Taleo officially joins the ranks of the repositioned today, declaring that its “next era of talent management” shall henceforth be known as “Talent Intelligence.”

In a word, what that means is analytics, or, if you prefer, metrics.

What’s so special about that, you may be asking, that it merits more than a mention? If it was merely a rebranding of talent management (and it is partly that), it probably wouldn’t. However, it is part of an industry-wide effort by vendors to educate employers, especially those with a “C” as the first letter of their title, to the value that lies within their HR systems.

Where the first wave of TM products were positioned as electronic assistants, providing easy storage and retrieval of employee records, products have now matured so far that they can be valuable tools in managing the business.

As Taleo’s VP of Product Marketing Ashley Stirrup said last week, companies spend billions ($100 billion according to the Taleo demo) buying and operating their ERPs, CRMs, and SCMs. When it comes to people management, Taleo says the spend is 2 percent of that.

With the pie chart showing those numbers up on our WebEx screen, Stirrup observed, “It really highlights how little companies know about their employees.”

One reason for that is that except in a few areas — sales comes to mind immediately — quantifying performance is difficult. Another reason is that it has only been the last few years that the software systems have become sufficiently sophisticated and integrated to allow managers to extract relevant employee information and link it to operational and production data.

HR hasn’t done enough to promote these capabilities and show the CFOs and CEOs how to use the power of these systems to advise their business decisions. For that matter, line managers and directors barely know about this. In fact, there’s a better than even money chance that most HR professionals themselves don’t know how to use their systems for business intelligence.

So it’s going to be up to the vendors to do some educating if they want to move that 2 percent to 3 percent.

Stirrup and Duncan Egan, Taleo’s senior director of marketing/Business Edition, offered some examples of how to use Taleo Insight, the analytics product the company has available for users of its Business Edition.

A recruiter could pull the last 10 candidate offers made to see what was finally accepted and use that information to counsel the hiring manager. Fortune 500 customer DaVita, a dialysis provider, used Taleo Analytics (the enterprise version of Insight) to reduce the time to hire nurses, saving $12.1 million.

While those examples focus on recruitment (Taleo knows who reads ERE), other uses abound. Workforce planning, for instance. More than a few high tech firms have been caught by surprise when key employees became fully vested and announced their departure.

That’s not likely to be the kind of thing many HR generalists are going to see — and flag — as a critical business data point. Which is part of the reason (no doubt there are others) that SuccessFactors began calling its HR products “Business Execution” and Kenexa launched a 2X platform and a trademarked  “ X e = s.”

Rudy Karsan, Kenexa’s CEO, said as much at the company’s analyst day last month. Six of Kenexa’s biggest new customers came from directly pitching top executives on the data and business intelligence capabilities of its TM products.

Now Taleo, which HR tech columnist Bill Kutik said has been muttering about talent intelligence, is shouting about it.

““It’s a staggering reality that most companies know more about their laptops and copiers than they do about their people,” Mike Gregoire, CEO and chairman of Taleo, says in the press release announcing today’s evolution of the company’s talent management strategy.

“That’s a woefully outdated strategy. CEOs need to think completely differently about their workforce. ”

Talent Insight, the analytics package for the SMB market, comes with 40 pre-built reports, derived from what user focus groups said were most helpful. More will be added. It’s permission based, so the C-titled can pull any report and even create custom reports. Downstream, users get access to information according to their need and pay grade.

Egan insisted that Talent Insight was not merely a stripped down version of the enterprise product. “It’s a separate product,” he said, coming out of a separate work group at Taleo. The emphasis was on usefulness and usability.

“We strived to make it as easy to use as Facebook or Amazon.com,” Egan said. That’s certainly a wise approach, considering that the product’s target — companies with fewer than 5,000 employees — is only a generation or two removed from the filing cabinet.

When I asked Egan and Stirrup what the takeaways should be from the demo, the pre-built reports and crossplatform capability of Taleo Insight made the list, as did its intelligent report builder capability.

Someone, I don’t recall who, summed it up even better: Taleo Insight — and for that matter, the industry’s entire effort to reinvent itself — “gives you the past, present and future of your workforce so you can make better and smarter business decisions.”

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Recruiting history was made this month. You may not be aware that last week marked the culmination of the most sophisticated recruiting effort executed in this century, one that will go down in history as a case study on how to recruit “game-changers.” The approaches used and the lessons to be learned are almost without comparison. If you want to recruit the best to your organization, don’t miss this opportunity to learn how “game changer” recruiting differs dramatically from typical recruiting.

“Game Changer Recruiting” Is Needed in All Organizations

You do not have to be a sports nut to realize that for the last two months numerous NBA teams have been pulling out all the stops and spending unlimited amounts of money to recruit basketball star LeBron James to their team. Simultaneously, almost-as-intensive recruiting efforts have targeted other game-changing stars including Dwyane Wade, Amar’e Stoudemire, and Chris Bosh.

Sports teams and corporations alike need all the game-changers (individuals who can change the entire direction of an organization) they can get. While you might think that sports recruiting is not comparable to corporate recruiting, that notion would be erroneous. This sports-superstar recruiting effort is ultimately an illustration of world-class “game-changer recruiting.”

If like most organizations, yours could use a few more “game-changers,” innovators, or exceptional performers, consider the lessons that can be gleaned from the events of the past eight weeks.

Lesson #1 — Calculate the Economic Value of a Game-changer

The first lesson to be learned is to calculate the dollar impact a game-changer can have on revenue. Most recruiting managers focus on the cost of recruiting individuals (i.e. cost per hire), ignoring the potential return or the economic impacts that recruiting a game-changer will have. The LeBron case study illustrates a superior approach, one focused on return on investment.

Historically the largest economic game-changing recruit was Michael Jordan. One study conducted by Fortune estimated that Michael Jordan had a $10 billion dollar impact on the NBA. LeBron will have a similar impact, not just on team revenues, but also on complimentary businesses in the greater metropolitan area. One economist recently estimated that impact could be as large as $3 billion.

