The following is the transcript of a webcast I did on 8/26/14 for SHRM (Society of Human Resource Management). This should not be copied or used without my permission.
Hello everyone. My name is Doug Douglas. I’m speaking with you from Austin, Texas today where I live and have my business. Let me just say a couple of things before we dig into our topic today:
- I love to have people connect with me at the end of these sessions, so if you’d like to connect with me on LinkedIn, Twitter, Facebook, etc. – please feel free to send me an invitation. I’ll put my contact info up at the end of today’s session.
- The biggest challenge for me in doing these webcasts is the diversity of the audience and the types of information that might be specifically useful to you. We have some on the call today from major global brands that all of us would recognize, and we have some on here who are from very small companies. Some have big budgets, and some have no budget. Some have a team of people working on recruiting, and others are a single person trying to do recruiting along with other responsibilities. So, in planning the information to share with you today – I really do try to consider all of those factors and try to make sure there is something for everyone.
In 2013, the movie “Frozen” was released by Walt Disney. This was based on the Hans Christian Andersen’s fairy tale “The Snow Queen.” The movie was wildly popular, but there is a song that came from the movie that has been sung by just about everyone imaginable now…
- Demi Lovato
- Idina Menzel
- Pearl Jam
- Boxer Manny Pacquiao
- And countless parents singing it at the top of their lungs as they drive with their kids
The song is “Let It Go.” And the chorus says…
“Let it go, let it go. Can’t hold it back anymore.
Let it go, let it go. Turn away and slam the door.
I don’t care what they’re going to say. Let the storm rage on. The cold never bothered me anyway.”
As you face recruitment issues and executive expectations and reduced bandwidth among your team, it requires a leader to stand up and say, “We are going to fix this and not just keep doing things the way and expecting different results. I don’t care what they’re going to say. Let the storm rage one…the cold never bothered me anyway.”
WHAT ARE THE ISSUES THAT ARE OF CONCERN?
As you consider the current state of your recruitment efforts, you might find that you are getting frozen out from the best talent.
- In a recent CareerBuilder survey, 30% of employers say that recruiting qualified candidates is their biggest concern.
Maybe you are seeing that your employees aren’t content and you fear a mass exodus at any moment.
- Did you know that in a recent poll, 78% of people currently employed say that they would leave their current job if someone would offer them another?
Or possibly you just see your recruitment costs rising and putting a strain on your budget.
- 18% say that recruitment costs are the most critical concern they face
If you work in an industry that employs skilled trades, you are undoubtedly getting hit hard in your recruitment efforts.
- Over 10 million skilled labor jobs went unfilled last year.
You live in this world. You see these very real concerns. You are tasked with trying to find solutions. Yet sometimes your bosses don’t see and understand the challenges that you face, the shifts that have taken in the workforce, and the demands for specific types of talent. In order to face these challenges, it takes someone who is confident, sure, and steadfast – committed to the big picture – and when the storms rage on, they just say – “Let it go, the cold never bothered me anyway!”
Recruitment Optimization. That might be a new term for you. I have been involved in this for years, but I finally named my process that a couple of years ago. At the time, you could go online and Google “Recruitment Optimization” and you would get less than 5 returns – mine being a couple of them. But today, you can search for it, and you get pages of returns. The trouble with bringing to market a fresh idea or term is that others quickly latch onto it and run with it. It is beginning to take on the same kind of feel as SEO did several years ago. Initially, SEO was a luxury for a rare few, but as it has become more complex and algorithms are changing moment by moment, then it is now seen as a mandatory aspect of a company’s marketing initiatives.
The days of posting an open job and waiting for people to apply so you can sort through them and pick one are over. A modern day recruiter must have a wide variety of skills, or the company must outsource this aspect of their business to an agency that has the tools, technology, and talent to compete for the best talent on your behalf. Consider what a modern day recruitment model looks like, according to Josh Bersin of Forbes Magazine:
- Development of an employment brand
- Developing creative advertisements and promotional materials
- Developing job requisitions (working with hiring managers)
- Placing and managing recruitment advertising and promotion
- Managing university and college recruiting
- Developing candidate relationship management and “farming” programs
- Sourcing key candidates for critical roles
- Screening and reference checking
- Use of pre-hire assessments
- Creating an interview process and using video and other interview tools
- Training and engaging hiring managers in the recruiting process
- Creating a career website
- Selecting and implementing an applicant tracking system
- Creating a mobile career website and experience
- Supporting candidates through the process and creating a positive candidate experience
- Globalizing each part of the process and localizing many steps
- Understanding local labor markets to localize programs and promotions
- Hiring and training recruiters
- Accessing third party agencies and executive recruiters
- Measuring and managing the process and focusing on speed, quality of hire, and efficiency
- Onboarding new people
- … and staying up to date on hundreds of new tools and technologies.
