Category Archives: Business

Airlines and Credit Card Applications

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I’ve been flying a ton lately and have had to experience quite a few airlines. I usually only fly Delta when given a chance. Honestly, I’ve flown all the others, and I find them to be superior in the things that matter to me. Delta gets me to where I’m going when they say they do. The Delta flights I’m on also seem safe and clean. The Delta employees I’ve run into actually come across as professional and friendly.

At the end of the day, most air travel has basically become akin to taking a ride on a Greyhound bus. I say this knowing most people have never ridden on a Greyhound bus. A real trip from one city to the next where you had to go to the bus station to catch the bus. It’s not glamorous. It’s slow and tedious. I once took a Greyhound bus trip from Grand Rapids, MI, to Omaha, NE, to see the girl I love. I believe that specific bus is still en route to Omaha. I started that trip over thirty years ago!

The one thing you notice when you fly a lot, which seems rather out of place, is the pitch to buy the airline credit card. What I’ve witnessed recently is the pressure on getting an airline credit card is directly correlated to the level of the airline you are own. Let me give you some examples:

  • Delta: They make a brief announcement over the intercom of some great offer of free flier miles if you go to some website and get the credit card. That’s it. One mention takes less than a minute. (For transparency’s sake: I have a Delta Skymiles credit card, but they got me via email, not flight announcement).
  • American Airlines and United: They also make the credit card announcement, but they also have their flight attendants walk up and down with actual applications for the credit card. Like, here you go, fill this out right now. It’s almost as if the flight attendants themselves are getting some sort of kickback. Or they should be!
  • Southwest: Much longer pitch, as is the Southwest way. They give way too much freedom to flight attendants and the intercom! I have to believe that standup comics actually get jobs at Southwest as flight attendants simply because it offers them a captured audience for their sh*tty jokes. You know, it’s some flight attendant up there telling a story about how their grandma got the card and came to see them for the holidays. I can’t remember if they also have the brochures/credit card applications that they hand out, but I’m guessing they do. There’s no way they don’t.
  • Spirit/Frontier: Okay, let’s be honest. I don’t fly these airlines. I would take the Greyhound bus before subjecting myself to this Carnival of the airways. But I can imagine what these pitches must be like, given all of the other cheap policies they have in place. Something like, “Yo! If we don’t get ten of you to sign up for this card, this plane isn’t leaving the gate!” They get their ten and then go, “Okay, only five more before we can take off from the tarmac!”
  • Korean Air: Nope. None of it. They just took care of me and made my flight the most pleasant experience ever.

Why do airlines shove their credit cards down our throats after we pay an exceptionally high amount for a ticket? Because it makes them a ton of money! It’s pretty simple economics. We have a captured audience. We are going to assume at least part of the audience are fans because they chose to fly with us. Of course, they want our credit card!

It’s actually somewhat surprising they aren’t pitching more things for us to buy. A new Away suitcase with a special Delta Airlines luggage tag that acts as a tracker as well! (I love my Away bag!) Some arrival limo service that’s easier than Uber and picks you up directly at your gate. Girl Scout cookies. I mean, who wouldn’t kill an entire box of Thin Mints on a flight from Detroit to Dallas? How much for the Girl Scout cookies? $20! Sold! Airport money is different than any other kind of money.

It’s all lazy marketing. We have a captured audience who paid for one thing. Why don’t we jam something else down their throats and see if we can make the flight experience even more miserable? The best is when your flight is delayed, and you hear the pitch. “Hey, why don’t you sell fewer credit cards and just get me to my destination on time!?”

I feel for the flight attendants forced to do this as part of their job. I hope they are getting kickbacks for each one they land. They should!

So, that’s my rant. Airline credit card applications in the air. Stop it. Be better.

Also, if you click here and use the code #SackettMiles you can get 90,000 Delta Skymiles!

If you have a baby, you’ll never have to pay Income Tax!

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Well, at least if you’re under 30 and live in Hungary!

