survey points to dissatisfaction with talent pool—how can hr help land the best catch?

Survey Points to Dissatisfaction with Talent Pool—How Can HR Help Land the Best Catch?

Chris Hanson

© 2009 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/ert.20243

Arecent Epsilon survey showed nearly 40 percent of chief marketing officers

(CMOs) at leading U.S. brands were unsatis-fied with the quality of the new-hire talentpool. Their perception of quality was definedas “someone who is able to handle theirresponsibilities on day one.” With nationalunemployment levels approaching all-timehighs, it’s hard to believe that the number ofqualified candidates could be so few.

As HR professionals, we realize that thisperception may not reflect reality. Truth betold, it’s not the CMOs who are chargedwith finding the best talent. Often it takes adiscriminating eye and a unique skill to findthe very best candidates from a sea of poten-tials. C-level executives and hiring managersrely on HR to scour the marketplace forgreat people. Great people lead directly tosuccess in the business world. Companiescan have a unique product, stellar service,or leading technology, but it’s the talentwithin an organization that separates it from the pack.

The executives surveyed also noted themost important characteristics they seek in new employees were creative thinking (70 percent), leadership (64 percent), projectefficiency (63 percent), forward thinking (63 percent), and fiscal responsibility (40 percent). These qualities can apply to manypositions we search for in various types oforganizations. Recruiting great people who

possess these qualities is part science andpart art. Although “gut feel” shouldn’t be discounted when hiring, I’m a firm believerin more science and less art.

Although the CMO survey is a snapshotfrom a select group of respondents, it’s not astretch to say that if one C-level executive isthinking it, others may share his or her view.That’s why it’s imperative for HR leaders tounderstand the overall business and what’simportant to an executive. If we are chargedwith finding, keeping, and developing greatpeople, then it’s critical to see the big picture.

Great leaders have a way of simplifyingthings and cutting to the core issue. They askthe right questions in a straightforward man-ner. As HR leaders, we should do the same.How does the company make money? Whatare the revenue and profit goals? Where areopportunities for growth? What talent isneeded to fuel that growth? What is ourgrowth strategy (acquire or hire)? Whatmakes people successful in our company? Byasking questions like these, HR leaders canhave a macro-level view of the business andspeak the language of the boardroom.

This article describes the Epsilon hiringphilosophy and how the company hasstrived to create a repeatable process inorder to make exceptional hires—over andover again. If there is any truth to the CMOsurvey mentioned above, we’ve got to think

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Employment Relations Today

Chris HansonEmployment Relations Today DOI 10.1002/ert

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like executives to change their perceptionregarding the weak talent pool and have abetter understanding of the type of talentthat will meet management’s needs andexpectations.

PROJECT-BASED RECRUITING

Executives are focused on results. They likemetrics and numbers. They like to keepscore, and it’s usually via the income state-ment. Finding the best people is really no dif-ferent. With a project-based approach torecruiting, we can deliver great talent andmake major strides toward creating a supe-rior talent-acquisition function.

A strong foundation gives HR the bestchance to change C-level perceptions of aweak talent pool. As any top performer willadmit, you win with the basics. Improvingthe talent-acquisition function starts with thetalent already in the company.

Large, complex organizations already havededicated HR practitioners across a variety of disciplines (employee relations, organi-zational design, training and development,benefits, etc.). A closely aligned but separatetalent-acquisition function probably alreadyexists in these companies.

Start-ups or businesses in emerging mar-kets likely have only a handful of HR person-nel. Managers need them for everything fromcounseling employees to processing I-9 formsto facilitating training (and, by the way, find-ing three coordinators, two project managers,and an administrative assistant who can startyesterday). If you’re an HR practitionerresponsible for hiring, you can implementideas outlined in this article. If you overseethe function but don’t actively recruit, youneed a dedicated partner who can executethe basics flawlessly and consistently.

THE EVOLUTION OF THE RECRUITINGFUNCTION

Lest we forget, HR is a service line to thebusiness. As with professional staff infinance, facilities, legal, and IT, we areresponsible for delivering a service to ourinternal clients. Ultimately, we all serve theCEO and every level below, although thatfact is easily lost during the hectic course ofany given day.

When we look for talent, we’re answeringthree basic questions: Can they do the job?Do they want the job? Will they fit the job?All the applicant-tracking systems, jobboards, and social-networking sites on Earth can’t provide these answers.