That’s a lot of responsibility, probably far more than you anticipated. If you asked your current recruitment team to write out their responsibilities – do you think they would hit on all of those areas? Most of them? Some? Or would they name just a few of those? Do they understand the strategic end of their efforts, or do they just smile, dial, and repeat?
Because some organizations understand the complexity involved in today’s recruiting efforts, rather than try to do it all themselves, they have made the decision to outsource this function to a 3rd part firm. Apple uses recruitment firms to assist them in their efforts, especially when starting up a new location. Very well-known Fortune 50 companies use firms because internally they haven’t figured out how to attract young talent or create a work environment that is appealing to Gen X or Millennials.
And for those who remain steadfast in doing everything in-house, they are often forced to deal with low performance, high turnover, and poor customer service if they do not have a well defined and appropriate recruitment model in place. Places like Google believe that hiring great HR and Recruiting people make a big difference, so they spend 4-5 times as much as other large companies.
REASONS FOR OPTIMIZATION
Like so many businesses, families, and even our government – when we see that we are behind on our metrics, we tend to assume that if we add more people or money to it, that we can “fix” whatever the cause is. But when it comes to recruiting, that isn’t necessarily true. If your strategy, processes, and metrics are bad – then putting more money and more people into the machine that executes bad strategies, processes, and metrics won’t fix anything. You might get a temporary boost, but the problems will overtake them at some point.
Other companies go to the extreme the other direction and decide that things are so far behind that they just need to quit trying to do it themselves and outsource everything to someone else to do, or maybe they do a hybrid approach and keep a small internal team and supplement it with outsourcing other searches to a firm.
But there is another option that often gets overlooked or ignored. In most cases, current strategies, processes, technologies, metrics, social media efforts, etc. can be optimized to increase effectiveness and efficiencies, while also reducing costs and turnover. This shouldn’t be the last resort – it should be the first option! By making these adjustments, a team can increase bandwidth within their existing team, reducing or even eliminating the need to hire more people or to further outsource some of the workload.
A comprehensive optimization program should be one that addresses all of the following:
- Recruitment Strategies
- Recruitment Processes
- Recruitment Technologies
- Social Media Efforts
- Team Structure
- Recruitment Costs
- Team Performance
Many companies continue to use strategies and processes that were set in place 10-15-20 years prior. The six most dangerous words that a business can say is, “We’ve always done it that way.”
In my opinion, strategies and processes should be evaluated and optimized every 2-3 years now. There are two main drivers behind my opinion:
- Technology changes quickly. Tools change quickly. “Go-to” places change quickly. If you have had your same strategies and processes for the past 10 years, Twitter wasn’t even created until 8 years ago. Pintrest came along 5 years ago. LinkedIn Recruiter came about 2 years ago. How do you not include things as widely used as Twitter, Pintrest, or LinkedIn Recruiter in your recruitment efforts, or at least consider them? Mobile recruitment is a huge part of the current landscape, yet a vast majority of corporate websites are not friendly to mobile browsers.
- Generational changes. Think with me of how the internet has changed the way business is done today. Things are radically different!
- The way we communicate with each other
- The way we solve problems
- The way we research
- Our customer base is no longer local but global
- Expectations for speed and efficiency are higher
So, if the internet has changed the way that business is done today, wouldn’t it stand to reason that it has also changed the way the first generation to have the internet every day of their lives would go about living their lives and addressing their careers?
When we consider those two things alone, the use of technology in our recruitment efforts, and the generational shift in expectations – I have to make a big point on this…
We have shifted too far to the technology end of things when you consider the modern day and next generation candidate.
There was something else that we have done that has also reshaped this modern day candidate. When they were kids, we decided that it was important that every child think things are equal and fair. There are no winners. There are no losers. Regardless of their contribution, they will be treated just like the one who contributes the most. So, we gave every player a trophy, ribbon or certificate.
