09/16/2020

Suck Less At Sourcing

By Matt Charney

If you’ve been in this business for any length of time (or even if you haven’t), there’s a good chance that at some point you’ve heard the somewhat hackneyed cliché, “the world’s most valuable resource is no longer data, but oil.”

This asinine aphorism has been widely cited since the Economist published a 2017 report of the same title, and has been a mainstay of “thought leadership” ever since. As we only recently found out, however, the problem with this metaphor is that at the moment, oil has no market value; in fact, the price of West Texas Crude (a key indicator) is actually negative. Data, however, remains one of the most critical components of business today. And nowhere is that aphorism truer than when it comes to the business of talent.

It’s convenient and cliched to say that our people are our greatest asset, which is completely false, considering they’re also the biggest expense on any P&L (assuming they’re not written off entirely). The truth is, in fact, that the data about our people is our greatest asset, and it’s one commodity that, unlike oil, has a seemingly infinite ceiling when it comes to market potential – and a significant impact when it comes to driving business and bottom line results.

Swimming Upstream

In recruitment, of course, like in the oil business, a significant portion of our capital expenses and infrastructure are dedicated to building a pipeline; there’s a tremendous cost associated with extraction (sourcing) and candidate development (refining, to continue the oil metaphor). Therefore, it makes sense to store any associated surplus, whether those are candidates or oil, until there’s sufficient market demand.

Dropping this extended metaphor for one moment, the idea of pipelining is obviously one that makes a lot of sense in resourcing; in theory, it sounds like the perfect strategy to ensure that there’s always an available supply of qualified talent available with the experience and expertise recruiters are looking for. 

Sourcing and engaging this surplus of talent, of course, takes a significant amount of time, as proactively finding and engaging mostly passive talent, particularly those with hard to find skill sets or niche industry experience, requires building a real relationship based on mutual trust; pipelining true top talent is anything but transactional or short term.

Open reqs, however, must be filled efficiently and effectively, regardless of relative market scarcity or candidate supply. Since even the best talent forecasts are inherently flawed (which explains why, in a December poll, fully  60% of global TA functions planned on adding headcount in 2020), this makes pipelining something of an inexact science, at best.

Hiring is just in time, all the time, and candidates, like any commodity, are valued almost exclusively dictated by short term demand relative to available supply of qualified candidates and the market competition for them.

These factors, like all variables in the business of talent, are imminently dynamic and unpredictable, and exist beyond the control of even the most carefully constructed workforce plans and talent forecasts.

That means that most of the time, our pipelines are, at best, leaky – and, despite our belief that the bigger the pipeline or talent pool, the better it will be for our employers, the fact is that timing is everything. That’s true for employers actively filling reqs, of course, but it’s equally true for top talent.

A candidate with high job satisfaction or engagement is unlikely to consider other opportunities; they’ll be more receptive to building relationships with recruiters – and consequently, entering a pipeline or talent pool – when their job satisfaction is lower, their career growth is declining or they’re actively disengaged at their current roles.

If you’re a recruiter looking to build a pipeline, however, telling the difference between the two prior to engaging them is an exercise in futility, and engaging a potential candidate around future opportunities if they’re currently looking, or for an open role if the timing isn’t right, effectively creates blockage in any pipeline that can not only disrupt the process for placeable candidates, but can lead to leaks, and ultimately, an empty pipeline.

Why is it, then, that sourcing is so inefficient? How can we do a better job with matching our candidates – internal and external, passive and active – to jobs so that we can move from building expensive infrastructure to an on demand model which negates the need for pricey infrastructure like dedicated sourcers, talent CRMs or “talent communities” while still allowing companies to hire just-in-time, all the time, to better align with current business conditions and market needs?

Human Capital Supply Chain Management: Your Wish is On Demand.

I’d like to introduce a concept that’s probably familiar to many of you, particularly those of you who have worked in contingency recruitment or services procurement at some point. Human capital management must adopt the principles of supply chain management if it’s going to succeed in the new world of work.

Doing so – that is, better aligning supply and demand to prevent not only pipeline inefficiencies, but also, effectively prevent us from over hiring new workers, or under resourcing our current ones (as companies are wont to do). This requires entirely rethinking our current approach to talent acquisition, but with a supply chain mentality, it’s a business case which becomes entirely self-evident: companies aren’t competing with other companies for talent; instead, it’s about optimizing human capital supply chains to ensure the greatest returns for the least investment in the shortest amount of time.

If talent acquisition is, essentially, a supply chain function, and the hiring cycle is essentially services procurement, then the real “war for talent” is essentially a battle for the human capital supply chain – and whether companies realize it or not, winning that war comes down to minimizing waste and creating a supply chain that’s got as few inefficiencies as possible.

Lean on Me: Kaizen for Recruiting

It’s no secret that TA has quite a lot of waste built into its processes, from sourcing and screening to offer development and onboarding. By using a lean approach to resourcing, companies can better understand how to eliminate any expenditure of resources for any goal other than the creation of value for the end customer. That means anything that doesn’t lead to a candidate getting hired, or a hiring manager getting the workers they need for the work they need done, should instantly be considered as a potential place where employers can cut. 

In supply chain and procurement, lean production practices revolve around minimizing work, and maximizing value creation. The two pillar concepts of lean, which was created and championed at Toyota as part of its TPS (that’s Toyota Production System, if you’re an Office Space fan) should sound familiar to anyone in resourcing or hiring:

  1. Just in time (or “flow,” in TPS)
  2. Autonomation (or what’s often referred to as ‘service enabled architecture,” or “smart automation,” depending on its use).