Unfortunately, few corporations invest in calculating the dollar impact of recruiting a game-changer on their organization. Those that do, often find that focusing solely on cost to recruit is silly. Google for example has estimated that a top performer generates three hundred times more revenue than an average performer. What would be the dollar impact if Warren Buffett joined your investment firm or Steve Jobs joined your technology firm? On a less-grandiose scale, can you imagine the impact on your organization if the inventor of the iPod or the iPhone were to join the organization?

When doing calculations, remember that the economic impacts of acquiring a game-changer are not limited to their direct contributions, but also include the attraction of investors and other high-caliber recruits that will also impact the performance of the organization. In addition, recruiting a game-changer from a direct competitor may significantly impact their ability to compete. Once your executives understand the startling economic value, they will support the use of a game-changing recruiting approach.

Lesson #2 — Realize That Game-changers Are Different

The second lesson to learn from the LeBron case is that game-changers, innovators, and top performers truly are different and must be recruited in a unique manner. The traditional corporate recruiting and executive search models will not work when recruiting most game-changers because those models do not accommodate superstar personalities, unusual expectations, and an unbelievable array of decision-influencers. To get the attention of a game-changer, you must understand exactly how they are different. While game-changers are not all alike, in general, they exhibit the following characteristics.

• Not looking for a job — they are probably currently employed and they are almost always well treated where they currently work. As a result, they are not actively looking for a new job and if they did hear about an ordinary opportunity, they would not pursue it.
• Power — they fully understand their value and their importance and as a result, they expect to be treated differently than the average applicant. They know that they hold the power in any potential new relationship or recruiting opportunity, so they expect to be courted.
• Difficult to approach — they are incredibly busy and there is a constant demand on their time. As a result, most erupt numerous barriers that would prevent strangers from even approaching them with opportunities. In order to make an initial recruiting contact, you will probably need direct assistance from someone who influences them.
• Trust is required — experience has taught them to be cynical of strangers and promises. As a result, you will need a strong relationship built on trust before they will seriously consider any offer from you.
• A triggering event required — because they are successful and well treated at their current position, they are generally satisfied with their current situation. As a result, it will likely take a major negative career-impacting event at their current firm to shift them into job search mode. In the absence of a negative event, it will take a major “WOW” jaw-dropping positive opportunity before they would even look at a job opening.
• A game-changer recruiting approach is required — the final thing to understand about recruiting any individual who is in high demand is that they almost always have an intense dislike for standard recruiting processes. Instead, they expect and require a “tailored” or personalized recruiting process that requires little of their time, that meets all of their expectations, and that contains not a single turnoff or “dealbreaker” element.

Lesson #3 — Shift to a “Game-changing Recruiting Approach”

The primary differentiator between a game-changing recruiting process and all other recruiting processes is the level of effort that is put into truly understanding the candidate and their needs. Most recruiters would argue that they already understand the needs of their candidates; however, heavy workloads force most recruiters to generalize and make numerous assumptions about what candidates need and expect.

In direct contrast, the game-changer recruiting approach is tailored to the individual who is being targeted. It is a market research/sales-driven approach that puts together a sophisticated candidate profile that covers the candidate’s job search process, how best to contact them, and their job acceptance decision criteria. This in-depth profile takes a significant amount of time and resources but is necessary if you want to have a realistic chance of success. There are 10 activities involved in developing a deep understanding of your target and creating a candidate profile. They include:

1. Identify factors that trigger a job search — a job opportunity by itself will not be enough to trigger a game-changer into job search mode. Instead, a combination of a positive job opportunity and the simultaneous occurrence of a negative factor that makes the target uncomfortable in their current situation is needed. To time your recruiting effort precisely, you need to be aware of what negative triggering events could arise and when they are most likely to occur. You must conduct research and interviews with those who know your recruiting target extremely well in order to compile a list of the specific events likely to trigger a desired change. Such events might include a corporate merger, management turnover, corporate scandal, or a significant cut to their budget.
2. Map their job search process — whenever a game-changer does begin to consider change, you need to understand and map out the process they will use. If you fish using bait, you understand that to catch a trophy fish you need to understand how a trophy fish searches for food. Likewise, recruiters must find out how their target found opportunities in the past, how and where they research opportunities, and what factors get an opportunity on their “short list” of opportunities to consider. Once you fully understand how, when, and where they find opportunities, you need to customize your approach to mirror their activities. Additionally, there must be a process to reevaluate the quality of your recruiting process against world-class standards, because a game-changer will likely judge your entire organization based on the experience they receive. It is quite common for recruits to assume that their candidate experience is a direct reflection on how they will be treated when they become an employee.
3. Determine who must do the recruiting — in many cases, game-changers expect to bypass traditional recruiters and instead be contacted and recruited by professionals of similar stature (or even by senior executives). As a result, you must identify their expectations and shift the initial contact and much of the recruiting to individuals who they respect and trust. Leading off with the wrong person can result in your opportunity being filtered.
4. Identify the best way to communicate and to reach them — if you want prospects to respond to your messages, you need to understand their communication preferences. That means you must research their most-favored way to communicate (i.e. in person, telephone calls, text messages, e-mail, on Facebook, etc.) and what must be in a message for them to respond to it. You must also identify other opportunities to communicate with them, including events they attend, publications they read, and websites and blogs regularly visited. If you do not know precisely where they “lurk,” you dramatically reduce the chances on reaching them. It is also important to note that the sites game-changers frequently are likely to be learning on content sites related to their professional growth, rather than job or career-oriented sites.
5. Identify the factors that will grab their initial attention — due to the volume and level of competition for their attention, if you expect to get on their short list, you need to identify the factors that would cause them to initially consider your opportunity. Once you identify the factors that will get their initial attention, you must make sure that compelling information on those factors is clearly visible on the sites they routinely visit. You may also have to educate their friends and colleagues about your organization, so that they will know about you and as a result, may speak highly of your organization during their interactions with your recruiting target. If you are an unknown organization or if you have a weak employer brand image, this step is even more important in order to prevent them from immediately ignoring your opportunity.
6. Identify the decision criteria they will use to accept an interview — game-changers routinely turn down opportunities to interview for new positions, so understanding what it takes to excite them about a particular interview invitation is a critical factor in the game-changer recruiting process. Identifying interview acceptance criteria requires extensive research and benchmarking and some guesswork. In the end, you must develop a ranked list of the criteria that they will use when deciding whether to accept an invitation and make sure that you convincingly communicate each of them in all of your initial recruiting and interview-related communications.
7. Identify “deal breaker” or knockout factors — in addition to positive criteria that game-changers will use to filter opportunities, there are also negative factors that will influence their decisions. Your research must identify each of these “deal breakers” (i.e. a weak boss, no budget, restricted decision-making, a lack of control, etc.,) and ensure that there is not even a hint of one of them present within the organization.
8. Identify their decision criteria and the information they need to accept a job offer — this is without a doubt the most critical step in the overall process. Consider the recruiting process similar to the sales process for big-ticket item. In both cases, successfully making a sale requires understanding a customer’s buying criteria and a product that meets that criteria as closely as possible. Some identify a candidate’s job acceptance decision criteria by asking them directly at the beginning of the interview process, or by interviewing friends and colleagues. Typical decision criteria include their degree of independence, the extent of their authority, their ability to build their own team, their ability to select projects, and the availability of ample resources. The entire interview process must be geared toward convincing them that this job meets every one of their acceptance criteria. It is also important to periodically ask them during critical points in the interview process if you are successfully meeting their criteria.To ensure that the target candidate remains engaged in the process, give them some input into it, so that they do not view it as inflexible. Ask them what specific information they need and what questions they need answered before they can make an affirmative decision. You should also ask them who they must meet and talk with before they can make a final decision on your offer. The overall interview process should provide them with an excellent candidate experience and you should use it not just as an assessment tool but also as an opportunity to provide a comprehensive sales pitch.
9. Identify who will influence their decision — game-changers are much more apt to consult with and seek the advice of friends and colleagues than the average candidate. As a result, make an attempt to identify and then proactively “sell” those individuals who will influence the candidate’s final decision. Incidentally, the process of identifying and educating “influencers” on the powerful selling points of your firm needs to start at the very beginning of the interview process.
10. Develop a counteroffer strategy — it would be highly unusual for a game-changer not to get a compelling counteroffer from their current organization. Because the normal reaction of a game-changer is to “stay put in a known environment,” you need to proactively research what that counteroffer is likely to be and to prepare a compelling strategy to overcome it. In addition, you should anticipate that the game-changer will get several external offers, so you need to do your research and benchmarking to ensure that your initial offer is clearly superior and most closely aligns with your candidate’s dream job.

