finding hidden budget dollars in your recruiting practices 10 2012 hrsmart

7/30/2019 Finding Hidden Budget Dollars in Your Recruiting Practices 10 2012 HRSMART

1/35

Recruiting Recovery

Finding Hidden Budget Dollars in Optimized

Recruiting Practices

HRsmart October 3, 2012


2/35

Introduction

Carl Kutsmode

Partner

Talent Acquisition ManagementConsultant with over 18 years experience

Talent Acquisition & Talent Management

Systems, Process & Strategy optimizationexpertise

Managing Partner and practice lead of thefirms Recruitment OptimizationManagement Consulting Practice.

Works with companies to assess, optimizeand re-align their recruiting capabilities tobest support the future talent needs of thebusiness.

Assess current recruiting practicesand talent or compliance risks inorder toAlign future talent and

business needs

Optimizerecruiting systems ,processes and strategies to reducecosts and improve efficiencies

Recruitthe BEST talent to drivebusiness performance

Retained Executive Search

Contract On DemandRecruiting

talentRISE Services

2


3/35

Todays Discussion

Review the impact of the recent economic downturn andrecovery on your corporate recruiting department practices andbudget decisions

Reviewthings that you can do today to ensure optimized

recruiting practices enable you to cost effectively and efficientlysupport your future recruiting needs

Provide a financial business case that will help the executiveteam support your recommendations for resources, support

or technology investment

Share lessons learned tips for avoiding costly mistakes as youembark on critical business decisions in the future

3


4/35

Hiring & Layoff Trends 2008 - 2012

The recession is over!

Hiring is increasingslowly in small spikes

Layoffs and voluntaryseparations havestabilized

Employment / Hiringtrends are steadilyincreasing upward

Now what?

4

Source: US Bureau of Labor Statistics 9-11-12 Labor Trends Summary through July 2012
http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdfhttp://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf


5/35

Economic Trends & Reactions

Economic Downturn2008-2010

Corporate Response

Recruiting slowed or Stalled

Cost cutting across alldepartments do more withfewer people

Hold on new recruiting or HRtechnology investments

Assess and improve efficiencyof core business processes

Layoffs of HR, Admin, dedicatedrecruiting and sourcing staff

Expand workload of remaining HRand Recruiting staff and shift somerecruiting to hiring managers

Vendor contract renegotiations

Increased use ofconsultants and contract labor

5


6/35

Economic Trends & Reactions

Economic Rebound2010-2012

Corporate Response

Recruiting trending upward unplanned hiring spikes

Cost cutting focus is replacedwith investment in new toolsand technology to gainefficiency in process

Establish New Normal makeinformed decisions basedupon data and relevantperformance metrics

Limited rehiring of HR, recruitingand admin staff

Technology investments resume

Consider RPO or other outsourcedrecruiting models to add futuredelivery model scalability

Focus on data analytics to driverecruiting performance and makeinformed decisions.

6


7/35

Starting Point: Assess the Following to Identify Efficiency andCost Savings in Your Current Recruiting Practices

1. Are you investing appropriately in recruiting and retainingyour Critical and Strategic Talent recruitment?

2. Are your talent systems, processes, tools and data optimallyused and integrated?

3. Are your recruiters overloaded with too many open

requisitions or recruiting the WRONG mix of positions?

4. Are your recruiters spending too much valuable sourcingtime on low value, administrative activities

7


8/35

Q1: Do you know which ROLESare CRITICAL and

STRATEGICALLY linkedto driving bottom linebusiness performance in your company?

8


9/35

Talent Matters!

The TOP PERFORMING Software Developers are MOREproductive than AVERAGE software developers. Not by a factor of10X, 100X, or even 1000X but 10,000X more productive!

Nathan Myhrvold, former Chief Scientist atMicrosoft

9

Examples of Various Roles and their Impact On

RevenuesPerform ance Matters!How good are you at

recruiting talent that is

cri t icalorstrategicto

your business?

- Skill training needed?

- More recruiters needed?- Investment in sourcingtools?


10/35

Determining Strategic & Critical Roles

Role Types Strategic Roles Core (Critical)Roles

Support Roles SurplusRoles

RoleDescriptor

Directly ImpactsBusiness Strategycreating value for thefirm

Usually < 15% of allpositions

NOT determined byHierarchy

Critical to deliveringresults to meetbusiness objectives

Roles serve as thecompanys Engine

A role the businesscannot do without

Typically ongoing,needs

It can be staffed byalternative staffing

means (Contingent,outsourced vendor etc)

Does notdirectly createvalue for thefirm

Does notimpact thebusiness

strategy

KeyActions

Make the mostsignificantinvestment in theseroles from arecruiting, training,compensation

perspective.

