In the world of recruitment, can a company manage its recruitment activities in a cost effective manner without jeopardising longer-term strategic talent objectives?
In the current economic climate it is obvious that prudent executives are focused on cost according to James Mendes, Managing Director, Asia Pacific, Alexander Mann Solutions. It would be almost negligent not to be when the economic signals are far from positive. Hopefully lessons have been learned from previous downturns. For example, many accounting firms are reflecting before cutting graduate programmes, having done so in the past, only to realise that when the good times return critical talent resources are not available.
Given the current environment it can take a brave, visionary HR Director or Recruitment lead to focus on quality when the corporate mantra is focused on cost. Mendes believes it’s essential to manage a dual focus for the following reasons:
- A focus on quality offers the greatest recruitment prize
- A focus on quality is even more important in a downturn
It seems evident that quality should be the primary focus of recruitment. Often, however, it is excluded. This can be because quality is hard to define and measure and therefore sometimes doesn’t get the focus it deserves. So, one of the starting points is to define quality. Quality in general terms is often defined as a ‘degree or standard of excellence’ but this needs further contextualising for recruitment--e.g. should recruiters focus on the quality of the process or the quality of the hire? Ultimately the real prize is the quality of the hire but studies show that high quality processes are an important contributor to better hiring (Human Capital Index research). The impact of better recruits on the bottom line has been documented in a number of academic studies. Whilst cost is a critical element of great recruitment the ultimate impact of better hiring can be much greater.
The real skill in a downturn is not to flinch from tough cost decisions whilst keeping one eye focused on the longer-term strategic prizes available as markets/economies recover. There are striking examples of executives that have seized opportunities in a downturn. The recent McKinsey Quarterly article 'upgrading Talent' highlights broader talent investments from Cisco and IBM in previous downturns. Some businesses have gone as far as using the current environment as an opportunity to expand their geographic franchise picking up specialised business units – such as Nomura’s well-documented acquisition of Lehman’s Asia unit. A downturn truly tests us and it’s more important than ever to attract the best for both the short and long term future of the company. If we are agreed on the fact that quality still matters in recruitment in a downturn, let’s turn our attention to the challenge: How can we maintain a quality focus?
There can be no absolute definition of recruitment quality—not all businesses are looking for the same outcome. Quality needs to be linked to strategy and the resulting human capital requirements. This is hard enough in normal economic conditions but it can be even tougher when there is significant volatility. The ’text book’ approach to linking recruitment to strategy is that the Board create a three to five year, or longer, plan and the appropriate HR representatives analyse the human capital requirements and define a plan for either training current employees or bringing in new talent. Seems simple, but it doesn’t work like that. Partly because strategy doesn’t happen in a linear fashion in the 21st century and the old idea of top-down strategic planning has been eclipsed by a more devolved strategic decision-making process that emerges from the grass roots.
Google is an often cited example of managing with such a philosophy, for good reason. A study by the University of Sheffield found that companies with devolved decision making showed an average 7% increase in value added per employee a year. This more fluid strategic planning is even more acute when there is such volatility in the market and fundamental business models are being re-thought. Therefore, a key challenge for recruiters in the current market is to be connected to strategic decision-making. Waiting for a nice blueprint of the strategy to land on your desk will not work in the current market. Recruiters need to be out and about in the business finding out about strategic developments, helping to drive the strategy process by advising business leaders on how to “translate” emerging strategies into a vision of the people that are needed to deliver the strategy. This is a rare and important skill and never more important than in the current environment.
Most recruiters are more motivated by 'hiring the best' than 'hiring cheaply'. Despite this you would be mad, and possibly out of a job, if you did not have an eye on cost right now. Don’t panic. Cost and quality are very compatible. Recruitment is a strategic activity which has a significant business impact. It is also a process with a significant amount of background research, database mining, and administration, interview scheduling, required. The dual focus on cost and quality eliminates wasted activities, for example only focusing on critical hires and stopping the processing of poor applications, and therefore enhances a focus on quality.
Total Quality Management implies engaging the whole organisation, essential for great recruitment, and looking at the end-to-end process. In this environment you may have received a significant increase in applications. Don’t be thrilled with thousands of applications that don’t fit your quality criteria. It’s essential in this market to be able to design a process that uses technology, sourcing strategy and assessment filters to target quality whist controlling process costs. Managing short and longer-term strategic objectives, as well as cost and quality objectives, is the essence of great recruitment.
Quality focus doesn’t have to mean significant investment or increased cost – it’s about eliminating wasted effort and ruthlessly focusing on the right skills. More challenging still is that it’s about connecting to rapidly evolving strategies to define what the right skills are as the world changes.
Paul Arkwright
Publisher