Final Thoughts

Some people viewed the recruiting process used to attract LeBron James as a circus. However, on closer examination, it was unique, targeted, and comprehensive. There were numerous WOW factors, including the city of New York crafting a customized video including a message from the mayor, and several cities organizing mass public recruiting parties to show their commitment. Teams used high profile individuals including Jay Z and even the President of the United States to influence the process. Numerous websites were created, blogs were written, and literally millions of tweets were shared on the topic.

To further highlight the importance of this recruiting effort, Lebron’s offer acceptance was televised in an hour-long TV special (a first). During the special, his decision criteria were disclosed, including the probability of winning a championship, a new coach, a choice of teammates, team chemistry, supportive owners, a large fan base, broader media exposure, and lifestyle considerations including the interests of his entourage, and of course hundreds of millions of dollars in compensation.

While millions were spent to recruit him and millions more will be spent to pay him, the economic return (likely to be in the billions) will far outweigh the costs. Believe it or not, the same dramatic results can be obtained by recruiting a single game-changer in the corporate world, although the fanfare would likely be less dramatic! If you are not landing your share of game-changers, the process that corporate executives must follow has been spelled out, all they need to add is … courage.

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We talk about “top” talent and “top” performers, but how do you know you’ve reached the “top”? Is there some kind of altitude marker? A sign that reads “Welcome to the Top”? Unfortunately, no. But of all the recruiting metrics in your talent capital toolbox, one indicates a recruiting job-well-done above the rest: Quality of Hire.

Every CEO, manager, and corporate investor knows that hiring the best people is what ultimately drives an organization’s long-term success. Yet the recruiting metrics most companies employ evaluate efficiency rather than quality. Metrics like “time-to-fill” and “cost-per-hire” only tell us about the process, not its impact.

What matters most is how new hires perform and how much they contribute to your organization’s growth and goals. “Top” performers can exponentially increase your productivity and profitability, while those with lower standards can damage your bottom line and plummet your reputation. Those numbers far outweigh how much time it took to fill their position. Yet the question remains: How do you evaluate the quality of your hires?

Determining Quality of Hire: Across Your Organization

If you were to deduce a formula for calculating how well your organization is hiring overall, it would look something like this:

Quality of Hire = (PR + HP + HR) / N

• PR = Average job performance rating of new hires
• HP = % of new hires reaching acceptable productivity with acceptable time frame
• HR = % of new hires retained after one year
• N = number of indicators

Example:

• PR = Average 3.5 on a 5.0 scale = 70%
• HP = Of 100 hires made one year ago, 75 are meeting acceptable productivity levels = 75%
• HR = 20% turnover = 80% HR
• N = 3
• Quality of Hire = (70 + 75 + 80) / 3 = 75

The result is a quality level of 75% for new hires made in one year throughout an organization. Calculations can be modified to reflect hires made by quarter, bi-annually, or in increments of two, three, five years, etc. It all depends on how much or how often you choose to measure and report.

This formula gives a good indication of how close or how far an organization is from reaching its collective hiring goals. However, filling in the variables can be a bit tricky.

Determining Quality of Hire: Per Individual Hire

When we sit down and break down the above formula, we begin to see where calculations are cut and dry, and where they need further attention and work. “Number of indicators” and “number of hires retained” are easily quantifiable. But variables like “job performance” and “acceptable productivity” need to be further defined before they can mean anything numerically. How do you turn “job performance” into a number?

Most organizations use a numeric rating system to evaluate the performance and productivity of new hires. On a scale of 1 to 5, how well is Hire B performing X? This requires clearly outlining a position’s expectations and objectives, and what Xs are important to assess according to your organization’s goals. X = new business leads generated. X = number of sales increase. X = number of findings submitted. You define the criteria. Only then will “quality” take on significant, measurable meaning when you tally up your hiring scores. The key is tying your talent management strategy and measurements to your business objectives and results.