Like many wealthy countries around the world, there is a baby shortage! Countries like Japan have been fighting this issue for decades. For others, like America, this is a recent dilemma that most still don’t know or understand. Hungary has known about their problem for a few years and has tried a couple of policies to encourage women to have more babies.

The first policy they attempted was to eliminate income taxes, for life, for women once they had four children. Yep, 4! As you can imagine, that wasn’t super popular. Also, they found that it takes a while to have four children! The new policy states that if a Hungarian woman has a baby before the woman turns 30, she will now be exempt from income taxes for life. That seems like a very aggressive policy!

The new policy just got approved in Hungary, so there isn’t a lot of data on the impact, but I’m guessing there will be many women and families who will take part. The estimated savings is about 17-20% more take-home pay for the women not paying income taxes.

Should the US have a similar policy?

We have a major baby problem in the US, and as Japan did two decades ago, we are mostly ignoring we have a problem. Young people are having fewer babies and waiting longer to have babies. The human replacement rate in the US is 2.1 to stay even with the current population. The US is currently at 1.7 and trending downward.

Why is a shrinking population a problem? Aren’t we overpopulated? It seems like fewer people would mean more for everyone else!? The thought being, “Fewer people would be more jobs and resources for those of us here.”

The problem is the math doesn’t work that way. Fewer people mean fewer workers. Fewer workers mean less productivity. Less productivity means less of everything. Japan’s economy has been flat to negative for two straight decades. Imagine being in a recession for twenty-plus years!?

The US needs both a baby policy and new immigration policies. We can not grow as a country with a negative replacement rate.

What could a US baby policy look like?

Here’s where it gets fun. I think Hungary, while aggressive, misses a ton.

One of the major issues that women and families have about having a child or multiple children is childcare. Hungary’s assumption is women will have a baby and then go right back to work to get that extra money. But in reality, the extra money will be eaten up by childcare. So, the truth is there isn’t any economic advantage.

To make a policy work, it has to work for both sides. The country needs more babies, and families need better economics that make sense and don’t burden them with crazy financial debt. The current cost to raise one child to the age of 18 in the US runs around $310,000, or $17,000 per year. That seems light as I know many families who pay way more than $17,000 a year just in daycare! And this doesn’t include college, which can run in the hundreds of thousands. Basically, you’re looking at $500,000 per kid. Who the hell wants that!?

Here are some things I would add to a US baby policy:

  • Zero Income Tax for one of the parents, assuming the working parent is caring for the child and the other parent. Mom decides to stay home and care for the child. The other parent gets the income tax elimination credit. If both parents work, the higher of the two incomes get tax-free income, and they also get a tax credit for childcare expenses.
  • Single parents with kids get tax-free income and daycare reimbursement until the child reaches school age, and then pre and post-school reimbursement once they reach school age.
  • For every kid you have over two, all children in your household get free college tuition. So, you have two kids. You pay for college. You have three kids, or four kids, or five kids, and they all get their tuition paid for.
  • Government-paid surrogates. For families who want children but can’t have their own, the government will pay for the surrogate cost. The government will also pay for your adoption expenses for you to adopt children from foreign countries to be raised in the US.
  • Parents get fully paid six months of parental leave that can be used simultaneously or segmented for any baby births, surrogates, or adoptions. Let’s get these kids off on the right foot.

I know, how will we pay for this? I don’t know, maybe we buy one less nuclear fighter jet that costs $25B. The amount of government waste is colossal, I’m sure we’ll figure it out.

The Best Job Titles of 2022!

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At least a couple of times a year, I share something from my friend, Rob Kelly, over at OnGig, and this was something he and his team put together earlier this year.

100+ Creative & Funny Job Titles by Department & Position

I think we are all a bit of job title whores, in a sense! I mean, if you’re a “director,” you really want to be a “vice president.” If you’re a VP, you want to be a “chief of something.” And on and on it goes. A manager wants to be a senior manager. A “typist I” wants to be a “typist II”. We love our titles!

