Recruiting's New Era

For HR leaders faced with rebuilding recruiting functions decimated by the recession, the experts have some advice: Don't go back to the old ways. This is the first of a three-part series.

Thursday, September 2, 2010
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During the depths of the recession, you cut back on your in-house staff recruiters. After all, why would you need them? You weren't doing much hiring.

But lately things have been stirring, and your company expects to start adding employees in the near future. Maybe the hiring managers are already coming to you with requisitions.

You could sure use those recruiters again. Now what? This question is dogging many HR leaders these days, as the need to hire new staff is already outpacing their ability to rebuild their recruiting departments. Some are trying to hire back their former recruiters -- only to find the best ones are in high demand, and may have already moved on. Many are bringing on contract recruiters as a stopgap measure, or turning to outsourcing firms.

But while everyone is scrambling, they may do well to pay heed to the lessons of the recession, say a variety of HR leaders, staffing directors and recruiters. For if there is rebuilding to be done, those lessons may be critical for success.

The recession has made clear, they say, that staff recruiting needs to be more strategic than in the past, and -- at least for professional and managerial jobs -- more relationship-based, similar to the approach used for executive recruiting.

Some recruiting departments have taken advantage of the slowdown to re-engineer their staff-hiring models, so they can be out of the gate quickly as the economy improves. And while some companies may not have time at this point to make major changes, the experiences of organizations that have gone through the process may prove helpful.

Keeping Them Around

One company that did rethink how it does staff recruiting -- BASF, the world's largest chemical firm -- is now much better equipped to deal with the expected intense post-recession competition for workers, says Michael Kannisto, BASF's director of staffing, university relations and employment branding for North America.

"When we come out of the recession," he says, "whoever gets up and dusts themselves off first is going to have a huge advantage."

Kannisto believes BASF's edge will come, in part, from its new use of workforce analytics to predict future talent needs and identify gaps that must be filled. BASF's North American operations, based in Florham Park, N.J., developed this approach during the recession, as hiring at BASF "slowed down drastically," and the staffing department had time for other projects.

By looking at factors such as new hires, internal moves, retirements and business-unit strategies, BASF was able to do some workforce modeling that's helped it understand where and when new staffing will be required.

"This allows recruiters to begin proactively sourcing pools of candidates before requisitions appear," says Kannisto.

His department is starting to see an uptick in hiring as the recession eases, and the new workforce modeling is predicting even more job openings than expected because of turnover trends and upcoming retirements.

"That's something we wouldn't have known," he says.

Kannisto's department had the manpower to make changes during the recession -- including bringing executive recruiting in-house and expanding its use of social media -- in part, because it did not reduce its recruiting staff. As hiring slowed, the company instead reduced its use of external recruiters.

"We didn't see any value to releasing people who had all this knowledge for BASF," says Kannisto.

Companies that held onto their in-house recruiters, like BASF, are now in a better position to handle the post-recession surge in hiring, says Linda Quaranto, a director in Deloitte Consulting's Human Capital practice.

"During the recession, most companies slashed their recruiting staffs," says Quaranto. "It happens every time there is a recession -- the recruiters are among the first to go."

Quaranto believes that may not be the most effective approach. When companies begin hiring again, they need workers who can hit the ground running -- and so they also need recruiters who understand the business and what it takes to be a successful employee. This strategic approach -- not simply filling open jobs, but hiring people who will be productive and valuable to the company in the long-term -- will make companies more competitive post-recession.

One immediate lesson, says Quaranto, is that, during the next recession, companies should hang on to their core group of recruiters "even if it is overhead, and even if it means taking the cost out of other areas of HR."

She recommends that companies provide their recruiters with a variety of skills -- such as helping people with career development -- so that during hiring slowdowns, they can do other jobs and don't have to be laid off.

Calling for a "New Breed" 

As companies rebuild their recruiting staffs, she says, they should bring on recruiters who can establish relationships with candidates, in much the same way executive recruiters do.

Kannisto says BASF is working toward that goal.

"Everything is moving toward that model of less transactional and more relationship-building, like executive recruiting," he says. The primary reason is that younger employees want to have more flexibility in their career development -- and so recruiters need to be able to match jobs with candidates' expectations over the long term, as the company changes as well, he adds.