Keep it as simple as possible. Don’t try to include too many X-factors in your metrics program. That can get overwhelming or dilute decisive outcomes. Work with key stakeholders (CFO, top managers, hiring manager, etc.) to ensure credibility. And tie revenue per hire to dollar impact across your organization whenever possible to demonstrate the value of high-quality performers.

And keep track of your hiring progress! Identify a baseline. Measure annually (using your new handy-dandy formula). Note your best hiring sources and factors that indicated new-hire success (as well as those that didn’t). Share your results and reward your recruiters and hiring managers along the way.

Because the best way to know you’ve reached the top is to look back and see how far you’ve come.

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Tens of millions of searches are conducted on the job boards every month. These are the active job seekers, drawn to one or another or, as is usually the case, more than one job board because, as Willie Sutton never said, that’s where the jobs are.

But for every active seeker, there are many more who, if they learned of the right opportunity, might just be convinced to kick the tires. Reaching those millions of others in order to find just that one, perfect candidate, is a recruiting goal best described as a quest.

For years, now, the job boards have been in hot pursuit. They’ve partnered with newspapers — CareerBuilder is mostly owned by newspaper publishers and Yahoo’s network is hundreds of newspapers deep — they power niche sites, buy keywords on search engines and traffic from social media, and have built networks of hundreds, even thousands of blogs, content providers, hobby sites, professional associations, and others.

In most cases, the networks and traffic deals simply broaden the distribution of job postings. Some, like the programs run by SimplyHired and Indeed, offer publishers the ability to choose what types of job ads to display. It’s a rudimentary type of targeting based on the content and nature of the site.

Monster’s Career Advertising Network is more sophisticated in that it targets ads to the user based on their browsing and job search behavior. Come across an ad that catches your attention and you click into the posting on Monster.com.

But recruiters are looking for more; instead of simply collecting apps, recruiters, influenced by social media, want to build relationships with candidates and bring them to the corporate career site.

Now Monster is leveraging its ad network to drive candidates to where recruiters want them and to deliver an advanced set of analytical tools to  help them more accurately tally up the results of a CAN ad.

I got an overview of the changes Monster has tested with some of its bigger customers. The change in the business model will undoubtedly appeal to recruiters and employers who might have balked at the old program’s double-dipping. Previously, you bought a job posting on Monster, then bought a CAN ad that linked to that job posting.

However, Monster is clearly putting the emphasis on building traffic to corporate career sites. Customers want to go from their ATS to the ad network and drive traffic back to the corporate career site via the ATS, Monster’s PR chief Matt Henson said, explaining the rationale behind the first of the enhancements to CAN.

Previously, employers who bought into CAN converted a job posting to a text ad (with logo) to get broader exposure: active job seekers via the Monster posting, and passive seekers (or at least less active seekers) via the CAN ad. CAN, being a period buy, meaning the ad would be served up over 14 or 30 days, didn’t guarantee a certain number of impressions, but company officials said an ad would typically get at least 40,000 and as many as 200,000.

Now, employers who have a Monster account can skip the job board posting and go right to CAN, bringing potential candidates directly to the corporate career site where the company can tell its story and begin a relationship.

The second development that Monster introduced is every bit as valuable and, if you are data-driven (as Dr. John Sullivan has been evangelizing for years), it may even be more useful. This is a set of enhanced analytics that can tell you where a candidate saw your CAN ad, how they came to your career site, and what they did when they got there.

So even if a candidate came across the ad last week, didn’t click on it, but today remembered it and Googled the company to find the job, the new analytics will tell you that. Did the candidate check out the job, leave, and then come back a few days later to apply? The metrics will tell you that.

“It let’s us go beyond the click,” says Chris Snow, analytics product manager at Monster. His comment that these analytics are “a powerful tool for recruiters” is understatement. Besides offering insight to the targeting and effectiveness of a specific ad, the data can help assess the ad’s branding value.

The first release of the analytics are already in place. They provide data on landing page visits (for the ads), candidate source information, application starts and completes, and basic ad click and impression information. More data points are coming in the future.

The analytics use a cookie with a 14-day duration, so anyone refusing cookies or who cleans them out at the end of a browsing session or acts after two weeks doesn’t get counted. That’s an issue everyone faces with cookies.

Still, that’s likely only a small number of job seekers. For everyone else, recruiters can get a much clearer picture of candidate interest and ad yield.

It’s also a plus for Monster, since source of hire statistics have always been problematic. Most sourcing data is gathered by candidate self-reporting or automatic capture by the ATS. So that candidate who Googled the company in the example above would be counted as coming from a search engine, when, in reality, they were acting on an ad.

Making all this work requires a tight integration with a corporate ATS, which means the CAN ad tracking isn’t going to work for every employer. You need to  have a way to create and submit a requisition through Monster’s Business Gateway.

Monster says there’s also a certain amount of customization a vendor is going to need to do for the system to work. It’s working with a few of the major ATS vendors now, though the customers will be driving the integration.

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Anyone who has been in management of HR or recruiting has struggled with the issue of measurement. To be taken seriously in a business world ruled by numbers, we have to get our own numbers right. But, despite all of our hard work gathering data and calculating ratios, it doesn’t seem that HR’s numbers ever have the credibility that measures from finance or operations do. To help rectify this situation, use the following three questions as you develop your metrics. 

Why Measure?

Every decision we make when choosing metrics has a consequence. What we measure says a lot about how we are managing our business. As an example, measuring the number of applicants per posted requisition is a common recruitment measure. However, this metric has no linkage to actual outcomes. It doesn’t tell you if these applicants were qualified or led to a hire. In fact, you could have a large number of applicants per requisition and not have a single qualified applicant. This is a measure of activity only. If you choose to make activity metrics like this a part of your scorecard, you are sending a message to your organization that you don’t really understand what matters and that you are more focused on activity than results. If you want to be taken seriously as a business partner, your metrics should reflect that you understand how business works. Commit to metrics like quality of hire or vacancy rate, as these are outcomes that the leaders within your organization will care about and value. These things are much more difficult to measure, but the effort to do so sends the message that you “get it.”

