Absurdity (Parental Advisory)

I love San Francisco.  It’s a great city to live in, with lots of food, plenty to do, and great places to ride a bike.  It also happens to be quite the interesting place for all sorts of reasons.  I could point to the Golden Gate Park, numerous museums, beautiful hills and neighborhoods – but I’m not.  Instead, I’m going to talk about naked people.  You see, SF happens to be a place where it’s legal to be naked, basically anywhere in the city.  My neighborhood bus stop is affectionate known as the “buff stop” and of course what would we do without the Barebucks (Starbucks) a couple blocks away.  This might be one level of absurdity, but to each their own.  The second level of absurdity is this:  San Francisco actually felt the need last year to pass a law stating that the naked people could not sit on public surfaces without a towel between them and the thing they happen to be sitting on.  When all of this happened, my first response was, “people let their skin come in contact with random foreign objects in public city spaces?”  Yeah, I’m the guy that washes his hands at least 20 times a day.  The point being that you’d think there are some things you just don’t need to tell people.

This doesn’t always hold true.  We’ve all heard of companies where the COE wants to approve every new hire that comes through the door.  We in HR know that the CEO adds no value to this, and that after 2 weeks the CEO has stopped to even bother looking at whoever it is s/he is approving.  We’ve all heard of companies where VP’s need to approve every compensation increase, again knowing that there is very little value being added except during the major exceptions.  Once again, I’m not sure if it’s more absurd for a VP to approve an increase of even one penny, or for HR not to have been a bit more persuasive against it.

It seems to me that all manner of obvious things happen in our organizations – but in this case, we’re doing things that we obviously should not.  And we shouldn’t have to create policy to prevent this absurdity, but often the absurdity will happen if we don’t.  The problem is that our organizations seem to like creating waste – wasted time and effort.  In the case of the CEO, it is also the diagnosis of a far more serious problem:  s/he does not trust HR/TA to get the right candidates, nor does s/he trust the manager to hire the right person at the right price.  We in HR are sometimes put in no-win situations.  Telling the CEO not to approve hires is both something we should not have to do (why is the CEO even thinking about it), but it also can put us in the light of not being serious about cost controls if we’re not careful.  Regardless of all that, these are conversations we need to have if we want to be true partners at the executive level.

For the record, I don’t hang out at Barebucks or the Buff Stop.

Also, hoping you realize how long it took me to find an image for this post.  :-p


Rules of the Other Road

The other road?  What other road?  The skinny 2-wheeled road of course.  Here is the idea:  for a cyclist to be safe when you are cruising down the road at 30 miles per hour, a guy 2 inches to your left, right, back and front, there are a couple basic things to keep in mind.

  1. Don’t hit the brakes.  At 30 miles per hour and a guy 2 inches behind you (true tailgating), hitting the brakes means that you’re going to have a very sore butt and back from impact.  When you do hit the brakes, usually it’s accompanied by some rather foul language that reverberates all the way back through the pack.
  2. Ride in a straight line (a.k.a. follow your line).  Don’t swerve, don’t move right or left unexpectedly.  I usually even check under my arm to make sure nobody is within striking distance before I “change my line.”
  3. Ride efficiently.  You can always see the guys to avoid riding close to.  They are the ones that are pedaling with their legs, arms, torso, and everything else.  Perfect efficiency is a relaxed and still upper body while your lower body does all the work.

I tell you all of this for one reason only.  HR is a finely orchestrated bicycle dance.  We can work together and radically increase our speed by drafting.  Or we can bring all of us down together as well (this latter option is often quite painful).  We often don’t realize the integration we have with each other – that we are only a small cog in the HR process.  If we look at things end to end, it’s quite a bit more complex.

A quick snapshot reveals that how compensation constructs jobs can make life really easy or hard for recruiting.  The quality of the recruiters’ work makes life easy/hard for HRSS (shared services) when the person is hired.  HRSS makes life easy/hard for payroll and benefits based on the accuracy of the data entry.

The thing is that we understand who is downstream from our piece of the puzzle, but I’m not sure we always care enough.  When the recruiter is told to slam someone into the hire process, HRSS is often left to pick up the pieces.  We sometimes don’t even know what all the ramifications are for months.  The problem is that we (in this example recruiting) did something unexpected, and forced an action on someone else.  At the end of the day, we probably caused more problems by deviating from our expected course than we solved by rushing someone into the organization.