For starters, take an objective look at yourcurrent organization and its talent-acquisitionfunction. Exhibit 1 depicts the evolution of arecruiting function and, therefore, the organi-zation. Moving left to right—from “ad hoc” to“optimized”—and graduating up to the nextlevel demonstrates progress toward growingand maturing the function. Where does yourrecruiting function fit on that spectrum?

Ad hoc organizations have a chaoticrecruiting function that is equivalent to theWild West. There is little to no process and

Ad Hoc Structured Proficient Optimized

Exhibit 1. Evolution of an Organization'sRecruiting Function

while goal. The steps taken to move from leftto right across this spectrum will mostassuredly yield results (and help change thatC-level perception).

A CONSULTATIVE APPROACH TO TALENTASSESSMENT

Whether your company is a start-up or a For-tune 500, recruiting should be run like a con-sulting practice. Our role is to understandclient needs and match those needs to the mar-ket. We have a brand to sell and relationshipsto nurture. Quality recruiters ask good, simplequestions that cut to the core issues that are

important to hiring managers. They view therelationship through a consultative lens.

In many ways, the root cause for hiringmanagers’ dissatisfaction stems from a lack ofcommunication—not the candidate’s lack of communication skills, but rather a lack ofopen dialogue between hiring manager andrecruiter. Too often, recruiters won’t spendthe necessary time “interviewing” the hiringmanagers to uncover their wants and needs.The knee-jerk reaction when a search isauthorized is to post the job on their favoritejob board, start cold calling through theirRolodex, or pray for someone to refer afriend or colleague who fits the bill.

When a good consultant approaches a newassignment with a client, there is a discoveryphase that takes place. It’s a fact-finding mis-sion to properly scope the project. Once youknow what you’re looking for, only then canyou execute a successful search. This process

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zero automation. Hiring goals are unclear,and workforce planning does not exist.Recruiting agencies are pervasive and deterio-rate any return on investment (ROI) you candeliver back to executives through the classic(if not outdated) metrics of cost-per-hire andtime-to-fill.

Structured organizations have defined aprocess and established a methodology forrecruiting. Some automation exists in theform of applicant-tracking systems and formalrequisition processes for checks and balances.Some basic reporting metrics are present, andcandidates are recruited from broader avenues(Internet, employee referrals, agencies, etc.).

Proficient organizations are making signifi-cant strides in the automation department(including labor requests/approvals, job post-ings, and integrated skills testing). Formalinterviewer training is established, and arobust set of metrics can be generated forexecutive viewing. There is also a greaterdegree of diversity campaigns in order to castthe widest possible net to acquire top talent.

Optimized organizations have well-definedand repeatable world-class processes in place,and these companies are thought leaders inthe discipline of talent acquisition. Dash-board-style executive reports are generatedon demand through an integrated-technologyapproach. Proactive and opportunistic hiringtakes place in an optimized environment.There is true partnership within the organiza-tion, and highly accurate forecasts drive hir-ing needs.

Determine where your organization istoday and envision where you want it to go.Be realistic, as progressing between stepsoften takes years. It also requires a significantcommitment directly from the executivesuite. Although it may be difficult to attain anoptimized recruiting function, it’s a worth-

Survey Points to Dissatisfaction With Talent PoolEmployment Relations Today DOI 10.1002/ert

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In many ways, the root cause for hiring managers’ dissat-isfaction stems from a lack of communication—not the can-didate’s lack of communication skills, but rather a lack ofopen dialogue between hiring manager and recruiter.


is a two-way street and sometimes requirescourage on the part of the recruiter. Ifrecruiters are not getting the necessary infor-mation or buy-in from managers, the chancesfor success decrease dramatically. Being coura-geous means challenging managers whenappropriate. Knowing the business will gener-ate confidence to challenge when necessary.

HR professionals are a service line to thebusiness, but candid discussion with hiringmanagers helps convince them they’re part ofthe solution. To make truly great hires, man-agers have to be as committed as, if not moreso than, recruiters. Without their commitment,the chances of missing expectations are higher.Without a partnership, managers’ perceptionsof quality are in jeopardy. Part of a recruiter’sjob is to help managers understand the impor-tance of a well-defined search and that man-agers have a role in the process. It goes with-out saying that effort, responsiveness,professionalism, and market knowledge areattributes the recruiter needs to bring to thetable. But nobody is better positioned to definethe ideal candidate than the hiring manager.

THE EPSILON RECRUITING METHODOLOGY

The aforementioned CMO survey begs thequestion, “What hiring approach was used?”If CMOs were dissatisfied with the talentpool and didn’t feel like their hires werequalified to perform their jobs on day one,there exists a flaw in the hiring approach.Although there are various ways to run asearch, applying a project-based approach is ideal.