My buddy Kris Dunn let me choose my own title when I first started writing over at Fistful of Talent, and I chose “Chief Storyteller.” Then I started writing a lot and showed up at a conference, and they had my title as “President of FOT,” and that to this day, gets KD all up in arms!

I think we should allow people just to choose whatever title they want to call themselves. I mean, if Karen wants to talk to the manager, make yourself the manager!

Here are my favorite titles from Ongig’s list:

Ambassador of Buzz (Corporate Communications Associate) – didn’t Rod make Jerry his “Ambassador of Quan”? If you know, you know!

Colon Lover (Copywriter) – I like big butts, and I can not lie. Oh wait, I’m terrible at grammar, wrong colon!

Collector of Business Cards (Business Development Rep) – I haven’t had business cards for like five years, and when someone asks me for one, I just take out my phone and Google my name!

VP of ABC (“Always Be Closing”) (VP of Sales Team) – it’s not a list without a Glengarry reference!

Head of Customer Wow (Head of Customer Service) – I love a “Wow” experience!

Vibe Manager & Head of all things Awesome (Head of HR) – Hell to the yeah! You feel me?!

C3PO – Chief Power Plugs & Patches Officer (CTO) – Stop it! Perfect title.

Chief People-Herder ( Community Manager) – These cats aren’t going to herd themselves! This also works for HR leaders.

Digital Overlord (Web Site Manager) – Anything with “overlord” is a winner!

Head of PR and Other Fun Stuff (PR Director) – good. Head of Fun Stuff – better.

Lead Enabler (Assistant) – There’s so much truth in this title, I felt it in my soul.

Captain Underappreciated (Office Manager) – This one made me remember the Captain Underwear books my boys read growing up!

Chief Cheerleader (CEO) – I think every single one of us needs our own Cheerleader. None better than your CEO!

Dr. No (CFO) – If I had a dime for every time…

Master of Coin (CFO) – Game of Thrones, anyone?

King of Sneakers – this might be my new title for the world!

Master of Disaster (Crisis Manager) – It’s funny! Until it’s not.

Out-of-Work Officer – And one for the sign of the times.

I get why we have titles. I get organizational dynamics. I spent the first half of my career title chasing. I got to be 35 years old, and I wasn’t a VP, and I thought I had failed. Then I finally got the VP title and realized the title meant nothing because it was really about what responsibility you have.

I’ve met managers who had the ultimate responsibility to change their company and their world. I’ve met chiefs that couldn’t change the size of the computer screen on their desk.

People won’t admit that titles matter to them. They act like it doesn’t matter. It only doesn’t matter to those who can choose their own title! For 99% of the world, titles are very important to our personal psyche. Titles give confidence and status to those who need that. Don’t ever discount the importance of a title for someone else. We can do that for ourselves, but not others!

What is your favorite job title you’ve seen or had? Hit me in the comments.

Tim Talks – Are you worried about layoffs?

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If you’re a close follower of mass media, we are currently being led to believe that the world is coming undone, and everyone is losing their job. That’s not really the case, so let’s dig into some reasons why that is…

Enjoy your day. Enjoy your weekend. Keep hiring great talent that produces excellent work, and your world will be a much better place!

What is the Health Insurance Design Impact to Employer Paid Abortions?

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Obviously, we had major news recently around abortion rights in America.

What I really want to talk about today is an amazingly quick response by organizations to immediately offer a new health benefit. Within hours of the announcement, we saw major employers come out publicly stating they would pay for the expense of their employees to obtain legal abortions if they could not get one in the state they lived and worked. Some employers also announced that they would pay for relocations for their employees to live in states with legal abortions.

All of this, just from a health benefit plan design perspective is quite remarkable!

Most employers can’t agree on offering smoking cessation programs for their employees or paying for gym memberships, but within hours, we are now paying for abortions. We have severely unhealthy obese employees, but we won’t pay for bariatric surgery. Organizations tend to move very slowly in making benefit design changes, and those changes tend to mostly be around cost/benefit.

Are we being “Inclusive” by offering an abortion benefit?

Again – I’m 100% in favor of a woman’s right to choose!

