Tuesday, December 21, 2004

A short explanation about predicting recruitment levels

It’s that time again. My daily trawl of HR and talent related news is increasingly dominated by survey after survey saying that the job market will boom in 2005.

It is also the season in many firms when budgeting happens. Managers are asked about their forecasted recruitment for next year. My advice would be – take these estimates and expect increases.

It’s probably worth looking at what causes recruitment. A simple way of looking at recruitment demand within a firm could be:

Recruitment demand=population * turnover + expansion demand

Where Recruitment Demand is the number needed
Turnover is the rate of staff turnover (between 0 and 1)
Expansion demand is the how much the company wants to grow by (of course this could be a negative).

OK, so that in itself doesn’t help you much. What you need to do is understand the factors that will indicate future changes in turnover and expansion demand.


Turnover

Turnover changes quite predictably during an economic cycle. When there is a slowdown fewer people enter the labour market but as confidence increases many of those who were dissatisfied start to come onto the market. Turnover increases as market supply increases, however salaries remain stable as the increase in supply is greater than increase in demand (wages are pretty sticky otherwise you might expect a slight decrease). We are pretty much at the end of this period, unless you are in countries such as Germany or Italy.

As the market continues to heat up the pent-up supply is used and demand then starts to exceed supply. Wages start to rise. The prospect of increased wages start to bring more onto the job market, though as I described before people tend to make trade-offs when deciding to leave so increased wages will affect some more than others.

Finally, as most recruitment is reactive, and few businesses build surplus into their staffing levels more people leaving causes those that stay to work longer hours. This has a negative impact on morale which again leads to higher staff turnover

Many businesses will therefore see an increase in staff turnover in 2005

Expansion Demand
There are many, many factors that could determine this but I am going to recommend that you look in particular to some lead indicators.

The number of contractors and consultants is an excellent lead indicator of future staffing levels. As the markets for these workers is more liquid than for permanent staff the number in your workforce will increase in advance of permanent staffing hires. Depending on who you believe businesses in the US and UK are running at about 15% up on the number of contractors compared to 12 months ago.

Expect your managers to come to you enquiring about increased staffing levels, and pay particular attention to parts of the business where the number of contractors has increased the most.

Another similar indicator is the level of hours worked within the business. This can be quite hard to measure accurately unless your business has a culture of timesheets. Maybe you want to build an index based on a regular questionnaire. It will also give you a way of judging morale.

Finally it is worth having a look at some business confidence indexes (also quite common in the press at this time). This presents a slightly different picture with some surveys suggesting demand has gone flat.

The dynamics of this system are quite complex, but given this you should be able to ask the relevant questions of managers when in discussion about next years’ recruitment targets.

Monday, December 20, 2004

More dumb things

In an excellent summary entitled The 17 dumbest things in recruitment on Electronic Recruiting Exchange Dr. John Sullivan gives his pet hates about the world of recruitment - very apt they are.

In the spirit of the article I would like to add:

18. Failure to create a transparent, open internal job market
How many firms do you know where jobs are badly promoted internally (they are put on some page deep in the intranet) and capable, known staff miss out on great opportunities. Adding to this how many firms do you know where there are rules such as 'you must get your manager's consent before applying' or 'you must have been in your current role for 18 months'? Do HR departments really think that candidates have such rules when applying to a competitor?

19. More on measurement
Far too few companies use the information that they already own (what's on their HRIS or even ATS) to analyse trends, gaps, segments, behaviours etc. How many of those poor websites could be improved just by looking at how people use their websites?
Not only don't HR departments put financial impacts to their metrics, they rarely put information that is useful for forward looking decision making.

20.
Failure to build relationships

If someone has invested the trust to give a company personal details they are already warm. Companies rarely use this relationship (with permission) to keep them informed on upcoming projects, internal news etc. Not 'junk' mail, targeted information about the company that they will appreciate. Just been in the press talking about a great new technology development? Do they think that their technology pool might be interested in this?

21. Failure to manage the Press
How many recruitment departments do you know that sit down with the company press team to discuss how to build reputation in areas where there are skill shortages. Cheap, easy, quick. The media are calling out for interesting stories, especially at a local area (where most staff come from).

What have I missed?

More on retention

The Akron Beacon Journal today has a Christmas themed article on retention and companies approaches to combating it.

It notes that
Between September 2002 and August 2003, the rate was 19.2 percent across all jobs in the United States, according to the U.S. Bureau of Labor Statistics. And it has gotten worse.

Eighty-six percent of executives say turnover has stayed the same or increased, according to a recent study by the employee retention consultancy TalentKeepers.

The article notes that trust and respect are primary reasons determining retention rates.

Online is now prime channel for UK jobseekers

In a comprehensive article in the Financial Times a YouGov survey is noted as revealing that online is now the prime way for UK jobseekers to find a new job.

Spend, however, is still going towards traditional media with approximately GBP200m per annum compared to GBP100m on online advertising, partly because of the much larger costs of traditional advertising.

The article discusses the strategies that the media companies are taking and that several large online companies are combining online advertising with recruitment agencies as a way to get large numbers of CVs.

Friday, December 17, 2004

Reference checking

The Globe and Mail has an article about reference checking that contains some interesting points.

It notes that reference checking is not an activity that is done thoroughly in many firms, though that this is increasing. When it is done it is too often of the 'get a letter from the HR department of the last firm' type.

The financial services and professional services firms often look at other issues, such as legal history, but this is being done mainly for regulatory reasons. What else can be done?

My view is that this is an activity that is best done externally, and a good place to look would be an executive search research firm - they probably know who that person will have worked with in the past. A good reference search should take about 1 day of a researchers time.

You're not looking for a perfect background - there are few saints in this world - but for a common theme. A high performer might have made enemies, maybe you speak to someone that they beat for a key job, but if you get the same 'development issues' time and time again it's worth questioning it.

Another way of reducing the likelihood of finding issues is to be upfront that you are going to perform thorough checking. The articles quotes Microsoft Canada's national recruiting manager Paul Hamilton.