When defining a recruiting methodology,some primary components are industry stan-dard. Epsilon’s recruiting methodology is bro-ken into five distinct phases: plan, source,assess, close, and engage. Think of any search


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the way a project manager views a deliver-able. Good project managers reverse engineertheir work. The end result (which means anon-time, on-budget project) stems from suc-cessive steps with a clear beginning, middle,and end. Timelines are predetermined, andmilestones are established in order to hit themark. The same can be said of any successfulsearch. Although no two searches are thesame, a defined and repeatable process ultimately leads to quality hires. Using theillustration in Exhibit 2, we can analyzeindividual steps in the process.

The graphic in Exhibit 2 is purposefullyshown as a bell curve, where the bulk ofactivity occurs in the middle. Each step isdependent on the successful completion ofthe previous one.

Step 1—Plan the Search

This is the most critical part of the search. Thisis where the consultative approach begins andthe hiring-manager “interview” occurs. Thejob description is defined for the dual purposeof finding the right talent and protecting theorganization from a compliance standpoint(with regard to, for example, the requirementsof the Equal Employment Opportunity Com-mission and the Office of Federal ContractCompliance Programs). If a ready-made job

PlanSource

Assess

CloseEngage

Exhibit 2. Five Phases of the RecruitingMethodology

your deliverables as well as theirs should beset. For example: “I’ll begin the search afterwe finish here. This involves finding candi-dates using all our resources and narrowingthem to a short list. You’ve agreed to reviewthe short list and respond within 48 hours.Also, you’ve agreed to ask your team forreferrals, since they might know someone intheir network who fits the bill. We’ll assesscandidates with the interview team andselect finalists before moving to the offerstage.”

Depending on what time-to-fill goals are inplace (if any), the source phase could takeapproximately two weeks. Tell the managersthis fact and get agreement on it. The assessphase may take longer (depending on sched-ules, availability of candidates for interviews,etc.). Assessments may last three to four

weeks. Let the managers know this as well.The close and engage phases round out theprocess over another two weeks, for a total ofapproximately eight weeks. Hiring managersshould be told the anticipated timeline for theentire process so that they can manage theirexpectations about the time it will take to filla specific position and learn exactly whatgoes into a search. (This timeline is generalguidance based on the assumption you’re hir-ing for relatively complex skill sets. It clearlywould be different for mass hiring efforts ofnonskilled labor or true executive searches.)

Just because you’re hiring a secretarydoesn’t mean it will be any easier to do thatsearch versus a search for a VP of Sales. Gen-erally speaking, the more senior the role, thelonger the search. The point here is that if we

description is available, the recruiter shouldhave a copy for the meeting. If not, this iswhere we outline the role, identify responsi-bilities, and determine qualifications (years ofexperience, education, etc.). Typical issuesthat should be raised during the planningphase include:

❏ Why is this job open?❏ What is the reporting structure?❏ What is the reward structure?❏ Who is on the interview team?❏ What is your ideal timeline to fill this

role?❏ Describe the “must-have” criteria you’re

seeking in a candidate.❏ Describe the “nice-to-have” criteria (they

are not necessarily knock-out factors).❏ Provide an example of the ideal candidate.❏ What character traits are most important?❏ Define what it means for new hires to be

able to do their job on day one.

Countless other questions exist, but thepoint is to fully understand the role. Forinstance, if you don’t know what a solutionarchitect does in your company and that’swhat you’re seeking, ask the manager toexplain it in his or her own words. If themanager is unable to explain the job functionadequately, ask if someone on the hiringteam can provide an overview or describe theideal candidate. Within reason, we need tofully understand the role to be filled and themind-set of the hiring manager.

A brief discussion outlining everyone’srole takes place. Recalling that a lack of com-munication is typically the root cause formanager dissatisfaction when hiring, it’simperative to be clear. This is the best oppor-tunity to gain buy-in from across the table.We’re all in it together, so a commitment on

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Within reason, we need to fully understand the role to befilled and the mind-set of the hiring manager.


don’t agree in advance on the milestones,then we’ve already failed to set proper expec-tations. Managing expectations is as importantas any skill or tool in our arsenal.

Step 2—Source the Candidates

The number-one source for new hires atEpsilon is employee referrals (36 percent in2008). They have historically proven to bethe best hires based on attrition rates, perfor-mance reviews, and upward mobilitythroughout the years. Good people knowother good people, and the power of some-one’s personal and professional networkshould never be underestimated.