But we need to have a conversation about the hypocrisy of some of these decisions being made around this issue. This is what we do as professionals in HR. We discuss decisions we make as organizations, and how each decision tends to lead to other issues we can’t yet know what they might be.

So, we are now offering abortions as a health benefit. Why?

Let’s say we are willing to pay $5,000 dollars for our female employees to get an abortion. It definitely makes us sound like we are a very progressive employer! It’s interesting, though, that many of the employers who are willing to pay for your abortion are not willing to pay for your parental leave if you chose to keep your baby. They are unwilling to pay for childcare assistance after you have your baby.

Why is that?

Could it be, that not having children make you a more productive and less expensive to insure employee?

We must ask ourselves this question, if not only to ensure we are being inclusive in our insurance offerings to our female employees.

If you want to be “inclusive” you offer a woman a full choice. Yes, you can choose to have an abortion and we’ll support you! Yes, you can have the baby, and we will still support you! If you only choose one side, you are being exclusionary. Why?

Abortion as an employer-paid health benefit

There are benefits we pay as employers that have very little financial impact but make us look like we are an employer of choice. College Tuition reimbursement was always the biggest one. We offer you college tuition reimbursement knowing almost no one actually takes advantage of it. It’s one of the lowest-used benefits a company can offer! But, we feel great about ourselves when we market this out to candidates and employees.

Are abortion benefits the next college tuition benefit? You offer it up, knowing it makes you look like a progressive employer, but you know it really has very little financial impact. On the flip side, offering paid parental leave and childcare assistance, well, those benefits actually cost us real money, so no, we won’t offer those!

All women should be allowed to make their own choice with their bodies. Period. Employers are going to decide if they should help women with that decision. I think we, as HR leaders and professionals, should be advising our executives that having a “Choice” is about more than one option. Our benefit plans should support any choice a woman wants to make, not just one.

Abortion is health care. Having and caring for a child is health care. Organizations need to support all choices that a woman might want to make.

The Baby Bonus Program You Never Knew You Needed!

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In HR and Talent Acquisition, we tend to be in crisis mode constantly. We are some of the best firefighters are organization has! Our functions tend, by their very nature, to be short-termed focused. This month, this quarter, this year. Rarely are we able to think and plan further than twelve months ahead.

The problem is, currently and in the future, we (the U.S. and pretty much every industrialized country on the planet) are not making enough humans! In the U.S., we are early Japan. This means our birth rate has dipped below the replacement rate. Japan has been facing this crisis for decades; we are just starting down this path.

Why does this matter?

  1. If we can’t replace our humans, we have a shrinking workforce, and it’s very hard to grow.
  2. If we aren’t going to grow enough humans, we have to find another path to get more humans, and that’s immigration, and in the U.S., we have been awful at immigration.
  3. If we can’t get real humans, we have to build robots. The problem is, why robots will come faster than humans, it still takes time, and robots can’t effectively replace humans in most roles.

What is the solution?

This might sound a bit controversial, it’s definitely out of the norm, but HR needs to build a policy that encourages our employees to have babies!!

“Wait, what?! You want us to encourage our employees to have s…”

Okay, hear me out! Japan knew it had an issue decades ago and did nothing to address it, believing nature would take its course. But it didn’t! We have the opportunity to reward and compensate our employees for growing our next employees!

In the U.S., historically, we’ve also sucked at parental leave policies, and we’ve held parenthood against workers for promotion. Having kids, for the most part, has been a negative to your career. We need to change that! We need to make it a reward and benefit to your career. Like, imagine if Mark and Mary had seven kids! They both should be promoted immediately to Vice Presidents or Chief Growing Officers or something!

I’m only saying that half-joking! We are in a crisis and to get out of a crisis takes bold moves.

The hard part of encouraging our employees to procreate is that HR has spent its entire existence trying to stop our employees from doing this very thing! Now I’m asking you to become the Chief Baby Officer.

Um, are there other solutions?

Yes, but America tends to hate both of these options, traditionally.