As they continued to grow and go throughout their middle school and high school days, teachers would consistently provide a curve to the grades, so those that under-performed wouldn’t be punished as severely and gave them higher grades – many times allowing someone to pass a class that really hadn’t earned it.
Well now, little Tommy and Susie aren’t on the soccer fields, baseball field, volleyball or basketball courts – they are now in your offices and applying for your jobs. And what do you think their expectations are for the way they will be treated? They have a deep need for human interaction, assurance, collaboration, and recognition.
The technologies being used today remove the human element from the process almost entirely. A person can spend two hours applying for a job online, only to have an answer on their candidacy within 30 seconds of them hitting “submit” on your career page. Don’t get me wrong, it would be impossible today to have an effective recruitment model without numerous technologies involved, but the important factors are their balance and in the motivation behind them.
The key to the modern day and next generation candidate is influence, engagement, and personal value. These things are so far removed from what companies are doing currently that it is having a huge impact on the quality and quantity of qualified candidates for their open positions. Any changes to your current strategies and processes need to be centered around these things. Companies like Zappo’s have gone to the extreme in this direction and placed all of the eggs in the engagement basket. We don’t have time to go and take a deep look at what they’re doing, but there are plenty of articles online that point out the positives and negatives to their approach that you can learn on your own.
There is a definite need for optimization when it comes to recruitment strategies, processes, and technologies. However, there are a few OBSTACLES that come into play when considering optimization:
- To get the best optimization recommendations possible, it requires someone who is unbiased to evaluate current strategies, processes, technologies, spending, social media efforts, team structure, performance, metrics, etc. When an internal person does this evaluation, there are personalities to be mindful of, there are existing ties for a current process to a current employee who developed that process, and obvious general preferences would be in play. The idea here is to get the most effective and efficient recruitment effort possible. PERSPECTIVE MATTERS!
- HR/Recruitment leadership worry about their own personal reputations. To bring in an outside evaluator, the HR/Recruitment leadership worry that they will be seen by their own bosses as not capable of handling their function or not being knowledgeable enough to optimize it themselves. When you look at this from the standpoint of #1, this removes all personalities from it. When you look at it from an executive’s standpoint, the issue is establishing a world-class recruitment structure that will be beneficial to the company through reduced turnover, faster turn-around times to fill open positions, and saving money on the recruitment efforts across the board. It still requires an ongoing person there to manage and drive that new process, which the HR/Recruitment leader would continue to do.
- Time. Time is always a factor. I began doing recruitment optimization several years ago, and now I do it exclusively. The biggest misconception that people have is that for me to come in an lead a full evaluation of the their current efforts in order to make recommendations for optimization, that I would require a month, or a couple of weeks, or even a full week of everyone’s time. While I’m sure there are consultants out there who make that their model because they are charging by the hour, this is not true of me. I have a comprehensive document that I created that walks me through every element of the recruitment function and I can almost always complete this in a single day. The most that I need any one person to sit with me and go through information is 3-4 hours. This allows each person to go about their normal responsibilities without a huge time commitment from them to support this process. When considering a consultant to do this type of evaluation – find someone who charges a flat fee for the service, and not charging you by the hour.
- Cost. Again, if you bring in a consultant that is charging you hourly, they will likely want that process to take as long as possible so they can bill for as many hours as possible. By going with a consultant who charges a flat fee for the consultancy, they want to wrap things up as quickly as possible, but also want to make sure they do a great job for you so referrals will potentially come. The cost – at least in my world – is not substantial, but the benefits of the optimization efforts will provide a very significant ROI quickly to your organization.
- Lack of options. Surprisingly, there aren’t many consultants out there who focus specifically on Recruiting, and those that do typically work for a recruiting firm and their finding will always include recommendations that you outsource some or all of your recruiting to them. You have many consultants out there who are HR consultants, but recruiting was just a piece of what they have done in the past. When it comes to evaluating technologies used and the various capabilities of those technologies, or knowing the modern day and next generation recruiting models, they have some exposure to it but maybe not much. Also, many HR consultants were at the executive levels prior to transitioning to a consultancy role – so it may have been several years since they were involved in transactional recruitment efforts. As someone who is exclusively involved in Recruitment Optimization, I only know of 2 or 3 others in the country that I am aware of who are focused on this much needed area.
