If I were on a board of directors, I’d be asking this question of the CEO: What’s the ROI on our recruiting investment? In other words, how is our human resources department spending our recruiting budget, and what do we get for it?
(Maybe I’m thinking more like a director these days because of this recent two-part CMO.com article, "Ascending To The Board." The second part of the series can be found here. And you might want to check out another related story, "The Well-Behaved Board Of Directors: Nose In—Fingers Out.")
It’s a loaded question. But I challenge any CEO to show me the metrics and to give me a good answer. You should challenge your HR department to do the same. My bet is you won’t like the answer.
This isn’t the first time I’ve discussed “How HR Engineered Its Own Funeral.” The problem is really simple: Your HR department probably does not recruit. It merely hires who comes along. And that’s why HR should get out of the hiring business entirely. Either outsource the function (Boo! That would be nuts. You’d lose your competitive edge.), or start doing your own recruiting (Say what?) and insist that the managers who work for you do the same.
That’s right: You should be spending at least 20% of your time doing the most important management task there is: Finding talent that keeps the joint running. That’s your job. Just because HR says they’ll do it is no reason for you to let this critical task be handled by silly database algorithms. The quality of your hires is your job. It’s your neck.
A new survey released by HR watchdog CareerXroads tells a troubling story. CXR has been surveying companies for over a decade, and they ask a simple question: What were your sources of hires last year? In other words, where did your new hires come from?
Every year since I’ve been tracking this survey, the story has been much the same: Most hires—about 25%—come from personal referrals. About the same proportion come from a company’s own Web site—jobs it posts for the public to see.
So, where does actual recruiting fit in to your company’s strategy? Well, almost nowhere. Sadly, your HR recruiters almost never go out to find, steal, seduce, cajole, and bring home the very best candidates that they have identified as the talent you need. HR just does not engage in that kind of competitive behavior. Next time you talk to your vice president of sales, ask whether your top sales reps wait for customers to be delivered to them on their computer screens by an “intelligent agent” that brings prospects to their door.
While reporting on how employers use job boards, one of the important questions CXR asked employers is this:
“What part of the Job Board’s two major services did you use: Post & Pray or Resume Search?”
Yes, it’s an inside joke in HR circles: “Post & Pray” means HR publishes a job description and prays someone will come along. (Is it any wonder HR complains it gets so many applicants that it has no time to send out thank-you notes to anyone?) It turns out that HR doesn’t bother much with actually searching for appropriate resumes in the job board databases it pays to use.
The survey says 60% of employers are “mostly posting” positions and waiting for who comes along. Only 8.6% actually search for the candidates they want. Keep in mind—even this extremely limited “searching” is done only within the confines of a job board database. Precious few HR recruiters go out into the professional community to actually recruit top talent.
If it doesn’t bother you that your HR “recruiters” spend most of their time fielding “applicants” from Monster.com and CareerBuilder, then consider these ROI-crushing statistics from CXR: Monster was reported as the source of hires 1.3% of the time last year, and CareerBuilder 1.2%. Yet last year the employment system dumped $1.1 billion into Monster.com alone. You do the math.
So take a good look at what your company’s recruiters are doing. CXR reports that “most recruiters are reluctant to cold-call someone who is not familiar with their firm or not clearly interested in their job even though they are obviously on the market.” Go back to your v.p. of sales and ask, “Are our sales reps reluctant to cold-call?”
Your recruiters spend virtually no time recruiting because they don’t understand your business or how to approach talent in the field. My advice: That’s your job. Please wake up and start recruiting, because no one else at your company is doing it for you. They’re posting and praying on your behalf.