The first option is to completely revamp our immigration policy and allow in millions of immigrants in both skilled/educated backgrounds and non-skilled/labor backgrounds. Traditionally, both political parties are against this because of the belief immigrants take jobs away from current citizens. Labor Unions hate this. Conservatives hate this. It’s usually a political non-starter.

The UK recently made a major change to their immigration policy because, like the U.S., they are facing a similar human challenge, and we should all take note because it’s an amazing policy. Basically, it allows professionals to come in with a Visa before getting a job, as long as they can prove they can pay their own way. This works because one of the biggest hurdles in U.S. immigration policy is we force an immigrant to have a job before they can enter, and for most U.S. employers, that just doesn’t work from a timing perspective.

The second option is more automation and robots. This is another one that labor unions tend to fight because it takes jobs away from humans. Unfortunately, this one is moving forward because we just don’t have enough workers, and even unions can’t produce more unions. More and more, we’ll see automation take the place of traditional roles we are used to seeing humans in. Cashiers, order takers, warehouse workers, truck drivers, etc. This is scary for many but a necessity for employers looking to run their day-to-day operations.

You might think that encouraging your employees to have babies is a very out-of-the-box idea, but in HR, we need to start thinking more long-term about how we’ll manage our workforce. If you believe your company will be around twenty years from now, a part of our job, strategically, should be thinking about this workforce concept.

Why is Walmart Struggling to Find $200K/Year Store Managers?

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6.68% of Americans make $200,000 a year or more. Of course, that is centered around certain areas. States like California, New York, Connecticut, New Jersey, Maryland, Massachusetts, etc., have a much larger percentage than the average. States like Mississippi, Alabama, Louisiana, most of the Midwest, etc., are under the average.

The Wall Street Journal had an article this week about how Walmart is struggling to fill their store manager jobs. Specifically, their General Manager job, the number one job in a Walmart store, which pays around $200,000 per year.

You would think with so few people making $200,000 a year, Walmart would have smart, ambitious folks knocking down their doors for a chance to make $200,000 per year!

But they don’t. Why?

First, most organizations tend to promote from within. Walmart is similar to this, but reality eventually hits the ceiling. An average Walmart store probably does a revenue of $50-100 million per year. The net income of those locations probably runs around $3-5M per year. There are roughly 350 employees in a Walmart store. Running a single Walmart store is like running a mid-sized enterprise business! Most SMBs in the country have a revenue well under $1M.

This means that Walmart can most likely train an hourly store employee to become a department manager but to become a General Manager, they are looking for some formal business education. You have to run a giant P&L. You have major risk factors. You need real leadership skills. In many towns, “the Walmart” is probably the biggest business in town!

College kids, on average, don’t want to leave State U for a $ 65,000-a-year job as a Manager in Training at Walmart. It’s not something you go back to the homecoming football game and brag about. Your friends took that $50k per year job with the tech firm in town as an entry-level, you make more, but they look down on you.

I know some folks are reading this and thinking, “So! You make more! You will continue to make more! You are in line to run a giant business! Who f’ing cares what others think!” Young adults do. Young adults care what other people think. If I’m frank, and I usually am, we all care what others think!

What would I do if I was at Walmart?

I love this game. It was the basis of my entire book! What would Timmy do if he ran your shop!

#1 – Stop trying to hire or require any form of formal education. Yes, you need smart folks, so give cognitive assessments. Find smart people who can learn quickly, who also have some “hustle” and “grind” to them. You probably have a ton of folks already working for you that you won’t consider. You also have to look at talent pools we tend to discount, most notably, in this case, 50 years and older, retired military commanders, etc. Walmart wants to solve this by talking new college grads into these jobs, I’d be talking failed executives into these jobs! Big salary. Big team. Big job. College grads don’t want that, your Dad does, and a retired military leader who is used to leading hundreds of soldiers does. Also, your Dad will work 60 hours a week and think it’s normal. A new grad will work a solid 40 and think it’s North Korea.

