Corporate TA is Doing Contract Hiring All Wrong!

In every university on the planet in every Economics 101 class, professors teach a very simple concept of FIFO (First In, First Out). It’s basically meant to describe the way products/material move through a system. There are two basic types, FIFO and LIFO (Last In).

FIFO is you get some supplies shipped to your warehouse, but you first use the supplies you already have in your inventory.  LIFO is you get those same supplies shipped to you, but instead of using the inventory you already have, you first use this new inventory to fill orders.

Unfortunately, in Talent Acquisition we really haven’t figured out the basic economic theory when it comes to Contract labor.

We’ve built Vendor Management Systems (VMS) and Managed Service Provider (MSP) which we thought were the answers to our prayers, but I find most corporate TA leaders and most vendors being pushed through these systems, are unsatisfied with the results on both sides.

So, How Do We Fix It? 

The pain point in bad contract hiring is caused by speed!

Yes, that same speed we desperately want is causing us to hire poorly!

Stick with me. VMSs work as a middle person between vendors and corporate TA. They’re basically a wall so your hiring managers and TA pros aren’t taking a million calls a day from bloodsucking recruiters.

VMSs have tried to fix quality issues, but the reality is in their veal to deliver talent quickly, that get caught in this LIFO dilemma. Almost every VMS on the planet runs their submission process in the same way:

  1. Job requisition goes out to suppliers
  2. Suppliers have some sort of limit of candidates they can put in (like 3 each), and the requisition has a limit of submissions it will accept as in total from all suppliers (like 25)
  3. Suppliers are on the clock to put candidates in before the competition puts them in.
  4. Riot mentality ensues and suppliers put the first garbage they can find into the system for fear of missing out.
  5. The “first-in” candidates are interviewed and a candidate is hired on contract.

The hiring manager is told this the best talent available, sorry, you’ll have to do.

This is a lie. 

One small change by VMSs and corporate TA could easily fix this problem. Do everything exactly the same way you’re doing it now, but don’t allow any vendors to submit talent for 48 or 72 hours. With this ‘window’ of time, your vendors would actually contact more talent, better talent, and not have the fear of missing out in shoving talent into your system as fast as possible. They would still be limited to three, but now they could actually select their three best – NOT – the first three they get in touch with.

Simple. Easy. Effective.

The two or three days of waiting, is nothing, compared to the increase in candidate quality you would get.

The contract hiring world has actually gotten to the point where it moves too fast. Too fast to give recruiters a chance to find the best talent that is interested in your openings. Indian call center recruiting shops are killing VMSs because of how they are set up. It’s all about meeting a number, it has nothing to do with actually finding great talent for your organization.

Contract hiring is increasing in all markets. This isn’t going away, so we need to find better ways of doing this. As you look into 2018 and beyond, and start to analyze your total workforce (ftes, contractors, temps, consultants) the portion of the total that will be contingent is growing. The more it grows, the better quality you need to have. Moving fast is great until it isn’t.

Company aren’t hiring the best contract employees they can right now, they’re hiring the fastest. There’s a big difference between those things.

The Talent Acquisition Trends You Need to Focus on for 2018!

Hey gang!

My buddy, Kris Dunn, and I will be leading a free webinar tomorrow talking about the talent acquisition trends you should be focusing on in 2018 that will have the fastest and most lasting impact to your talent strategy success.

Artificial intelligence, Google for Jobs and other hot topics are dominating conversations across the recruitment industry. But at the end of the day, do they really impact your business?

With new recruitment trends popping up all the time, you need to know which ones are worth getting behind — and which fleeting ones you can afford to ignore. Most importantly, you need to be able to cut through the noise and align your business around strategies that will position you firmly ahead of your competition in 2018 and beyond.

Talent acquisition experts Tim Sackett and Kris Dunn will join CareerBuilder’s Scott Helmes to address these issues and more in a new CareerBuilder webinar, “AI, Google for Jobs & More: Talent Acquisition Trends You Need to Focus on in 2018 (And Buzzwords to Ignore)” at 1 p.m. EST on Tuesday, Dec. 5th. (That’s tomorrow!) 