I’m not saying it’s always bad to deviate.  Sometimes it’s necessary.  When I hit the brakes at speed, it usually comes with a simultaneous shout, “SLOWING!”  When I change the line I’m riding, I usually check under my arm (think of this as checking your bicycle blind spot) and quickly flick a wrist so everyone knows I’m moving over.  The point is, unexpected deviations are bad.  Planned and coordinated deviations when really necessary can prevent a log of angst.


Merge, Outsource, Re-merge

Imagine this. You’re fixing your house, and you take down a few walls to reconfigure how the place looks – it’s a bit more open, you can see more, put more people in it when you entertain. While you’re at it, you decide to put new walls up – perhaps a new powder room where there wasn’t one before, or a new bar area. But the bar area never got used, and you didn’t install water to go to in so you could have a sink and forgot the wine rack, so you take it back out since it wasn’t what you really needed. At the end of the day, you’ve spent a whole lot of money trying to get what you wanted, and then didn’t get what you wanted.

The trend has been going on in business for decades now. Organizations acquire or merge, and then merge common business units and functions. What follows is counter intuitive: after the merge comes the re-piece mealing of the business unit or function. Basically we merge things together and then break them apart again.

We’ve really done the same thing in HR. Over the last decade and more, we’ve tried to figure out what can go into HR shared services. We’ve dropped payroll and benefits in there, then we added HRIS and call centers. The first steps were easy, we gave payroll to the ADP’s and Ceridian’s of the world, and benefits to the Mercer’s and Hewitt’s of the world. Then we went a step further and gave away our call centers to HRO, going ultimately to a state of letting someone else do the transaction processing for us.

We thought this was smart, and in many of the cases, it was. We reduced our costs, created scalability through our providers, and theoretically instilled better quality. But a couple of years ago, we had one of those “uh-oh” moments – we realized that we did it wrong, perhaps went too far, or just didn’t prepare the right way. It’s not to say that outsourcing was bad, or even that we outsourced too much. But it did make us realize that simply outsourcing doesn’t get you to the end state without a lot of work.

What we’ve done in the last couple of years is pull back some of the outsourcing and reintegrate the processes back into our shared service centers. We realized that there is lots of stuff in HR that can’t be simple handed over to an outsourcer and scripted. After all, we’re not talking about accounts payable and cutting checks – much of what we do is nuanced and no matter how many process flows or scripts you write, there is always another unique problem heading towards you just over the horizon.

The problem with HR outsourcing is not that they can’t do what they do effectively. It’s that we haven’t figured out where to draw the lines. We give away the core employee indicative transactions like personal data or job changes. Yep – those are pretty easy. But along with that, we group the complex international movements in with the job changes. Often these are high potential or succession candidates that are getting moved around because we’re actively investing in their development. Rather than simple job changes, we’ve moved people between countries and business units, and both they and their managers are senior people in the organization that expect a high quality transaction. Outsourcers seldom bungle the regular transactions, but given the complexities of other types of movement, dissatisfaction rates can be pretty high. So we bring the transactions back in, but it was not the outsourcers fault – they were probably good at the basic stuff, and we were supposed to be smart enough not to give away the complex processes that were important to us.

I’m pretty sure we’re going to go through another round of this pretty soon. Everyone seems to be thinking about service delivery models, but we’re still thinking about efficiency and cost rather than effectiveness and services. Sure, we can save $100M on paper, but in most cases it didn’t work the first time around. Are we going to make the same mistake again?

Recruiting Effectiveness Measurement

Last post I wrote about recruiting efficiency measures.  From the effectiveness side, we’re all used to things like first year turnover rates and performance rates.  Once again, we’ve been using these metrics forever, but they don’t necessarily measure actual effectiveness.  You’d like to think that quality of hire metrics tells us about effectiveness, but I’m not sure it really does.

When we look at the standard quality of hire metrics, they usually have something to do with the turnover rate and performance scores after 90 days or 1 year.  Especially when those two metrics are combined, you wind up with a decent view of short term effectiveness.  The more people that are left, and the higher the average performance score, the better the effectiveness., right?

