How to Build a Talent-acquisition Strategy

It is amazing how much information and training there is out there for recruiters with regard to tactics and tools to do their jobs. When I got into the business, I didn’t have that kind of access to information or the sheer volume of others’ experience to draw upon. This has been a tremendous boon for those who choose to build a career in recruiting.

Where we still struggle is in teaching the next generation of leaders, how we, as senior leaders, develop the TA strategies that they are then tasked with applying those tactics and tools to. ERE has done a great job of developing next generation talent advisor training for TA professionals, but there is still tremendous value in teaching the “why” not just the “how.”

That is why I want to focus on how I build TA strategy, in order to pass on what I’ve learned. Now, full disclaimer, there is no “one right way,” and you will find a plethora of contrary advice out there, so you will need to choose what you feel works best for you and your specific situation. However, these have served me very well during a successful career, and I believe with slight necessary modifications, they can serve you also.

Step 1: Assess Current State

I will further divide this into four subgroups: Demand, Resources, Process, and Results. When entering the assess stage, do your best to withhold judgment or preconceptions. The more neutral you can be, the more effective your assessments will be.

Let’s start with demand:

  • What is average annual/quarterly/monthly hiring load?
  • How much of that is driven by turnover?
  • How much of that turnover is regrettable?
  • How much of the hiring demand is based on growth?
  • What is the geographic breakdown?
  • What is the position type breakdown?
  • How does all of this compare historically?

Understanding your hiring load goes a long way to crafting resource strategies when I get to that point. When you break it down to a monthly and quarterly level, you can better identify periods of high or low demand.

Turnover, of course can give you an eye into possible quality issues or external/internal pressures that may exist.

Regrettable vs. non-regrettable turnover is a clarifying area that will help you better hone in on reasons for turnover later.

I use the position breakdown to look at positions by difficulty in sourcing and recruiting. I use the following criteria: What is the barrier to entry for the role? This is usually defined at years of experience and education required, at the most basic level. What does the potential candidate pool look like? What I look for here is supply vs. demand and competition in my markets.

Finally, you need to do a historical comparison — a minimum of three years, if available. This will help you to start look at trends that have impacted the current state. Please remember that at this stage you are still neutral, so don’t worry about “good” or “bad” impact, just impact.

Now for Resources:

  • What is the current human capital supporting TA?
  • What are the role breakdowns?
  • What are their loads?
  • What tools are in place?
  • What is their utilization?

These are pretty basic, but need to be asked. Particularly in role breakdowns and loads. Are they fully applied to their role, or are they doing double (or triple) duty? Are they primarily aligned based on: internal customers? Locations? Recruiting methodology? =Based on alignment, what are their req loads? When gathering this information, you can look at position descriptions, but you should also ask, and observe your people in action.

When evaluating tools, first do an inventory of all tools and their costs. Next look at their utilization. I would break utilization down to the same buckets you broke recruiter alignment into. If you try to do an overall analysis, you could be starting with data that will skew your plans later.

Utilization can be measured on time spent using the tools, and/or number of times tools are accessed. Most vendors can provide these reports for you easily. Hold off on results for now, as that will come into play later.

Now I move into Process:

  • What is the current recruiting process(s)?
  • When does it begin?
  • When does it end?

These seem like really simple questions. However, the answers are often complex.

When looking at the current process, it is not about the current ideal process, the one that may be handed to new hiring managers, but the actual process. How much variation exists? How is the variation aligned? Is the variation based on individual managers, groups, divisions, locations, position types? How many steps, and how long does each take? Keep these times sorted by your alignment determined above. How many decision points? How many handoffs?

There is not right or wrong answer for when the process begins. At some companies it may be when the vacancy is announced, at some once the req is created, and at others when the req is approved. Just be certain to know how “start” is defined for your team.

The same is true for when it ends; there is no right answer. It can be at offer acceptance, clearance of background check, or start, for example. Again, just make sure it is clearly defined.