Who Cares?

The creation of metrics seems like an operational activity that should be squarely rooted in analysis and process improvement. But, like everything else inside an organization, metrics are also political. As I demonstrated above, the metrics you choose says a lot about how you manage your business. And, if our metrics are going to speak for us, we need to consider who we are speaking to. As you build your metrics, ask the following questions:

• Would the CEO see value in this measure?
• Would the CFO agree that this metric is valuable to track?
• Would my internal customers easily understand how this measurement helps us deliver better service to them?

If the answer to any of these questions is no, go back to the drawing board and keep working. If you are unsure, then go find a few business leaders you trust and get their opinions. Keep working until you can answer all three questions with a resounding “yes!”

So What?

This final question might be the most important of the three. How do these metrics affect the action you take in managing your function? It should be obvious for most of your metrics that up is good and down is bad or vice versa. You will have goals set, but what do those goals mean? How much variance is too much variance? At what point do you have to take action?

Take the “time to hire” metric that most of us measure as an example. If your goal for time to hire is 30 days, would you make changes to your process if your actual result was 31 days (a 3% variance)? What about 36 days (a 20% variance)? What action would you take? As we construct metrics, think through these “what-if” scenarios to have a clear understanding of not only what we are measuring, but also what we will do when the result varies from the target.

Once you’ve run your metrics through these three questions, you are ready to measure and report. However, you are not out of the woods yet. The biggest mistake that most HR and recruiting teams make happens at this point in the process. You must ensure that your data and calculations are perfect. All it takes is one scorecard with one measure where the wrong number was used or the calculation was done incorrectly to kill the credibility of the entire set of numbers. Remember that everyone already thinks you are bad with numbers if you work in HR, so don’t prove them right. Double- and triple-check your numbers. If a result seems a little off, dig in and check your data to ensure that it’s not a mistake. It would be a shame to get this far and destroy all of your hard work with sloppy math.

Having great metrics isn’t the silver bullet to gaining credibility with your organization, but it can be an important step in the right direction if you do it right.

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Did you know that ERE has a group on LinkedIn? Check it out!

Here’s what’s going on in the ERE community this week:

1. The only danger in mobile recruiting?
2. Is your recruiting quaint?
3. Talent acquisition metrics
4. The big disconnect
5. Whose responsibility is it to check references?
6. Featured group of the week: Recruiting leadership forum

1. The danger of mobile recruiting? Not doing it.

Kristine Rhodes writes “Recently, I asked my client partners why they declined using mobile marketing as part of their recruiting strategy in 2009. I heard everything from “It’s just hype,” to “It’s intrusive,” to my personal favorite “It’s dangerous.” So I thought I’d share some quick facts to dispel the myths, and provide a few ways to ease into a mobile strategy.

Are you trying to get mobile recruiting initiatives completed this year? Take a look at Kristine’s post and add your own comments.

2. Is your recruiting quaint?

Kristen Fife argues that having a tool that only works in one type of browser sends the wrong message. She states: “It’s 2010, guys. I live in Microsoft’s backyard and a good number of the people *I* know use Firefox at home and work. Not to mention Chrome. And Safari (hellooooooooo, remember the new iPad that was unveiled a few weeks ago?) as well as a host of smaller browsers such as Flock, Opera, etc.

Is making an application cross-browser compatible not realistic or is it necessary in a multiple browser world?

3. Talent acquisition metrics

Ritvik Bhawan outlays the different types of metrics a person should use if they are looking to track their progress. He breaks them down into three categories:

• Workforce planning and acquisition strategy
• Applicant sourcing and candidate management
• Applicant tracking and final joining

Take a look and see if any of your favorite metrics are left out.

4. The big disconnect: how recruiters earn their fee

Barbara Goldman tells a story about how she worked behind the scenes as a third-party recruiter to secure a candidate in a way that the client didn’t see. She writes, “After my candidate started, and I called to collect my fee, the president of the company asked me how I had persuaded him to even interview. You see, unknown to me, he was a target candidate for the company. They knew him. Three recruiters had tried to drag him in. He said no. Now, they finally got their man.

What are your thoughts? Is a third-party recruiter’s value disguised?

5. Whose responsibility is it to check candidate references?

A member of the independent recruiters group on ERE asks: “I am preparing to enter the field as a contingent fee recruiter specializing in health care, and I have a couple of burning questions. [Whose] responsibility is it to verify a candidate’s references? Would not the employer always want to do this for themselves even if you do it? My other question is how should this issue be  handled (worded) in my contract?

Got some feedback for him? Leave a comment for him in the group.

6. Featured group: Recruiting leadership forum

The recruiting leadership forum was created by John DePolo and the objective of the group is to “share best practices in recruiting leadership with members, and brainstorming new ideas that will help companies improve their processes.” A couple recent posts include how people are approaching the hiring of former prisoners and non-employee referral programs. Are you a leader in recruiting? Check this group out.

To see what else you’ve been missing, check out the ERE community.

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by Dr. John Sullivan and Master Burnett

Becoming a leading-edge recruiter is an admirable goal few corporate recruiters strive to achieve. Not only must a leading-edge recruiter routinely demonstrate a marked increase in positive business impact over other recruiters, but they must consistently monitor trends, devise new approaches, benchmark against emerging practices, and constantly fight with colleagues often resistant to trying something new.

Historically, staying on top of trends and new approaches was relatively easy, as there were only a few companies isolated in a few narrow geographies that one needed to watch. The War for Talent in 1997 certainly drew a lot of attention to the practices of technology firms in “silicon hubs” like California’s Silicon Valley (home to Google, Cisco, Intuit, Facebook, Twitter, and HP) or Seattle, Washington’s, Silicon Forest (home to Microsoft and Amazon), but up until a few years ago there was no formal process to identify where leading-edge practices were emerging and who was developing them.

ERE Media’s Recruiting Excellence Awards and articles by global strategy advisors like Kevin Wheeler and ourselves, who have advised and studied the practices of companies in more than 40 nations, are helping leading-edge recruiters focus their attention where evolution is occurring.