Not so quick.  While low turnover rates are absolutely desirable, they should also be assumed.  High turnover rates don’t indicate a lack of effectiveness.  High turnover rates instead indicate a completely dysfunctional recruiting operation.  Second of all, the utilization of performance scores doesn’t seem to indicate anything for me.

Organizations that are using 90 or 180 day performance scores have so much new hire recency bias that they are completely irrelevant.  It’s pretty rare that you have a manager review a new hire poorly after just 3 or 6 months.  For most organizations, you expect people to observe and soak in the new company culture before really doing much of anything.  This process usually takes at least 3 months.  And while the average performance score in the organization might be “3” your 90 and 180 day performance scores are often going to be marginally higher than “3” even though those new hires have not actually done anything yet.  However, you’ll have a performance score that is advantageous to the overall organizational score making you think that your recruiters are heroes.  Instead, all you have is a bunch of bias working on your metrics.

I’m not sure I have any short term metrics for recruiter effectiveness though.  Since we don’t get a grasp of almost any new hire within the first year, short term effectiveness is really pretty hard to measure.  I’m certainly not saying that turnover and performance are the wrong measures.  I’m just saying that you can’t measure effectiveness in the short term.

First of all, we need to correlate the degree of recruiting impact that we have on turnover versus things like manager influence.  If we’re looking at effectiveness over 3 years, we need to be able to localize what impact recruiting actually has in selecting applicants that will stick around in your organizational culture.  Second, we need to pick the right performance scores.  Are we looking at the actual performance score? goal attainment, competency growth, or career movement in # years?  Picking the right metrics is pretty critical, and it’s easy to pick the wrong ones just because it’s what everyone else is using.  However, depending on your talent strategy, you might be less interested in performance and more interested in competency growth.  You might want to look at performance for lower level positions while the number of career moves in 5 years is the metric for senior roles.  A one size fits all does not work for recruiting effectiveness because the recruiting strategy changes from organization to organization and even between business units within the same organization.

Overall, recruiter effectiveness is not as simple as it seems, and unfortunately there isn’t a good way to predict effectiveness in the short term.  In fact, short term effectiveness may be one of those oxymorons.

Recruiting Efficiency Measurement

If you look through Saratoga, there are all sorts of metrics around measuring our HR operations.  For recruiting, these include all the standard metrics like cost/hire, cost/requisition, time to fill, fills per recruiter, etc.   Unfortunately, I’m not a fan of most of these metrics.  They give us a lot of data, but they don’t tell us how effective or efficient we really are.  You’d like to think that there is going to be a correlation between fills per recruiter to efficiency, and there probably is some correlation, but true efficiency is a bit harder to get a handle on.

When I’m thinking about efficiency, I’m not thinking about how many requisitions a recruiter can get through in any given year or month.  I’m not even sure I care too much about the time to fill.  All of these things are attributes of your particular staffing organization and the crunch you put on your recruiters.  If you have an unexpected ramp-up, your recruiters will be forced to work with higher volumes and perhaps at faster fill rates.  Once again, I’m sure there is a correlation with recruiter efficiency, but it may not be as direct as we think.

Back to the point, when I think about recruiting efficiency, I’m thinking about the actual recruiting process, not how fast you get from step one to step 10, or how many step 1-10 you can get through.  Recruiting efficiency is about how many times you touch a candidate between each of those steps.  Efficiency is about optimizing every single contact point between every constituency in the recruiting process – recruiters, sourcers, candidates, and hiring managers.

The idea is that you should be able to provide high quality results without having to interview the candidate 20 times or have the hiring manager review 5 different sets of resumes.  If you present a set of 8 resumes to the hiring manager and none of them are acceptable, you just reduced your recruiting efficiency by not knowing the core attributes of the job well enough and not sourcing/screening well enough.  If you took a candidate through 20 interviews, you just reduced your efficiency by involving too many people who probably don’t all need to participate in the hiring decision and who are all asking the same questions to the candidate.  Sure, there is a correlation between the total “touches” in the recruiting process to time to fill, but “touches” is a much better metric.

I know we’ve been using the same efficiency metrics for ages upon ages, and most of us actually agree that we dislike these.  Touches within the recruiting process makes a whole lot more sense to me, as it gets to the actual root of the efficiency measurement.