#2 – Build the Manager School. If a great GM in a Walmart environment makes them $3-5M a year, there are margin dollars to build more great GMs! Part in-person instruction. Part on the job training. Part virtual instruction. All the way in on fully engaging non-stop. Send them to manager boot camp. Make it exclusive. Bring in big-time celebrity speakers around leadership and performance. Do graduation with a gold watch.

#3 – Make it so lucrative they won’t want to leave. $200K is nice, but you need some other stuff. You need to make folks say, “F! You!” To their friends who don’t think Walmart is cool enough. What is that? I don’t stock options. Partner programs on profit sharing. Company SUV.

Here’s what I know. The profit difference between Walmart’s worse GM store and their best GM store is so big it would make you blush. It’s millions of dollars. So, making sure you hire, train, develop, and take care of the great ones is priority number one. Building the talent pipeline to successful GMs would be the job of a team of people that included great recruiting leaders, brand and marketing leaders, and technology and data leaders.

I’m not saying this is an easy job. It’s enormously difficult and complicated. But, it’s doable. The problem is, that every organization thinks the solution to their problem is new college grads. They can help, but it’s only one sliver of the full pie that is needed.

You Don’t Have a Recruiting Problem!

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I met with a CEO of a tech startup company last week. He had a very familiar story. “Forever (or at least what’s seemed like forever for him) we have never had a problem recruiting talent to our company, but now we can’t hire anyone”, he said to me. Seems like I have this exact same conversation with an executive at least weekly these days.

So, I put on my consultant hat to try and figure out what the real problem is. It’s rarely a recruiting problem and it’s always a recruiting problem. Let me explain.

When you have a recognizable positive brand, a fun place to work, lead the market in pay, and work in a cool industry, everyone wants to come work for you. Your top of the funnel is filled with candidates. You believe you must be super awesome at recruiting. You actually might be super awesome at recruiting, but you also could suck super bad as well.

You see in the history of the world it’s actually never been easier to find talent. Yes, you read that correctly. In the history of the world! Today, it is also one of the most difficult times in the history of the world to get that talent you found to accept your job. Both of these things are true simultaneously.

You can find them, you just can’t close them.

This has almost nothing to do with the pandemic. People in recruiting love to blame the pandemic, but this is simple economics at play. You have twice as many jobs open, in the US, as unemployed people, and most of those unemployed people do not have the skills needed for the open jobs. So, if you have 6 million unemployed people and 12 million jobs, you really still have almost 12 million jobs to fill.

In 2018 and 2019, before most of us even knew what a pandemic was or became vaccine experts, economists were ringing alarm bells over the lack of workers currently and in the future. But we ignored them because that’s what we do in organizations. We fight today’s fire, not tomorrow’s fire. And, honestly, even if we did decide to do something about it in 2019, what would we have done? Lobby for better immigration policy? Pay our employees to start having sex and create more babies? Truly, what would you have done?

The long-term vision strategy problem.

My startup CEO friend does have a recruiting problem. Because they made most of their hires through referrals, they never built the recruiting machine. No tech. No team. No strategy. No budget. Dead in the water, because we love to believe what’s working today will always work forever. Until it doesn’t.

His problem now is he’s playing catchup. Hire the recruiting talent. Build the recruiting stack. Create an employer brand. Do the recruitment marketing. Etc. The plan is actually pretty straightforward. But painful when you’ve only posted and prayed for your entire existence. All he wants to know is why can’t we just keep posting and praying, or when will post and praying start working again.

Posting and praying isn’t working right now, but it will work the next time that unemployment shoots up to 7%+, and that might happen again. We can always hope for a major recession to make hiring easy again. Most likely we won’t see high unemployment for a long time because of our current state of demographics, but a major recession, war, and pandemics are always our best hope!

Let’s just say we actually might have known this hiring problem was coming. Let’s just say. I mean because of millions of baby boomers leaving the workforce, a birthrate that is under replacement rate for years, closing our borders to skilled and unskilled workers, etc. Let’s just say we might have known this was coming, what could we have done?

