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Whitepaper - Rethinking Recruiting   Adler Group
 

Whitepaper - Rethinking Recruiting Adler Group

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The purpose of this whitepaper is to offer a dual approach for breaking...

The purpose of this whitepaper is to offer a dual approach for breaking
this perpetual cycle. It starts by re-establishing hiring top talent as the
primary goal of the corporate recruiting department. Here are some
critical guidelines for making this important shift

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    Whitepaper - Rethinking Recruiting   Adler Group Whitepaper - Rethinking Recruiting Adler Group Document Transcript

    • Recruiting SolutionsWhitepaperTop Down, Bottoms Up:Rethinking Corporate RecruitingMay 2011By Lou Adler Overview The economy is recovering. Based on a Hiring Pulse survey we recently conducted in collaboration with LinkedIn, 54% of companies in the U.S. and Canada expect to increase their hiring by 10% or more in 2011. Finding enough top people to meet these needs won’t be easy - especially since another LinkedIn survey (late 2010) indicated that only 18% of fully-employed professionals are actively seeking a new spot.About the author Surprisingly, recruiting leaders sometimes overlook the fact that active candidate sourcing techniques cannot be used to find and recruit passiveLou Adler is the CEO and founder of The candidates. During the past 15 years, many fell for the promise that theAdler Group (www.adlerconcepts.com), a latest active sourcing tools would enable companies to hire top talent attraining, consulting and search firm scale. At best this is only partially true, on the rare occasion when tophelping companies implement SM candidate supply exceeds demand.Performance-based Hiring . He is theAmazon best-seller author of Hire With Hiring top talent in a growing economy requires great jobs, even betterYour Head (John Wiley & Sons, 3rd recruiters, fully engaged hiring managers, and a well-thought outEdition, 2007) and the Nightingale- compensation strategy. The lack of a complete Top Down businessConant audio program Talent Rules! strategy and planning process for hiring top talent is part of the problem.Using Performance-based Hiring to Hire Few companies have optimized their hiring programs based on qualityTop Talent (2007). of hire. Typically driving the process is the need to minimize cost or some legal guideline, improperly implemented. With a major rethinking of the entire hiring process from top to bottom, it’s possible to have it all – high quality, low cost, full compliance, and scalability.About LinkedInLinkedIn is an Internet platform company Despite its importance, developing a Top Down quality of hire strategyfocused on connecting the world’s represents only half of the solution. At the execution level, a bunch ofprofessionals. The LinkedIn website recruiters working on totally different assignments with hiring managerslaunched in 2003 and is the world’s largest of various levels and skills need to implement this process every day, onprofessional network with more than 100 every search. This requires a Bottoms Up approach in which recruiters aremillion members, representing every fully trained and guided by a common set of best practices.country and executives from every Fortune500 company. Over 70% of the Fortune In order to find, recruit, and hire the best candidates, whether active or100, as well as thousands of small-to- passive, recruiters need to fully understand real job needs, use advancedmidsize businesses, now use LinkedIn networking techniques to find enough top people, and then be able toRecruiting Solutions to find, contact and persuade these people to evaluate their jobs as potential careerhire great talent for their organizations. opportunities. They also need to be adept at assessing talent and closingFor more information, go to the deal, while working closely with hiring mangers to advance thehttp://talent.linkedin.com. process at every step. In our survey, recruiting leaders identified these as essential skills, but were most concerned that their recruiters might be especially weak in figuring out how to look for, and connect with, strong passive candidates. 1
    • There is a critical need for the combined “Top Down – Bottoms Up” concept to be developed and implemented in tandem. Top Down by itself will fail for lack of proper execution. Bottoms Up will partially succeed, but at enormous, and unnecessary, effort. There is enough evidence to indicate that the lack of this dual implementation approach is what has doomed most prior attempts to make hiring top talent a scalable process. As the economy recovers, traditional active candidate sourcing can no longer be relied upon as the primary means for finding and hiring top talent, especially as companies increase their emphasis on passive candidate recruiting. Until company executives and HR and recruiting leaders decide to finally make hiring top talent a replicable and scalable business process, the likelihood of breaking free from the never-ending quest for the next sourcing silver bullet is unlikely. The “Top Down – Bottoms Up” business process offers a realistic approach to guide this redirection. Why We Need to Rethink the Whole Hiring Process from Top to Bottom First, the economy is recovering and the demand for top talent is accelerating at a faster rate than the available supply. Figure 1 represents the overall change in U.S. jobs as reported by the Department of Labor, from January 2008 through March 2011. While jobFigure 1 growth has increased in the past 12 months, it has not been sufficient to alleviate the deep losses in 2008 and 2009, with the national2008 - 2011 DOL Monthly unemployment rate now hovering around 9.2%. This is about to changeJobs Reports for the better. 