You will walk away with:

  • Tips on how to position your business to have the best staffing and recruiting year ever in 2018
  • Insights on key talent acquisition and staffing trends — and how they will impact your business
  • Strategies to be more efficient and productive so you can show 2018 who’s boss

Register Now

Come join the conversation and start off 2018 on a great path of recruiting success! 

What is the right diversity mix of employees for your organization?

This is a question I think many executives and HR and TA leaders struggle with. SHRM hasn’t come out and given guidance. ATAP has not told us at what levels we should be at with our diversity mix. So, how do we come up with this answer?

Seems like we should probably be roughly 50/50 when it comes to male and female employees. Again, that’s a broad figure, because your customer base probably makes a difference. If you’re selling products and services mostly women buy, you probably want more women on your team.

The more difficult mix to figure is when it comes to race. Should we be 50/50 when it comes to race in our hiring? Apple has taken it on the chin the last few years because of their demographic employee mix, and even as of this week, are still catching criticism for having only 1/3 of their leadership team is female, and only 17% of their entire team being black and Hispanic. 55% of Apple’s tech employees are white, 77% are male.

So, what should you diversity mix be?

The most recent demographics of race in America show this:

  • 61.3% are white
  • 17.8% are Hispanic/Latino
  • 13.3 are black
  • 4.8% Asian

Some other interesting facts about American race demographics:

  • 55% of black Americans live in the south
  • White Americans are the majority in every region
  • 79% of the Midwest is white Americans
  • The West is the most overall diverse part of America (where 46% of the American Asian population live, 42% of Hispanic/Latino, 48% of American Indian, 37% of multi-race)

So, what does this all mean when it comes to hiring a more diverse workforce? 

If 61.3% of the American population is white, is it realistic for Apple to hire a 50/50 mix of diversity across its workforce? I go back to my master’s research project when looking at female hiring in leadership. What you find in most service-oriented, retail, restaurants, etc. organizations are more male leaders than female leaders, but more female employees than male employees.

What I found was as organizations with a higher population of female employees hired a higher density of male employees as leaders, they were actually pulling from a smaller and smaller pool of talent. Meaning, organizations that don’t match the overall demographics of their employee base have the tendency to hire weaker leadership talent when they hire from a minority of their employee base, once those ratios are met.

In this case, if you have 70% female employees and 30% male, but you have 70% male leaders and only 30% female leaders, every single additional male you hire is statistically more likely to be a weaker leader than hiring from your female employee population for that position.

Makes sense, right!

If this example of females in leadership is true, it gives you a guide for your entire organization in what your mixes should be across your organization. If you have 60% white employees and 50% female. Your leadership team should be 60% female leaders.

But!

What about special skill sets and demographics?

This throws are demographics off. What if your employee population is 18% black, but you can’t find 18% of the black employees you need in a certain skill set? This happened in a large health system I worked for when it came to nurse hiring. Within our market, we only had 7% of the nursing population that was black, and we struggled to get above that percentage in our overall population.

Apple runs into this same concept when it comes to hiring technical employees because more of the Asian and Indian population have the skill sets they need, so they can’t meet the overall demographics of their employee population, without incurring great cost in attracting the population they would need from other parts of the country to California.

Also, many organization’s leaders will say instead of looking at the employee base we have, let’s match the demographic makeup of the markets where are organizations work. At that point, you are looking at market demographics to match your employee demographics. Again, this can be difficult based on the skill sets you need to hire.

If I’m Apple, I think the one demographic that is way out of whack for them is female hiring. 50% of their customers are female. 77% of their employees are male, but only 33% of their leadership is female. It would seem to make demographic sense that 50% of Apple’s leadership team should be female.

Thoughts? This is a really difficult problem for so many organizations, and I see organizations attempting to get more ‘diverse’ in skin color without really knowing what that means in terms of raw numbers and percentages.

What are you using in your own shops?

Do you pay your employees more for referring Diverse candidates?

I know a ton of HR Pros right now who have been charged by their organizations to go out and “Diversify” their workforce.  By “Diversify”, I’m not talking about diversity of thought, but to recruit a more diverse workforce in terms of ethnic, gender and racial diversity.