Focus on new hirequality and fit

Align TOP talent inthese roles with thebusiness strategy andsuccession plan

Develop technicalskills; Be good atinternal and externalrecruitment

Provide equitable

rewards andincentives

Provide self directedopportunities to grow,learn and advancecareer in the firm

Improve and automaterecruiting process togain efficiencies

Focus on quality andlower turnover

Provide opportunitiesto grow into core roles

Look for opportunitiesto leverage contingentstrategies

Make little tono investmentin recruiting forthese roles

Look for

opportunitiesto leveragecontingentworkforcestaffingstrategies oroutsourcingopportunities.

10

Source: A Differentiated Workforce, by Dick Beatty PhD, Mark Huselid PhD, Brian Becker PhD.


11/35

Why Invest Money in Being Good at Recruiting andRetaining Critical and Strategic, Top Performing Talent?

High performing companies do better at managingand retaining talent

Valuation of companies is in now measured by thequality of its talent

Business environments are more complex anddynamic

Advisory Boards and financial markets are expectinggreater business performance

Their contribution to thebottom line is mostsignificant, measurable and noticeable! Cost ofturnover can be 5-100X greater than the cost toreplace other employees

11

Source: DDI Nine Best Practices for Effective Talent Management (White Paper 2009)


12/35

Business Case For Investing MORE in Recruiting ANDRetaining your Strategic & Critical Roles

Identify your Strategic and Critical Roles in your company

Ask your CFO if they can share the average NET annual revenue OR download a copy of the mostrecent annual report consolidated 10-K summary from your website

Use the formula below to create your business case for investment in new tools, resources orproactive sourcing support needed to help you fill Strategic & Critical Rolesfaster! A 10%reduction in hiring cycle time to hire can be a significant savings!

12


13/35

Q2: How optimized are

your talent systems &processes?

Are your recruiting processes streamlined andautomated?

Are your systems and processes aligned withyour current business strategy?

Are your users trained and usingALL of thecapabilities of your existing systems?

Are the systems seamlessly unifiedORintegrated?

Are the systems SAAS (Cloud) or server based?

13


14/35

14

Talent Identification, Selection & Planning O CR SRCore Leadership

Competencies / Traits

Core set of validated core competencies exists for each operational roleand manager training and tools with behavioral anchors exists and is used.Strategic talent competencies are assumed and little or no assessmentagainst the competencies is done in the selection process.

Talent Assessment &

Selection

Talent assessment and selection in operational and critical roles isstandardized and tools are used to assess candidates against corecompetencies and skills needed.

Succession Planning /

Pipeline +Bench

Strength

Readiness assessment criteria includes mobility and situational experiencecriteria. All high potentials are tracked manually in spreadsheets by HR.HR does a monthly rollup of high potential candidate data into a sharedspreadsheet for overall tracking/ reporting and review by executive team.

Retention of Critical and Strategic Talent O CR SR

Critical & Strategic

Retention Planning

Focused on development plan, leadership skills and competency gapassessment and development

Analytics of Turnover Turnover data by role to identify trends in critical and strategic role turnoveris not done. Turnover data is only reported in HR but not analyzed againstany industry or internal benchmarks to identify trends and risks.

Conduct a Current State Qualitative Assessment of Your Practices FromDifferent Role Perspectives

O= OverallCR = Critical RolesSR = Strategic Roles


15/35

Common HR Data Management Business Challenges

Redundant, inconsistent manual data entryof recruiting and newhire data into separate recruiting, HRIS and performance managementsystems.Impacts staff time and creates more opportunities for error inyour data

Lack of user sophistication , adoption or skills training in utilizing

the full capabilities of the existing systems.Impacts recruiter efficiency, data integrity, performance reportingaccuracy

Hours of recruiter time spent manually tracking data in manual

excel spreadsheets or exporting and formatting data from multiple HRsystems that are not integrated and then manually merging it into a singleroll up spreadsheet for management reportingImpacts recruiter time that should be spent on higher value recruitingand sourcing activities and creates opportunity for recruiters to manuallymanipulate data in their favor

15

16


16/35

Legacy Collaboration Model

Unified Collaboration

Model

Hiring Managers input

Performance Data into a

different Performance

system

HR Admin pulls data from 3 different systems to create management

reports on recruiting, performance and new hire data

Recruiters Enter Recruiting Data into an ATS System

HR Admin re-enters data into

HRIS System for each hire

Hiring Managers

enter performance

data in same system

Recruiters enter

recruiting data into a

single unified talent

management system (i.e

Hrsmart)

HR Admin updates

new hire and on-

boarding data in

same system

Everyone can access their appropriate talent

Dashboard and Report section of the Unified

system to view Real-Time metrics - anytime

Data Management Comparison

16


17/35

Unified vs. Integrated Technology

Unified (HRsmart ) Integrated (Multiple Vendors)