Candidates are made aware from the beginning of the interview process that they can expect complete reference checks as well as a scrutiny of academic credentials and past job performance, he says.

"We want to make sure we can substantiate the information they give during the interview. If there is any key area we identify in the interview process, we will probe deeper."

In the year the company has been doing the scrutiny, 85 candidates for management jobs have been hired and none have had to be rejected because of problems with their background, he adds.

As noted it is better to use someone not involved in the recruitment process to do this activity, as after a long and difficult exercise the last thing many wish to hear is that their choice is not all they believe they are.

When companies spend so much time and money identifying high performers isn't it time they should do background checks more thoroughly?

Retention is an issue, but not for us

Interesting article in Legal Week on recruitment and retention in the UK legal sector. Based on a survey of industry HR directors regarding key strategic issues facing their firms.

One part caught my eye:
The R-word is no longer redundancy, but retention. However, there is the rub. The research indicates that while 86% of respondents cite retention as an industry-wide issue, just 40% of them believe it is an issue for their firm.

Why only 40%? Well my guess is that they are all using the same HR benchmarking data which lets them compare themselves with industry averages. So just under half think that they are 'doing better than our competitors'.

Like most other industries much of the effort is being done at the top, with programmes for partners. This was type of approach was commented on by The Work Foundation in their excellent report Managing Careers in Large Organisations (PDF). Programmes focus on the top level of staff.

I absolutely agree that programmes should include the top level, but companies should be rolling them out, even in a watered down version, to all levels of staff. It is not just senior management who impact organisation performance, no matter how much our media like to jump on the myth of the superstar CEO (who on his own turns a business around overnight).

The Legal Week article also notes:
Certainly the costs of not getting this right are now being measured - more than 50% of the respondents claim to measure attrition costs, the most popular methods being through the measurement of replacement costs and training fees.

If you then look at cost per staff and multiply this up by the number leaving at that level you quickly get to some very big figures. If you look at the probability of staff leaving you will see that it is significantly higher if the person has only been with the firm a short time- one recent client lost 35% of all hires in the first year, but less than 1% of staff who had been with the firm for 20 years resigned.

In many firms new hires, especially the 'graduate population' gets great mentoring and development whilst they are on the programme then get nothing (other than a yearly review) when the programme finishes. And you are surprised that they leave?

Thursday, December 16, 2004

Who the recruitment marketer should work with

Recruitment marketing is one of those jobs where to succeed you need to pull lots of people from within the organisation together. This is meant as an open list of who should be part of that team:

Marketing
There are lots of people in the marketing function that you need to work closely with. You’ll need to speak to your brand reputation people to understand external perceptions of the corporate brand (most companies subscribe to a survey).

You should speak to the marketing research team to help you understand how to acquire and use all of the data that you’ll both need and want.

Given the evidence that I found you should probably be speaking to the advertising people to be informed of any big campaigns

Corporate brand will be wanting to speak to you so that any advertising fits within the corporate guidelines (you need a set for recruitment advertising.

Corporate Relations
A two way one this one. First you need to be informed of what the press are writing about the firm. Corporate Comms also should be briefed on your recruitment activity – they should be thinking about the impact of any announcement on your ability to hire.

Secondly, it is worth discussing with them about developing a plan to get you in the press. Stories about interesting projects do wonders to get candidates interested in the firm.

Web Team
Why is dealing with the web team so often so frustrating? Your site, and the way candidates move through the corporate website to and from it will often determine how a campaign works. You should be sitting down with this team to look at understanding web stats including career related search enquiries, making it easy for candidates, ensuring your site is accessible by all. It is good to keep informed of what stories are going up on the corporate site as often you will want to link to these as they have an employment angle.

Internal Communications
will get your message across to the maximum number of staff as quickly as possible. Work with them. They understand the channels available and will discuss how to time and place communications so they get read, and don’t conflict with other corporate messages. Remember, the more staff you can get into roles the less you need to recruit externally (making opportunities more transparent increase retention. Don’t be fooled into thinking your colleagues are checking out your intranet site all the time.)

HR
I can’t think of a part of HR who you shouldn’t have on your list. You will probably find that they are really interested in what you are doing. Try and get a good set of two way conversations.

The only other group I can think of are your staff. Use collaboration with the staff to help test messages (you probably want to build teams in different parts of the business for this). I describe them ‘listening posts’ – if you want to recruit developers then test your advertising on well briefed individuals from that area. Get them to tell you what is happening at the ground level.

Recruitment is best when the efforts are spread within the firm. Leading a collaborative company wide effort is very powerful.

Video on CVs

There was an article yesterday in the Edmonton Journal about a company - seeMyInterview who have set up a service offering video on electronic CVs.

The paper reports Larry Hill, president of seeMyInterview as saying
"It's a 11/2 minute elevator pitch on why you should hire me"

adding...

"I found that many employers did not get a good understanding of a resume just from what they read," he said. "As a recruiter, because I had interviewed the candidates I would propose to them, I saw elements that would only be evident if they came face to face.

"We have a culture that evaluates just by paper too quickly."

and
"Usually with interviews, one of the biggest areas is body language and your verbal skills. This video features all of this and it makes a difference."

The final point is interesting. Most good interviewers will try to get past this initial impact and onto the content of the interview. Sure, first impressions matter but in my experience the interviewer goes into the interview expecting the candidate to perform (or they wouldn't have called them in). Negative first impressions are more likely to be remembered.

Faced with a pile of, let's say, 100 CVs for a role, am I going to spend 90 seconds per candidate watching a video which isn't focussed on the questions I want answering? The recruiter isn't looking at the CV for the candidate to present themselves - they are looking to find evidence of the experience needed. Write your CV to focus on the role you're applying for (using the same sort of keywords used in the job description, constructed into meaningful sentences) and you'll catch the recruiter's attention.

The article reports that the fee for the service is $150 and the company is offering it to colleges, universities and other educational institutions.