Other experts agree that, as companies rebuild their recruiting staffs, they should seize the opportunity to rebuild in new directions.

Judy Sweeney, vice president and head of research at the Dublin, Calif.-based talent-management software firm Taleo, calls for a "new breed of recruiters" able to do more than "just create a job description and post it."

A recruiting staff, she says, should work closely with HR leaders and hiring managers to understand what the company is looking for and, in turn, help educate HR about what kind of recruiting works and what doesn't -- why, for example, people might be turning jobs down.

The metrics for this new kind of recruiter, says Sweeney, should not be based on whether a hire has been made, but on "What's the quality of that hire?"

Recruiting departments may also want to adopt new models, such as the one developed two years ago by Lincolnshire, Il.-based Hewitt Associates. Instead of using "full-lifecycle recruiters" to handle all aspects of recruiting, Hewitt now divides up the work so that "sourcers" can be anywhere in the world.

"While my recruiters are sleeping, there are sourcers in India who are finding people," says Erin Peterson, Hewitt's vice president of global talent acquisition.

By assigning different recruiting functions to different people, Hewitt has reduced the typical time for filling a job by one month or more, says Peterson. And the recruiters who deal directly with job candidates have more time to spend with them, "which enhances the candidate experience," she says.

Try Before You Buy?

For companies that must rebuild their recruiting departments from the ground up, the question may be where to start -- should they rehire their former recruiters or look for new ones? Should they hire contract recruiters, rely more on contingency recruiters or go the recruitment-process-outsourcing route?

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Experts say that since each option has advantages, companies may want to use a combination of approaches, tailored to their needs.

RPOs, they say, are particularly valuable when companies need to fill a large volume of "repeatable" lower-level jobs -- ones that require easily identifiable skills, and may be relatively easy to fill. For professional and non-executive management hires that require special skills and perhaps relationship-building, recruiters -- whether staff, contract or contingency -- may be more effective, they say.

An organization's laid-off recruiters may be a good bet, especially if they were highly qualified -- but, as Deloitte's Quaranto notes, they may not be available. "If they're good recruiters, they've probably already moved on," she says.

For those organizations that cleaned house drastically, say the experts, it may be best to simply start over.

"Organizations shouldn't miss the opportunity to bring in innovation and new blood, to bring in someone who can think with a new mind," says Peterson.

Peterson, who is responsible for hiring at Hewitt, says many companies are rebuilding by bringing in contingency recruiters, who may be embedded in the recruitment team for several months.

One advantage, she says, is that companies have the chance to watch the contingency recruiters in action, to see who might eventually be brought on board.

"It's try-before-you-buy," she says.

Contingency recruiters are valuable when the organization has an opening for someone with a specialized skill set -- particularly one that the company has little or no experience with.

Says Quaranto, "If it's a new skill set, and you need to make the hire rapidly, it probably would not be prudent to do it on your own."

Contingency recruiters can also be called upon to educate the internal recruiting staff on how to hire for such positions in the future, she says.

However, if companies are to rely on contingency recruiters to help them become competitive after the recession, they may need an attitude adjustment.

Rick Christ, owner of Christ Enterprises, an information-technology staffing company in Turnersville, N.J., says some companies have taken unfair advantage of contingency recruiters during the recession.

Instead of calling upon two or three contingency recruiters to fill a single position, which Christ says is reasonable, some companies have been engaging as many as eight recruiters, which guarantees that most of the recruiters will end up receiving nothing for their efforts, he adds.

The recruiters are willing to go along with this because times are tough these days -- a situation, Christ says, the companies readily exploit.

"Recruiters are fed up with the way they're being treated," he says. "As the economy improves, good recruiters are not going to work in that environment."

Companies that use many contingency recruiters for a single job are hurting themselves in another way, says Christ. The companies don't let the recruiters talk to the hiring managers because that would be unwieldy, but it also means, he says, "[Those recruiters] really don't know what the company is looking for."

"The best environment for a contingency recruiter is one in which we can learn as much as possible about the company and what the hiring manager is looking for -- in both hard and soft skills," says Christ. "We best accomplish that when we're true partners."

Regardless of the approach companies decide to take on recruiting, say the experts, they had better move quickly. While the end of the recession may not yet be in sight, staffing departments need to be ready. Preparation is all.

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