Recent Trends in Human Resource Management

Wednesday, December 31, 2008



Nothing frustrates a worker more than a bad boss!

Bad bosses are difficult and can make work treacherous for others. They are not a rarity, but are quite common in organisations. Their presence is hard to ignore and even harder to dodge. As one works hard to climb the corporate ladder, bad bosses can prove to be stumbling blocks to an otherwise smooth rise.

What can one do to establish a cordial working equation with a bad boss? While the victims of a bad boss know that they are working under one, they still fail to understand his/her behavioural nuances. They do not analyse the psychological make up of their boss and end up being victimised. If the subordinates of a bad boss want to stay in the job, they have to be smart enough to understand the mental makeup of their boss, since without a clear understanding of the reasons behind the boss's tantrums the victimised subordinates could get unduly stressed.

Bad vs. bully To begin with, it is important that victims understand that a 'bad boss' is different from a 'bully boss'. Bad bosses are not bullies. They are simply bad and gravely annoying. They tend to attack a person's self-esteem and pride in subtle ways, thereby alienating him from the team. They also tend to play favourites and always create unhealthy competition between team members. They do not aim to build cohesive and productive teams, but focus on preserving their command and control over teams, irrespective of the means. They also tend to get vindictive and personal with their subordinates, and take criticism as an assault on their credibility as a person. There are more such attributes of a bad boss. An understanding of these will help workers stay wary of them. It also enables bosses to introspect and assess for themselves their credibility as a boss.

There is no consensus on the attributes that define a bad boss. Every person will have different definitions of good and bad, and therefore it is difficult to pin point the characteristics of a bad boss. However, there has been extensive study on the subject which shows that while there may be differences in the fine print the larger picture looks the same. The common attributes of a bad boss brought out by these studies are:
  1. Bad bosses typically love ego massaging. They like people who are always in agreement with them and can get extremely cranky if subjected to criticism even if it is constructive.
  2. Bad bosses use ineffective means of communication. They tend to give deadlines in a very casual way and at times fail to follow up themselves. This may prove to be detrimental to the subordinates' work output.
  3. Bad bosses tend to go overboard with their criticism and punishment for people they do not like. They do not consider the option of soft and positive talking, and instead become unnecessarily aggressive to prove their point. Use of disproportionate disciplinary measures is common among bad bosses.
  4. Bad bosses do not give subordinates an opportunity to explain their point, and issue verdicts based solely on their perception.
  5. Bad bosses do not miss an opportunity to blame subordinates, while recognising contribution only after a lot of effort by the staff.

Bad behaviour of the boss can be very demoralising for subordinates and can take its toll on both their professional and emotional stability. Apart from changing jobs, the only other way to handle bad bosses is to understand the reasons behind such behaviour and work towards making adjustments to accommodate the negative elements.

  1. Communicate: Subordinates should talk to the boss about the way they feel when subjected to bad behaviour. They also should communicate their intentions in order to clear the bad air between them.
  2. Choose a mentor: Subordinates should choose a mentor for themselves who can help them with their problems and show the 'right way' of doing things. The mentor should be neutral and in the good books of the boss.
  3. Apprise the HR team: Subordinates should apprise the HR team about their relations with the boss if the problems get serious.
  4. In case there is a credibility problem and the HR team and the boss's boss do not trust the subordinate, then the victimised subordinate must gather support from other victimised colleagues and present a united front.
  5. Seek transfer: In the worst case scenario, internal transfer must be sought by the subordinate.

The aforementioned approaches can help workers tackle their difficult bosses better. However, the onus of establishing a working professional relationship, irrespective of the differences, lies both with the boss and the subordinate. Unless both show tolerance and settle contentious issues between them the relationship only stands to lose, sabotaging individual as well as departmental performance.

Ref: TheManageMentor

Boost Engagement in a Financial Crises: Tell the Truth

Boost Engagement in a Financial Crises: Tell the Truth

The recent turmoil on Wall Street appears to carry more than just financial implication: It may be lowering employee productivity and engagement, as well.

In a new survey by Workplace Options, a work-life consulting and training company, half of respondents said they are experiencing stress because of financial concerns, and nearly the same amount said that stress makes it hard to perform their jobs.

"It's a critical issue because the first reaction is to hunker down, play it safe and try to not stick out," said Jim Haudan, CEO of Root Learning and author of The Art of Engagement: Bridging the Gap Between People and Possibilities.

"When fear, uncertainty and doubt reign supreme, people begin to get on the [anxiety] train," Haudan explained. "They look at turf control, they begin to catastrophize what's going on, and they begin to worry if [they're] next. All of these emotions are very real, and all of these emotions are exactly what you don't need at a time when you want people to unify, align, change and be agile.

"To help get employees back on track and to leverage workers' capabilities to the fullest, Haudan said talent managers should advise leaders to do the following:

1. Convey the reality of the situation.

Above all, leaders must be frank with employees. "People are amazingly resilient and able to deal with the downside, but the unknown is paralyzing," Haudan said. "The leader's job is to bring the facts into focus and create a perspective.

"To do that, leaders must engage in two specific behaviors: tell the truth and show the bigger picture. "[When leaders tell] the truth, people actually becoming more trusting," Haudan said. "It's when you're not thinking you're being told the truth that you become less trusting.

"There's a very emotional connection, too," he explained. "Telling the truth also conveys that we, leaders, understand the predicament our people are in in such an empathetic way it creates a connection [that allows us] to go forward rather than stay where we're at.

"But leaders also should be sure to convey the bigger picture to employees. Haudan said employees often complain they only receive bits of information that can often give them a haphazard view of what's going on, like disparate jigsaw puzzle pieces.

"They said, 'Why don't [executives] just send the cover of the box across to the puzzle, so we can see how it all fits together and then realize that some of these parts that seem to be in conflict may have their appropriate places?' I think more than ever in these turbulent times, getting people to see the 'box top' of the business and the state of the business is absolutely essential to tap into their capability," Haudan said.

