Get More Talent! How to Build the Talent Factory Your Company Needs to Scale


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OpenView’s eBook, “Get More Talent! How to Build the Talent Factory Your Company Needs to Scale,” is a comprehensive guide to building the kind of in-house recruiting team that your growing company needs to lower recruitment costs, drive higher ROI, and create a better, more visible, and highly credible company culture.

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Get More Talent! How to Build the Talent Factory Your Company Needs to Scale

  1. 1. Get More Talent!Get More Talent!How to Build the Talent Factory Your Company Needs to Scale
  2. 2. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 1 FOREWORD It may surprise you, but the most significant challenge facing startup and expansion-stage technol- ogy companies today may have nothing to do with technology at all. Instead, according to a recent report by Silicon Valley Bank,1 the most problematic hurdle for those businesses revolves around another word starting with the same letter: talent. In its annual Startup Outlook report, SVB revealed that 90 percent of software executives plan to add headcount in 2013 — if, of course, they can actually find and attract the type of people who will help their companies grow. Astonishingly, 90 percent of those same executives believe they will have trouble doing exactly that this year. In other words, the war for top talent is still being waged. And if your growing software company isn’t prepared to compete, it may not be able to keep up. So, what should your expansion-stage business be doing to find, attract, and retain the kind of top talent that can fuel its growth? Some of the most forward-thinking companies are developing their own talent factory — a team of in-house recruiters who can manage the recruiting process with factory-like precision. In “Get More Talent! How to Build the Talent Factory Your Company Needs to Scale,” OpenView outlines the benefits of building an in-house talent factory, explains which types of companies should be doing so, and lays out a clear process for creating, manag- ing, and measuring a successful talent team capable of helping to dramatically scale your business as efficiently as possible. Ultimately, however, the argument for building a talent factory within an expansion-stage software company is simple: You need top talent to grow. If you aren’t able to recruit enough of it, you will likely struggle to keep pace with your competitors. And, if you recruit the wrong type of talent, you may unwittingly create a ticking time bomb. A correctly designed and implemented talent fac- tory can help you mitigate those issues, while also improving your company’s culture, visibility, credibility, and cost-efficiency. Is your business ready to build a talent factory? And do you have what it takes to do so? Read on to find out! Keith Cline, Principal, Dissero 1. “Startup Outlook: The Issue of Talent,” Silicon Valley Bank, May 2013.
  3. 3. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 2 CHAPTER 1: IS AN IN-HOUSE TALENT FACTORY RIGHT FOR YOUR BUSINESS? The saying goes that a company’s most valuable asset is its people. That adage is particularly true at the expansion stage, when companies typically experience explosive growth and need to hire a steady stream of talent to fill critical roles throughout their organization. Take too long to add headcount — or worse, hire the wrong people — and you could quickly put your company in danger of not being able to thrive. When the time is right, smart companies get around this issue by hiring a team of dedicated recruiters to manage their recruiting and hiring. They invest the time, energy, and money to develop that team and outfit it with the right processes, tools, and techniques. At OpenView, we call this process building a talent factory because it results in a strong pipeline of talent that is procured with factory-like precision through tested recruiting best practices. While the main function of a talent factory is to recruit and hire top talent for your company, this encompasses a variety of tasks, including: • Meeting with hiring managers and discussing the needs of their teams • Creating job descriptions and providing salary information • Screening resumes of inbound applicants and responding appropriately • Attending career fairs and building relationships with colleges and universities • Proactively sourcing candidates through a variety of mediums, including social networks • Conducting initial phone screens to determine fit
  4. 4. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 3 • Acting as a project manager to move candidates through the interviewing process • Implementing interview and evaluation best practices throughout the company • Completing reference checks • Extending offers • Assisting in onboarding new employees The Benefits of Building a Talent Factory If you are a rapidly growing expansion-stage company, establishing a talent factory will be vital to your com- pany’s continued growth. In fact, according to a 2012 study by the Boston Consulting Group,2 recruiting has the highest business impact of any HR function. So, even if you don’t yet have a full-fledged HR department, building an internal recruiting team can create a significant impact by: Lowering recruitment costs Many companies that do not have a talent factory or an in-house recruiter use staff- ing agencies for the bulk of their hiring. For full-time employees, agencies can charge 20 to 35 percent of the hire’s first-year annual salary as a “finder’s fee.” Depending on how many roles you hire each year, you may be paying more in fees than what it would cost to build and operate your own in-house talent factory. Driving higher ROI Not only will an in-house talent factory result in a lower cost per hire, but it will also enable you to hire multiple candidates (should there be more than one open- ing for the same position) at no extra cost. An in-house talent team can also main- tain an ongoing pipeline of candidates with a particular skill set, helping you make repeat hires more quickly, and implement programs to improve employee retention (e.g., establishing programs to promote work/life balance). 2. “Realizing the Value of People Management: From Capability to Profitability,” The Boston Consulting Group, July 2012. All of these activities are vital to the talent acquisition process.
