Recruiting Inside the Loop
When recruiting sits at the core of the business, best practices call for accurate workforce projections and a culture of continuous improvement.
ATS’ success hinges on its ability to supply skilled technicians who can maintain complex factory equipment for major manufacturers such as Honeywell, Honda and General Electric. Hefti tracks all new business through direct contact with client companies and ATS managers.
"HR is our competitive advantage," says Jeffrey Owens, president of ATS. "Retention, recruiting and training are all critical to the company, and HR is deeply involved in new business prospects. The executive team meets regularly and HR is included. It is also included in daily and weekly meetings with sales teams."
Hefti’s recruiters also have direct contact with client companies and ATS managers and are firmly entrenched in the business. All recruiters are actively involved in each product area and meet weekly with the area vice presidents to discuss open positions. To facilitate a proactive approach, recruiters receive staffing projections for one, two and three months out.
Best practices now call for immersing recruiters in the business.
"The best recruiters are aligned to a specific unit so they understand at a visceral level the factors that affect the company," says Brian Wilkerson, who heads up Watson Wyatt’s talent management consulting group. "They have to understand performance from a manager’s perspective."
ATS has created an advanced system for engaging recruiters in all aspects of the business and creating accurate workforce projections that minimize time-to-hire delays. The company, a spinoff from Caterpillar Inc., must hire 600 new employees each year with an internal recruiting staff of 15 to meet the needs of a growing roster of clients. Annual growth for the company is averaging 20 percent.
Every Friday morning at 7:30, all ATS employees are invited to attend meetings that provide a full update on new clients and goals. Most employees attend, and recruiters are always there and often make presentations.
"An open culture motivates people," Owens says. "We share with as many people as possible the daily operations of the company. People can’t do their jobs if they are not up to speed on the strategic direction of the business. We are very open about everything that happens."
Based in Peoria, Illinois, ATS is structured around three product areas: on-site factory maintenance, industrial parts repair services at its two service centers, and maintaining and repairing computer systems for clients. Recruiters research every client and remain actively engaged to ensure that they understand specific client needs. To improve the onboarding process and to keep recruiters engaged, ATS requires its recruiters to attend new-employee orientations.
"We move recruiters through the three product areas to keep them fresh and to give them the flexibility they need to meet changes in our needs for specific types of employees," Hefti notes. Many ATS recruiters hold green belt Six Sigma designations and all participate in the company’s Six Sigma process. All of the recruiters have PHR certificates. The workforce projections recruiters receive come from an internal automated system that projects new business and tracks promotion opportunities.
Best practices for recruiting are particularly important at ATS because the skilled maintenance and repair employees it needs are in scarce supply. The skilled-labor shortage in manufacturing is acute and growing. Manufacturing operators who are laid off do not have the knowledge and experience necessary to easily retrain for skilled positions, and after years of instability in the sector, few new entrants pursue careers in the field.
"The skilled trades require years of experience," Owens says. "The electronic controls used in automation are very sophisticated." Retirement rates in the skilled trades are high. In addition, companies have been reluctant to hire for open positions, so there are not many younger workers who can be moved up. Also, Owens says that it is difficult to attract younger workers because of negative attitudes toward manufacturing jobs.
ATS sources from three areas. First, the company makes heavy use of lateral recruiting, including recruiting from manufacturers who are closing down or relocating overseas.
"But this can be difficult because these employees have their own culture," Owens notes.
A second source is military personnel. Hefti and the director of recruiting are former military. Coming from the armed forces makes for particularly good candidates because they have solid training in fields such as electronics and experience in maintaining sophisticated machinery.
"We train them in technical skills, and we work with them on their ‘soft side,’ " Owens says. "We teach them how to work in a corporation, which is quite different from working in the military." Today, 30 percent of ATS’ employees are former military, and the company has set a goal of increasing that to 40 percent.
A third and far more difficult source comes from the company’s attempt to pull young workers into the field. "We stress the promotion opportunities in the career, good pay and benefits, and technically challenging work," Owens notes. "We have to do a lot of selling that this is a great option."
In January, ATS launched a new workforce readiness program as a joint venture with Illinois Central College. The new multi-skilled technical career program is a 40-week accredited curriculum that teaches automated manufacturing and maintenance.
Hosted at ATS headquarters, the program gives successful students an opportunity to work at ATS. In addition to this formal training program, ATS executives and recruiters travel to local high schools and community colleges to improve the perception of manufacturing jobs.
The turnover rate at ATS is 16.8 percent; about half of it is involuntary. "This may sound high, but we’ve made significant progress," Hefti says. "We transition some employees to the customer culture. The customer hires us as a change agent, and to achieve this, we have to have some churn. We keep raising the bar and pushing for higher performance."
When a client taps ATS for outsourced maintenance, the client’s most valuable employees remain on the job to ensure a blend of tribal knowledge and new cultural influences. This combination can revitalize maintenance operations. All ATS employees must complete 20 hours of mandatory training each year, and all receive their own formalized internal mobility plan as part of ATS’ talent management program.
"Our recruiting culture, like the culture for the company as a whole, is continuous improvement," Hefti says. ATS recruiters are evaluated on one-year retention rates for their hires. "We do a ‘lessons learned’ session when an employee leaves," he notes. Recruiters are also evaluated on feedback from clients and for meeting the continuous improvement goals in their reviews.
"You can focus recruiters for short-term results, but you also must engage them for long-term results and the long-term success of the company," Owens says. "We don’t emphasize the number of hires or the time to hire, but the quality of the hire."
At ATS, recruiters know that 70 percent of their ability to advance is based on learning that comes from their work on the job, 20 percent comes from mentoring and coaching, and 10 percent comes from outside training.
"In performance evaluations, they know the focus is on their service quality and what they are doing to improve the recruiting process and the company," Owens says. "If they just keep their head down and do nothing but recruit, they will not have a good performance review."
ATS’ approach is part of the major change in recruiting that must occur at all companies that need to improve staffing results.
"For recruiters, a mind-set shift must occur," Wilkerson says. "Many recruiters still believe that their job is to fill requisitions. Their job should be to bring in people who will impact the business. It comes down to measuring the impact that hires have on the business."
Recruiters may contend that they can’t control such factors, but no employee controls all the factors that ultimately determine how they are evaluated, Wilkerson notes.
"Recruiters have to learn that they may not control the outcome but they are still accountable," he says. Many recruiters still can’t do a simple analysis of the cost considerations in using contingent labor instead of hiring full-time employees, he notes.
Besides immersing recruiters in the business and holding them accountable for business impact, companies must ensure that recruiting directors have the information they need to do their jobs and improve workforce planning.
"They need a strong understanding of demand in the organization and how people flow into dollars," Wilkerson says.
Recruiting directors also need to know how the business looks at costs and its people component, and how to make a business case. Finally, they need to understand supply dynamics, and they need to understand them on a global basis even if the business is not yet operating overseas, Wilkerson says.
ATS views recruiting as a core function and does not plan to outsource any part of it. But recruitment process outsourcing is now the fastest-growing sector of HR outsourcing.
"Organizations are looking at taking recruiting to outside vendors because making the transition to effective recruiting internally is too painful," Wilkerson notes. "They want to hold recruiters accountable for financial results and they have greater confidence in their ability to do this with outside recruiters. Even if it costs them more, they are willing to outsource. Recruiters are starting to feel that they are back in demand like they were in the 1990s, but they don’t understand that it’s going to be a different game this time."