Dear CEO and CHRO,
After years of reading those McKinsey and Gartner ‘what are the CEO’s priorities’ survey results, I felt I needed to send you this note.
Chances are, you may have also read and possibly participated in those surveys as well. For the last 5 years, those survey results found that identifying, attracting, developing and retaining talent is consistently among your top 3 priorities. The problem is, based off hundreds of conversations I’ve had with CEOs, CHROs and heads of recruiting in the last few years, there seems to be a disconnect with what you say is important versus what your own organization displays as important.
I know you are busy, so let me give you 7 key things that you and your company should be doing, if you are not already, to get your business better aligned to what you say is an ongoing priority. These are not prioritized in order of importance, as it would be foolish to do so without better understanding your business.
1. Tie identification, attraction, development and retention to your hiring managers’ and business leaders’ goals, performance and compensation.
When you look at your own organization some of these might be priorities across the enterprise vs others that might be more specific to business units that are, for example, challenged on the retention part.
Demand and expect monthly scorecards aligned to these priorities from HR and recruiting, with KPI’s that will help raise awareness and move the needle.
Saying identification, attraction, development and retention in your quarterly company update on your people is great, but showing that you have measures of accountability and can show progress, sends a better message. If it really is as important as the surveys state, then you should tie talent objectives to your executives’ compensation and performance plans.
Some leaders like sticks. I personally think more people are motivated by carrots.
2. Speed, cost and quality: Just pick quality, please.
You have probably heard the old saying speed, cost and quality, pick any two as you can’t effectively achieve all three at once. If you really believe identifying, attracting and retaining talent is a priority, then everything should pivot around quality, be tied to quality and measured against quality. Because if you don’t, then in my experience it’s going to impact speed and cost anyway.
There are dozens upon dozens of reasons why quality must be the key focus. Here are three obstacles to overcome:
- More people involved in interviews than you need (time+cost).
- More canceled requisitions than you should have (time+cost).
- Lost opportunity cost of roles remaining open because of a lack of quality job criteria, the process, role responsibilities and expectations not properly established:
- combing multiple roles into one job;
- out of touch with market compensation;
- hiring managers wanting to see more candidates than they need and then ultimately losing out on the best ones previously seen.
I will give you an example of how not making quality part of your recruitment/business process is costing you. I once modeled up the financials related to attrition in an organization and found that a 4% positive shift in attrition added $36 million back to the bottom line of that company.
We dug into this deeper, analyzing exit interviews and the reasons why top performing people were leaving voluntarily in the first 12 months of employment. We found there was a clear disconnect between what the hiring managers and recruiters promised about the role and opportunities versus what the actual role and company culture was.
In addition to the hard dollar attrition cost, the downstream impact is if your recruiting team and hiring managers are spending up to 50% of their time focused on back-filling roles, then how do you expect them to be proactively identifying talent tied to your growth strategy?
3. You have more recruiters in your organization than you know. Engage them.
Let me tell you of a conversation I had with a CEO when I was getting hired as the global head of talent acquisition. During the interview, I asked him how many recruiters he believed he had in his company. His response, “Well, globally we have well over 100.”
My response was, “No you don’t.” He looked at me quite puzzled. I said you have nearly 20,000 employees. It took him a couple of seconds, but he then smiled and responded, “Well I guess you are right, Rob.”
If employee referrals are not the number one source of candidates at your company, then you are doing something wrong. Many articles and studies have shown that employee referrals are consistently the best quality of hire you can make. If you are not getting 40-50% of your hires this way, then you’re going to continually be challenged solving for identification, attraction and even retention of top talent.
4. You must have a consistent, structured interviewing and assessment framework that clearly identifies a top performer vs an average one.
Related to point number 2, if you have your hiring managers and people involved in interviewing asking such silly questions as “What’s your greatest strength,” or “Why should we hire you,” or even sillier questions like “Why are manhole covers round,” then you’re doomed to mediocrity at best.
Invest in not only a consistent, structured interview process that assesses key success criteria of top performers, but also invest in training your people how to interview correctly. There is more to interviewing that a 1 hour mandatory HR training video on legal dos and don’ts.
5. Diversity is not a quota.
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Yes, we need more women in leadership roles. Yes, we need to hire more veterans. Yes, we need to hire more diverse employees, but if you’re doing this to just meet targets to show the world what a great company you are, then you’re missing the point.
It’s not about targets. If you have diverse customers (and you do) then you need diverse employees who understand what comes with diversity of opinion, thought and innovation. Make identifying, attracting, developing and retaining diverse talent a priority.
6. Your employee brand is not a slogan.
You also need to be transparent and clear with candidates, your employees and the world, about what your employment brand is. Too many people during the interview process are sold a false bill of goods on the promise of a glossy, marketing spun employee brand only to become disgruntled once they find out what it really is like to work at your company.
If you’re going to attract talent and fix attrition, it starts with being clear, consistent and honest with people. People aren’t perfect and neither are companies, so why have your employee brand disconnected from this reality?
7. Invest in identification and attraction of talent.
Currently 2-3% of your total spend goes towards the recruiting budget. I get that recruiting is a cost center sitting inside the HR cost center. I’m not suggesting we need to turn it into a profit center as that is another letter for another day, but if you say that identifying and attracting the best talent is a top priority, then you might want to think about increasing your recruiting budget some.
You’re going to be hard pressed getting your recruiters to be proactive at identifying and attracting the top talent that is not already looking if you currently have most of them working on 50+ positions at once, and supporting dozens and dozens of different hiring managers
I will leave you with this related story:
A CHRO came to me one day and said, I’m getting great feedback from the executive team on our internal executive recruiter who is finding and assessing great leadership talent. They love the high touch experience this executive recruiter brings with proactive market and industry insights, along with a comprehensive assessment of the candidates they submit. The candidates love him as well, given he keeps them regularly informed and provides great added value information on the company and executive team.
I responded that is great to hear and exactly why we hired him.
The CHRO then paused and said, Rob, can we replicate this model with the rest of the recruiting function to support the entire company?
I said, sure, but you do understand that currently the executive recruiter works on about 6 roles at a time while our recruiters average closer to 30. So, we can replicate the executive recruiter value, but are you OK if the cost per hire basically doubles, and we have potentially three times as many recruiters as we currently do today to achieve this outcome?
I’m sure you can guess with what the CHRO responded with next.
Mr/s CEO and CHRO, thank you for taking the time to read my letter.Rob McIntosh Principal Advisor and Founder Intelligent Talent Advisors