2. Communicate the "score.

"When the financial crisis began to unravel, many employees were glued to their computers, constantly clicking for updates."I've never seen so many [people] check the market so many times in one day," Haudan said. "Human beings, in times of turmoil, want to know what the score is. There's never been greater curiosity about the score; use and leverage that curiosity to not only [get employees to] understand the business but to keep everybody in the game. The urgency can either tear us apart or be a catalyst to bring us together."

3. Prioritize.

Employees are likely to feel overwhelmed in turbulent times, and when upper management unwittingly leads them to believe every initiative is urgent or important, they're more apt to just give up. Leaders should focus on keeping things simple and direct to improve engagement.

Ref:Agatha Gilmore

Friday, December 26, 2008

The Current State of HR

The Current State of HR

Year-end 2008 is quickly approaching and all across the globe the news is dominated by negative stories about the dismal economy. We have all experienced irrational thinking and are guilty of doing it from time to time, but as we prepare to move into the New Year there is no greater threat facing global companies than irrational thinking in the HR function. Looking back, one thing was glaringly obvious more companies than ever before realized just how ill-prepared they are for the emerging labor climate. All throughout 2008 stories emerged from iconic organizations detailing just how out of touch they had become.

Moving Forward, No Reprieve

Despite night after night of negative economic news around the world, the vast majority of global companies (70% according to the most recent Gallup research) were actively trying to maintain or grow their workforce in December. Despite burgeoning unemployment, demand for top talent in skilled and professional roles is as tough as ever. Global growth combined with profound labor force demographic changes impacting more than 85% of the developed world are keeping competition for top talent fierce. While recruiters understand the challenge of recruiting today, and senior leaders understand the demand for continued investment, the vast majority of HR leaders appear to be doing business as usual.

Are You Prepared?

The near future requires robust and prescriptive action that cannot be influenced by irrational thinking. Do your measures reflect reality, or rather the perception you want others to have regarding your efforts? Are you comfortable standing up and saying the ship is already taking on water and a change in course is needed? These are the kind of questions VPs need to be asking right now. For every major strategic initiative, as well as all core deliverables, you should have objective evaluation processes in place that prove beyond a shadow of a doubt that your efforts are effective.

Three Most Important Things

While every organization has different strategic priorities and will undoubtedly work to achieve them in differing ways, there are three things that every world-class HR organization should be doing, including:

1. Prioritizing mission critical and key jobs. For far too long HR professionals have equated the terms equitable and equal. All jobs do not impact the organization the same when performed well, below average, or left vacant. While politically difficult, organizations must find a practical and accepted way to define mission critical and key jobs, and then to prioritize HR deliverables towards those roles and the talent that occupy them. Once identified, its a lot easier to deliver world-class service and demonstrate a profound impact on the business.

2. Macro level workforce planning. Too many organizations that have tried to implement workforce planning programs have gotten bogged down in the complexities that arise when the focus is too granular, i.e. every role, every employee. Granular workforce planning produces too much data and makes it easy to get lost in the statistics. Workforce planning programs should be actionable in nature, they should help answer several high level questions that establish whether or not the workforce in moving in the right direction to support the future needs of the organization and at the right pace.
3. Leveraging robust analytics and process yield modeling approaches to prove impact. With mission critical and key roles identified and macro level workforce planning initiatives in place, the next practice firms must focus on is yield modeling transformative processes such as development efforts and staffing programs. HR professionals should be able to respond with precise plans that include cost, timeline, and resources needed.
Final ThoughtsA perfect storm of environmental factors is lining up to make the next ten years very difficult with regards to recruiting and retention of top talent.

Ref: HR Funda

Tuesday, December 23, 2008

10 Recruiting Problems You Might Face During Tough Economic Times

10 Recruiting Problems You Might Face During Tough Economic Times

During volatile economic times, some things that used to be easy in recruiting and Talent Management become much more difficult. As a result, it’s important to identify and then focus on these new problem areas:

1. Hiring freezes. One of the first knee-jerk reactions during tough times are company-wide freezes. Although salary, promotion, and budget freezes negatively impact retention, hiring freezes can decimate a recruiting function. Some tips on fighting hiring freezes can be found in my recent article.

2. Stock options are no longer a major motivator. With the stock market constantly going up and down, stock options become less valuable as a motivator both for current employees and for candidates. As a result, you need to shift your sales approach to candidates to emphasize exciting work, flexible work, better benefits, more security, or to focus on cash performance bonuses.

3. Job security is king. Economic volatility makes both employees and candidates nervous about their future. This fear among potential candidates causes them to increase their emphasis on security, which will definitely make “drawing away” the currently employed top performer from their current firm much harder. Recruiting needs to re-examine the information that it provides on job security on its website, in position descriptions and in its offers in order to make it more compelling.

4. An increased volume of traffic. Normally, all great recruiters focus on the employed candidate (the so-called passive candidates). However, layoffs and high unemployment may mean that some high-quality people are now available among the ranks of the unemployed. Unfortunately, if you actively recruit during tough times, the volume of mediocre but enthusiastic unemployed people who will apply for your jobs will also increase dramatically. This high-volume, low-quality flow means that your screeners will be strained and that your selection process has to be more precise to ensure that you don’t mistakenly hire highly enthusiastic people who turn out to be low performers.

5. Relocation issues. Moving people between regions becomes nearly impossible when individuals can’t get new mortgages or sell their existing homes. This problem affects both internal transfers and new hires. Alternatives to consider include focusing on recent college grads who generally rent or consider “narrowing” your recruiting area to a reasonable commuting distance.