All talent management modules are builtfrom the ground up by a single vendor

Data entered into any module is linked by acommon source record to all other talent

modules that require input on that datapoint

System upgrades to any module areseamlessly updated to all modules

A single HR Talent dashboard for decision

support is comprehensive and customizable: Recruiting & Onboarding

Performance management

Succession Planning

Retention

Diversity

Each talent management module ispurchased from a separate vendor(Recruiting/ATS, Performance Mgmt,Succession Planning, etc)

OR

The core technology vendor (ATS, ERP orHRIS) has acquired other vendors andintegrated them into their solution

Data entered into each vendor module maynot always be linked by a common datasource record which requires a customizedAPI link be created and regularly updated as

vendor updates are rolled out ($)

Multiple HR Talent Dashboards typicallymust be accessed unless a customizedcentral dashboard is requested ($)

8


18/35

The Business Case for a Unified Platform

The Power ofONE!

One system

One vendor

One contract One price with volumediscounts

One support team / contact

One source record that links

data to all modules One HR Metrics Dashboard

One update impact on allmodules when updates aremade

And TheSimplicity of..

Financial and contractsmanagementwith a single vendor

No $ needed for custom API integrationof each module

No $ needed to maintain the customAPIs when vendors make systemupdates

Time savings on reporting and dataanalysis in one system vs. logging intomany to pull separate reports andmanipulate them

18


19/35

Q3: How can data be used to help you optimize yourability to RecruitTop Quality Talentto your

organization?

HIRED!

HiringManager

Satisfaction

Talent Qualityand Ability toAttract the BEST

Talent

Recruiting Performance /Speed to Hire

19

20


20/35

20

Best In Class Talent Acquisition Survey Says- Top Impacts on Recruiting Success are:

Staff ing Eff iciency, Effectiveness, Scalabi l i ty and Candid ate

Qual i ty w i l l be the Staff ing Imperat ives o f the Next Decade

Source: Staffing.org 2011 Staffing Benchmark Report

21


21/35

Starting Point Resource Properly!- Requisition Load Directly Impacts Recruiter Performance and Quality

21

Source: Recruiting Roundtable 2009 Benchmark Report. Workload is defined as the average number of open requisitions per recruiter

Experienced employees are defined as those with five or more years of experience

External Benchmark: Recruiting Roundtable research recommends for optimal performance a requisition load of 11-20 for recruiters hiringexperienced positions. For entry level positions the recommended recruiter requisition load is 20-30

22


22/35

Time Allocation Impact on Recruiter Performance - Are YourRecruiters Spending More Time onHigh OR Low Value Activities?

22

Lower Value Activities: 45%

30% - Managing admin activities with 17%beingdedicated to just candidate interviewcoordination and scheduling

13% - Reviewing applicant resumes to postedjobs ( internal and external )

High Value Activates: 55%

37% of recruiter time is spent sourcing andphone pre-screening / interviewing candidatesfor match to current openings

5% of recruiter time is spent managing candidateand hiring manager relationships and driving therecruiting process forward

7% - Special projects & internal meetings

4% of recruiter time is spent proactively sourcingand networking for top talent

2% - Initial recruiting strategy meetings withhiring managers clarifying new open jobspecifications

23


23/35

Key Questions to Answer and a Business Case ForProperly Resourcing Your Talent Function

Do you have HR Generalists doingrecruiting part time or dedicatedrecruiters focused 100% onrecruiting?

Do you have admin support staff

supporting your recruiting or HRteam to own lower value activities ?

Are your recruiters carryingrequisition loads greater than 25 -30 per recruiter for variouscorporate positions at all levels and

40-50 for high volume lower levelrecruitment of the same positionongoing?

What is the requisition mix of yourrecruiters? Is it strategicallyaligned to your business needs?

23

24


24/35

Strategic Business Alignment Metrics that Matter

24

Source: 2010 Corporate Recruiting Benchmark Report

Staffing.org

Recruiting Cost Ratio (RCR) andRecruiting Efficiency Ratios(RER) are better measures ofRecruiting Effectiveness andRecruiter Productivity

25


25/35

Measuring Recruiting Costs Using the RCR vs. CPH

Recruiting Cost Per Hire Ratio (CPH) - Does not account for variations in positiondifficulty to recruit or geographic impact on the search costs or timeline.

Cost per hire = total recruiting cost / number of people recruited Accurate only when uniformity in staffing specifications and operations exist Inaccurately accounts for variations in job functions, skill levels, labor market conditions and industry

variables Example Someone recruiting an executive level position in a rural market will take longer and incur

greater costs than someone recruiting a mid level management role in an easily sourced skill set in amajor metro market

Recruiting Cost Ratio (RCR) More fairly measure and compare recruiting costs acrossposition levels, geographies and recruiters

Recruiting Cost Ratio = total recruiting costs / total compensation recruited

Example: Recruiter Xhired 15 engineers, who were paid $50,000 each (first year comp.), and spent $66,000

doing so (all in cost including office overhead, candidate travel, the recruiters proportional salary, etc.)