600 400 200 0000s -200 -400 -600 -800 -1000 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar 2008 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2011 2011 A recent Hiring Pulse survey we conducted in conjunction with LinkedIn reveals that most companies are getting ready to hire more aggressively. This is summarized in figures 2-4. The key point: whether large or small, or in the U.S. or Canada, 54% of the 293 companies surveyed indicated they would increase hiring by 10% or more in 2011, compared to 2010. The breakdown by rate of increase is shown in figure 4. Late last year (2010) we conducted another major survey in conjunction with LinkedIn to better understand the job-hunting status of fully-employed professionals. Over 5,500 people participated in the survey, 4,543 of them fully-employed and working in a corporate environment. 2
    • Figure 2Survey Backgroundand Demographics Company size 153 140March 2011 survey conducted by LinkedInand the Adler Group. 293 respondents, allcorporate recruiting decision-makers. Location 239 54 Enterprise (1000+ employees) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% SMB (<1000 employees) US Objective: to take a snapshot of the health of hiring • How demand is changing in 2011 Canada • Which skills are most critical for corporate recruiting teams • How well equipped teams are today to handle the challengeFigure 3Healthy Increases in All respondents 13% 30% 52%Hiring Expected in2011, Especially at SMB only 14% 30% 50%Larger CompaniesHow do you expect the hiring volumeacross your organization to change in Enterprise only 12% 31% 55%2011? Increase from 2010 US 13% 29% 54% About the same as 2010 Decrease from 2010 Canada 11% 37% 46% Don’t know 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Figure 4Forecasted Hiring 10% more hires 54Increases153 Companies 20% more hires 45 30% more hires 20 40% more hires 9 50% more hires 8 Don’t know 17 0 10 20 30 40 50 60 70 The results of this survey (see figure 5) offer the second reason why a major change is needed in how companies find, attract and hire top people. The key finding: the active candidate market, at 18 percent of the total market, is too small and too overworked to make a difference. At best everybody is just recycling the same candidates. To meet increasing hiring needs, a major shift needs to take place, reallocating significant resources and efforts to target the passive candidate pool, representing 82 percent of the total. Based on what these fully-employed professionals are seeking , it’s readily apparent that if a company is only posting traditional job descriptions on its career site and job boards, it’s only reaching 8% of the fully-employed professional market. Another 10% might find these postings though some type of SEO, SEM or pipeline approach, but that still leaves 82% of the fully-employed professional market unreachable by traditional active candidate sourcing programs. 3
    • Figure 5 For passive candidates, the primary reason they’d even consider anotherJob-Seeking Status of the opportunity is how it compares from a career standpoint to their current role. Since the criteria top passive candidates use when deciding to evaluateFully-Employed by Category a new position differ from those used by active candidates, the sourcing and4,543 Respondents recruiting process must also be different. Very Active SuperPassive 8% Semi-Active …. since the criteria top passive candidates use when deciding to evaluate 22% a new position differ from those used by active candidates, the sourcing 10% and recruiting process must also be different. 16% Tiptoer Failure to understand these differences and adapt them into the hiring 44% process is the primary reason companies struggle to find and hire enough Explorer top passive candidates. These problems are exacerbated in a growing economy, as the demand for talent quickly outstrips the supply, and competition enters into the equation. The third reason we need to rethink the hiring process from top to bottomJob-seeking Status Category is that for many companies, hiring top talent, whether active or passive, isDefinitions more art and hope than science and process. Frequently companies hire asVery Active: 8% of total respondents. These many recruiters as possible within the budget available, give them too manypeople indicated they were actively looking requisitions to handle, let them fill them any way they think best, and thenfor a new job and currently sharing their let them go one-on-one with their hiring managers, with little support orresume. They are seeking a job comparable direction. Making matters worse, hiring managers tend to use outdated jobto what they now have, but either with more descriptions, contend they don’t have enough time to spend on hiringsecurity or more upside