  5. 5. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 4 Fostering a better candidate experience and building culture along the way Having a talent factory will create a more streamlined hiring process that ensures that each candidate your company recruits goes through the same procedures, meets with the same people, answers similar questions, and is told the same information. In turn, your candidates will have a better overall experience, and your company will be able to make a more educated decision on which candidate is the best fit for the job, because there is continuity in the process. Shaping your company’s culture A talent team can help shape company culture and impact its development through its policies and programs. Improving visibility Talent specialists also act as ambassadors, representing your company and its culture to the outside world. By attending career fairs and on-campus events, a talent team will provide valuable marketing for your company, creating more visibility within your desired candidate pool. A quarterly networking event led by your talent team can also pay huge dividends for talent acquisition by showcasing your company and its employment opportunities. Increasing credibility Candidates will always be more responsive and exude more confidence when they feel they are being treated as an individual, rather than an application. A talent team can serve as liaison between the candidate and the hiring manager, improv- ing communication and, ultimately, your credibility — even among candidates you don’t end up hiring. Creating a greater sense of urgency Because the internal recruiting team will be in the trenches, they will recognize the need for new hires more quickly and be held accountable by the hiring managers who are awaiting qualified candidates. Additionally, the hiring managers will be asked to provide more timely and complete feedback if the recruiting team is in the same office, allowing for a shorter feedback loop and faster decisions.
  6. 6. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 5 Who Will Benefit Most from this eBook? This eBook is intended for the key stakeholders at your organization who will be responsible for building your talent factory, as well as your talent team itself (director of talent/talent specialists). Stakeholders may include the CEO, COO, CFO, or VP of human resources at companies that: • Are at the expansion stage, which means that you have a prod- uct offering, a set of satisfied customers, and are executing a core go-to-market strategy; you are also growing at a rapid rate, which creates a need to hire employees quickly. • Have at least 75 employees and/or are forecasting extreme growth. If you are too small, or are not projecting hiring for enough positions, the ROI will likely not be high enough to justify setting up a talent factory. • Are hiring at a steady rate. Generally, this is 10 to 20 hires per quarter, or about one hire every one to two weeks. If not, the money you spend on resources and salary to employ a recruiting team will likely be higher than what you are currently spending on talent acquisition. If this is the case for your company, then you need to decide whether hiring a talent team makes sense for your company.
  7. 7. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 6 Does Building a Talent Factory Make Sense for You? The first thing to evaluate when considering whether to create a talent factory is the cost. As with any hire, it is important that you have room in the budget to add to the team. Beyond a competitive salary and benefits package, there is the cost of addi- tional resources such as upgraded LinkedIn accounts, multiple job board postings, and networking event sponsorships. On the flip side, it is also critical to assess whether you can afford not to build a talent factory. While the expense of doing so might seem high, the money you are saving on recruiting costs by not hiring a recruiting team could very well be canceled out by lower productivity from managers who are spending a significant amount of their time on recruiting and onboarding. If a tal- ent factory makes financial sense for your business, this eBook can be used to supplement your own hiring function or serve as a guide to building a talent factory from the ground up. The following chapters cover the core elements of building and execut- ing a talent factory, including: Whether you are at an early stage startup, expansion-stage company, or a mature corporation, hiring top talent is always a priority. This eBook will help you ensure that your business can most efficiently find, attract, and compete for that talent. Identifying the resources your talent team needs Exploring how the talent team should lead the overall hiring process of your company Hiring a director of talent and/or talent team members Explaining the metrics you need to track to measure and strengthen your talent team
  8. 8. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 7 CHAPTER 2: ASSEMBLING AND MANAGING A TOP-NOTCH TALENT TEAM How you choose to build your talent team depends on a number of factors. If you already have recruiters in place, the next step is to hire a director to focus on strategy and develop recruiting best practices. If you already have someone in a director role, you may need to find recruiters to hire additional roles. Or maybe you have no HR or recruiting function at all and need to start from scratch. In this chapter, we will assume that you are building a team from the ground up, starting with a director of tal- ent. However, even if you already have recruiters in place or will be hiring them first, there is valuable informa- tion in this section on scaling a talent team. The Composition of a Talent Team What does a talent team look like? Ideally it will have a director who oversees the hiring process at your company and man- ages the recruiters. For the purposes of this eBook, we will refer to those recruiters as talent specialists. Their role is to identify talent for your organization and manage the hiring process. In addition, talent specialists can take on other projects such as setting up internship programs, establishing employee retention initiatives, and filling other HR/recruiting-related roles. The director and talent specialist roles are explained in detail throughout this chapter.