Finally, in defining the current state you need to look at and define Results. This can be the trickiest part of the process, since this is based so much on the quality of data being measured and how it’s measured. I’ve often found that I’ve had to go old school manual to get to the data I need, so do not be surprised if you have to as well. It’s far better than just relying on what has already been reported.

To that end, try to look at the following (and as above, segregate by any variation already identified):

  • What is the funnel and pass through from end to end? This should align with the process steps above, overlay prospect candidate and applicant numbers.
  • Tie this in with time, look at req aging, time to fill.
  • What is the offer filled percentage? Is it net gain, loss, or neutral?
  • What is the offer acceptance percentage?
  • What is candidate satisfaction?
  • What is hiring manager satisfaction?
  • If known, what is recruiter satisfaction?
  • If possible what is quality of hire?
  • What is the cost per hire?

Most of these are pretty straight forward, so I’ll only pull out a few for further discussion.

When measuring satisfaction use the data you have to start. If it is inconclusive, do a current state survey to get a better benchmark. For candidate satisfaction, reach out to rejected candidates if you can; their experience is far more telling than hired candidates. I know almost no one measures recruiter satisfaction, which is a huge missed opportunity, but get their thoughts as well if you can.

Quality is the toughest to measure, and it really depends on how you define it. If it’s tenure, then you have an easy-to-measure data point. It may not be accurate to all quality, but it’s easy. If it’s performance based, make sure it is a consistent measure or can be easily defined. If not, skip it and deal with it later in the process.

Finally, take all the data and overlay cost. To factor cost, use hard costs that you can control at this point … salaries, tech spend, travel, agency, assessments, etc. Baking in soft costs will be harder, but it is safe to assume that a complicated process will be more expensive. If you don’t have super-sophisticated systems, the technique that can at least get you an estimate is to the following:

  • First take the sendout-to-interview ratio and using conservative numbers, factor five minutes per candidate in hiring manager review. Add that time up and multiply by the average hourly pay of your hiring managers. It’s not perfect, but it will get you close.
  • Step two: factor total time in actual interviews by candidates, and multiply by average employee hourly pay (again being conservative and assuming that interview teams are mixed).

Shake, stir, or adjust how you see fit. What you are looking for is the soft cost of lost time spent interviewing.

This will give you a good benchmark to work from in defining future outcomes.

Now I will discuss how to define a relevant, and achievable future state for your TA organization.

Building a TA Strategy — The Why

Now let’s focus on building the “why” so you can then start to build the “how.”

Above, I was about doing a neutral assessment of the current state, looking at various factors to define demand, resources, process, and results.

Now that we’ve mapped that out, move onto desired future state. There are really only two steps at this point: define and design. I can assure you that the number of steps correlates inversely with complexity!

Now I will focus on Define, as in defining your desired future state. More specifically, there is only one place to start, and that is the end. What is the end output that the organization desires? This is ultimately the question you need to answer, but first be aware that you cannot produce that answer in a vacuum, nor dictate that answer to the organization. That answer can only come from leadership. You may or may not agree with it, and you may or may not be able to influence it, but it is the only answer that matters, since that is who is determining how your success will be measured. The great news is you will get to apply your unique skills to designing and implementing the strategy to meet the defined future state outcomes.

The four most common outcomes desired are decreases in cost and time or increases in quality or quantity.

Let’s get a sense for each:

  • Reduce Cost: Who doesn’t want to save money, right? As you did your assessment from the first part above, where were cost inefficiencies? Agency spend? Unused or underused tech? Complicated process? You get the idea. You need to assess why cost is the issue as well. Does your customer feel they are lacking value for what they receive? If so, why? Has the company experienced an unexplained increase in hiring costs? Remember, unexplained does not mean unreasonable; it just means an expert hasn’t explained it to them yet. You also have to look at the dark side as well. Is the request for cost reduction an indicator of poor company finances?
  • Reduce Time: Just like cost, who doesn’t want to save time? So again where were the inefficiencies? Look for time gaps in your process map. I’ve used some simple visual tools in the past to show the process by position, manager, location, etc., with all the times displayed for each step. So where are the issues? Can you control it? Can someone else control it? You have to ask why time is important. The quick answer will always be “we need people yesterday,” but that doesn’t tell you anything. What you really want to know is the specific effect time has on company performance. What is the financial benefit to the company for each day that time to fill is reduced? If no one knows that, that’s a problem. Next, is there any relationship to time and quality that will outweigh short-term benefits with long-term gain? Is time causing a fall out of what appear to be top candidates? For the roles my team manages, I will always trade time for quality. In order to make that assessment, you have to be able to clearly show that the roles that you recruit for have differentiated outcomes based on the quality of hire, and specifically how much differentiation. As purely theoretical example, if you hire cashiers, there may be very little differentiation between your best and worst performers, whereas if you hire for brain surgeons, there may tremendous variability between top and bottom performers.
  • Increase Quality: Once again, who doesn’t want better quality hires? You need to know two critical pieces of data right away. First, why? Do you have data that suggests that a measurable improvement in quality produces a measurable difference in company performance? There are great examples out there that show this to be the case. Sullivan has presented on this in the past. Next, how is quality defined? What I just laid out is one definition; however, how an organization defines quality can be a fickle thing. I know organizations where quality of an employee is measured based on their obedience. Some may define it based on other “fit” measures aligned with culture. Challenge those ideas, unless they clearly demonstrate improved performance for the organization. Be wary of situations where the primary quality measure is tenure. It is almost never a valid measurement in my experience, and should be questioned thoroughly.
  • Increase Quantity: For the sake of discussion, this can be further defined as quantity of candidates. So what is the root cause, from the customer’s perspective? Is it a perceived lack of quality based on the number of choices presented? Is it a lack of diversity? Is it discomfort from not having “enough” candidates to review? Is it a lack of trust of TA to review and assess applicants? Is it indicative of a broken decision process? As with all of these, once you hit root cause, you can solve!

Below I will start breaking down these four outcomes into strategies.

Reducing Costs

Now I will focus on a strategy specific to reducing cost in your process. If you remember from above, I broke the drivers of your strategy into four buckets: reduce cost, reduce time, increase quality, and increase quantity. Each will be addressed in turn, and your end strategy may incorporate pieces that address each.

In order to start building your plans, return to the process work you did in the beginning. First, the heavy lifting: you need to assign a solid ROI on your various sourcing tools, whether they be human or automated. This means you have to have a strong degree of confidence in your source-of-hire data. As a note, candidate self-selected source of hire data will almost never allow you to have a strong degree of confidence.

As you begin this process, remember to start with hires, not the total number of applicants per source, just the hires that can be traced back to the source. The ratios are often in the form of a metric, but they are not truly a value add, so let’s just focus on results at this point. To come up with your basic ROI measure, simply divide the cost of the source by the number of hires produced. There are advanced calculations you can do to refine this, but that’s a topic for another day, for now let’s stick with this basic calculation.

Now that you have the numbers, rank your sources based on the ROI. Remember at this point to add your sources that you paid for that didn’t produce any hires as well. Draw a line so you can see which ones are above and which ones are below your average cost per hire. Does it line up with what you expected, or are there underperformers who have revealed themselves?

This is a tremendous opportunity to remove wasteful underperforming tools and reduce spend. Often time the myriad of sources you may use grow out of a sense of pleasing a customer by engaging in codependent behavior and supporting a “more is better” approach to sourcing. This creates an opportunity, as you build your strategy, to demonstrate your expertise and speak to the benefits of a better targeted strategy, and one that is more respectful of company resources. Your hiring managers will get that. They wouldn’t last long in their roles if they spend company money on things that didn’t produce results.

As a side note, I’ve seen situations where leaders are afraid to expose this information for fear that they will call their past strategy out as ineffective. As you introduce your new strategy, keep the focus always forward, you are doing the right thing, good strategy is fluid and agile and adjusts to adapt to our VUCA world.