Clearly, by bringing in more individuals from underrepresented groups in your workforce, you’ll expand the “thought diversification”, but for those HR Pros in the trenches and sitting in conference rooms with executives behind closed doors, diversification of thought isn’t the issue being discussed.

So, I have some assumptions I want to lay out before I go any further:

1. Referred employees make the best hires. (Workforce studies frequently list employee referrals as the highest quality hires across all industries and positions)

2. ERPs (Employee Referral Programs) are the major tool used to get employee referrals by HR Pros.

3. A diverse workforce will perform better in most circumstances, then I homogeneous workforce will.

4. Diversity departments, if you’re lucky enough, or big enough, to have one in your organization, traditionally tend to do a weak job at “recruiting” diversity candidates (there more concerned about getting the Cinco De Mayo Taco Bar scheduled, etc.)

Now, keeping in mind the above assumptions, what do you think is the best way to recruit diversity candidates to your organization?

I’ve yet to find a company willing to go as far as to “Pay More” for a black engineer referral vs. a white engineer referral. Can you imagine how that would play out in your organization!?  But behind the scenes in HR Department across the world, this exact thing is happening in a number of ways.

First, what is your cost of hire for diverse candidates versus non-diverse candidates? Do you even measure that? Why not?  I’ll tell you why, is very hard to justify why you are paying two, three and even four times more for a diversity candidate, with the same skill sets, versus a non-diverse candidate in most technical and medical recruiting environments.  Second, how many diversity recruitment events do you go to versus non-specific diversity recruitment events?  In organizations who are really pushing diversification of workforce, I find that this figure is usually 2 to 1.

So, you will easily spend more resources of your organization to become more diversified, but you won’t reward your employees for helping you to reach your goals?  I find this somewhat ironic. You will pay Joe, one of your best engineers, $2000 for any referral, but you are unwilling to pay him $4000 for referring his black engineer friends from his former company.

Yet, you’ll go out and spend $50,000 attending diversity recruiting job fairs and events all over the country trying to get the same person.  When you know the best investment of your resources would be to put up a poster in your hallways saying “Wanted Black Engineers $4000 Reward!”.

Here’s why you don’t do this.

Most organizations do a terrible job at communicating the importance of having a diverse workforce, and that to get to an ideal state, sometimes it means the organization might have to hire a female, or an Asian, or an African American, or a Hispanic, over a similarly qualified white male to ensure the organization is reaching their highest potential.

Workgroup performance by diversity is easily measured and reported to employees, to demonstrate diversity successes, but we rarely do it, to help us explain why we do what we are doing in talent selection.  What do we need to do? Stop treating our employees like they won’t get it, start educating them beyond the politically correct version of Diversity and start educating them on the performance increases we get with diversity.  Then it might not seem so unheard of to pay more to an employee for referring a diverse candidate!

So, you take pride in your diversity hiring efforts, but you’re just unwilling to properly reward for it…

 

Where do you find the best recruiters?

Logical Argument (that I had with someone recently):

Best Recruiters = Best Companies to Work For

Rationale: The best recruiters bring in the best talent, the best talent makes the best companies.

Illogical Argument (but frequently factual):

Worst Companies to Work For = Best Recruiters

Rationale: If your company is the worst company to work for, meaning you have a bad environment, and a bunch of other negative stuff, it’s going to be very hard to recruit top talent to your organization.

———————————————————————————————-

I was having this conversation with an HR executive that I highly respect but he can be a major idiot (i.e., he use to be my boss which in itself doesn’t make him an idiot, that he does on his own).   Here’s my point.  Working at a bad company makes it extremely hard to recruit.  This type of environment breeds recruiters who either fail (and usually very quickly) or through tremendous odds succeed in finding talent to little by little make their organizations better.

His point is easy: Great company, everybody wants to work for you, recruiter cherry picks the best talent and then calls them to tell them they’ve won the Job Lottery (my explanation, not his!).

I’m not sure this is the chicken and egg scenario. Does the company make the recruiter great, or does the recruiter make the company great?  I really believe great recruiting can turn around a company that isn’t so great. But, average or even sub-average recruiters many times won’t pull down a great company.  At the same token, I do believe the Best Companies to Work For have more average recruiters than great recruiters (oh boy, I said it), why?