opportunity. people, interview using their own personal techniques, and typically make judgments based on short-term, narrow, or biased needs.Semi-Active: 10% of total respondents. Thesepeople are casually looking for a new job 2-3 There is little evidence that companies have improved their overall ability totimes per week or to test the market, generallyusing search engines or job aggregators to consistently hire better people as a result of adopting the latest sourcingfind these positions. Since they’re a little more advances. Except for the early adopters or the big employer brands, littlediscriminating, these people want new positions has improved as far as quality of hire is concerned. At best, most companiesthat are clearly better than what they now have. have stayed even. This would be the expected outcome once diminishing returns set in. In fact, one could argue that with increasing job mobility andTiptoer: a significant 16% of total respondents. turnover caused by the rapid adoption of all of the new sourcing tools,These people are thinking about changing jobs quality of hire has actually declined. Even if the new people hired are ofand have only reached out to a narrow group equal quality to those leaving, lack of tenure and company knowledgeof close associates, but are not actively looking. makes them less effective in the short term. This is the fourth reason aIn order to change jobs they would need a rethinking of the talent acquisition process should be at the top of thesignificantly better job than what they have now. recruiting and HR leadership priority list.Explorer: a whopping 44% of totalrespondents. These people are not looking fora new job, but would discuss an opportunitywith a recruiter if the job represented asignificant career move. In this case this meansbigger job coupled with more upside potential.Super Passive: a very significant 22% of thetotal market. These people are completelyhappy in their current jobs and not interestedin discussing any new job opportunities. 4
    • Figure 6 A Top Down Model of a Scalable Business Process forTop Down Model Hiring Top Talent Over the past 20 years, I’ve worked with a number of recruiting organizations that have created a business process for hiring top talent. The Consistently find & hire most successful have based their process development on many, if not all, First class technology top talent Optimizes quality, cost of the factors shown in the outer circle of the Top Down requirements list foundation & time (figure 6). Large third-party agencies and recruitment process outsourcing Hiring groups are the primary leaders in much of this, since their business models Full legal compliance managers capable & predicate the need for economies of scale and efficiency. engaged Requirements Scalability must be the primary emphasis of any process redesign, but this Managed for a Scalable Recruiters needs to be balanced by three fundamental business objectives: maximizing by metrics Talent professional & effective quality of hire, minimizing cost and time to hire, and ensuring full legal Acquisition compliance. In most cases cost or compliance dominates the process design Process approach. Quality of hire becomes a much revered, but secondary goal, met Driven by Proactive comp ($$) either by random chance or hiring manager insistence. workforce planning program Career- We’ve developed an online survey to rank companies on each of the 12 based All diversity hiring goals Optimized messaging factors in the Top Down model (see the end of this paper for details on how are met active & & recruiting passive to take it). Based on initial results, it’s evident that only a few companies are sourcing doing everything on the list at a reasonably high level of performance. A few meet some the requirements, but fall far short on the overall objective of consistently finding, recruiting and hiring top people. All of this is despite major investments in the latest sourcing tools and applicant tracking technology over the past 10-15 years. This level of underperformance is attributable in large part to lack of consistency in adopting best practices, inadequate planning and overreliance on traditional job descriptions. This is critical since the best candidates are looking for career opportunities, not lateral transfers. These issues intensify when coupled with wide swings in hiring manager and recruiter capability, particularly when it comes to recruiting passive candidates.Figure 7 Regardless of their importance, most of the factors in the Top Down list are beyond the scope of the individual recruiter to accomplish on his or herBottoms Up Model own. Without the top down planning, direction and support, plus the appropriate resources, even the best individual recruiters are unlikely to be successful. This is where HR and recruiting management needs to take on a Results bigger leadership role. driven Recruit SWK & & close expert Assess HM talent partner Develop the Recruiting Team to Deliver Consistent, Recruiter High-Quality Results Circle of Knows Tech/ATS savvy Excellence job & Even with an effective top down strategy and process in place, success will messages Competency Model largely be dependent on enough strong recruiters using a common set of best practices. We developed the Corporate Recruiter Circle of Excellence Organizes Sourcing competency model (figure 7) to highlight the full set of skills a recruiter & plans strategy would need to possess in order to find, attract and recruit the best active and passive candidates in a highly competitive market. Candidate Web 2.0 care active Networking passive Use the ranking scale below to gain a quick sense of the current competency of your team (or yourself, if you’re a recruiter) on each of these measures. The “Circle of Excellence” highlights the need for recruiters to rank at or above Level 3 on most of the key factors in orderNote to effectively lead the implementation process. Those who rank below aSWK: someone worth knowing level of 3 may be able to implement the process, but not necessarily leadHM: hiring manager or change it. 5