Hopefully, you were able to make some significant spending reductions in this step. The next step is to look at unnecessary spend linked to process inefficiencies. These will vary by organization, but some common examples might be multiple flights and/or hotel stays for candidates to interview on site more than once, testing or assessment tools that have not been validated against performance, or even the soft costs of having too many people involved in the hiring process.

The upside here is that solving for these issues will help you create a more elegant process as part of your strategy. Most companies and their leaders, if not formally versed in process improvement, are well aware of the concepts and understand the value of reducing waste in various processes to increase the bottom line. So you will be speaking their language! The challenge will not be in identifying the waste, but in providing and selling the solutions you generate to alleviate the waste. Here, your expertise will come to the rescue. It is easy for you to build a case as to the negative impact on candidate experience based on too many flights to interview. What your hiring managers most likely perceive as a good or at best a neutral thing can cost them candidates, based on that poor experience of repeatedly taking time off work, leaving their family, etc. They may not understand that if there is no true value to actually physically being on site, video technology is cheaper, highly effective, and flexible.

With regard to overly complicated interview scenarios, use your expertise and knowledge to show the benefits of team interviewing, for example. Demonstrate how even though fewer bodies may be involved in the interview process, you can still accurately capture all the information you need to make a proper decision.

These are just examples, but regardless, the final step is to quantify the cost associated with the waste. Money and ROI resonate with your leaders, so provide them with before and after forecasts. Seeing the bottom line will better allow them to support your new strategy!

Stick around, to get into reducing time.

Time

Time is something there is never enough of, and something you can’t buy more of. It is a valuable commodity, but the question is how valuable?

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Time to fill is one of my least favorite metrics, but it one of the most heavily weighted in measuring the effectiveness of a recruiting team and their leader. As I discussed above, it is really only a valid measure if it truly ties into quality and has an impact on company performance.

The key to reducing time, in my experience, is twofold. First, don’t swing for the fences, seek incremental improvements, and second, manage what you can control, and report what you cannot.

In seeking incremental change focus on:

  1. Recruiter inefficiency: simply by providing guidance and coaching on how to best manage their desk and time, you can help your team get candidates into the pipeline faster. This sounds so basic, but oftentimes day to day you get pulled into things that aren’t value add or necessary at the time, and a leader can have a huge impact on results by keeping us focused.
  2. Flexibility: in corporate recruiting, one of the “sells” is that you don’t have the perceived brutal hours of agency recruiting. However, let’s first be honest. If you want to be a successful recruiter and/or recruiting leader, and think you can do it in a 40-hour week, well, best of luck to you. Part of the reason for this is based on candidate availability. If you work 8-5 and your candidate works 8-5, it will probably be tough to have meaningful communications during those hours. So allow your team flexibility to work when it make the most sense. You often serve two customers: the company and the candidate, but a good leader will insure coverage and give folks the freedom to work responsibly.
  3. Scheduling: this is a beast. The herding required, and the time it takes to make multiple phone calls, emails, texts, and IMs to get an interview team and a candidate coordinated to meet for an interview is Herculean. Look at your process map for this step. Anything longer than 30 minutes to make this (the scheduling) happen is too long. There are a number of ways to improve it. You can have “coordinators” on your team who set up interviews. Be careful that they don’t become a dumping ground and catch-all for work the rest of the team does not want to do, so as not to overwhelm your process. Another idea is to not schedule interviews. Why is that recruiting’s job? Empower the hiring managers to schedule their own interviews. They feel the pain of the vacancy more than anyone else; they can negotiate with their hiring team quicker and more effectively if one or more of the members needs to be asked to move something or to make themselves available. A great number of pros I’ve talked to are afraid to implement something like this. I’ve done it, and can tell you it is easier than you think, and can really get the process moving.
  4. Feedback I’ve looked at a lot of process maps in my day, and this seems like a common hangup point — recruiters and candidates sitting around waiting for feedback. My experience is to be proactive and not wait, but how do you do that? A couple of options: as part of the interview schedule, schedule a debrief at the end. If that doesn’t work, use an electronic form to capture the info. There is no guarantee that those will work, but if they don’t, and you don’t get feedback in a reasonable time (it’s best to get this agreement upfront from the hiring manager during the intake) let the manager know you are going to close the req. I’ve always explained that I’ve got a ton of other open positions and hiring managers that want to hire, so I’m going to work with them as a priority. It works.
  5. Interviews: Show what you control and what the hiring manager controls. Here’s a process map example you check out. It’s simple and is in real time. It also shows what recruiting controls and what the hiring manager controls, so if time is important, it can show pretty quickly if your interview process is working against you. Believe me, managers managers don’t realize this. You are always thinking about it, but they aren’t. Once you show it to them graphically, it’s like a light goes off!