Casting the widest possible net is essentialwhen sourcing. We can’t decide whetherwe’ve hired the best person unless we’ve

looked at everyone. The source phase is analo-gous to a funnel. The funnel is filled from thetop with all available talent. Results shouldinvolve a résumé review that produces asmaller pool of manageable candidates. Lever-age your applicant-tracking system to filtercandidates during the sourcing process.Almost every tool has the ability to load pre-screening questions so recruiters spend timereviewing only the most qualified applicants.

Use all available resources at your dis-posal. However, spending money on recruit-ing sources that don’t yield good results justdoesn’t make sense. Take the time to calcu-late yield on all your sources (job boards,agency recruiters, employee referrals, printads, direct sourcing, campus hires, etc.). For


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example, at Epsilon we’ll pay up to $5,000 for an employee referral who is successfullyhired. It’s an unusually high amount but still cheaper than paying for a headhunter.Determine what gets the most bang for thebuck. There will be trial and error over time, but these calculations prove worthwhilebecause they provide an ROI for hiring. We’vefound that by factoring in all recruitingexpenses typical cost-per-hire floats in the$6,000–$8,000 range. When faced with volume recruiting, our break-even analysisshows that approximately eight hires can justify using a contract recruiter versus payingfor those eight through an agency. So by swap-ping out the fees for the contract-recruitinglabor cost, we come out ahead on the ninthhire or more.

Step 3—Assess the Candidates

When expectations are clear and you’vefound a short list of candidates, it’s time toevaluate. This is where we apply the basicquestions: Can they do the job? Do they wantthe job? Will they fit the job?

Tried-and-true behavioral interviews workgreat for almost every position. If creativethinking is something the hiring managerfeels strongly about (70 percent of those inEpsilon’s CMO survey seek that skill), thenmake it a priority to measure. Predeterminedquestions should be formulated. Assigningquestions to each member of the interviewteam can help to ensure that you are measur-ing the “must-have” criteria that the hiringmanager laid out during the planning phase.Because each manager has his or her ownstyle, it’s important to give managers somefreedom in formulating questions, but therestill needs to be an understanding of what’sbeing measured. This is a great coaching

Good people know other good people, and the power ofsomeone’s personal and professional network should neverbe underestimated.

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opportunity for inexperienced interviewers asthey learn to evaluate people.

Creating a simple 1–5 rating scale for theskills assessment provides a measurable datapoint at the end of the process, instead ofsimply relying on feedback such as “I likedthem” or “Seemed like they could do the job.”

When hiring for technical skills, somecompanies incorporate testing tools (such asProveIT and TeckChek), which gives them anobjective view of the candidate’s knowledge.Although it doesn’t necessarily mean theperson with the highest score will always behired, it’s another way to inject objectivityand measurable data into the decision. Thetest results can also be referred to later tocheck whether they were a good predictor offuture success.

A roundtable discussion with the hiringteam to discuss test results is necessary. Thisprocess doesn’t have to be overly formal, butgetting everyone together in a room is key. Acombination of the highest-scoring finalistsalong with input from the interviewersshould give the hiring managers informationneeded to make their selection. The opencommunication that occurs during this meet-ing will solidify expectations. At the end ofthe day, there should be some healthy debate,a clear view of candidates’ strengths andweaknesses, and an agreement that the rightperson was selected. Of course, this doesn’tnecessarily mean every new hire will succeedand stay forever. But it will satisfy the feelingthat the right choice was made using a blendof objective data and subjective gut feel.

Step 4—Close the Candidate

Closing actually starts from the very first con-versation between HR and the candidate. It’sa bit unrealistic to think a candidate should


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navigate through a series of interviews only tobe given a one-sentence offer that will closethe deal. Some feel that compensation should-n’t be discussed until this phase, but that iscontrary to how we do things at Epsilon. Webelieve that the reward structure should bediscussed early and often.

The relationship between HR and the can-didate is based on the same open communi-cation that HR and the hiring manager share.In the perfect scenario, a closing conversationshould be a bit anticlimactic. Of course, anoffer of employment is an exciting time forsomeone, as it should be. However, if expec-tations have been set properly from the start,the discussion is relatively transactional innature. Balancing the transactional part andthe crescendo of excitement is an art. The sci-

ence of the successful close is the setting (andmeeting) of expectations.

Step 5—Engaging the New Hire

It’s an exciting feeling for new hires to havefound their dream jobs and walk in on dayone full of energy and ideas. However, theexcitement can be fleeting if the new hiresdiscover that nobody knows who they are orwhere their offices or desks are.

