Presentation to National Association of Executive Recruiters by Murray Parker
History | Change | Relationships | Planning | Contribution
Why Change?
It's Good Practice:
Let's look at the example of production supply chain best practices. Their goal is to provide the optimum flow of quality resources in time for production to complete and deliver on-spec products per the business plan.
Why not apply the same practices to human resources? That is, plan ahead and hire according to forecast. Plan to have all the people with necessary capabilities in-place and ready to contribute by the time called for in the business plan.
We already see examples of this approach with interesting results:
- SOFTWARE CO hires 21 account executives from their private talent community of 60,000 prospects in three weeks.
Result: Fast time to fill, quality candidates, no fees and a very happy VP of sales.
- HOSPITAL in New Zealand hires two burn surgeons from the UK in 2 weeks, identified from their global private talent community in 48 hours.
Result: hired in days versus months, saved money and lives.
- A Director at MARCOM began his relationship at the company's career site anonymously months before the right opportunity for him was posted and emailed to him.
Result: Fast hire, low cost and a huge supporter of his company's internal talent organization.
You may notice that the actual time to hire in these examples was very short. Strategic recruitment does not mean that there is a long time to fill. Actual hiring can be completed as rapidly as you can execute the interview process.
You will also note, that each case involved identifying candidates from a talent community. Those talent pools weren't created overnight.
Strategic recruitment involves developing and nurturing talent resources on a regular basis. Implementing good practice in terms of planning ahead and managing relationships can set the stage for amazingly quick and high quality hiring.
Get the Greatest Value:
When it comes to recruitment, no matter what metrics you employ to evaluate your results, you truly win only to the degree your new hire performs and contributes to your business. The vision that leads your business through rapid growth, a new product that gains market leadership, or a significant cost reduction; these are the returns for hiring well.
Employee contribution is huge; whole industries (service, software and others) are now valued at billions of dollars based on their human capital. Stocks also plummet when key contributors exit. The absence of critical employee contribution can be very costly, sometimes fatal to a business plan.
Dr. John Sullivan, Chairman of the Human Resource degree program at San Francisco State University recapped the conclusions from a recent survey of venture capitalists. Access to capital and new business ideas is no longer the most critical resource for startup firms; the most critical resource is talent.
Key dimensions of this human capital contribution include:
- 1. Timing --- having the capability in place and ready to produce in time to meet business goals
- 2. Quality --- does the person actually meet or exceed performance expectations
When compared to tactical search, strategic recruitment offers the potential benefit of superior performance in both key dimensions.
Although it is relatively easy to grasp the importance of both the timing and quality of employee performance, it seems to be quite another matter to develop a valid means for measurement.
A recent survey by CFO Research Services (Baird/3-03) discovered that only 16% of financial executives understand the return on human capital investment even though 36% of revenues are spent on human capital.
Certainly there are tools and resources now available that can provide solutions under the proper strategic direction. Enterprise software applications such as SAP systems hold the potential to provide the raw data. Pioneer resources such as Staffing.org are helping to educate the business community and bring clarity to valuation metrics for human capital. Such metrics allow organizations to determine recruitment best practices based on contributed value rather than just cost savings.
The World is Changing:
If maximizing employee contribution and benefiting from talent office best practices don't together provide sufficient motivation for employers to consider strategic recruitment, demographic changes in the workforce may soon make it a necessity.
- There will be a growing shortage of experienced candidates. Check out Roger Herman's, "The Impending Crisis, Too Many Jobs - Too Few People" or review BLS statistics. Job creation is expected to outpace workforce growth by at least some 10,000,000 by the year 2010. Just how far into the future is that really? Have you got a plan to achieve and maintain full employment by then?
- Even now, elevated unemployment levels have not created a professional employee surplus. Biotech/pharmaceutical, healthcare, financial services and consumer products industries are among those that continue to face shortages of key qualified personnel. Current total college educated unemployment of about 3% is almost as good as it gets. Most perceived surplus actually represents temporary displacement, such as IT engineers in Silicon Valley who could have a job tomorrow if willing to relocate to Washington DC.
- Changes in workforce requirements also contribute to the near-term shortage of qualified candidates. North America's transition from a manufacturing to a service economy has displaced many skilled and unskilled workers. Changing corporate cultures have created a need for new skill sets. For example, the demand for more team-oriented, interpersonally competent middle managers has created a tight supply for qualified mid-level executives. In many cases, people can be re-educated to contribute in new sectors or new cultures, but again, realizing the benefit of such programs requires advance planning and additional resources.
- Changing makeup of the workforce will alter not only the "who" but the "how" of acquiring and maintaining human capital. It is predicted that 85% of the growth in the workforce within this decade will be from diverse populations.
Since it is people who truly differentiate one enterprise from another, how we prepare now for these coming changes will ultimately determine the success of our organizations in the future.
next . . . Relationships