The Hotbeds of Evolution and Innovation are Shifting

No one can argue that rapid growth of the technology sector in 1997 left many technology companies desperate for talent, and that desperation drove many charged with recruiting for such organizations to both collaborate and innovate new practices to help close gaps in supply and demand. While not cheap, importing labor and shifting work to geographies where the supply of labor exceeded the demand has been the dominant approach.

For more than a decade such solutions have helped allocate work across an emerging global talent market, but now many of the geographies that picked up work are also struggling to source qualified talent to staff available projects. While China and India may have a surplus of unemployed/underemployed people, they too have a shortage of skilled professional labor.

As global economic growth focuses on Asia, desperation of firms in Asia to keep pace with the demand for talent is driving more and more talent management focus on excellence in execution, collaboration, evolution, and innovation.

With smaller company sizes, nations like Australia and New Zealand are earning a reputation as being home to progressive companies willing to try new practices. Nations like Singapore, Malaysia, and Vietnam, to name only a few, are channeling state investment dollars into industry-sector-focused universities and research parks that elevate public/private collaboration to new levels.

However, nowhere can one find as much focus on recruiting leadership than in India and China. Twelve years ago production standards in both nations were subpar, work ethics were questionable, and infrastructure was lacking, but today both nations have firms that excel in world-class engineering design, international trade, offshoring, and manufacturing. Over the course of those 12 years, firms in India and China have not only studied and adopted Western talent management practices, they have improved upon them if not in design, most certainly in execution.

Examples of Progressive Recruiting and Talent Management Practices

While ERE readers will need to wait until March to learn about which companies won a recruiting excellence award (with finalists announced soon), what follows are a few practices becoming common among leading employers in India based on our work and a review of the ERE Award Applications. Mentally compare this list of practices to those that are currently in operation at your organization.

General Recruiting Practices

• Prioritization of key jobs and skills. Recruiting resources focuses on the most critical 40%.
• Pre-need hiring. Talent pools mapped and individuals assessed prior to requisition opening.
• Tight integration with sales/operations to drive workforce planning. Recruiting leaders often sit side by side with sales and operations leaders during development meetings to coordinate workforce planning efforts.

Employee Referral Program Practices

• Dedicated referral teams employing a proactive referral strategy in which recruiters personally solicit the names of the very best from the very best employees and managers. (In one organization this approach produced 47% of all hires, garnered a 66% employee participation rate, and consistently produced the highest quality hires, all with a cost-per-hire 20% lower than other hiring channels.)
• Employee referral processes that target corporate alumni in order to boomerang them back. (This approach often produces better results than any other alumni recruitment effort.)
• Onsite referral fairs that allow referred candidates to receive on-the-spot interviews and/or offers.
• Online referral status tracking that provides feedback on status and alerts when a referral’s status changes.
• Established referral targets for individual managers and teams.
• Required pre-assessment of referrals by referring employee. To eliminate poor quality referrals many programs require that employees pre-assess their referral and share the assessment as part of the submission process.
• Service-level agreements that guarantee feedback to the referring employee within 72 hours of submission and help-desk response to inquiries within eight hours.

Metrics and Business-case-related Practices

• Advanced statistical analysis processes including six sigma assessment, value chain analysis, and force field analysis for assessing and improving recruiting process performance.
• Quantification of the direct-dollar impact of new hiring processes on corporate revenues. (In one example, the organization identified that reducing time-to-fill in revenue-generating positions by 40% could increase revenue by millions of dollars.)
• Development of “hiring accuracy” metrics that assesses and quantify hiring success/failure rates.
• Distributed real-time recruiter productivity measures. (One organization found that simply measuring and reporting productivity increased it 70% in one year.)

Recruitment Marketing and Branding Related Practices

• Development of in-house recruitment marketing teams capable of supporting frequent communication design/delivery channel changes.
• Using search engine optimization techniques to measurably increase visibility of jobs and brand messaging online.

College-recruiting-related Practices

• Using ambassador programs to build relationships with top students and faculty.
• Adoption of CRM approaches that let recruiters communicate frequently with students via text messages about events in the students’ lives, such as “best of luck” messages during final exams.
• Development of robust campus performance assessment processes and metrics.
• Use of contests, quizzes, and projects to excite top students and more accurately assess them.
• Engagement of market intelligence data to identify employee value propositions that better engage students.
• Online professional training courses covering topics that improve the quality of potential candidates and attract top students to participate in the application process.
• Leverage alumni to give tech talks, classroom lectures, and on-campus workshops.
• Curriculum guidance. Many organizations work closely with academic leaders and key faculty to align curriculum with industrial need, ensuring that courses focus on practical knowledge and skill development that is immediately relevant.

Training and Development Practices

• Extensive focus on deep enterprise training, development, and leadership preparation. (One organization has built the world’s largest leadership and development training center, exceeding in size GE’s famous Crotonville facility. The 270-acre, $60-million plush facility has a hotel, food center, employee care center, theater, and research facility.)
• Overseas residential training programs. Recent grads are frequently provided an opportunity to work internationally for a period of several months prior to accepting a stationary role in their home country.

Are You Leading or Lagging?

I hope you agree that this list represents some pretty progressive practices and strategies. While India’s leadership position is certainly open to debate, there can be no doubt that staffing challenges in India and China are forcing leading firms like Infosys, Tata, Aricent, Reliance, and Wipro to focus on execution and innovation. Some might argue that lack of government regulation and lower cost of labor enable them to do things you couldn’t do in the U.S. or Western Europe, to which my response is simple: it’s not the job of a leader to whine about what they can’t do, but rather to find a way to do what they need to do.

Not all organizations in India are on the leading edge when it comes to talent management and even those that are have areas that need improvement. The point is that if you want to be on the leading edge you need to be aware of other organizations on the edge, and that moving forward more and more of the firms you need to monitor will be in India, China, and other Asian nations.