Because working in recruiting for a Best Company, makes you lazy. You know longer are the hunter, you become the farmer.

Before you blow a gasket I’ve worked in both environments, crappy going out of the business company where nobody wanted the job you were offering, to industry leading the best company to work for everyone wanted your job, even the crappy jobs.  It was easier working for the latter.

Did the best company still have challenges, you bet, but it was still easier.  We had high-class problems at the best companies (oh no! how do we properly select from all these great candidates) compared to the bad company (oh no! how do we keep the doors open next week if we can’t hire enough people).

So, what’s my point?  

If you are looking to hire a great, top performing recruiter don’t believe the hype that they need to come from a “Top” company.  Where they need to come from is a company that has faced major recruiting challenges, and they’ve found ways to be successful in-spite of those challenges. If you find a recruiter who has always live in fairy’s world their entire career you throwing them into your nightmare might cause their halo to fall off.

Are You Hiring Weaker IT Talent If You Get Above 12% Female on Your Staff

So, Stack Overflow came out this week with their annual Developer survey. This survey is the real deal when it comes to IT staffing and data. Over 64,000 IT pros responded to the survey! That’s a giant data set up on hiring trends! You can download the survey results here: Free Guide: Recruiting Developers in 2017. (FYI – they’re not paying me to promote this, it was just fascinating data!)

So, there’s this concept in hiring when you look at pools of talent in a single skill set when it comes to gender. Let’s say you were running a retail chain. Your total employee mix is 70% female, 30% male. When you go to hire leaders you would assume that your leader gender mix would be 70% female and 30% male. But, we know this doesn’t happen.

In fact, in most cases, we see the opposite, 70% male and 30% female leaders selected. What happens when you do this is that you degrade the quality of leaders you are hiring because you are over hiring out of one pool. So, the quality of talent you are pulling from continues to get weaker and weaker. If only 30% of your employees are male, but you’re hiring 70% of your leaders from that small pool, you are statistically more likely to make bad hires.

In IT 88% of employees are male, 12% female (from the study). Thus, the theory would say, if you hire more than 12% female IT workers, you are ‘over’ hiring within one pool and probably getting lower level candidates from that pool.

I know that sounds crappy, right! Everyone hates when data doesn’t tell the story we hoped for! I get it, we all want more females in IT. I want more females in IT. But if you force it, you actually are giving your organization weaker talent, based on the pools available.

Some other super cool things that Stack Overflow was able to pull out of the data: 

– How do IT Pros find their job (called Job Discovery)?

  • 27% Referred by friends, peers, internal employees
  • 18% External Headhunters
  • 14% Contracted
  • 13% Job Board
  • 8.5% College Career Fair
  • 7.7% Visited Career Site directly

What’s missing? Yep! Almost no IT talent is hired by your internal recruiters! This should be super scary for TA Leaders! Go ahead and argue the data – it’s 64,000 IT pros! This is not a lie. Why is this the case? Well, the study also shows that only 13% of IT pros are actively searching for a job at any one time. Most internal recruiters only work with actively searching job candidates, so their pool of talent is very small, to begin with, thus way less hires.

– Job evaluation factors? Those things IT pros find most important when deciding upon which company to go work for. This one will also sting most Corp TA Leaders:

  • #1 – Is this position better for my career and skill set (okay, this is good)
  • #2 – Money fools!
  • The last thing on the list? Diversity. Ouch. IT pros could care less about your diversity initiatives and working in a diverse workforce. We want so badly for this to matter to candidates, but this study says it doesn’t. IT pros care more aobut the reputation of the person they work for, than diversity.

Go download the study for yourself. If you truly understand all of this data it will make it much easier for your organization to hire IT talent. We tend to spend so much time focusing on the wrong things and then struggle to understand why we can’t hire enough or fast enough.

 

 

 

2017 Michigan Recruiter’s Conference is October 25th in Detroit!

That’s right gang! We’re back and better than ever!

The 2017 Michigan Recruiter’s Conference will take place on Wednesday, October 25th from 9 am to 4 pm in downtown Detroit onsite at our wonderful corporate host Quicken Loans!