6. A loss of trust and confidence. Although your firm might not have been involved, the general mistrust of business that has resulted from the economic turmoil means that both your employees and your candidates will likely now have less trust and confidence in anything that you say. In recruiting, this means that your website must be more objective and believable, your interviews need to be more credible and your offers will need to be stronger, if you expect to convince the cynical.

7. Managers will focus less on recruiting. Few managers have ever really enjoyed recruiting. But their interest in it will likely even decrease further during tough times as the stress from their business workload increases, while their available staff decreases. Their interest in recruiting will decrease because they certainly won’t be doing it as often but also because of the increased frustration that invariably occurs when many of their “active searches” are never be completed because of frequent “surprise” hiring or budget freezes. Their lack of interest in reading resumes and interviews will invariably mean a dramatically slower average “time to fill” at your firm.

8. Layoffs. Although you probably can’t stop layoffs from happening, you should certainly fight to minimize their impact on your employment brand image. Work with PR to ensure that layoffs by your firm don’t become front-page news for potential applicants to see and worry over.

9. Technology budgets. Almost invariably during tight economic times, any budget resources available for buying new technology (ATS systems or new software) are likely to disappear. So either make your purchases immediately or be prepared to live with what you have for a while.

10. Recruiting budget cuts. Almost everyone gets their budget cut during business downturns but there’s no reason for recruiting’s budget to be cut any deeper than others. The key to maintaining your budget is to build a strong business case demonstrating that cutting recruiting has more negative business impacts than the limited cost savings that these cuts generate. Also utilize split samples to demonstrate your impact. When possible, work with powerful executives in growth businesses to get them to “champion” your cause or to directly fund recruiting initiatives that impact their business unit. Also, work with the CFO’s office to quantify the dollar impact of low quality and bad hires, as well as the revenues lost as a result of position vacancies in revenue-generating and revenue impact positions. In finally, focus on winning external recruiting and “Best Place To Work” awards to increase your visibility and credibility among executives.

Monday, December 22, 2008

How HR Professionals Can Play a Role in Protecting the Enterprise

How HR Professionals Can Play a Role in Protecting the Enterprise

The story that made headlines this past summer of the San Francisco IT administrator who locked top administrators out of the city's network for several days should spark some serious discussion among HR professionals. The incident was a classic example of what a disgruntled employee with elevated privileges can do to take down the enterprise, such as encrypting data or changing passwords to restrict access to business functions.

IT professionals perform invaluable functions – without their services, organizations could not function. On the flip side, disgruntled IT employees are generally recognized as the highest risk an organization has, as they can do irreparable damage by stealing, corrupting or restricting access to data. A recent study indicated that an incredible 88 percent of IT workers would take company secrets and remote access credentials with them if they were fired. To mitigate this staggering statistic and avoid situations similar to the one in the San Francisco lockout, HR needs to develop a close relationship with their information security staff.

Once a disgruntled IT employee gets into a position where there are red flags that he or she might be a risk to the organization, steps need to be taken to restrict that person's access to the network. Having regular contact between the HR and information security departments will help management stay informed of potential "problem" employees, which is key to approaching the entire issue of insider threats.

Keeping your organization's data secure requires the cooperation of every employee – but HR in particular should play a critical role, especially with IT professionals, starting with the hiring process. When putting together a job description for a position that will have access to the organization's information assets, such as a network or system administrator, HR needs to clearly understand the duties and responsibilities of that position. For example, how much authority is vested in a particular job? What sort of access control will be in place for this position? Effectively communicating job responsibilities requires a close relationship between HR and the information security department, yet security professionals are often left out of the process.

The organization must also place a relative value of importance upon the information in the database that is being protected. Until an organization classifies what the data is worth, it will never know how valuable it is. What would be the impact of the damage to the organization if certain data was lost? For instance, what if the company's intellectual property fell into a competitor's hands? It could put your company out of business.

Another important factor to consider in the IT hiring process is to know more about the type of person you're putting in charge of your information assets. Thorough background checks should be performed before any hiring decision is made. That means more than a simple credit check and 15-second phone call, which is all that transpires in many cases. You need to look into the past of those employees requiring elevated clearance levels to determine if there's a history of disruption or any sign of previous instability. In many instances, this type of information is not discovered until after the person has already been hired; you may then have to alter their job or even terminate them.

Once employees have been hired and put in place, the next point of consideration for HR should involve separation of duties. Giving any one position too much power is rarely a good idea. For the IT professional, there should be a clear separation of duties, whereby one person doesn't have complete network control or authority. It is advisable to divide network responsibilities between at least two people to prevent significant changes within the IT infrastructure. Even if the two positions are totally independent of one another, the position descriptions should be linked to communicate that no one person will have sole responsibility for a particular function, such as access to changing passwords across the entire network.

Companies need to be especially aware of employee behaviour during difficult times. Actions such as layoffs, lack of bonuses or pay increases, or turning an employee down for a promotion can prompt some people to want to 'make themselves more important' – escalating their privileges to give themselves additional responsibilities and control. Companies need to be aware of suspicious behaviour within their network. Therefore, an independent, knowledgeable party such as an information security professional should consistently review network logs to check who has accessed various portions of the database and network. Your company's network(s) and databases must also be segmented with access control best practices in place.

If bad company news, or even the rumour of bad news, is on the horizon, HR should alert the security person to be on the lookout for suspicious behaviour. For example, if there is a massive change of passwords by one individual, or someone suddenly has more authority than they had before, that individual needs to be closely monitored or even isolated until a sufficient investigation can occur. Enforced vacations and job rotations are sometimes necessary for those holding highly sensitive positions.

Any time an organization tries to cut corners with their security and doesn't have enough people in place to provide a separation of duties, the organization runs the risk of putting all their eggs in one basket. The days when it was satisfactory to perform a 'minimum' level of security are gone. Having a second person in place that can understand the technology and undo any damage – or prevent the damage from happening in the first place – is crucial to any organization's well-being.