UK employment at all time high

Statistics released by the UK government suggest that UK employment (the percentage of those of working age who are in employment) rose last quarter & that the total number in employment is at an all time high.

Summarising
, National Statistics reports
Labour market statistics published on 15 December 2004 show continuing stability in the labour market. There is an increase in the employment rate, more people are in employment, and fewer people were made redundant but the number of job vacancies is down. The unemployment rate is lower, there are fewer unemployed people and the claimant count has also fallen. Growth in average earnings, both excluding and including bonuses, has increased.

It is worth noting that overall figures often hide structural shifts - some sectors always do better than others. For example, vacancies in Finance and Business Services have risen 22.6% on the year with vacancies in Transport and Communications falling by 9%

It is also worth looking at Deloitte's December Survey on Jobs which reports much the same, but goes into further detail on specific areas where the labour market is overheating.

Wednesday, December 15, 2004

Better recommendations in candidate selection

Two related items came to my attention recently. First was a great (but quite technical) article from 3 German academics – Färber, Weitzel and Keim entitled “An automated recommendation approach to selection in personnel recruitment” and then seeing information on isdd’s OmniQ products in recruitment.

Both seem to tackle the same problem – most HR departments have far too many CV’s and finding the relevant ones is difficult and time consuming.

There are, as I see it, two main ways of tackling the problem – first you can ask job specific questions which can rank applicants for a particular role (of course you might have numerous types of tests which give you further ranking data) or the system takes a previously provided CV and uses analytics (hopefully a lot more intelligent than Boolean searching) to rank the applications. From what I can see isdd and Färber, Weitzel and Keim have seeked to do the latter.

Without seeing the isdd product in action I am not going to be as bold as commenting specifically on it. However the website suggests that it is used instead of a dedicated front-end system. Their phrase “OmniQ will automatically collect all emails and attached documents sent to the company from prospecting graduates” (taken from the PDF on it used in the graduate market) fills me with horror. I suggest it may be better to have the technology built in to existing applications.

Alternatively the industry could press for the adoption of standards such as the HR-XML resume schema that would enable far more accurate searching within CV’s.

This area is one to watch.

Understanding what matters to the candidate

This is the first in a series of posts of a 'how to' nature - in this instance how to get a better understanding of what matters both to your staff and your candidates.

Let me start by again discussing the job. I like (well some would say am obsessed by) the comparison between a product and a job, and as such your firm has many 'products' that it sells to candidates, some which will appeal, others less so. Just like any product there are many factors, some of which will matter more to some people than others. You will get a great fit if what your 'product' (the job) offers matches what your 'customers' (the candidate) wants.

But how do you do this? Well it is relatively simple, though will take some time. I assure you the results are worth the effort.

First you need to define what the factors you want to measure. I have always found that a mixture of gut instinct and a few workshops is a good way of defining these. You will have factors and subfactors - eg a factor could be 'non salary package benefits' and subfactors could include 'car scheme' or 'health club membership'. Getting these right is important. Get lots of colleagues to 'stress test' it - have you missed anything.

Next you need to survey people. I might be tempted to speak to someone in marketing about this as it is a complex issue. You want to get people to rate each factor on a scale in their ideal job. I will come onto this again later after I have shown you what you are going to do with the data.

Usually you arrange these items in what is described as a comb chart. I have used some factors as examples (this is not based on data or any other analysis - it's for example only) an example is illustrated below



Back to more data that you'll want. Next you want to understand what they think of you - you are going to compare the two. You might be able to ask candidates this, however you may get a good result by asking them on their first few days with the firm (before they're influenced by reality.) Here you could ask 'before you came to interview what was your view of us'. I would also suggest getting some who have been with the firm 3, 6 and 12 months to complete this as well.

From this you will get the following:



What you can see is that for some factors what they want (the blue) is higher than the yellow (what they feel you offer), and for other factors it's the reverse. For those elements with high scores these are the things that they really want and therefore you want to sell on. For those (like international travel on this example) you have sold this one, but they don't care about it (for this one you might want to look at the opposite also, like how they view you on work / life balance). Publicising or promoting such items will be unproductive.

You can use this analysis for a whole range of things:

* Redesigning your 'product' - changing the package, what the work involves etc
* focusing your recruitment advertising to things that will be influencers (get these factors reiterated at all stages of the recruitment processes)

There are some more ways you might want to look at the data:

* You should look at this by segments in your workforce - hey it will even help you identify these. What do high performers value that others don't (clue, look at their desire for strong leadership & organisational success compared to importance of the job). You could then sell those factors that will attract the high performers
* Looking at staff views later on will give you an understanding of the differences in views from when they started to after they have found out what you really offer. If they think you are great in one area, it's important to them and after they have spent time with you they think you are weak in this area you probably have identified a reason that they leave.
* Finally, you might want to ask them what they think of your competitors. This will enable you to get a view of your comparative strengths as perceived in the market. Again great information for making a great pitch. Wouldn't it be great to give the interviewer information such as 'they come from A & we have found that we are stronger at x, y and z so you might want to mention our great programmes in these areas'.

This has been a pretty basic overview but I hope it gets you thinking.

Identifying high performers

Heather, on her "Marketing at Microsoft" Blog wrote a great piece recently on the work she was doing to define a recruitment strategy at Microsoft. Specifically it discusses how she is working to identify the top performers from the average ones so they can focus on identifying and attracting those.

Given some previous experience I decided to add a comment. I republish it here to share some of those ideas:

I've done this sort of exercise in several firms over the last 5 years - let me show several interesting hints.