Recruiter Y hired 7 senior managers, who were paid a total of $980,000 (first year comp.), and spent$84,000 doing so

Source: 2010 Corporate Recruiting Benchmark Report Staffing.org

25

Recruiter X: Cost per hire = $66,000 / 15 = $4,400Recruiter Y: Cost per hire = $84,000 / 7 = $12,000

Recruiter X: Recruiting Cost Ratio = $66,000 / $750,000 = 8.8%Recruiter Y: Recruiting Cost Ratio = $84,000 / $980,000 = 8.6% ***

26


26/35

Recruiting Cost Ratio (RCR) Benchmarks

Source: 2010 Staffing.org Recruiting Benchmark Study

Example: Consulting 13.8 18.4

Average = 16.0

26

27


27/35

Cycle Time Vs. Recruiting Efficiency Ratio Benchmarks

27

Source: Staffing.org 2010 Benchmark Report

UsingRERmetr ic to m easure eff ic iency accoun ts for the im pact of

unique indu stry experience, costs, cycle t ime, geography, com pany

size, total hires (internal vs external) and outso urc inginto an

average Recruit in g Eff ic iency rating.

28


28/35

Mutual Accountability- Measure Recruiter AND Hiring Manager Satisfaction?

28

Use Post Hire web surveys

to measure new hireexperience, candidate quality,and hiring manager andrecruiter satisfaction with

each other during the searchprocess

SLA Agreements are usedto manage expectations andcreate clear accountabilities

between sourcers, recruitersand hiring managers

Source: Staffing.org 2010 Benchmark Report

29


29/35

What Best in Class Organizations are Doing Differently

29

1. Proactive, ongoing pipel ine sourcing in advance of n eed to f i l l cr i t ical & strategicroles faster

2. Focus on ability to identify, predict and assess talent quali ty3 . S trateg ic work fo rce p lann ing and bus iness a lignmentto support changing needs

30


30/35

Sourcing:- Talent MAPPING tools and data can help you make INFORMEDSourcing & Recruiting Decisions

www.WantedAnalytics.com

30

31
http://www.wantedanalytics.com/http://www.wantedanalytics.com/


31/35

Predictive Assessments Reduce Turnover Costs andImprove Your Ability to Predict Talent Quality

31

32


32/35

Business Case For Investing In Tools To Assess andPredict Talent Performance / Quality

32

Are you tracking andanalyzing turnover andperformance ratings trendsin Critical / Strategic roles?

Do you have tools in placeto improve your ability toassess employeeperformance and predictnew hire performance?

Are your managers trained

in the use of yourperformance managementand talent selectionassessment tools?

33


33/35

Recap / Action Items

Assess your current talent related systems and processes to identify

opportunities for seamless data integration, management, collaboration& reporting.

Identify and focus talent planning on your critical and strategic roles thatdrive bottom line business performance.

Regularly analyze your workforce data to identify trends and potentialtalent risks related to turnover, performance, aging workforce, leadershipand critical role succession, and diversity.

Assess your recruiting practices regularly to optimize resources and tools.

Re-align recruiting and talent management performance metrics to drivethe right behaviors.

Strategically use talent supply & demand tools to make informeddecisions on recruiting, compensation and new office locations.

33

34


34/35

talentRISE Talent Risk Analysis Report Offer

To conduct a talent RISK analysis for your organization, we will need an HRIS data export of the

following current workforce data for the employee group you wish to have analyzed. Minimum of 250 employee records required. Cost is $3 per record. Minimum fee is $1500.

A report will be generated within 2-4 weeks of receiving the data from your HR team:

Position Title

Department

Hire Date

Birth date

Date Entry into Current Role

Termination Date

Termination Reason

EEO Gender

EEO Race Last Performance Rating Score

Annual Pay $

Compensation Grade / Code

Employee Employment Full time / Part Time

Employee Exempt Status Exempt / Non Exempt

34

Additional questions needed to complete thefinancial risk analysis section of the report:

Percentage that headcount is expected toincrease or decrease next year in this role oroverall?

Industry classification?

Total annual gross revenues

Total annual gross expenses

Average revenue per employee

Overtime policy

35


35/35

Questions / Contact Info

Carl Kutsmode,Managing Partner

[email protected]

Ph 773 916 6801 www.talentRISE.com

35

finding hidden budget dollars in your recruiting practices 10 2012 hrsmart

Documents