Saturday, December 20, 2008

IT firms hike referral bonuses

IT firms hike referral bonuses

Though recession goes on worsening, some U.S. firms in India are on a hiring mode for outsourcing jobs and they are increasingly hiking referral bonuses for existing employees. Referral bonuses are supposed to be given to employees who refer talented people to the company. U.S. Firms like Deloitte, ADP, Pegasystems and Broadridge in India have hiked the referral bonuses already, reported The Economic Times.
Deloitte, which employs over 6,000 people in India, has doubled its referral bonus to employees last week. The employees will now get Rs. 10,000-50,000 for every person who they refer, depending on the level at which they will be joining the firm. The company has also increased its campus hiring by 20-30 percent this year.

An industry analyst said, "This is the right time to hire as salary expectations of people have become realistic and referral system helps identify suitable people. Besides, expansion of India operations will help the firm cut cost significantly and mitigate the risk of the U.S. slowdown."

"Most firms in the West are trimming down workforce there to cut cost. This is expected to bring more offshore work to India. This could lead to an increased demand for people especially the high-end talent pool," said, Prashant Srivastava, HR expert & managing partner (India), The Gallup Organization.

He also mentioned that firms are under pressure to scale up faster and the referral system provides a cost-effective way to get people with right-skill and attitude. Compared to the recruitment process through executive search firms referral will be at least 10-15 percent cheaper.

Pegasystems, a U.S. based business process management (BPM) software provider is looking to hire 60-80 high-end talent-pool for its R&D center in Hyderabad in six months. "Our referral bonus ranges from Rs 25,000-75,000 per person. As we want to scale up our operations at a faster pace, we have increased this bonus by Rs 50,000 for referring a person at certain positions like tech lead. Hence, if a candidate is selected, an existing employee can earn up to Rs 1.25 lakh, which will be beyond his salary. We will give this extra benefit for the next six months," said Suman Reddy Eadunuri, MD, Pegasystems Worldwide India.

Similarly, ADP, the $9 billion business outsourcing solutions firm, is looking at recruiting 400 people in the next six months at its Hyderabad and Pune centers. This year (June-December), the company added 400 people. Of this, about 52 percent were selected through referral process as against 45 percent last fiscal.


Thursday, December 18, 2008

Three New Strategic Roles Defined

Driving Change: Three New Roles Defined

While breaking down the barriers between the existing HR functions that impact talent management is in itself a profound success, leading organizations are also formalizing a number of proactive activities that add true strategic power to talent management.

By creating a formal workforce planning role, organizations are empowering staffing departments, training departments, and operations departments to take the guesswork out of how it will happen, and they are managing using robust forecasts that scientifically demonstrate the correlation between workforce utilization/composition and organizational capability and capacity.

To further support strategic talent management, workforce planning is coming online with two other proactive roles. Employment branding is becoming more mainstream as organizations recognize the need to make themselves more visible and attractive to top talent, and to motivate existing employees. Retention efforts are formalizing not just to stave off the need for hard-to-find replacement talent, but also to support knowledge management and knowledge transfer between several generations of talent.

Each of these new roles is outlined here:

Vice President/Director/Manager of Workforce Planning

This role will be responsible for developing systems that ensure that the organization has an adequate supply of talent to support planned business objectives in both existing and new markets. (Note the emphasis here is not to run statistics and create reports, but rather to ensure an adequate supply of talent.)

Specific responsibilities for this role include:

· Overseeing the creation and management of all strategic HR goals, management practices, organizational policies, and talent management systems to ensure the organization has the capability and capacity to secure an adequate workforce when needed.
· Participating in organization-wide strategic planning and operations-planning sessions to provide input on workforce-related touch points.
· Projecting the organization's supply and demand for talent on a moving one-, three-, or five-year basis (timing dependent upon industry).
· Identifying gaps in projected supply and demand for talent and developing strategic and tactical plans to acquire the labor needed to meet objectives.
· Marshaling the cooperation and integration of HR deliverables.
· Establishing and maintaining the business case for organizational change needed to retain a position as the "employer of choice" among key internal and external talent constituencies.
· Analyzing data from all internal functions to determine the relationship between talent availability or utilization and productivity, or the occurrence of sentinel events. (A sentinel event is any unexpected occurrence that results in a severely negative outcome.

Vice President/Director/Manager of Employment Branding

This role will be responsible for developing systems that identify and manage how the organization is perceived by both internal and external key talent constituencies to ensure that the organization develops and maintains a dominant position in relevant labor markets as the employer of choice. (Note that the emphasis of this new role is not on employment advertising but on understanding and managing perception among key constituents.)

Specific responsibilities for this role include:

· Developing and implementing an employment branding strategy that ensures key constituents continue to perceive the organization as an employer of choice, thereby simplifying talent retention, motivation, and attraction.
· Marshaling internal management practices and people programs to ensure that the employment experience delivered is one capable of sustaining projected talent needs.
· Overseeing the creation and integration of employment branding messages in all public relations, media relations, marketing communications, community relations, special events, and recruitment advertising campaigns.
· Identifying and developing storylines around company management practices that can be repeated internally and externally through employee referral campaigns, public speeches by executives/managers, news stories, and select awards program applications.
· Periodically assessing employment brand internally and externally to ensure alignment between current strategy and labor market conditions.
· Establishing and maintaining the business case for organizational change needed to develop the required employment brand.

Vice President/Director/Manager of Retention

This role will be responsible for developing systems that identify mission-critical talent stores within the organization and a stable of tools and approaches that can be used on a one-to-one basis to retain them. (Note the emphasis here is not to develop organization-wide approaches that treat employees equally, but rather to provide differentiated treatment to top performers in key roles that have been characterized as critical to the success/failure of organizational objectives.)

