the job is filled relying on passive job boards. This frustration leads to anger and resentment and eventually people suffer from stress or worse leave. I asked this question to an HR professional and was astounded at the response. She basically said that the company should wait until the best person responds to the job. BOY YOU CAN WAIT A LONG TIME. I worked for a company like this that waited forever for the perfect candidate to show up. The women winded up having a nervous breakdown. TRUE STORY.

    Management is very much to blame because although companies state that talent is very important to the company this statement is simply FALSE. What do they care? Afterall they get paid 250 times the rate of the average employee salary? This is a very serious problem as well.

    I personally feel that the HR profession is held in very low regard much like sales professionals. Every corporate executive thinks they can replace their sales people, their HR staff with a job board or an E-commerce site. The real issue is that your customers do not want to talk to idiots and neither do potential employees.

    The reality is that these critical professions need Individuals with people skills, problem solving skills to get the job done rather than wait for things to happen. They fail to puts these words into action. When a company Kodak refuses to talk to suppliers such as Recruiters you are not only missing out on hiring great people but you also miss out on current trends and events happening in an industry. As you are well aware of Kodak has over the past years had financial problems due to failure to talk to outside suppliers. This is happening in the Pharmaceutical industry.

    If a company may not want to even consider a top performer on a contingent basis there is definitely a big RED FLAG. INDIFFERENCE, INCOMPETENCE AND HYPOCRACY. I have spoken to several HR professionals who do say they are not using agencies at this time and in fact Retained Search Firms. I am referring to a food company with a high turnover rate. My question is why?. Does this sound like a company concerned about hiring costs or turnover issues? The answer is DEFINITELY NO.

    There if many suppliers who can do the job better, faster and cheaper. The status quo is always easier to deal with then making improvements to existing policies, procedures and existing suppliers relationships.

    HR professionals – a majority of them are not proactive and based on the trend that I have discussed a lot of them have very little business experience. You cannot expect this type of person to be effective or proactive who has very little experience. There are certainly exceptions such as IBM and other companies that realize that cannot wait to hire someone 6 months to a year. To my amazement they have hired people outside the technology industry from other industries.

    I have to admit that because of this low regard of the HR function there will always be a need for outside recruiters. There is a perception of being undervalued and not critical to the corporation. I am not here to generalize these points but to simply state my personal experiences that in some cases have influenced me to consider the Recruitment Profession as a valuable and needed Profession. The HR industry must take a more proactive view in the profession rather than act like government bureaucrates in order to stay relevant to the dysfunctional corporation

  8. Really interesting article and posts – Had a big discussion about this with one of my H.R managers recently. I was discussing the cost per hire, the necessity for speed in hire, and how much it costs to keep a position vacant.

    You see my client takes a very long time in the selection process – interviewing, offer and acceptance and background checks. I often jokingly say that candidates can get through a background check and security clearance for NASA faster than getting hired with my client.

    The h.r manager w/o a beat explained something to me that truly knocked my socks off..

    We often talk about speed to hire candidates, and all this metrics stuff right? Well here is something to think about —–

    this manager made a comment along the lines of – It can get more expensive to fire a poorly selected candidate than to keep the position open for a while whilst making a Strong Selection.. the best selection.

    When I think about frivilous lawsuits, cost of turnover, training new employees and all the other costs that come from employment shortage and turnover (lack of better word) I guess what was stated really put’s another perspective on the metrics of Recruiting, employment and H.R

  9. I think all the comments to this article are great but when we talk about separating departments and outsourcing aren’t we really talking about trying to gain efficiency? Regardless of the leadership in the organization, skill set of the department, or separation of departments how can efficiency be gained when it isn’t measured at the current state of the department/business? My suggestion would be to measure efficiency and refine your HR, Staffing, and Recruiting function to gain noticeable gains in efficiency based on data. Executives, no matter how they see the value proposition of HR or their workforce, understand the efficiency metric and will respond to it. Start there and then use other meaningful metrics to refine your business.

    Regards,

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