So there are some quick and easy ways to improve your time to fill. Next I will look at quality.

A Quality Model

Now I will talk about setting, or resetting, your TA team up to focus on a quality model. This is the Golden Metric, the one that trumps all others. If you cannot introduce candidates who will perform well with in your organization, then you are, in a way, dooming your organization.

Quality is a very tough metric to measure, as I’ve discussed before, and I will need to divide this discussion into two parts: 1) You do not have a clearly defined measure for quality, and 2) You do have a clearly defined measure for quality. The caveat is this: hiring manager satisfaction is not the same as quality of hire!

Let’s start looking at the first scenario, where “quality” isn’t clearly defined, and performance is measured more subjectively. Although I am starting to see a shift, the vast majority of companies are still in this boat. So how do you measure quality? And how do you as a recruiting leader ensure your team is driving quality?

I’m going to give you three different measure you can use, either combined or individually as a starting place:

  1. Tenure: not a great metric because it only accounts for how long someone stays and doesn’t differentiate performance. However, for roles where there is little differentiation in performance, it can be an effective benchmark.
  2. Performance rankings: if this is subjective, the metric is only as good as the data in, but look for trends and correlations. You should also look at the one-year performance ranking against the interview score.
  3. Sendout-to-interview ratio and sendout-to-hire ratio: How many candidates does it take to get it right? The lower the ratios, then most often, the better job the recruiter is doing at identifying quality candidates. Be sure to control for positions where these ratios may be naturally low due to very small candidate pools.

These will help you articulate performance and results of your team. They are easy to understand and to display visually.

Now for those that fall into the second bucket, where quality is clearly defined and measured, your role switches to sleuth and analyst. To me, the fun part!

The method I like to start with is gathering the top 20 percent and bottom 20 percent of performers’ information from your recruiting system … all data, notes, etc. Within each group, look for commonalities, and you can subdivide within the groups as necessary, by team, location, etc. Is this group heavy with people whi have similar education backgrounds, past employers, tenure, experiences, source, etc.? I start looking at as many datapoints as I can, probably too many, but that’s my system.

Once you’ve done both groups, look first for what they share. For example, did a high percentage in both groups go to the same college? If so, exclude that as a predictive factor — it cancels out, and, it’s just proven itself not to matter. Now look at the differences. These will be the factors that you can use moving forward to do better targeted sourcing and recruiting. But don’t skip the first step and jump to the second. You must know what doesn’t matter … as much as what does. That’s because it shows you know what you are doing, and it will help you manage push back on certain recruiting targets. For example, if you show that a high percentage of your top-performing employees all have degrees from The Ohio State University, and a high percentage of your low performers have degrees from the University of Michigan, and your VP of marketing wants you to spent time, money, and resources recruiting at the University of Michigan, you can spare yourself the headache, because you have the data showing that there isn’t a positive ROI to justify it.

Good quality measures take you to the next level as a leader and help you best manage your teams’ efficiency and spend!

I’m not going to talk about strategies for increasing quantity, since there is a huge body of work on that subject both here, and especially from our friends at Sourcecon.

Thank you for taking the time to read this, and thank you so much for being a part of the recruiting community. Your commitment to this profession makes all of us stronger.

  • martinsnyder

    Thoughtful as always Jim. If only useful correlations were easy to find!

    • Jim D’Amico

      Gracias Martin!