Specific responsibilities for this role include:

· Overseeing the development and implementation of talent management methodologies to identify mission-critical roles within the organization based on objective assessment versus speculation.
· Overseeing the creation and deployment of tools and approaches on a case-by-case basis to ensure the retention of key employees.
· Analyzing internal data from all functions to identify relationships between organizational practices/events and turnover.
· Developing and administering knowledge management and transition processes for planned turnover.
· Developing and maintaining systems that monitor and report on managers' abilities to develop and retain top performers.
· Establishing and maintaining the business case for organizational change needed to drive retention efforts.


It's a brave new world, one with few barriers to competition, which is why barriers to strategic talent management must be removed. Existing barriers include isolated HR functions, lack of strategic mindset, and lack of infrastructure to power true strategic talent management. Removing these barriers isn't easy, but is a necessity for survival in a global economy. Many professionals in HR are not adequately equipped and will not survive in a modern HR function. Organizations cannot let those incapable of transitioning become barriers themselves.

It is time to step up to the plate. It is time to embrace new proactive activities. It is time to stop talking about being strategic and actually be strategic! Enjoy the future — it your turn to be the corporate hero.

Tuesday, December 2, 2008

HR World in Transition Phase

Three New Roles Every Modern, Strategic Talent Management Function Must Have

These roles are Employment branding, workforce planning, and retention.

The human resources profession is one often perceived by those outside the function as a bureaucratic, compliance-driven, administrative function that is reactive versus proactive and that changes at the speed of a rock.

In most organizations, that perception is one well-earned, since most HR processes and policies are developed in response to a significant event and are intended to limit certain behaviors instead of enabling others. HR has become the function known for saying "you can't do that" as opposed to function known for saying "this is how we can accomplish that." However, a few leading organizations are breaking with tradition — at least when it comes to talent management — establishing new functional structures that account for current labor market realities, and adding new proactive activities to the stable of HR services.

A growing number of organizations are leveraging the visibility currently being placed on the impending talent shortage/crisis by corporate leaders and growing the scope of talent management activities to include formalized processes, programs, and departments focusing on proactive management of the employment brand, retention, and workforce planning. These groundbreaking organizations are tearing down massive walls that years of political infighting have created between HR functions in order to develop entirely new HR structures where all deliverables are integrated to "strategically" manage the portfolio of talent that the organization can use to call upon to achieve both short- and long-term objectives.

No longer does the training and development function devise and offer training programs for skill sets that can more readily be acquired through recruitment at a lower cost. No longer do key employees leave the organization because a bad manager kept them from advancing or learning. No longer do offers made to top candidates get rejected because compensation cannot adequately assess the market value of talent. Sounds too good to be true? It isn't, but getting there isn't easy; lots of archaic thinking gets in the way!

Wednesday, November 26, 2008

Top 10 HR Tips For beating the recession

Top 10 HR Tips For beating the recession

A survey of HR directors and business leaders by recruitment firm The MBS Group has produced what it calls 'Ten tactics for tough times'.

Those involved in the research were all at board or senior management level, within the retail, luxury, and consumer goods sectors. How useful these tactics actually are is open to debate, but they provide a useful barometer of the current thinking taking place in top firms.

Tactics For Tough Times

1. Ride the storm - preparing for difficult times but not currently planning large scale layoffs.

Leaders of consumer, retail, leisure, and luxury industries are wisely shying away from kneejerk staff cuts or talking about culls of more mature staff. This reflects an innovative and creative approach to talent that other sectors would do well to observe.

2. See upside in downturn - the best business leaders see opportunities in turmoil.

Business leaders are focusing on the future, aiming to find new opportunities and disrupt existing markets with innovation, based on consumer insights.

3. Show me the value - rapid response and appropriate price promotion are working for some.

‘Extreme value propositions’ are working well with increasingly cost-conscious consumers. In an effort to grab market share, a race downmarket is developing, to capture consumer spending power with a ‘best-price’ message.

4. Pocket returns in pockets of growth - some sectors are positively booming, such as online, home entertainment and some luxury brands.

Online business continues to defy gravity. The results seem to indicate a ‘digital divide’ between companies who have older business models and those who have successfully incorporated e-commerce and new technology platforms. The latter are now benefiting from this shift in consumer behaviour.

5. Refocus on emerging markets - opportunities in Asia are attracting increased attention and investment whilst Europe and the US flounder.

Many respondents indicated that they are refocusing their businesses on the significant growth opportunities in the Middle East and Asia and, to a lesser extent, Eastern Europe.

6. Keep up with customers - businesses must find a way to match or exceed customers' increasingly agile changes in behaviour.

Customers’ behaviour is changing faster than businesses are able to shift their strategies. Consumer loyalty is not surviving the challenge of great deals and people are defecting to (own) brands that previously they would not have considered.

7. Hang on to talent - attracting the best talent is increasingly vital, but also becoming increasingly difficult.

Business leaders are not planning for the large-scale lay-offs that happened in previous recessions. Instead, they are focusing on whether they have the skills and talent to take them through the downturn. They recognise that it will be increasingly difficult to attract the best new talent into their organisations.

8. Empower your people - business leaders are recognising the value of experience, while also ensuring that their people have the right skills and training in place to survive and prepare for the upturn.

Internally, the focus is on having the right strategies in place to retain the best people, as well as managing under-performers in a tougher way. Incentives are being adapted to reflect these changed priorities.

9. Keep up morale - maintaining workforce morale will be a decisive benefit.

Businesses reported that they are redoubling efforts to demonstrate decisive leadership via more internal communication. For example, several companies are making increasing use of face-to-face communication to increase the CEO’s visibility, to set the right tone and convince employees that their jobs are safe. They recognise the need to avoid the creation of a bunker mentality within their businesses and build employee confidence and trust in their leadership.

10. Engage your staff - keep staff members on your side.

A high proportion of our survey respondents recognised that full employee engagement is needed to be able to shift strategy successfully. A minority of companies cited examples of the impact that this can have.