1) Often the best place to start is your corporate HR database. The more information here the better but given your size, even if the data is not complete you can generally get some statistically relevant results. One measure is to track rate of progress over time (who gets promoted the quickest, constantly). CHAID analysis on big groups can produce interesting results (you will have someone in market analysis with the tools and knowledge how to do this)

2) For recent hires you may well find referrals perform the best though looking longer term might reduce this impact. This is due to the initial process (often called socialisation, where the psychological contract is cemented). Referrals often have the referrer as a 'buddy' to help them through this process increasing their initial performance

3) Many of the 'best places' for hires will also produce the most average hires (sorry, no easy answers). You don't want to ignore the poorer performers - you want to identify what were the differences between the total population and the population of hi-po.s

4) Ensure that you really understand how you will classify talent. A good team depends on a mixture of people, and performance is often due to the environment that people work in (team dynamics etc) rather than the individuals (there are lots of sports examples to show the teams full of the best players often aren't the ones who win). 360 review data often shows interesting information. Are you promoting people because they are great at managing upwards yet their reportees don't rate them well.


5) Analyse your selection data over time. Is what they are tested on really a good predictor of success? Do regression on review data with selection data.

6) Try and track the high performers opinions. The employer opinion survey can produce some great information though you will need an identifier - for example 'have you been on X training', where X is provided to high performers only. One thing you'll notice is that high performers have a stronger interest in corporate performance and leadership whereas many will have more interest in their immediate team and what their role is. My guess is that it is the attitudinal stuff that is a good indicator - do their values match Microsoft's

7) When you find something drill down. Why is that occurring? Develop stories and test them. Eg, with one firm I found that their best recruits (based on speed of progression) came from the London School of Economics (it wasn't on the firm's list of schools they presented at). The reason? The LSE has 70% or so overseas students (as well as a great academic team) and it was the intercultural experience that was the key factor. We then looked at other high-performers and found many were the sons / daughters of families who had changed countries many times in their childhoods.


Book suggestion - Complicated Lives

I am firmly of the belief that if you understand how people live their lives you are in a much better position to understanding how work fits into that life and ultimately how you can attract and retain those you want.

Complicated Lives: sophisticated consumers, intricate lifestyles, simple solutions by Willmott & Nelson I believe is one of the best places to start to understand modern life (it is based on the UK but will probably give you a good insight into other cultures – we are rarely as different as it first seems – anyone who has done international HR or recruitment can confirm this).

Based on a large three year survey & numerous academic studies it explains the increasingly complex choices that people make in their lives, dispels lots of modern myths and gives some great examples of opportunities that businesses can follow to take advantage of the changing environment.

Let me give you but one example on how this can shift the issues for recruiters. The authors find that family ties are no less strong, but that they have become ‘vertical’ rather than ‘horizontal’. The role of grandparents looking after grandchildren has become stronger than ever as mothers return to the work force. Being close to grandparents is becoming increasingly important.

Why does this concern recruiters? Well, if families want to cluster around grandparents then the traditional geographic mobility, especially of skilled workers declines. Your local community matters more than ever before. Companies need to think about dispersing their workforce into potentially smaller centres. Visas might be hard to get but convincing someone in the same country to move might be even harder. You might want to consider increasing your presence as recruiters in your community, and trying to keep those that you have even more – you probably don’t have that many people in your relevant target pool.

Unlike many business books these days this one is more than a ‘one idea spread over 250 pages’. It will get your mind racing and give you the data and insights to make better decisions and policies. One of my favourites of the last year.

How people come to leave

Most of the reports and studies that I had seen on the reasons people leave an organization were very much concentrating on the reasons that people give when they leave, not on the process that they go through to get there. Given this I wanted to do some research to develop an understanding of the dynamic process underlying their decision.

Now for the caveat – this understanding was done by doing some statistical analysis understanding several linked components and what the fit was between them. It was an analysis using a large population size (n=65,000) employee opinion survey. As such it didn’t track individuals through the dynamic process but tried to identify a trend by looking at fit between a large number of variables with the large number of responders. A relatively simple pattern is observable.

Let’s visualise one hire (for the sake of the explanation let’s call him Peter – there seemed little difference in the pattern between male & female though there were some differences in the numbers at each stage).

Peter joins the firm as an experienced hire. He does so with a certain expectation about what it is going to offer him – not just in terms of the ‘hard’ bits of the offer like salary, pension etc. but also the ‘soft’ bits – what his new boss is going to be like, the social aspects of working in the new team… Let’s make the assumption that Peter is happy with this package of ‘benefits’ that he is going to get from the job (ie it was the best that he saw on his job search)

During the first period of time he researches actively the ‘soft’ stuff trying to understand his new environment. He probably focuses on what the job really is about (the challenge) first followed by what makes the organization tick. This process in what is often called the ‘socialisation’ period is one of the key factors in determining his retention.

Let’s say he is initially content (he still thinks that he has made a good choice). Over time however something always changes, not least the challenge (it always gets easier over time to do a job, unless of course the job changes) – of course he could find that he and his boss don’t really click. Anyway something changes.

When Peter joined he felt that the pay and time he has to put in were ‘fair’ (he wouldn’t have accepted the offer if he didn’t, given our assumption). In fact, if you ask someone about pay and they say ‘pay isn’t the most important thing’ what they mean is that ‘I think the pay is fair to balance the other positives and negatives of the work’.

As people spend longer in a role the balance how they perceive positive and negative aspects changes. We found a strong link between the time people spent in a role and their desire to move on (either internally or externally).

As this happens something else occurs – their feeling of being ‘underpaid’ changes and so does their desire for ‘more work / life balance’ (ie more free time or less time demanded in other ways to do the job eg commuting, working after hours etc). The linkages between feeling underpaid and desire to have more work / life balance were startling and they were very closely linked with people who either were actively planning to leave their role or were thinking about leaving.

Why does this happen. Well let’s consider when Peter joins. He is initially happy with the job – the positive aspects (pay, other hard benefits, the ‘soft’ benefits) either are equal, or better than the negative aspects (the time he has to commit to the job, commuting, the negative aspects of his boss, any lack of challenge..) Over time this balance changes, either from things he learns on the socialization period, the challenge of the job dropping, something changing the job (a restructure for example, or just someone key leaving the team). What can Peter do about this?