Optimization can provide a significant ROI for you. It should be included in any evaluation of current strategies, processes, technology and so on so you can measure the overall return on your optimized plan. Typically, you should see a positive ROI in the following ways:
- Reducing turnover costs by hiring better. Many companies, even when unemployment is high, are facing a limited number of reasonable candidates for their open positions and they end up settling on someone out of desperation instead of making sure to fill the position with someone who is functionally capable and culturally non-threatening.
- Transitioning to a pipeline approach and away from a just in time approach. Several factors go into this, but the idea is that through engagement, you have prequalified candidates who are interested in your company and just waiting for an opportunity to become available. When it does, then you can move quickly to plug in the correct person in a much shorter time frame and minimize any lost revenue potential.
- Minimizing lost opportunity costs. Many companies deal with this, but don’t even factor it into their recruitment costs. It’s when a company has to turn away potential business because they are understaffed and do not have the capability to ramp up quickly enough to gain that new business.
- Strategically planning the best path forward. So many companies just post jobs here and there and then never track to see where the bulk of their candidates are coming from. Or maybe focusing on an internship program would be a better route. Maybe reducing the money spent on advertising and increasing referral bonuses makes more sense. Depending on your company and the specific issues that you face, a deep strategic look could provide an overwhelming ROI.
- The use of technology. Technologies must be used in recruiting – there is no way around that. But they should be used to speed up efficiency and convenience for the candidate and the recruiter alike…not just the recruiter. That’s how we have gotten into the mess we are in now. The average time a recruiter spends on a resume today is 6 seconds. A solid recruitment optimization consultant should have a great understanding of the tools available today and how they can be plugged into the overall processes to give it a balance of high tech and high touch.
Bottlenecks in your current process also impact not only the speed and efficiency of your efforts, but your recruitment costs and ability to close those great candidates. The problem here is that many companies do not have the correct metrics in place to measure the data needed to realize these bottlenecks. They certainly aren’t included in the default reports that come with your Applicant Tracking System. Specialized adhoc reporting is required. By doing so, you can uncover where the process is consistently slowing down and potentially losing candidates or costing the company more money as delays occur. Here are a few areas that I like to measure because it tells me where I can make improvements:
- Total days open – goal should be under 30 days
- Total days before candidate submitted – no bandwidth or tight market or neglected
- Number of candidates submitted (the recruiter doesn’t understand or the hiring manager doesn’t know what he/she is looking for or there was a misunderstanding between the two)
- Total days from candidate presented to hiring manager feedback – a search may be open for 45 days, but many times it was because it took the hiring manager 2 weeks to get back to the recruiter on each candidate submitted – hold managers accountable too
- Percentage of candidates presented who were interviewed by hiring manager – is the recruiter finding acceptable candidates or does the manager just interview everyone sent over
- Total days from hiring manager feedback to interview – are we scheduling interviews too far out and losing candidates / are we cancelling and rescheduling interviews
- Total days from interview to offer/decline – Are we constantly in an undecided mindset and thinking the next one might be a little better
I hope you have begun to see the importance of optimization efforts. It’s far more than just advertising in the right places, asking the right screening questions, or getting people in empty seats…it carries with it the profitability and stability of the company.
Most, if not all, of us drive cars. On a day to day basis, most of us think about how much gas is left in the tank. You can’t just put gas in the tank once and expect it to run forever. You have to continue to monitor where you are and every so often, you have to stop what you’re doing to fill that tank so you can continue to move forward. But solely focusing on how much gas in the tank doesn’t solve your problems if the car is out of oil, the engine overheats, the tires are flat, and the car won’t stop because the brakes have been worn away. You have to consider the whole car and make sure that everything is running as it should for the car to do its job.
Optimization – if done correctly – can help you to be effective and efficient in your overall recruitment and retention efforts. For some companies, you may only need some gas in the tank, but in others – you may need a complete overhaul. But for most, it falls somewhere in between those two extremes. I encourage you – have an unbiased person come in who understands modern day and next generation recruiting strategies, technologies, and processes and have them see where you are today and provide the road map to get you where you want to be.
On a topic that is this big, and so many unique and diverse companies listening in – I was only able to give you some basics to think about when optimizing your efforts. I’m hopeful that you were able to get something useful from our discussion today, but knowing that I wouldn’t be able to give you great detail – that is why I offer to have you contact me afterward with specific questions.
I have seen optimization work time and time again – reducing recruitment costs, increasing bandwidth, lowering turnover rates, and providing big ROIs. The point of today was to let you know that this should be your first option and not your last resort.