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Two Out of Three Ain’t Bad Cost, Time and Quality in the Talent Game

October 18, 2008
Related Topics: Career Development, Candidate Sourcing, Employee Career Development, Strategic Planning, Featured Article, Staffing Management

Workforce Management recently featured a cautionary tale titled "Survey Data Emboldens Cry for Recruiting Funding," and it's pretty much what you would expect. Everyone says recruiting and talent acquisition are core to the business world, but everyone's pointing to a lack of funding, a need for better technology and stressed recruiters as problems to overcome.

Allow me to give you the bottom line on the recruiting game. You’ve got three factors you can control as a recruiter: time to fill (the average number of days it takes you to fill a position), cost per hire (what each hire costs on average related to recruiting expenses) and the ever-elusive quality of hire (which means different things to different people).

Like the poet Meat Loaf once said, "Don’t be sad. Two out of three ain’t bad." (Note to my Gen Y friends before you e-mail me comments about my age: Meat Loaf was an important entertainer to the boomers who sign our checks. Know your history!)

To illustrate the trade-offs in recruiting related to time, expense and quality, here is a conversation that, as a talent professional, you might recognize:

You/Me (talent professional): "Hi, Jennifer! I’m the lead recruiter on the account manager position you’re preparing to fill in your organization, and I wanted to give you a quick call to make sure I understand the requirements of the position, and what you are looking for."

Jennifer (hiring manager): "Kris, I’m glad you called. I need a purple squirrel, and I need the purple squirrel fast. I’m looking to get this person aboard in the next 30 days. (A full description of the ideal candidate ensues from Jennifer, which includes industry and functional experience so unique that it rivals a job specification for a left-handed sheepherder who has been a sales trainer with a background in Unix development.)

You/Me (desperately trying to manage expectations): "Jennifer, we can definitely work on that. I wouldn’t be credible to you if I didn’t point out you’re looking for a profile that’s very unique in the marketplace. Any chance that you’ll drop the need for the sheepherder to be left-handed or fluent in Unix if we struggle to find a candidate with every one of those credentials/skills?

Jennifer: "No. I need that type of sheepherder, and I need them yesterday."

You/Me: "You know I pride myself on working these searches without help from third-party recruiters. However, if you need everything in that profile and you need it in 30 days, we may need some outside help. Are you willing to spend a placement fee for the right candidate?"

Jennifer: "My budget got slashed two months ago, so I don’t have funding for that. But I still need the skills on my team in the next month."

You/Me: (Silence, accompanied by sense of dread and slight self-loathing.)

Welcome to recruiting in America, and to running a business.

Here's the secret, and it's like anything else in life and business. You can get new hires for any position 1) good and fast, 2) good and cheap, or 3) fast and cheap. The problem is that you can't get all three factors (high quality, low average time to fill and low average cost per hire) at the same time in a consistent fashion.

It's Economics 101. Let's examine your choices:

    1. You want high quality. So does everyone else. Once you make the smart jump to quality, you have to choose whether you are going to be patient with your recruiting/HR team and live with an increased time to hire (which keeps your costs low), or spend more on internal or external recruiting resources (which will drop your time to fill).

    2. You want talent quick. Great! Pay more for increased internal or external recruiting resources or accept that you’re not always going to get the highest quality, especially if you force your internal recruiting team to fill it within 30 days.

    3. You want to control your costs (cost per hire). Not a problem! Just accept the fact that you will have lower quality over time (if you want low costs and a quick time to fill) or a higher time to fill (if you want quality as well as controllable expenses).

Without question, a strong director of recruiting or competent HR pro can make improvements to all three factors by developing an efficient department that makes good use of talent and technology and is active in the talent game. Once they develop an efficient department, however, it's a market-driven scenario. You can choose two of the three factors outlined above, but you usually can't have all three.

It's probably one of the best examples of the talent game resembling a factory. Once you streamline your department and get the natural efficiencies in all three areas, you have to become a "business partner" (buzzword alert!) and educate your internal customers on the trade-offs, and let them help choose what's most important to them.

Sometimes being a business partner means forcing someone else to make the choice and not accepting the unrealistic expectations being put on your back as a recruiting or HR pro.

Here’s how I would shift (or share) the burden:

    1. Explain to the hiring manager that there are three things (quality, time and money) you look at within each search once you have the job specs. Don’t assume they know these factors or will acknowledge them. Educate on the tradeoffs outlined above in your own words. Let them ask questions. Talk openly about all the factors.

    2. Ask them to choose the two factors most important to them. Brainstorm with them if they aren’t sure. Once you have an indication of what’s most important to them, ask if their view is consistent with the rest of their department and their boss. Compare and contrast, as necessary, why their view is different from that of other stakeholders.

    3. Encourage—or require—them to communicate the two search factors (quality, time or money) they are focusing on within the search to the rest of the organization and their boss. Have them give you visibility to that communication so you can become involved in the dialogue.

    4. Once you’re engaged in the search, report back early and often. Don’t leave the hiring manager holding the bag. You’ll want to give solid status reports on what you are seeing in the candidate world in order to give the hiring manager the chance to change their mind about the factors. The most common change will be a hiring manager who starts out willing to wait (choosing low costs and high quality) but migrates to a stance of being willing to pay (choosing high quality and a more immediate hire).

So that’s the plan to engage your hiring managers to be realistic on the recruiting trail. My experience says that most will choose quality first, and then be faced with the toughest choice of all in the talent game. Do I want it early or cheap?

Good luck with that one! If they struggle, remember you can always channel more Meat Loaf and encourage them to sleep on it.

Workforce Management Online, October 2008 -- Register Now!

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