Well, very little. However he still wants to balance the positive and negative aspects but to compensate for the increased negative aspects he now wants more money or to work less (or likely both to some degree). What becomes top of Peter’s mind is that he is not being paid enough to put up with all the bad stuff. So when he leaves the money is quite high up on his list, though it hasn’t changed since he joined (or has been increased inline with the market). When he resigns he tells HR in his exit interview ‘I felt I was underpaid’ or ‘I want a better quality of life’. The money or work / life balance becomes ‘the straw that broke the camel’s back’

For this reason fighting retention on money is a short-term strategy – it neither cures the underlying reasons for the unhappiness and is far too easy for your competitors to copy.

Tuesday, December 14, 2004

On alternative advertising media

Sometimes they are the bane of the recruitment managers’ life – the words ‘can we do something creative / different’. The manager sees them as liberating; many recruiters see them as an opportunity to pour good money down the drain.

The results generated by such ‘alternative’ methods can be disappointing – why?

To really understand how your advertising is going to work you need to think about how people view advertising and use these behaviours to your advantage.

Most recruitment advertising is like the classified ad. You have something that the viewer wants and you need to communicate this in the most effective manner. They are usually looking at the ads for this information (it's not like a TV ad which you watch because you were watching the programme - here the ad watching is a consequence, not the reason for looking at the media)

There are two main sorts of people who will respond. Those who are active job seekers and those who are passive. The active may even have bought the paper because they wanted to look at its job ads. There is a purpose in the way they read through the sections – they go to the relevant pages, they scan the pages looking for the relevant information and only when it looks like they are going to be lucky do they read that copy that went through 7 iterations between ad agency and hiring manager.

Guess what – the easier you make this process the more likely you are of having success. What are they looking for? What the job is (scrap those useless internal titles), where the job is, who is it working for, how much it pays… Use creative images, but only if it’s the norm in the publication you are using. Your ad won’t win awards but it is likely to get the best response.

(Note: you can also use creative style ads if you are advertising for a role that people associate with your brand, so a retail chain wanting sales staff can lead with something creative because by having the brand on the ad you attract the interest of those looking for a retail job.)

The passive job seeker will be looking through the job papers in much the same way, but their scanning might be quicker. Here the information really needs to jump out, and so does your USP. If you believe that you can attract people with a great work / life balance (knowing that this is a common complaint with other firms in your sector) say it in the top of the advert, probably in a sub-heading.)

For both of these users they will be looking at the job pages because they have an interest – it’s just their level that differs. What happens with ‘alternative media’?

Let us consider the example of a marketing manager. We think about our marketing manager, how they live their life, what they read etc. and our marketing team suggests that this type of person is likely to read the Economist. We know that the Economist has recruitment ads – why don’t we place an ad there?

Well, who you are looking for may be a subscriber but when they get to the recruitment ad pages they skip through to the next set of pages. They don’t even scan the pages. They expect to get no benefit from what is written so they just miss them out. That is one expensive ad, which is likely to be seen only by those seeking the sort of jobs that are advertised in the Economist. We all are really good at missing adverts, especially those that we think will hold no value. (There is a great story that one of the UK banks placed an ad in their window offering free cash to anyone who came in and claimed it (to demonstrate that nobody looked in the windows) – they got maybe one person in a whole day. Thousands of people must have walked past, programmed not to look at advertising).

So what does and could work? Well the best ‘alternative’ location are where there are a lot of potential applicants all with some free time. Placing an ad in the store works for store assistants, but is less likely to find success for someone for a senior finance role in head office. Bus shelters and train stops work, especially on the routes to your office as people stand around with time to waste when they read ads that are of little interest (they have time to kill). Just make sure you have a clear and easily to remember next step (www.yourcompany.com/careers is hard to beat)

What can work for large recruitment campaigns is creating it into a story and then using PR – ‘BigRetailer opens in town – creates 200 new jobs’ is just the sort of story local press love. Again, think about how your target market will interact with the media.

Finally, what I haven’t discussed is alternative channels such as the internet, relationship management etc. These are more than likely to come up in the future but the same principle applies – understand how your target ‘consumes’ the media and you’ll be close to understanding how likely you are of succeeding.

Monday, December 13, 2004

Tracking reasons for joining and leaving

Lots of companies do exit interviews. Sometimes they are done by the managers, often by the HR manager. This takes time and effort. However, rarely is this data used in a meaningful way. What does it really tell you?

Getting to the stage where someone has resigned and then asking ‘why?’ is rarely the best time to use the information productively. Getting someone who that person associates with the problem to conduct the interview is also not a great way of getting them to open up. Finally, what happens to this data? Is it measured? Are trends developed? Are you making decisions on a few, statistically insignificant opinions?

Exit and entry interviews can be one of the most powerful ways of getting information on what is happening in the organization, but it needs to be done correctly. What can we find?

• The reasons that people join you, and why they leave gives you an understanding of the company’s reputation and its reality. Consider asking ‘why have you decided to go to X?’ as well as ‘What were the reasons that made you consider leaving?’ The first will often give you an understanding of what they thought wasn’t right about your firm.

• Who did they go to? Who did they come from? What was it about their offer? Knowing who your competitors are and why they are attracting or losing staff gives you an idea how to compete. So your local competitor is losing staff because their training scheme isn’t well regarded – why not run an advert promoting the strength of your training, you’ll be surprised how many who were thinking of leaving make an effort. You can also track competitors pay schemes this way

• What did they think of your recruitment process? How could you make it better? Who was also competing against you for that person?

The list could go on.

What you do with this information is probably the most important part. You need to capture this in a way that enables you to report on it, and identify trends quickly. This is probably easiest done if you can get it automatically scored, eg by using a scale for each response. From this you can then measure the answers, and as importantly, see how they change over time.

Surveys can be hosted over the internet, the data automatically populating a database. You might want to consider some incentives to encourage people to fill it in, or you might make it a policy decision. The costs of these are usually far smaller than the cost of the traditional interview.

Designing and implementing such a questionnaire takes time and considerable thought, however the information will give you powerful information to strengthen your employment offering and develop your employment brand.

Do you know more about your customers than your staff?