We could have started growing our own talent by lessening formal education for jobs that didn’t education but we’re lazy as recruiters so we add in education to limit our candidate pool. We could have looked at candidate pools that have historically been deemed less desirable by executives: older workers, workers with records, workers with disabilities, etc. We could have automated more quickly and deeper into our processes. We could have added in more benefits and work environment options that retained and attracted more workers.

So, yes, you have a recruiting problem, but it’s not because you don’t know how to recruit, it is most likely because you don’t know how to plan and strategize. It is because we didn’t view recruiting like we do other business problems we have. We viewed it as an administrative function that you can just muscle through. You have a recruiting problem, but it’s not really a recruiting problem, it’s a business problem.

Should Corporate Recruiters Get Paid Salary & Commission?

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First, shoutout to @Hervbird21 (Recruister) on Twitter for starting this conversation (Editor’s Note: Hervbird21 I don’t know who you are but send me a note and I’ll share your LinkedIn if you’d like) Also, take a look at the Twitter thread as there are some exceptional recruiting thought leaders who had thoughts on this subject.

Link to the thread

I’ve written about this a number of times over the years, but with the recruiting market being so hot right now, I’ve actually had a number of Recruiter compensation calls with corporate TA leaders trying to figure out three main things: 1. How do we retain our recruiters; 2. How do I attract more recruiters; 3. How do we reward great recruiting performance?

First, I’m all in on the fact that recruiters should be paid in a pay-for-performance model. That doesn’t mean that corporate recruiters, agency recruiters, and RPO should all be paid the same way. All three of those roles are different and should be compensated based on what the organization needs from each recruiter.

Let’s take a look at the Pros and Cons of Performance Pay for Corporate Recruiters

Pros:

  • You get more of what you measure and more of what you reward.
  • Your best recruiters will be compensated more, and higher compensation is tied to longer tenure.
  • Low performers and internal recruiters who actually hate recruiting will hate it and self-select out.
  • It will most likely raise individual recruiting team member performance in the aggregate.

Cons:

  • You will most likely have turnover with this type of change
  • Potentially, you could get behaviors that aren’t team-oriented. (IE., senior recruiters not helping junior recruiters)
  • Potentially, you could lower your quality of candidates as recruiters move quickly to gain performance comp. (the quantity over quality argument)
  • It actually might increase your compensation budget, initially, until you can find the model that is most effective.

Okay, wait, why did I say “potentially” on the Cons? Primarily, because it truly depends on the model design. Just making a decision to pay more for hires is ridiculous and leads to bad outcomes. But, developing a model that rewards individual performance that is based on recruiting behaviors that lead to better hires, quickly, and in a team setting, well, now you diminish the negative outcomes of pay for performance.

How could we make pay for performance work for corporate recruiters?

I’m not trying to dump on all the folks who commented on “Quarterly Bonuses” but stop that! “Quarterly Bonus” really means, “I don’t want to be individually measured and held accountable, but I also want more money on top of my great base salary”. Quarterly bonuses in most corp TA shops are a joke. They are usually based on Hiring Manager satisfaction and days to fill, two of the most subject measures that have zero correlation to better recruiting.

Also, internal recruiting pay for performance is not just a modified agency or RPO model. Corporate recruiters do much more than just recruit in most TA departments, so if you reward them to just recruit, understand, you’re just standing up an in-house agency model. Your internal recruiting model for corporate has to be unique to the job.

Some thoughts and ideas:

– Spend a bunch of time deciding what you actually want from your recruiters and from your function as a whole. Those two things must be aligned.

– Before going to a pay for performance model you need to get your arms around your recruiting funnel data. Otherwise, you’re just guessing at what and who to reward.

– In most cases, you can’t make the rewards the same because recruiters have different requisition loads and levels of position. Also, in most cases, certain areas of your organization hire at different times. So, get ready to test and be flexible to do the right thing at the right time.

– It’s okay if a recruiter makes more than you think if the model is producing what you want it to produce. Too often I hear from TA leaders that are like, “Jill is making too much!” But, Jill it killing it and the top recruiter.