Registration is now open – the cost of this event is $69 per person. This is a corporate talent acquisition event, no agency or third party recruiting pros will be allowed to register. It’s not that we don’t love you all, it’s that this is a development event, not a come pimp us with your services event.

Space will be limited, so please register early if you want a seat. You can transfer registration to another person on your team if plans change.

Who’s on the Agenda I hear you asking yourself! Oh, boy did I hit a few home runs this year!!!

SPEAKERS:

Carmen Hudson, Principle Consultant at Recruiting Toolbox, and Co-Founder of Talent42

Shaunda Zilich, Employment Brand Leader at GE

Will Maurer, Global Talent Acquisition, Sourcing Manager, General Motors

Holly Fawcett, Curriculum Development Manager at Social Talent

Margie Elsesser, VP of Talent Brand & Strategy at Quicken Loans 

Mike Bailen, VP of People at Lever and former Head of Talent for Zappos

Killed it, right?!?!

ERE, SHRM, and TEDx wished they had this line up coming to their events!

Thank you to our sponsors for making this happen – Lever and Quicken Loans.  We could not offer this at such a low price without their financial assistance and support! So, support them!

Can’t wait to see you all in Downtown Detroit! Bringing it to the D!

 

 

 

 

Midwest Recruiter’s Bootcamp! Minneapolis July 31st-Aug 1 (LAST CALL!)

My good friend and recruiting guru, Paul DeBettignies, is hosting the Midwest Recruiting Bootcamp in Minneapolis next week, and he asked me to come and speak at it. He also asked some of the top recruiting minds in the business as well! The camp is next week July 31st and August 1st in Minneapolis, and you can still register and be apart of this!

Check out this list:

  • Maren Hogan – Create Winning Employer Brand for Knockout Recruitment
  • Jim Durbin – 8 Mistakes You’re Making: The New Rules Of LinkedIn
  • Shannon Pritchett – In OR out? Creative Sourcing Techniques to Find Your Candidates OUTside the box
  • Caroline Karanja – 10 ways to build diversity, practice inclusion and increase engagement within your organization
  • Paul himself – Create and Grow Your Recruiter Brand
  • Nick Roseth – Selling Minnesota: Strategies And Tools to Improve Recruiting To The Region
  • And me – hugging mostly! Okay, not really, I’m going to be sharing the 10 Truths Of Recruiting And Why You Are Failing At Them! And, how you can not fail at them!

When Paul first talked to me about the concept of the Midwest Recruiting Bootcamp I knew instantly it would be a hit and something I wanted to be apart of! Why? This is real Recruiting development for recruiting teams! It’s what I wanted to bring to Michigan with the Michigan Recruiter’s Conference.

National level development and speakers, in our own backyard! 

Paul let me know today he still has some space open for any recruiter’s or recruiting managers who want to join us. We’ll be onsite at the University of Minnesota. It’s two days that are packed with great material. If you can’t make both days – come one day, then send someone else on your team the other day! Or just come one day – you’ll still get a ton out of it!

REGISTER FOR MIDWEST RECRUITING BOOTCAMP! 

This might be the biggest bang for the buck in recruiter training budget history!

Here’s Paul telling us a little more:

T3 – @Teamableme – Recruit the Best Talent from your Employees Networks

This week on T3 I review the employee referral technology Teamable. I’ve been a big fan of employee referral technology for a few years now, so I thought I already knew what Teamable was before I demoed. What I found was Employee Referral Automation 2.0!

Jobvite kind of created the industry of employee referral automation and leveraging your employee’s social media networks. For the money and the ROI, employee referral automation is still the most underutilized technology in talent acquisition. Almost every TA leader will tell you employee referrals are their highest quality hires and one of their top sources, but the spend almost zero dollars on technology to better these stats! It’s completely insane!

So, Teamable takes employee referral automation and says, how do we make it better? What do current users of employee referral automation like, and what do they wish they had that they don’t with this tech, and what is no one doing with this tech? This is what I think will ultimately set Teamable apart from other players in the space of employee referral automation is their innovation and ability to show organizations new ways to leverage this technology.