Most businesses know a lot more about their customers than their staff. For retailers loyalty cards have provided masses of data about basket composition, shopping habits, even likeliness to take up offers. For companies selling directly to a smaller number of customers there are feedback programmes, customer research, the list goes on. Ultimately it’s all about one thing – know what makes your customers tick and you are far more likely to be able to add real value.

This value is not just a nice-to-have but an essential. In real terms it can mean more brand loyalty, great spends, better planning of product lines. Lots in fact that can drive higher margins and profit.

So, what does your firm know about its staff. Well, it might know average age, the take up for the pension scheme, the retention rate. Oh, and they probably told you lots of stuff about how they felt in the last employer opinion survey. But my guess is that this does not really tell you much.

What you should be focusing on is WHY they act and think this way. How does work fit into their lives? What gets them up in the morning to come to you, rather than your competitor? What would cause them to leave, or just as bad to mentally bailout?

Generalisations can be worse than no information but this doesn’t mean that you have to understand everyone individually – this would take far too much time and energy and they probably would resent it. What you need is to be able to group these people into groups who share similar behaviors. Marketers call these groups segments

Knowing the behaviors of these segments, and the size of the segments gives you great insight into how your staff are going to behave. You can segment in numerous different ways, and none is ‘right’. Segmenting by attitude to work is one of the more popular ones.

How could you use this information? Let me give you an example. Retailer X offers a competitive salary and a range of benefits that equate to about an additional 30% of salary. It is justifiably proud of its pension scheme.

Retailer X attracts young, fashion-orientated people to work in its stores. The turnover is high, but not uncommon for the industry. Let’s call one fictional employee ‘Sarah’ (the majority are female).

Why does Sarah work? Well she needs the cash, or potentially wants the cash. She still lives with her parents, though she is saving for a deposit for that first flat. She really would like a small car, maybe a Ford Fiesta and once a year Sarah goes to Ibiza with her closest friends. You’ll find Sarah spending quite a high proportion of her salary on nights out with the girls.

Does Sarah really care about that pension – no (although she probably should)? What Sarah would really value is ways to help her realize her ambitions.

Knowing this information the Compensation and Benefits teams speak to Ford and extend that great car-purchase scheme designed for middle managers to enable Sarah to get the great rate on her Fiesta that the company can get. This costs the firm almost nothing, but gives the Sarah lots of reason to stay with the firm. Maybe they do a deal with a travel firm.

Sarah is excited about these new benefits and tells her friends. She encourages two to apply and one joins in a nearby branch.

Once you know about your Sarah’s you can design a whole range of policies that help them. And if you know that 48% of your staff are like Sarah you can predict uptake on policies, likely effects of reorganizations.

Building this thinking into your high performer data will enable you to understand what policies to give to everyone which will specifically appeal to high performers. Or you could use it to help you attract more older workers to your firm.

Just remember, these segments aren’t fixed – people do move between them, usually after significant moments in their lives. However understanding your workforce will give you considerable power to predict and design interventions.

Thursday, December 09, 2004

Graduate management schemes and the questions candidates ask

Graduate training schemes typically fall into two broad categories - ones that aim to develop functional related skills, and those who seek to find potential future general managers for the firm. Of course there is overlap between the two - most typically that a functional scheme may also want to develop those who lead in that functional area (e.g. accountants who manage other accountants) and there are many instances of those on general management training schemes wanting to specialise in certain business areas following their rotations. The question that I will raise here is whether we can use information on information seeking as a guide on motivations of candidates without commercial experience.

Research on information seeking during the early months of employment shows that those candidates who wish to develop towards technical expertise will be most interested in exploring issues around employer support for development, training etc. and those with a more general management interest will typically be more interested in HR policies such as appraisal, performance measurement, career mapping etc. Also, surveys on what concerns employers points that those graded as high performers (generally with a desire towards developing as managers) are generally more interested in organisational issues - e.g.. performance of the organisation, belief in management - whereas others focus more on issues relating to their jobs and those around them.

Graduates without employment will often have a strong desire towards employment with a reputable and well regarded firm. Many will have some idea about which direction which the want to take their career, though this will develop and for a large number change over the first 24 months. Given the cost of development, and for general management schemes the degree to which value added by the graduate is biased towards the medium to long term, there is obviously a desire to recruit those with a deep desire towards management.

Candidates at all levels will tailor responses to fit what they believe the interviewer is looking for - 'the right answer'. This applies especially in the areas of motivation. What becomes telling though is what sorts of questions the candidates ask of the interviewer, or seek through the process.

Given that the candidate asks questions that they are interested in (instead of ones they think will impress the interviewer) classifying these questions can add an extra level of data to ensure fit with the role. One would expect that those with a natural desire towards management related work would be more interested in the mechanisms that will enable them to achieve promotion, and those with a natural desire to become functional experts will be interested more in how the company will support them develop skills.

Two ways of getting this information; first, after a generic presentation as part of the selection process (common amongst many firms during a selection day) or even by asking a generic question on 'what attracted them to apply' information can be gathered on motivations and areas of interest. This may be best as perceived smalltalk at the very beginning of the interview and as such should help the candidate relax.

The second is at the end of an interview during the candidates questions. It should be relatively easy for an experienced interview to classify the questions without the candidate feeling they are being scored.

As with any data identified during the selection process this should be validated with other ways of assessment, but the questions that a candidate asks might add considerably to your understanding of their potential fit to the scheme.

Friday, December 03, 2004

Linking the corporate and employment brand

There has been much discussion recently about developing the employment brand, ranging from the superficial - 'what style / colour / layout our recruitment advertising is going to be' - to the insightful - considering employment brand in all its components from compensation, work environment, non-financial benefits (eg work-life balance), company culture, how the candidate views the recruitment process to the company's or its products' brand positioning. I will be discussing some of these issues in the future but what few have discussed, or researched in great detail is the linkage between the Company's brand positioning and it's employment brand.

I have been fortunate to be able to look at some of these issues in a variety of firms and my anecdotal evidence to date suggests that for many firms the corporate brand is possibly the major element of the employment brand, especially in the early stages of job search.