HR and hiring managers shouldn’t missthe opportunity to make a great first impres-sion. Once again, you win with the basicshere. Be sure to communicate the new hires’arrival; have desks, computers, and phonesready for them; take them on a tour of theoffice, café, and gym; introduce them to

The relationship between HR and the candidate is based onthe same open communication that HR and the hiring man-ager share.


coworkers and colleagues; and establish aplan for day one, week one, and month oneon the job. All of these efforts go a long waytoward welcoming new members of theorganization.

The benefits of a well-thought-out wel-come for new hires are twofold. First, theseefforts set the tone for a professional and pro-ductive environment. Second, new hires whofeel welcomed will also feel that they havefound the right job in the right organizationand will want to refer their friends to workthere; tapping into a new employee’s networkcan supply a flow of candidates for months tocome.

MEASURING THE RESULTS

Executives like to keep score, and they’re typically interested in some core metrics

generated from recruiting. How many peopledid we hire? How long did it take? Howmuch did it cost? They’re also interested inthe quality of hire. They want to know aboutproductivity and the impact on both cost andrevenue. Part of the overall business knowl-edge includes calculating the cost of vacancy.For instance, if your company sells projectwork (i.e., billable people) instead of a prod-uct, there is revenue directly tied to that headcount. Be prepared to understand the cost ofvacancy for a particular position, becauseevery day the position goes unfilled there is aloss of revenue.

Weekly, monthly, biannual, and annualmeasurement can be leveraged to give a


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transparent view of recruiting activity, aswell as production and ROI:

❏ Weekly. A dashboard-style report to lead-ership can show open searches, aging, andbillability of open jobs and hires. Moremature organizations can also set up dash-boards by a classic red/yellow/green colorscheme that will indicate which searchesare on target versus those that need closermanagement.

❏ Monthly. Detailed reporting on hires,sources, cost, yield, applicant, and inter-view benchmarks will help track andmanage the recruiting process over time.Detailed reporting can provide such infor-mation as the number of résumés submittedor reviewed that became candidates; thenumber of candidates who became final-ists; the number of finalists interviewed tomake a hire; and whether the benchmarksare off target.

❏ Annually. A year-end roll-up of monthlydata should be built and analyzed. This iswhere you’ll examine metrics for time,cost, yield, source, and so on, which arecalculated to determine what works andwhat doesn’t. Look back into previousyears (if you’ve done this before) andtrack what hires have left, who has beenpromoted, and where they came from(source and prior company).

Ultimately, you still want to knowwhether the hiring manager is satisfied, andthe best way to do that is to ask. Surveyyour hiring managers twice a year. Freeonline survey tools enable fast and easy datacapture through point-and-click functional-ity. Keep it simple to get maximum responseand make adjustments based on their feedback.

Be prepared to understand the cost of vacancy for a partic-ular position, because every day the position goes unfilledthere is a loss of revenue.

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CONCLUSION

The recent recession has stocked the talentpool with more candidates than most haveseen in their lifetimes. As unemploymentrates reach and exceed generational highs,hiring managers and HR professionals willface more challenging circumstances, as thenumber of applicants for each position isbound to increase exponentially.

The results from Epsilon’s CMO survey areconfounding. With more candidates than ever,how could almost 40 percent of executives be


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unsatisfied with the level of talent? Unfortu-nately, the survey data doesn’t lead us to anexact answer. But, the savvy HR professionalmight be able to theorize—CMOs may per-ceive a shortage of talent because they arenot “fishing” correctly. Pardon the extendedmetaphor, but one can troll a pond stocked tothe brim with fish, but the wrong bait and ahaphazard technique will yield lacklusterresults. Now, more than ever, it’s imperativeto have a proven hiring strategy that can helpsort through the school of applicants to findthe real “keepers.”

Chris Hanson, senior director of HR and recruiting, is responsible for building and sustaining a world-class human capital operation. During his tenure, he has led overallemployment-branding initiatives in cooperation with corporate marketing, includingEpsilon’s nationwide campus-recruiting function. Prior to joining Epsilon, he was thesenior recruiter/team leader at PTC, a product-life-cycle management-software-solutionsprovider. Before joining PTC, he was an executive recruiter for Keane, Inc., an applicationand business-process-services firm. He is a member of the Society of Human ResourceManagement. He may be contacted via e-mail at [email protected] or by visitingwww.epsilon.com.

survey points to dissatisfaction with talent pool—how can hr help land the best catch?

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