Now, I know what you’re thinking, but before you insist that recruiters aren’t in procurement, and TA isn’t just another category of spend, then consider a few foundational principals of the TPS model – and how similar they sound to sourcing best practices.

8 Lean Rules for Every Recruiting Roadmap:

  1. Think long term: the optimal outcome isn’t the most expedient, but rather, the one that will have the most utility and create the most value, over the longest amount of time – like internal mobility and development, for example.
  2. Continuous Improvement: Every process can be further optimized, and only through continuously striving to improve efficiencies and drive results can real problems be identified.
  3. Pull, Don’t Push: Overproduction is predicated on being reactive; staying ahead of market demand means that you can control demand, rather than rely on available supply.
  4. Find Balance: What the Japanese call “heijunka,” in lean, is a method that seeks to minimize overburden by reducing unevenness within a production process and ensuring that everyone not only contributes to the end result, but that the allocation of that work is balanced. Burnouts and process gaps are the primary causes of inefficiency.
  5. Quality Counts: If you focus on being best in class and design your processes for quality instead of competency, then you accept that if a problem is identified, the most important thing is stopping to fix it.,
  6. Build the Foundation: A process should work regardless of the people who work on it. Standardization and continuous improvement are key to business continuity, talent management and employee engagement.
  7. Technology Serves People and Processes: Technology must be reliable, tested and augment or enhance, rather than replace or add complexity. If technology doesn’t add direct value, and if a process has to be adjusted to accommodate that technology, then it is creating waste and undermining value.
  8. Employee Development is Everything: It’s easier to replace an existing part from a known supplier than it is to source a new one from an unknown and untrusted entity. Always reuse or repurpose existing assets, if possible.

If we apply these foundational facts to the “deadly wastes” of lean, we should have a good idea of what the future of total talent totally looks like.

Waste Management: 6 Things TA Messes Up

In talent today, having the most agility, flexibility and scalability in resourcing will increasingly rely on having not only the right processes, but also, the right technology partner, to implement, manage and optimize your hiring efforts for maximum efficiency and long term impact.

  1. Inventory Management: Resourcing has the tendency to favor overproduction when building a slate of candidates. Whenever more product is produced than internal or external stakeholders require, this results in what’s considered, in supply chain management, to the the worst kind of waste, as it hides or generates all other inefficiencies. Overproduction leads to too much inventory, which then diverts budget and resources to eliminate any supply not generated from demand. This is often the impact of relying on “post and pray” or traditional recruitment ads to attract more candidates than required, proactive “pipelining” of candidates without having an immediate need, and submitting multiple candidates to a hiring manager prior to receiving feedback (or submitting the same candidate to multiple roles and creating internal competition).
  2. Inventory: Whether in the form of raw materials (uncontacted candidates or social profiles), work-in-progress (candidates being screened or submitted for consideration) or finished goods (new hires waiting for onboarding), must be actively processed, or they create waste. In recruiting, some examples of this are candidates who are engaged and interested, but not interviewed; internal and referred candidates who aren’t considered or contacted; and neglecting to search an ATS or existing talent database prior to posting a job or proactively searching for new talent.
  3. Transport: Every step in a process that requires the movement of inventory carries a significant risk, not to mention added costs for no value. In TA, this is often seen in asking top talent to interview multiple times; migrating data from one system to another without seamless integrations; or, commonly, requiring recruiters to deal with multiple stakeholders or decision makers during their hiring process rather than have a central point of contact and clear communications process.
  4. Overprocessing: This is one of the most common TA inefficiencies, as it occurs any time more work is done in a process than the customer requires. From building specialized employer branding campaigns to using inbound social and digital marketing, to adding preemployment screens or assessments before hiring managers and candidates can meet, employers often add complexity and unnecessary components to their process of connecting the right candidate to the right job at the right time. It’s easy to get too clever in talent acquisition, but we waste hundreds of millions of dollars a year as an industry on this one waste alone.
  5. Waiting: The longer the process, the more waste is created – like how candidates have been known to abandon processes when the hiring manager won’t decide on a final candidate or provide feedback, or constantly asks “who else is out there?” Given the excessive waste of waiting, the answer is inevitably, “no one worth waiting on.”
  6. Defects: When the product doesn’t meet the process or customer specifications, and must be replaced or fixed. In recruiting, this happens frequently, which is why the rate of failure of new hires in their first year is close to 1 in 4, according to a recent Deloitte survey. Or why agencies have 90 day guarantees, often.

Overcoming Waste in Recruiting:

So, how, exactly, are employers supposed to effectively match supply and demand proactively if talent pipelines are problematic and inefficient, and talent communities are largely made up of transient job seekers and unqualified candidates who have mostly opted in rather than being selected for process participation?

The answer is just in time. And it’s always the right time for just in time with QuantumWork. Having the right people at the right place at the right time means that you can stop building pipelines and talent communities and start making hires. Our cutting edge, scalable and sustainable processes ensure that no matter what your resourcing demand may look like, you’ll always have the supply of top talent you need to ensure your new hires succeed. 

With QuantumWork, you’ll get a total view of your total talent picture, giving you the ability to acquire the right people, at the right time, at the right place and in the exact amount based on real time demand. Significantly reduce waste, improve the candidate experience and better align your budget and resources to hiring instead of “acquiring talent.”

Because in times like these, we could all use a hire power on our side. And we’ve got your back.