  9. 9. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 8 Getting Started: How to Hire Your Talent Team If you already have a director of talent in place, or if you have a VP or director of human resources, he or she should be respon- sible for hiring the team. If your company doesn’t have anyone in a human resource function, consider these factors when deciding who else within your company should take charge: • Capacity: How many people or teams does this person already manage? Would they be able to effectively manage another team? • Function: It rarely makes sense to have a talent team report to your CTO or VP of marketing. Someone in a similar opera- tional role is a logical choice, and at smaller companies, the CEO may even be best. As a rule of thumb, a talent team fits in well among the administration, HR, and finance departments. • Location: The person managing your talent team must be in the same location as the team being hired. Collaboration is important when setting up the team, especially at the beginning. • Experience: Look at the resumes of your executive team. Someone who was in an HR or recruiting function earlier in their career might be a good choice to manage the team until a director of talent is on board. Whoever you choose, that person’s first responsibility will be to hire a director of talent.
  10. 10. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 9 Hiring a Director of Talent When hiring a director-level recruiter, it is important to initially determine what the scope of that person’s responsibilities will be. Will he or she be responsible for talent acquisition and human resources tasks, or just the former? If your director of talent will hold other HR responsibilities, you should look for someone who not only has extensive talent acquisition management experience, but who has also managed the HR function at a growing technology company similar in size to your organization. This director of talent/HR will be expected to manage the full talent/HR function, at least until your company scales to the point where you require a VP of HR or Chief Talent Officer. General Responsibilities Although specific responsibilities for a director of talent will differ depending on your company’s needs, some standard respon- sibilities include: Hiring and terminating Hiring recruiters, managing them for success, and terminating underperformers when necessary. If this person is the only member of the talent team, then they will also be charged with all open requisitions. Strategic hiring plans Working with hiring managers to map out the hiring plans for the year. Budget management Ensuring that the talent team is effectively operating within its budget, and periodically performing cost and productivity analyses. Goal setting Developing metrics for the talent team, and creating quarterly and annual goals that the team can measure against to determine success. Day-to-day management Working with the talent team to put best practices into place, resolve impedi- ments, and help them achieve their quarterly and annual goals.
  11. 11. Get More Talent! How to Build the Talent Factory Your Company Needs to Scale | 10 Performance reviews Conducting performance reviews with each member of the talent team. Hiring for high-level roles A director of talent can be instrumental in hiring for C-level positions or for a board of directors search, where a deeper network and more experi- ence are required. Picking a technology The director of talent should play a role in overseeing the selection of recruit- ing technologies and be the administrator of the applicant tracking system for the team (see Chapter 4). Once you determine the areas of responsibility that your director of talent will own, you can prepare to launch your search for the right candidate. Please see page 50 in the Appendix of this eBook for a sample job description for a director of talent. “A director of talent is responsible for setting and executing your company’s talent acquisition strategy and should be comfortable not only overseeing a team of recruiters, but also leading searches for an array of positions, from an entry-level software engineer to your next CMO. That takes the right combination of recruiting expertise, management experience, and strategic insight into both your organization and industry.”   Diana Martz, Director of Talent, OpenView Venture Partners