Final Thoughts

Generally speaking recruiting is a conservative profession. If you’re a “defensive type,” super patriot, or resist being data-driven, you will likely dismiss our contention that the U.S. is/has slipped into second place with regard to recruiting leadership. If, however, you are open-minded, I suggest that you revisit this list of practices and use it to help determine where your firm needs to be if it’s going to seriously compete for talent in the emerging global labor market. Companies in India, Singapore, New Zealand, and China have already started recruiting top scientists, mathematicians, engineers, and finance professionals from leading corporations in the U.S. and Western Europe. The battle is heating up. Are you more prepared to fight or give up?

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This is one of a series of what I call “think-pieces.” Instead of casual reading, these articles are intended to stimulate some in-depth thinking and to pose some strategic questions that recruiting leaders should ponder. The questions raised here are, at least in part, designed to make you uncomfortable” with your current approach to recruiting.

It’s December 2009 and it’s the end of the “decade from hell” during which the recruiting and talent management function endured some ugly times. Rather than bemoaning what happened, why not take a few minutes or so and rethink your approach to recruiting. The topic for this particular think-piece is corporate power and why recruiting seems to have so little of it.

Thought-provoking question #1 — Is it true that on the corporate “power scale,” recruiting falls well below where it deserves to be?

My basic premise is that when it comes to power and recognition, the recruiting function should be one of the most important business functions, ranked right up there in importance with finance, product development, and sales, but for some reason, it is funded poorly and often underappreciated.

Fortunately there are a few exceptions; a few stark examples of situations where recruiting is so important that it is classified as a mission-critical business function. Two industries where recruiting is certainly “king” include both college/professional sports and the entertainment industry. It’s obvious to everyone in these industries that if you attract a major recruit like A-Rod, LeBron, or George Clooney, you haven’t just recruited a good employee, but instead you’ve changed the revenue stream of the company for a significant period of time. As a result, sports teams and entertainment moguls put huge resources into recruiting. In direct contrast to corporate recruiting, when their teams or studios are doing poorly, they put even more effort and resources into recruiting top talent.

The point that I want you ponder is that in the corporate world, there’s something in the way that we currently conduct recruiting that puts us well down on the mission-critical scale, in spite of our actual impact on corporate performance. If you agree with this premise, below you will find some points that might explain our relatively weak position in the corporate world.

Thought provoking question #2 — What are the top 10 characteristics that make functions powerful in the corporate world?

It’s possible for a business function to go from powerless to mission-critical merely by changing the way it acts. Supply chain is certainly a great example of that dramatic transition. For years it was known as purchasing, inventory, and transportation and under that overhead approach, the three functions received little attention, recognition, or resources. However, once it began to use technology, metrics, and to demonstrate its dollar impact on corporate revenues, it became a corporate darling and rose to the top of the power scale. The question is, “are there common factors that cause the most powerful corporate functions to receive the lion’s share of corporate resources?” I recommend that you come up with your own list of these “power factors” within your organization. But I am providing you with a list of the top 10 critical “power factors” that I have found to be consistent differentiators between the powerful and the underfunded.

1. Focus on revenue impacts: Process results are reported in dollars, demonstrating their impact on revenue.
2. Show impact on strategic goals: Process goals and results are unambiguously linked directly to strategic business goals.
3. Competitive advantage: Results are directly compared to the results of competitor firms, in order to ensure that your firm retains a competitive advantage.
4. Prioritize: They prioritize their efforts and focus on creating strategic impacts.
5. Proactive: They seek out opportunities rather than waiting and reacting.
6. Metrics: The functions are managed and decisions are made based on numbers and strategic metrics.
7. Manager’s reward: Their results are an important component of executive bonus formulas.
8. Innovation: Their rate of innovation is among the highest in the corporation.
9. Technology focused: They use the latest technology.
10. Reporting: Their actions and their results are reported as an integral part of the standard business and financial reports are read by executives.

Thought provoking question #3 — Does our current conservative approach to recruiting essentially doom us to a weak power status, or are there actions that can be taken to increase our status?

Below you will find a few recommended actions and some thought-provoking questions for each of these 10 power factors.

You must demonstrate revenue impacts: is there any doubt in your mind that recruiting a key innovator, a top salesperson, or a great branding person directly increases corporate revenue? Incidentally, is this impact not just for one year but for many years as the new hire stays with the organization? If we can agree that there is a major business impact as a result of strategic hiring, what exactly is preventing you from working the CFO’s office to convert the impact of recruiting into dollars? Why doesn’t your team calculate the difference in performance between a great and a mediocre hire in the same position, in order to make the business case that demonstrates the tremendous revenue lost as a result of weak hiring processes. Have you calculated the correlation between excellence in hiring and improved workforce productivity and business results?

Tying recruiting goals to business goals is essential: most recruiting functions rely on tactical goals like reducing cost per hire and monitoring the number of positions filled. Does it make sense that such narrow and functional goals would appear insignificant to senior executives? Their goals are to increase sales, improve market share, increase customer satisfaction, and to innovate in the product area. Does it make sense to work with the people who set the overall strategic business goals to ensure that everyone sees the direct connection between what recruiting does and those goals? What is keeping you from converting your goals, so that they directly match those of the business? For example, let’s look at the business goal of increasing sales. Is it possible to demonstrate how great hiring in the sales function can directly increase sales? Well, if that’s possible, why not change your recruiting goal so that the strategic impact is clearer? Does the goal of “hire 75 people” resonate the same to senior executives as this goal: “increase sales performance by 12% by hiring 17 top-performing salespeople away from key competitors”?

Focus on beating your competitors: it’s no secret that most recruiting functions are inward-focused, while most executives are laser-focused on aggressively crushing their competitors. Would your power position improve if you demonstrated to executives how you were also extremely competitive and as a result, you directly monitored and then aggressively countered the recruiting strategies and actions of your major competitors? What are the barriers that are preventing you from demonstrating that your company’s sales, product development, and innovation rates are measurably superior to your competitors’ because your recruiting practices are superior to your competitors’? Why don’t you conduct a competitive analysis on a regular basis to see where what you do is inferior to what they do? And shifting back to the sales example, why haven’t you demonstrated how aggressive recruiting on your part can hurt the sales of your competitors? Do you purposely target the best salespeople at your competitors? In head-to-head competition over top sales candidates, what percentage do you win?