Friday, November 21, 2008

Getting Better at Recruiting and Retaining.

Cost effective Hiring and Successful retention in the corporate world is very essential today. For this reason companies are working on the areas of recruitment & retention to get more insights on the same. Some of the key findings are:

. Knowing the generation Y better will improve an organisation's chances of recruiting and retaining them

. But to know them organisations must move beyond perusing documented information.

The better you know your prospective candidates the better the chances of luring them. The logic is that simple. There is already a lot that organisations know about generation Yers. However, if the intention is to recruit more from this generation, the question to ask is, "What more can we learn about them?" The answer is critical to formulating an effective strategy-one that ensures a competitive edge.

This week's mailer will clue in organisations and their recruiters on the characteristics and quirks of generation Yers. This information should help them realign their existing strategy to recruit successfully and retain them.

Defining the 'Y' cadre

Commonly referred to as "Millennials", "Echo Boomers" and "Net Generation", generation Y constitutes those who were born from 1980 to 1999 and grew up in the 1990s and 2000s. A few well-documented and work-relevant characteristics of this generation are:

. They are more ambitious than the previous generation so much that sociologists call them the overachieving, overscheduled generation

. They like changing jobs, and earned the title "job-hoppers"

. They have great expectations from their workplace as, according to research, "they desire to shape their jobs to fit their lives rather than adapt their lives to the workplace". This outlook is a huge challenge to employers.

The above-mentioned characteristics are well-documented. In fact, most organisations have already realigned their recruitment strategies around them. But there are a few other quirks that are not so well documented but can have an equally huge impact on an organisation's strategy. They are:

Trait: Dependence on parents

Being the products of helicopter parenting, generation Yers find it difficult to wean off parents. This generation does not think much of moving back home after college. Less rebellious than their predecessors, most of them even let their parents decide on where they will work and for whom. That this generation job-hops is a well known fact, but what is undocumented is that their job-hopping is driven by the will to learn. Encouraged by their parents' advice to learn and grow from different experiences, the generation is willing to risk job security and fantastic salaries for the thrill of learning something new. Also the fact that they can fall back on their parents makes them greater risk-takers than their predecessors.

Tip: In getting the Yers to make career decisions, give them time to consult their parents. Encourage them to make those phone calls to their parents from the interview room itself.

Trait: In-box management

It might not appear as an advantage, but the fact that Yers choose to start their work day without a 'to-do' list actually makes them better 'prioritisers'. As a behavioural expert comments, "Baby boomers use their in-boxes and in-trays as to-do lists and go by them on a typical work day. However, Gen Y is sold on the idea of an 'empty box'". This means that what they do is not dictated by what comes into their in-box or in-tray but by what they feel is important. This gives them better control in deciding their priorities and also makes them conscious of managing their work activities based on priorities. In short, they do not work on a first-in, first-out basis but on the "most important comes first" basis.

Tip: Allow Yers the leeway to plan their day. Strict scheduling can frustrate them.

Trait: Women power

Yers appreciate gender equality and have little qualms about women surging ahead as earners. Generation Y women feel more empowered, go solo in making career and personal decisions, and feel less insecure at work. Another observation is that women take a back seat voluntarily when they decide to have children.

Tip: Think of flexible work hours and work-at-home options for new mothers.

Trait: Team spirit

Generation Yers thrive as teams. Probably the first generation to value the importance of team power, this generation appreciates how individual efforts at work multiply when combined with team efforts. So oriented are their efforts to work in teams that team-building and bonding initiatives are only reminders of what they already appreciate. Therefore, where they really need help is in developing their leadership potential.

Tip: Divide everyone into work teams. Even a one-employee function or department can be integrated into a large group.

Some of this information is probably already known but not accounted for as yet. However, what is essential is to be aware of these undocumented generational differences. Organisations must interpret this information to use it as a recruitment advantage.

The ManageMentor

Friday, November 14, 2008

Auditing the Human Resources Function

Effectiveness of the Human Resources Function

The purpose of a Human Resources audit is to assess the effectiveness of the Human Resources function and to ensure regulatory compliance. The audit can be conducted by anyone with sufficient Human Resources experience. Having experience working in more than one company is a plus, as it provides the auditor with a broader perspective. There's an advantage to having the audit conducted by an external consultant. Because the external consultant has fewer biases about the organization and has less personal interest in the outcome than an employee of the company, the external consultant may be more objective.

Collect Data

Assess the mission, vision, strategy, and culture of the organization, from whatever written material there is in the company (check with the department or person who handles public, customer, or shareholder relations). Collect existing data such as:
1. Hiring statistics (acceptance rate, hiring rate, hiring projections)
2. Turnover
3. Compensation and benefits philosophy and practice
4. Exit interview summaries
5. Employee complaints (discrimination, harassment, safety, other)
6. Promotion and advancement practices and trends
7. Human Resources budget and expenditures

Where possible, compare the data you collected with market data. This information will provide you with a point of view for the next phase of the audit: the interviews. If, during the interview, discrepancies arise between the data and the interviewee's answer, you can explore the reasons for the discrepancy(s).

Conduct Interviews

The purpose of the interview is to collect input from the internal customer on their Human Resources needs and how those needs are being met. Begin the interview with top management. Next conduct interviews with a sample of subordinate managers including first line management. The topics to discuss during the interview include:

  1. Perceptions of the company and its goals
  2. Strengths and weaknesses of top management
  3. Employee perceptions of the company and top management
  4. Relations with subordinates
  5. Support of career goals for self and employees
  6. Major Human Resources issues
  7. Which Human Resources functions work well
  8. Which Human Resources functions need improvement

Conduct the Regulatory Compliance Audit

The following areas should be audited as part of the regulatory compliance audit:

  1. Personnel files and recordkeeping (contain only job related information)
  2. Pay equity
  3. Job descriptions (ADA compliance)
  4. Legal postings
  5. Equal Employment Opportunity and Affirmative Action
  6. Forms (applications, internal forms, etc.)
  7. Workers' Compensation
  8. Fair Labor Standards Act
  9. Family and Medical Leave Act
  10. Legal reporting

Summarize the Results

Consolidate the information you collected. Compare the results with market surveys. Determine which practices are good/popular/effective/competitive. Determine which practices need improvement. Recommend specific improvements referring to the results of both the Effectiveness audit and the Regulatory compliance audit. Justify the recommendations. Determine how to measure whether the improvements are successful.