Teamable also found a game changer when it comes to using their technology to potentially increase your organization’s diversity hiring. That’s huge!

What I like about Teamable:

– Employees in your organization have the ability to see both the referrals they’ve made and what’s going on with them, but also those they’ve requested and where those are at as well. It’s one of the major gripes employees have after making a referral, that they don’t know what going on with it.

– Gamification is integrated very well into the dashboard showing a leaderboard of most referrals, which employees are most active, which employees have the most connected network, etc.

– The ability to segment out within your organization which employees you want to send specific job postings to. Why is that important? Diversity hires more diversity. Let’s say you had an opening for a Sales Rep. Your team was top heavy with dudes and you wanted more females. Instead of sending out this posting to all the sales reps you only sent it to your other female sales reps. What would happen? More than likely the referrals that came back with other female referrals. It’s not a guarantee, but the percentages are pretty good. BTW – works with any segment of your employees!

– ATS integrations already built for Jobvite, iCims, Lever, Greenhouse, etc. and Teamable will give you a visual cue if the person being referred is already in your current ATS, which is super helpful in letting those who referred know as soon as possible.

– Great UI/UX with their dashboard and ability to pull metrics and see the full funnel.

If you don’t have employee referral automation this is a must demo. I don’t know how to make that any clearer, this technology is a game changer for hiring more employees for less money and higher quality. I’m shocked that it’s not used by 100% of organizations who rely on and desire more referrals.

T3 – Talent Tech Tuesday – is a weekly series here at The Project to educate and inform everyone who stops by on a daily/weekly basis on some great recruiting and sourcing technologies that are on the market.  None of the companies who I highlight are paying me for this promotion.  There are so many really cool things going on in the tech space and I wanted to educate myself and share what I find.  If you want to be on T3 – just send me a note – timsackett@comcast.net

The Top 7 Sources of Hire for 2017!

Silkroad released their annual Sources of Hire 2017 report and I always love looking at big sets of data around the source of hire because I think the vast majority of organizations are misallocating their talent acquisition resources in a big way, and this data just gives me more evidence to point to!

Check out this chart:

So, it looks like Employee Referrals remain king! That doesn’t surprise anyone, what should be surprising are two items from this list:

1. Organizations are wasting more time on Indeed than any other place. 2nd place of a waste of time is LinkedIn. What? If the vast majority of your interviews are coming from Indeed, but a much smaller percentage of your hires are coming from Indeed, you have a misallocation of resources. LinkedIn has the same thing happening but from a much smaller overall number.

2. CareerBuilder is exponentially a better overall value than LinkedIn, but when I ask most companies to give me their #1 spend LinkedIn is almost always their largest single purchase when it comes to the source of hire, even though it’s #7 overall.

So, what does this data tell us?

First, if you are not investing in automating and increasing your employee referral program, you should probably not hold a TA leadership position at any company in the world. I find most organizations spend the least amount of money ‘marketing’ and ‘automating’ their referral program than any other single source they have. Yet, it’s their number one source and their number one quality of hire source.

Second, Indeed does drive a ton of traffic, and for many companies that’s organic (free) traffic, so you can’t beat that. It’ll be nice to see if Google Jobs changes all of this when it’s fully live. You should see a traffic shift from Indeed to Google as a source of hire. But, this doesn’t mean Indeed will go away. Just like the job boards, people will find value and talent at Indeed.

Third, if you’re single biggest spend is on LinkedIn, yet, it’s not your single biggest source of hire, you’re being taken. By whom? Most likely your recruiting team who claims LinkedIn is awesome when it’s really not that awesome, for you. If your hires per source and cost per hire per source work out that LinkedIn is number one for you, great! Spend more! This data shows it probably won’t.

Lastly, you should be striving to make your sources and interviews be fairly equal if possible. If you’re interviewing a ton from a source because you get great traffic, but you don’t make many hires, it’s a greater waste of time than those sources where you get a high interview to hire ratio.

One final cool stat:

3:1  

14 Million applicants, 655,000 interviews. This data tells us what the magic number is that we already all know, it takes three interviews to make one hire.

Feels right, doesn’t it?