With hindsight this is not so surprising - we all would ideally like to work for companies we believe in - but what the data suggests is that for 'consumer facing firms' (as opposed to strict Business to business providers) it is highly likely that your job applicants will have decided to buy from you, and will probably do so in the future.

Let's take the example of a major UK retail bank. With the competition for retail banking in the UK one would expect somewhere in the region of 20% of job applicants to be customers. In fact the actual figure was more like 50%, though this depends on grade / position. There was also a 100% increase in speculative applications after generic corporate advertising, such as TV adverts.

Extending this it suggests that those brands who target certain groups in society will find it easier to source those employees who fit within these groups. A retail bank seen as 'approachable and fun' will find it easier to attract candidates than one seen as 'serious', at least at the cashier level. Aspirational brands find it easier to recruit.

Of course, this relation between the two brands is two way. How you treat your candidates will directly affect your corporate brand reputation, and given the number of job applicants a big firm gets (100,000 per year?) think of all the opportunities to damage the corporate reputation. Given that job seeking is an emotional experience then bad experiences (and great ones) are going to be magnified.

Unfortunately HR departments aren't, on average, the best brand ambassadors. Too many recruitment departments are inwardly focussed rather than 'customer focussed'. Many do far more to damage the corporate brand than they do to build it.

There are a few firms I know who understand this linkage. It is hardly surprising that employment brand in these firms often sits in the marketing department.

Thursday, December 02, 2004

On MBAs

I've been reading Henry Mintzberg's Managers Not MBAs recently and many, though not all, of his points resonate.

Before I start I better state my knowledge on this subject. First, I don't have an MBA - I studied for a Masters in Strategic Human Resource Management to gain a deep knowledge within my area of expertise. I have, however, been in charge of business school relations, MBA recruitment, and have reviewed employer sponsorship of MBAs for staff. I have headed recruitment for a management consultancy and have monitored performance of MBAs in several firms.

First, let's start by a two simple questions; Would I recommend hiring MBAs? Would I recommend sponsoring a member of your staff who wishes to do one?

On hiring MBAs: MBAs present a whole range of skills, and for many recruiters what someone has done before business school is more important than what they learnt at business school. Unfortunately (and this also applies to many graduate hiring schemes) there is a large disconnect between the candidates presumed worth and what they actually bring. If it the technical, analytical skills that you demand then places like Rotterdam's Erasmus school provides 'little business experience' MSc.s in business which will give the candidate just as much technical expertise. If you want exceptional performers in a small space I suggest going to any of the Indian Institute of Management - hey and that way you only need to be on campus for a morning and you'll get the people you want. Both routes will give you the raw skills at a cheaper price. If you want some experience as well don't judge an MBA against other MBAs, judge them against someone with experience who is asking for the same salary. Get the best person for the money.

For many businesses the best time to hire an MBA is for their second job after business school. With a bit of good luck they will have encountered some difficulties, had their school fees paid by a consultancy or bank and come to you with energy, ambition and a big serving of reality.

On sponsoring MBAs: If one of your bright high performers comes to you and asks if you will sponsor him/her (usually a him) to go to LBS / Insead / Harvard etc. I would suggest the following. Ask why they think it will benefit the employer and how they would write a business case for doing so. They will struggle.

In my experience there is only one instance when sponsoring an MBA could justify the cost, and that is when the course is a part-time course split over a few years with a pay-back clause in the agreement. This can work as an employee retention tool - you'll probably have them for at least the duration of the course.

Many of those that I have met and interviewed have gone to do an MBA because they feel stuck - they've probably taken a career direction which was wrong or as likely, they aren't performing in your meritocracy as well as they think they should. Those high performers who get promotions on a regular basis, who you would risk putting on your most important projects, they won't be the ones knocking on your door. Those looking for easy solutions will.

A full review of the book will come later.

Wednesday, December 01, 2004

hr-xml and why it is an ideal format for the CV

hr-xml is the leading standard for standardisation of xml vocabularies in HR. It has support from many of the major companies in the HR services / software environment (see this list)

One of the standards that is being constructed is for a standard xml vocabularies for the CV, or resume (sensibly they make no differentation between the two - formats might alter geographically but content is usually similar).

Whilst this is obviously good news for HR suppliers why could it also be great for candidates?

Currently, when candidates send their CV to a potential employer via their application tracking system (ATS) the system typically uses a filter to parse the CV into it's database. It will try and work-out what is the name, education institution, previous employers etc. Many do this pretty well, depending on the format used but at best it's an inexact science. I recently tested one used by a major technology firm and it got my name right and that was about it.

In the 'old days' when recruiters used a funnel approach (take 100 CVs, narrow it to a shortlist and to the hire) this didn't matter so much. A recruiter doesn't read the CV - they scan it. A good recruiter can do this very accurately and very quickly, but that takes years of experience. Why didn't it matter? Well, reuse of CVs, especially in corporates was pretty low.

Now your details should be being reviewed for roles as they appear. If the database holds the information in clear fields the recruiter can quickly find what they are looking for. If the system has the CV in one big text field it can't differentate between someone who has worked at Microsoft from those who put proficiency in Microsoft Word. The more accuracy the system has in the CV the more chance that a candidate will be found for the right role.

Speaking to the founders of one of the big ATS providers last week it is clear that many do accept CVs formatted as hr-xml documents at present. Unfortunately the take-up by candidates has been low, mainly because an xml document isn't easy to write and the schemas need technical knowledge to understand.

For a candidate having their CV in a xml standard makes sense as it enables seperation of the style information from the content. It can be published online, easily translated to other formats including pdf and Word and shown in 'human friendly format'

There are several providers working on more usable solutions, including Microsoft who have a product for their Infopath product, though this is more useful for those wanting to standardise CVs in a corporate environment. What is really needed though is a (probably free) application that lets a non-technologist construct the xml document, and use various styles. If this was to happen it would increase accuracy in recruitment for both candidates and hiring managers.