Obtain Approval from senior Management

Present the preliminary results and recommendations to senior management individually. Point out how these recommendations will support their needs. Obtain their support, then present the final results and recommendations to the senior management staff for final approval.

Implement the Program

Consider implementing the program in part of the organization as a pilot program. Monitor and measure success and seek to continuously improve processes. Be prepared to modify the program if an organizational change requires it.

Tuesday, November 4, 2008

Effective Organizations

Effective Organizations(Organization Development)

The trend toward reducing the number of management levels in organizations is being driven by the need of organizations to increase the speed and accuracy of communication. Traditional organizations, with their many levels of management, process information slowly. Plus the information gets filtered along the way, often for political reasons which can conflict with the overall good of the organization.

Processing information quickly and accurately, then acting upon what is learned, is critical for the success of an organization. Another key item is selecting relevant information for measuring organizational performance relative to organizational goals. This can be challenging in light of today's information rich environment. (Selecting the wrong metrics, those which pull the focus of the organization away from what is most important for its ultimate success, will harm an organization). After selecting the appropriate metrics, organizational performance can be further enhanced by linking the performance results to individual or team incentives.

Performance Management is a process that can facilitate the flow of information in an organization. Performance Management includes the following:

  1. A flow-down of goals beginning with the organization's strategic plan, to the annual organizational goals, to the President's or CEO's individual performance goals, on down to all employees in the organization. Thus each member of the organization can ultimately tie their individual performance goals to the organizational goals .

  2. A formal feedback system in which individual performance results can ultimately flow back and influence the organization's strategic plan. Feedback must occur frequently.

  3. A mutual (between the employee and manager) establishment of duties and responsibilities and criteria for measuring success. Also, performance results are mutually determined. The mutuality is what encourages the feedback.

Saturday, November 1, 2008

Employee-Manager Trust Strengthens Work Relationships

With more than 135,000 employees working in some 80 countries worldwide, Procter & Gamble, creator of brands such as Tide, Folgers, Pringles, Charmin and Crest, has isolated the manager-employee relationship as a critical component of effective performance management.

"It's the No. 1 reason why people leave a company," said Keith Lawrence, director of human resources, beauty, health and well-being at Procter & Gamble Co. "It's such an important relationship. It determines the work an individual is assigned, their future assignments, promotions, compensation, as well as the basic love, care and feeding that we get each day."

In order to enable effective manager-employee relationships, Lawrence said the process must begin with a manager's fundamental belief that a high-quality relationship with every one of his or her employees is important.

Positive manager-employee relationships actually start when an employee joins the manager's team or attends the company on-boarding program. On-boarding can help the two get to know each other, identify their strengths and establish how they can work together.

To set the right tone at this stage, Lawrence said the manager should have clear work plans and objectives for what will be accomplished in the first assignment.

Ongoing, continuous feedback - including not only what needs improvement, but recognition of what is going well - will help reinforce the employee's contribution and build a basic feeling of trust, respect and a sense of teamwork.

"We have a lot of systems to give feedback on an ongoing basis, but the most effective way to give feedback is to tailor it to the individual employee," he explained. "Some employees like to get written feedback, some like to get it in person, others like to hear all the good stuff, and you have to soft pedal the issues. It's important for the manager to know every one of their employees and deliver feedback as they like it delivered."

The level of personalization and trust in this manager-employee relationship is so relevant; it can take only one incident to damage it. Saying one thing and doing another, offering inaccurate information or not fulfilling commitments related to advancement or new opportunities for growth and development are a few critical but common manager mistakes.

"Fundamentally, all relationships boil down to trust," Lawrence said. "The worst thing a manager can do is make a commitment and either not deliver on it or not be honest, candid and complete with their employee. It's very hard to rebuild trust. Stephen Covey would say you need seven deposits in the emotional bank to account for one incident like that. In the trust fund, it's beyond that. A manager can really blow a relationship when they're not trustworthy or when they lack integrity."

Procter & Gamble uses its annual employee survey to measure how well managers are building and sustaining employee relationships. The survey has several relationship-based questions for which answers are monitored, benchmarked and tied to manager - particularly senior managers' - bonuses.

"That puts teeth behind the importance of this," Lawrence said. "We also have a wide range of tools and training available to managers and employees to help their relationship building. For example, we have a relationship-building tool kit that has an array of different exercises and approaches that both employee and manager can use to help them strengthen their respective relationship.

"Last, we're leaning toward what we call strength-based relationships, and the analogy here is in a marriage, you learn to appreciate and play to each other's strengths as opposed to trying to fix the parts you don't like. The same is true here. We're trying to focus on what are the strengths that each employee and manager has and how can they respectively play to those over time and build and strengthen one another."

Kellye Whitney

Ten Things Great Bosses Know...

Ten Things Great Bosses Know...

1. The Most Important Thing Bosses Do Is Help OTHERS Succeed:

This sounds simple, but bosses got promoted because of their personal achievements. Now, they have to shift the focus from themselves to the growth of those who report to them. In other words, it's not about YOU, boss. It's about the troops. If they do well, you should, too.

2. Managers Cannot Treat Everyone The Same:

Great bosses learn how to customize their approach to each person. Yes, they hold true to core values, but don't assume that they have to act in identical ways with each staffer. They manage people as the complex individuals they are. And that's a real skill.