    • Circle of Excellence Definitions Corporate Recruiter Circle of Excellence1. Delivers Consistent Results from a Quality Performance-based Ranking Scale and Timeliness Standpoint2. Uses Industry/Company/Job and Business Level 1 – Needs significant training and development. Knowledge to Improve Performance – Is Level 2 – Average performance, meets basic objectives with some SWK: Someone Worth Knowing coaching and supervision.3. Works Directly with Hiring Manager, Hiring Level 3 – Consistently meets challenging objectives with minimal Team, and HR to Influence Results and Push direction. the Process Along to a Timely Conclusion4. Understands Real Job Needs, Develops Level 4 – Consistently exceeds challenging objectives and helps coach Appropriate Career Oriented Messages and develop others. including the EVP: Employee Value Level 5 – Role model. Far exceeds challenging objectives. Sets the Proposition standard of performance.5. Prepares Unique and Effective Position- dependent Sourcing Strategy for Each Job We used the recent LinkedIn Pulse Hiring survey to gain a sense of what Based on Demographics, Supply vs. company recruiting leaders thought were the most important Demand and Competition competencies in the Bottoms Up Circle of Excellence model. Figure 86. Active Candidate Sourcing: Uses Latest summarizes the responses of almost 300 recruiting leaders. Five skills Web 2.0, Advertising & SEO/SEM stood out among all of the others: Techniques to Drive Top Candidates7. Passive Candidate Recruiting: Uses Latest • The ability to accurately assess candidates. Candidate Development & Networking Techniques to Identify and Attract Top • Having an understanding of real job needs instead of relying upon the Candidates to Consider Opportunities traditional skills-based job description.8. Understands Importance of Great • The use of advanced networking techniques to find and recruit passive Candidate Care and Ensures that It’s candidates. Delivered for Every Person • The development of unique sourcing strategies by type of job, rather9. Organizes, Plans, & Prioritizes Work to than using a “one size fits all” approach. Maximize Productivity and Effectiveness • Possessing strong company and industry knowledge to accurately10. Effectively Uses Technology (including present the career opportunity. latest sourcing tools and ATS) and Works the Internal System Accurately Interviews from Phone Screen Interestingly, in a parallel study over the past 10 years, we’ve asked top11. to Full Assessment passive candidates what was most critical in their decision to consider a12. Recruits, Advises, Negotiates and Closes position when contacted by a recruiter. In addition to the company brand, Top Candidates Given Challenging the relevancy of the job and the career opportunity topped the list. This is Compensation Requirements consistent with the findings of the Hiring Pulse survey. Without a strong understanding of the real job requirements and complete company and industry knowledge, recruiters will have little success convincing topFigure 8 people of the value of their open position. Active candidates are not nearly as discriminating as passive candidates in this regard. Recruiters willMost Highly Prized Competencies need to be both more aggressive and more skillful as they shift their focusfor Corporate Recruiters vs. Key towards passive candidate sourcing and recruiting.Areas of Weakness % rating competency one of the three most important % rating ability today a 1 or 260%50%40%30%20%10% 0%-10%-20%-30%-40%-50% Strong Works well Understands Develops Uses latest Uses advanced Ensures Organizes, Effectively Accurately Strong knowledge with HR & the real job unique Web 2.0 networking tools great plans & manages assesses & recruiter & of industry hiring team to needs sourcing plans tools & & techniques candidate prioritizes internal screens negotiator & company influence & based on job technologies for passive experience work process & ATS push process type & difficulty for active candidate candidate sourcing sourcing 6