Technology advancement and the demand for labour

A recent paper by Alan Manning of the London School of Economics suggests that the assumed link between technology progress and employment of the lower skilled might not be correct. In fact the paper suggests that the demand for the least skilled jobs may be growing.

One reason cited for why this is happening is that there is an increasing relationship between the proximity of the low skilled and high skilled - namely we are expecting a higher level of 'service'. This can be seen in many sectors. Retail banking, led from the US, has for the last few years been increasing the number of customer facing roles (which are generally low skilled and low paid) and in some instances increasing the number of branches.

We can look at articles such as the recent news about First in Glasgow having to go to other countries to get bus drivers as showing the state of what Manning, with Maarten Goos, called 'McJobs' in his article 'McJobs and MacJobs: The growing Polarisation of Jobs in the UK' (in The Labour Market Under New Labour, Dickens, Gregg & Wadsworth 2003)

This research, and practitioners experience is showing a rapid heating of the employment market for low skilled. Due to the proximity need it is likely that in the next few years this will put increasing pressure on immigration in developed economies, a topic which is politically sensitive.

In the meantime, companies need to be addressing these issues with some urgency - the labour pool for these jobs is small, and the demand is likely to rise rapidly.

Headcount targets - encouraging inefficiencies

Any HR manager knows about headcount targets. They are the generally imposed from the finance department eager to control costs and make the business more efficient. But do they really do this?

To start this we need to make a few assumptions about the organisation. First, that there is usually one (or a few) general aims. In many firms this is to maximise profit for shareholders. In a public sector body it might be to serve more people. Whatever the aim the organisation needs to maximise ‘value for money’ – ie do as much as possible for as little cost.

For most organisations labour cost is the biggest cost. In many organisations it is around 70% of total costs. So to reduce or control cost then firms should control labour, right? Certainly, but the aim is to reduce cost and there is not a perfect link between cost and headcount.

Let me give you an example from a firm we have worked for. The firm gave each manager a headcount target and budget. What were the effects?

Well, managers tended to hire experienced hires only. Given the choice of hiring someone who could do the job from day 1 to somebody who would need training they always went for the immediate effect. What was wrong with this? Well it took away succession planning and over the medium term increased cost – the percentage of trainees the firm took on was tiny, they always had to pay recruitment firms large amounts to hire staff and pay hirer salaries to attract experienced hires in a competitive market.

Secondly, the firm tended to hire lots of none-permanent staff as these avoided headcount. They also cost more, and again succession planning was limited.

Finally if a great staff member delivered their project early then nobody was willing to have this ‘redundant’ headcount on their headcount target until they were aligned a new project. So the firm tended to get rid of some of their best project managers, just the ones that they should have been working hardest to keep.

So what was the overall result of the aggressive headcount targets? Well the total cost per head was much higher than if the managers had just had to manage their budgets. Succession became something that was only worried about at senior levels. And because some of their best staff lost headcount they either lost people, or encouraged people not to deliver early.

Surely a better way of managing is to control labour costs? Well of course, but few firms really know how much there staff costs, especially over the longer term when you have to factor in cost of acquisition and disposal, equipment costs, floor costs as well as salary and benefit costs. But this in itself is not impossible, and the benefits, we think, and worth aiming for.

If the aim is to give managers a better way of managing scarce resources then we should measure that resource in a way to make optimal decisions – by measuring the total productivity given a certain cost.

Graduate Recruitment – A scheme or a market?

How many graduates does your firm hire every year? 50? 100? 250?

Well our guess is somewhere near 2 or 3 times that number. Puzzled? Ask yourself a simple question – how many of your administrators, junior IT guys or support reps have joined pretty much straight from university?

Walk around any large firm these days and you’ll find large numbers of recent graduates doing the sort of jobs that school leavers used to do. Why? There are a few factors here:
More and more people are going to university and entering the workforce later in life
The supply of traditional ‘graduate’ jobs hasn’t grown with the extra supply
A significant percentage of these students have at least one year’s work experience
Lots of graduates (some surveys put this at around 50%) would prefer to go straight into jobs rather than join a traditional training scheme
Many see getting a job – any job – with a big firm as an opportunity to prove themselves (you told them you were a meritocracy didn’t you!)

So, how are firms adapting to this rapidly changing landscape? Well a lot are doing exactly what they historically have done – spend lots to attract a relatively small number of designated ‘high-flyers’ and spending lots with recruitment agencies to get the rest.

Yet it is possible and effective to use the graduate recruitment budget to target all these different types of future employees. The major change is that you should think of your firms approach graduates as building brand within a market, not selling a particular product (that training scheme). What does this involve?
First, understand where your firm has been making hires that are suitable for the graduate market. Here corporate data from HR systems, or text analysis from details stored on recruitment systems is useful, as is internal survey techniques.
Second, segment these hires. You could do this by job area, date hired (many roles are cyclical, if only because of the date when managers get budget). There are some great tools out there to help with this. Develop a strategy for each segment.
Third, any marketing collateral that has a shelf life (this includes things like general presentations which have a shelf life in the audience’s minds) should aim to promote the firm and your employment brand.
Your web site should act as a way of promoting current jobs (those jobs that are known about). Count your training programme as one of these and by all means increase the quantity of information about this.
You should be considering how to build a ‘relationship’ with visitors to the site with the ability to communicate updates, new jobs etc. The site can be used to market internships and other temporary opportunities.

What are typical results? Well with one recent client we got marketing costs per hire down by 80%, mainly by taking out recruitment firm costs. There is also an increased attention in your activities as you become more relevant to more people.

Finally, success from this type of approach can enable the firm to standardise other parts of the hiring process, such as selection, allowing increased quality and measurement.

First entry

Realising that I was spending more and more of my web time on blogs I decided that the time was right to start one myself. The purpose of this is:

* to publish insights to a wide audience
* as a way of opening a debate on resourcing based issues
* to share 'stuff' that I find interesting or useful, both for the HR specialist, recruiter or marketeer

Please feel free to comment.