Prioritize and focus on high-impact areas: just like sports teams, all powerful functions prioritize their customers and their services in order to put their limited resources to where they can have the most business impact. Football teams focus on hiring quarterbacks, and movie producers focus on landing one or two marquee stars. In direct contrast, most recruiting functions treat all positions and hiring managers the same. They process requisitions based solely on the date of the requisition. Executives already prioritize products and business units; what is preventing you from doing the same? Would you gain more respect and increase your business impact if you instead identified the most critical business units and jobs? If you focused your hiring on revenue-generating positions, would you increase revenue? Does it really make sense to put your best recruiters on low-impact jobs and commodity business units?

Shift from reactive to proactive: most recruiting efforts can only be classified as reactive, meaning that you react only when a recruiting requisition opens up. But wouldn’t your power position improve if you shifted to the more desirable proactive mode? What if you shifted recruiting to a continuous “pre-need” mode, where you proactively seek out available talent rather than hoping that it might be conveniently available at the exact time when you have a position open? If you understand the superior approach of a we-find-them capability compared to posting jobs and hoping that the best will find you, have you considered a most-wanted list where you continually target top industry people throughout the year and react quickly when they are available? What’s keeping you from alerting your managers when top talent becomes available? Maybe you should study and learn from sports teams, where they purposely increase their focus on recruiting when performance is down?

Metrics: not a single one of the most powerful business functions make decisions based on emotions or past practice. From finance, to IT, to marketing and supply chain, they all rely heavily on “decision metrics” to continually improve. Most recruiting departments failed to generate a single metric in important areas such as:

What is your continuous improvement rate in recruiting?

What is your failure rate in hiring?

What are the critical success factors in world-class recruiting?

As a result, maybe the time has come to stop listening to HR metrics people (who almost universally “don’t get it”) and instead to begin to talk to business metrics experts. Why is it that it after all the work you’ve put into designing metrics, no one pays attention to them — because they’re all historic and they don’t help with actual daily decision-making?

Managers need to be rewarded for great hiring: like it or not, managers have learned over time to laser-focus on the things that are measured, reported, and rewarded. Even though HR controls compensation and performance appraisals, most managers are not rewarded significantly for great people-management. If people are your “most important asset,” why aren’t managers measured and rewarded for effectively using that asset? Yes it’s a tough battle, but if promotions, raises, and bonuses were tied directly to people results, wouldn’t managers then come to you for help in improving these areas?

Innovation must permeate the function: the most powerful functions innovate continually and at an amazing rate. Rather than waiting for funding before they innovate, they instead innovate first in order to get more funding and recognition. Is it true that within HR, cutting costs and avoiding errors is more beneficial to your career than risk-taking and industry-leading innovation? Is using Facebook really innovation? What is the rate of innovation within recruiting? When was the last time that a business function came to recruiting in order to learn about effective innovation processes? Are you guaranteeing continuous innovation by recruiting continuous learners on your recruiting staff, and do you have formal processes for identifying the “next practices” in talent management before everyone else adopts them?

Being technology-driven is essential: the most powerful functions love technology because technology is essential for speed, globalization, innovation, and improved decision-making. Do your recruiters misuse or avoid technology because they are too closely tied to tradition? Does buying an ATS system and using only a few of the features qualify as being technology-driven? Why don’t you use technology in interviewing, assessment, employer branding, and onboarding? Does your technology allow you to do 100% remote hiring, or can you prove that your technology increases the quality of your hires?

Your results must be reported to all: visibility is essential for obtaining and maintaining power. If recruiting results are reported only to HR, your results, no matter how spectacular they may be, are likely to remain a well-kept secret. Have you worked with the CIO and the CFO to ensure that your results are embedded in standard financial reports? Are managers with poor recruiting results embarrassed to see their name at the bottom of a ranked performance list? Can your executives and managers see each month how excellent recruiting results correlate directly with excellent business results? When recently hired individuals are recognized for outstanding business accomplishments, do you step forward and remind everyone that it was your process that made it all possible? Finally, what actions must you take in order to ensure that recruiting metrics receive the same visibility and recognition as inventory, time to market, and market share metrics?

Some Final Questions To Ponder

If your brain isn’t already spinning with thoughts, ideas, and questions, here are some additional questions to further stimulate your thinking.

• Do you vary your recruiting approach and strategy between different business units that are in completely different growth modes stages in their business cycle?
• Do you have a plan that would allow you to dominate your industry in talent management?
• Do you let individual hiring managers use their short-term perspective to decide what competencies your organization will have? Or instead, do you make an effort to educate senior managers about the future competencies that are needed throughout the corporation?
• Does your lack of integration make the hiring process a hodgepodge of disconnected events, rather than a seamless process?
• Why is the only “solution” that you offer hiring new employees? Why not offer options including substituting technology for people, hiring contingent workers, and getting ideas from non-employees through contests?
• Have you quantified the negative impact on product sales from mistreating applicants who may also be current or future customers? Does your candidate experience equal your customer experience on the product side?
• Have you analyzed why within HR, OD, leadership development, and succession planning received more emphasis and recognition than recruiting?
• Do you even have a forecasting capability within recruiting? Do you have a plan for when the economy suddenly improves? Is your recruiting process agile, so that you can meet the diverse recruiting needs of the different regions around the world?
• Do you identify and track the many bad and negative things that appear in social networks and on the Internet about what it’s like to work at your firm? Have you demonstrated the impact that a great employer brand has on your firm’s stock price?

Final Thoughts

The key success measure of any “think piece” is that it makes you uncomfortable with the status quo. This particular article focused on the disparity between the power that we should have compared to how little power we do have, and it should have encouraged you to think about action steps for recruiting to gain its rightful place among the corporate power elite. Maybe action steps on how to improve your relative power should be a topic at your monthly or annual meeting. Finally, you should also notice that the approach that I’m recommending is based not on whining or demanding recognition but instead on how to act differently in order to influence senior management. The goal is for them to finally recognize what we already know, that nothing improves the performance of an organization faster than hiring a significant number of top-performing innovators into key positions!

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