    • The final question in the LinkedIn Hiring Pulse survey was to find out howrecruiting leaders ranked their teams on each of these competencies. Thered bars in figure 8 indicate the percentage of recruiting leaders who ratedtheir teams either 1 or 2 on the 5-point scale - in other words, just averageor below.The biggest competency gaps identified in the survey were in the areas of“advanced networking techniques for passive candidates” and the need to“develop unique sourcing programs” by type of job. I’d add“understanding real job needs” to this list, since it drives everythingrecruiters need to do to be effective.It would be easy to conclude that the lack of a companywide ability torecruit and close passive candidates in significant quantity drives the needfor rapid adoption of any new active candidate sourcing idea to emerge.Regardless, this is a bit shortsighted given a passive candidate market morethan four times the size of the active candidate market. One alternative is tohire enough top notch agency recruiters who have the skills to recruitpassive candidates. While an effective short term solution, this is a notscalable, since each recruiter brings his or her own unique style to the table.The Bottoms Up approach emphasizing the competencies in the RecruiterCircle of Excellence model offers a more balanced and appropriate longterm solution. The skills listed are trainable, recruiting leaders recognizetheir importance, top candidates expect recruiters to possess them, andhiring managers demand them.Summary and ConclusionsIn order to build a sustainable and scalable talent acquisition program,human resources and recruiting leaders need to rethink the idea ofchasing the next silver sourcing bullet as a primary strategy for hiring topperformers. For one thing, finding the best talent is not the same asrecruiting and hiring them. There is a need to develop a comprehensiveapproach for hiring top talent that fully addresses the challenges involvedin finding and hiring the best passive candidates. Since the passivecandidate market is significantly larger than the active candidate market,making this change is critical as the economy recovers and the demandfor top talent increases.Since the dawn of the job boards, sourcing top talent has somehowreplaced the importance of recruiting and hiring top talent as a core skill.As a result, quality of hire has not improved by much, if at all, in the past15 years. Companies with big employer brands still attract the lion’s shareof the nation’s top talent regardless of their approach to sourcing, witheveryone else trying just to stay even.The purpose of this whitepaper is to offer a dual approach for breakingthis perpetual cycle. It starts by re-establishing hiring top talent as theprimary goal of the corporate recruiting department. Here are somecritical guidelines for making this important shift:1) Establish an overarching goal of developing a scalable business process for hiring top talent. The Top Down model introduced in this whitepaper offers a set of criteria this process would need to meet in order to be considered successful. This Top Down model is driven by three core objectives: maximize quality of hire, minimize cost and time, and ensure full legal compliance.2) Obtaining full executive support coupled with adequate resources is a key component. Without enough recruiters with enough time to do it right and a team of fully-engaged hiring managers, success is problematic. 7
    • To assess your organization’s Top Down 3) On the Bottoms Up execution side, “hiring anarchy” should not berecruiting capabilities today, complete allowed to prevail. Rather than allowing the team to use whatever isthe survey at http://lnkd.in/Uqhs3b appropriate given the circumstances, all recruiters need to adopt a common set of best recruiting, sourcing, interviewing and closingFor a more comprehensive version of practices.the Recruiter Circle of Excellence 4) The Recruiter Circle of Excellence competency model summarizes theCompetency model, contact skills recruiters need to possess in order to consistently find and hire topinfo@adlerconcepts.com passive candidates.To learn more about how LinkedIn 5) The Top Down and Bottoms Up approaches need to be implementedRecruiting Solutions can help you in tandem, otherwise the whole project will fall short of expectations.consistently hire the best talent, go to A Top Down approach will fail due to lack of proper implementation.http://talent.linkedin.com A Bottoms Up approach will only partially succeed based on unique circumstances, e.g., job, recruiter, or hiring manager, but at enormous cost and effort. As the economy improves, and the need for top talent accelerates, it’s important for companies to recognize that a strategy built upon the rapid adoption of the latest active sourcing idea to emerge will be less effective than it was during the recent downturn. Just the fact that 82% of the fully- employed professional market can’t be found using these active sourcing tools highlights the need for more aggressive passive candidate recruiting efforts. More important, in the long term, overreliance on sourcing tools without a corresponding improvement in recruiting ability will have minimal impact on improving quality of hire. It’s obvious that once everyone has all of the same tools and the same visibility to the same candidates, diminishing returns will set in quickly. The winners then will be those with the best career opportunities, the best processes, the best recruiters and the most engaged hiring managers. Copyright © 2011 LinkedIn Corporation. LinkedIn, the LinkedIn logo, and InMail are registered trademarks of LinkedIn Corporation in the United States and/or other countries. All other brands and names are the property of their respective owners. All rights reserved. 07-LCS-WP-004 4/11 8