– If you can’t get your head around paying for hires, pay for the behaviors and activities that lead to more hires.

– Start with a month or quarter test, make sure during the test no one will lose money. The goal is to try and reach some sort of outcome of better performance, to see if it can work. If they are only concerned they might make less money, you won’t truly see what can work or not work.

– It’s not about quality or quantity. It’s about quality and quantity. I’ve never led a recruiting team in a corporate or agency where good recruiters would ever send a crappy candidate on purpose. That just doesn’t happen, normally. If it did, that recruiter didn’t belong on the team.

I don’t believe in recruiting “team” rewards as pay for performance in most cases. Most teams are not designed and measured for “team” performance, so many on the team are getting the reward for a few doing most of the heavy lifting. You can still have team rewards, but you truly have to think about how you reward your most effective recruiters, short and long-term.

I think the ideal ratio for compensation for corporate recruiters should be 75% base salary and 25% pay for performance, where your best top recruiters can make 125% of their normal total comp if they are killing it. As I mentioned above, you will have recruiters quit because you have “recruiters” on your team that didn’t take the job to recruit, but to administer a recruiting process and collect a nice base salary.

Okay, tell me what I missed in the comments or if you have a model that is working you would like to share with everyone!

Mailbag: Can an experienced Recruiter be any good with 378 LinkedIn Connections?

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I had a Talent Acquisition Leader reach out to me this week. She is having a hard time hiring recruiters and was looking for some insight. Now, she was looking for more of a professional generalist recruiter. Someone who can hire some hourly, but also corporate positions that include: finance, IT, operations, marketing, etc.

She mentioned she had gotten a resume of a recruiter who had four years of experience, but when she looked her up on LinkedIn, she only had 378 connections. Could this recruiter be any good with so few LinkedIn connections?

The Answer

No.

Okay, before you become unglued, let me explain.

Let’s say this four-year recruiter was only hiring high volume hourly. That would mean this person would never spend time on LinkedIn, since hourly workers, for the most part, do not have profiles on LinkedIn. So, now you’re thinking, “yeah, Tim, LI connections don’t matter for this person so they could be a great recruiter!”

Still, I say no!

Because, for me, a great recruiter builds a network of other recruiters and sourcers to constantly learn from. It basically takes almost no effort or skill to connect with 500 other recruiters, sourcers, HR pros, and your personal network on LinkedIn. Once you get to the 500 mark, no one knows if you have 501 or 30,000.

I challenge my own entry-level recruiters that have no recruiting experience to get to 500 connections as quickly as possible. Within six months, they should be able to do this very easily. So, if you run into a recruiter who is three or four years into their career, and they are under 500, they are showing you that they probably have very little interest in expanding their network and learning from others.

500 LinkedIn connections are like training wheels for a recruiter. I don’t expect every profession to have over 500, but recruiters, sales pros, and people looking for jobs should always have over 500. There’s no reason not to, it’s literally the easiest professional networking available to everyone for free.

Do more LinkedIn connections then equal someone is a better recruiter than another?

No.

But, wait, you just said…

Recruiters, of all types, need to get to 500. After that point, it really becomes more about the quality of the connections that you build. If you just accept every Open Networker on LinkedIn, that network will be full of Life Coaches and Pyramid Scheme sellers!

Great recruiters build networks that help them learn more and recruit better. I would say once you establish a network, you then become much more selective about who you invite and which invites you to accept. Right now, with my network that runs over 20,000, I only accept about 1/3 of the invitation requests I get based on the criteria I want in my network.

I know recruiters that quickly maxed out their LinkedIn networks with garbage and had to go back and scrub their networks, and it’s very time-consuming. But, I also see recruiters who switch industries and skills who do this as well. Your network should grow and change with you based on where you are at in your career.

So, LinkedIn connections matter and they don’t. That’s just reality in today’s world of recruiting. Whether you are recruiting doctors or truck drivers, you should still be using LinkedIn for your own professional development on an ongoing basis.