3. IQ Gets Bosses Only So Far; EQ Takes Them to The Next Level:

I'm talking about emotional intelligence: the ability to be self-aware, self-managing, socially aware and adept at managing relationships. This means knowing how to read the emotions of others as well as our own, to know how to power up or power down in synch with a situation, to build trust through expertise, integrity and empathy.

4. People Fall In Love With Ideas & Solutions Of Their Own Creation:

It's faster and easier to tell people what to do; but when people come up with their own ideas, they are much more invested in them. Anyone who's ever assigned stories knows this one. Journalists love the project they come up with more than the one that's given them. When we put our personal stamp on something, we care more about it. This applies in work assignments, negotiation and conflict resolution.

5. Coaching Is A Critical Skill:

Bosses who "fix" the work of others don't help them grow. Fixing may be faster, but has short-term impact. Coaching takes more time but the results last. Fixing is about the product, coaching is about the person. With good coaching, the person and the product improve.

6. Staffers Must See You, Not Your Evil Twin:

What's the difference between visionary and delusional, a roll-up-my-sleeves helper and a micromanager, or between confidence and arrogance? It's often in the the way the leader communicates and the staff perceives her. Leaders can't assume their employees can read their minds. It's hard work to make your intentions clear.

7. Conflict Doesn't Get Better If It Is Ignored:

The best bosses build cultures where conflict may be inevitable among smart, creative people, but it is handled extremely well. Differences are aired, values are clear, people are held accountable, and bullies don't win.

8. Intrinsic Motivation Is The Most Powerful:

The best work gets done when people motivate themselves. That's intrinsic motivation: Internal engines like competence, choice, meaningfulness and progress. Or the joy of working with a team, or achieving something solo. Great bosses know what drives each person they lead.

9. Managing Change Is A Constant Responsibility:

Change can make people very uncomfortable, but leaders must move people in new directions, toward new opportunities. Today's newsrooms are undergoing massive changes of culture, workflow, skill sets, formats and technology. Great leaders build bridges to the future.

10. Leaders Inspire Others:

There's meaning, honor and dignity in every form of honest work. Don't fear that you will look corny by sharing a vision, a passion, or a dream. The best bosses make us feel better about ourselves, our work and our goals. Dare to inspire.

Monday, October 6, 2008

Retention Problems Begin During the Hiring Process

In most organizations the recruiting function is entirely separate from the retention effort, yet the design of the hiring process has a dramatic and direct impact on future turnover. More than one-third of the factors that drive future turnover have their roots in the recruiting, hiring, and on-boarding process.

Recruiting Factors That Impact Future Retention

If you're interested in reducing turnover, here are some of the hiring-related factors that impact future retention:

1. The source where you found the candidate. Employees who make referrals have a personal interest in the individuals they refer succeeding on the job. As a result, the employee making the referral has a tendency to mentor or guide that individual and will intervene to help the candidate if he or she gets frustrated. Sources of recruits who don't have that mentoring connection, like large job boards, almost always produce hires who quit at a much higher rate. Look at each of your early turnover cases and see which of your sources have above-normal turnover rates.

2. Their average tenure in other jobs. Calculate how long, on average, any "serial quitters" stayed in their last several jobs as an indicator of how long they are likely to stay in this job. I am not saying you shouldn't hire people who change jobs frequently. They might be top performers who are simply in high demand or who work on projects with relatively short lifecycles. However, you should estimate their likely tenure, then mark it on your calendar, and then later, actively "re-recruit" them around the time they are "overdue" for change and are likely to begin looking for a new job.

3. Hiring candidates who are focused on money. Every candidate has his or her own set of motivators for taking and remaining in a job, and a significant percentage of people are motivated primarily by money. Money is the offer component that is the easiest to compare between firms, but it is also a factor that can change fast. Individuals whose primary motivator is money tend to be at the top of the turnover pyramid because they frequently "jump" to a new job as soon as a higher monetary offer comes in. No matter how good your initial starting salary, if your organization is slow to give raises, bonuses, stock rewards, or to counter outside offers, you will inevitably lose these individuals when more money comes along. Leading firms like Ernst & Young and Southwest Airlines understand this relationship and as a result, they specifically target hiring individuals who don't have the "give me the money" mentality. Incidentally, individuals hired from executive search firms can fall into this "money first" category. If they left the last job because an executive search professional presented a "better money" offer, don't be surprised when they leave again when the next executive search professional calls with slightly more money to offer. Solutions include targeting individuals from not-for-profits, government, education, and medicine. Also, share information on the maximum and minimum salary, stock options, and bonus amounts (based on actual new-hire experience over the last two years). By providing only trend information from actual experience and carefully avoiding any direct promises to individual candidates, you can minimize legal issues and any misperceptions about the actual amounts that they "will" actually make. To determine a candidate's top motivators, give them a simple, one-page survey that requires them to force-rank the top and bottom factors that motivate them to change jobs. By forcing them to rank the top and bottom three "job change" motivators, you can get a good (though not perfect) idea of whether exceptional money is a critical factor. Options could include high base pay, bonus percentage, exceptional benefits, challenging work, learning and growth, working in a team, working independently, the opportunity to innovate, job security, a directive manager, a hands-off manager, a product they believe in, the desire to help others, recognition, and two-way communications.

4. On-boarding and orientation. The first few days on the job have a dramatic impact on future retention (one firm found that weak orientation could increase future turnover by as much as 20%). Research shows that individuals make a "mental decision" during their first month as to how long they expect to stay with the organization (Note: this phenomenon is highlighted in the popular book, Blink). New hires subconsciously judge whether the organization meets, exceeds, or fails to meet the expectations they have based on how they were treated during the first week and month. If they are under the belief that your organization promised exciting work but are told during their first week on the job to sit in their cubical and "read the manual," they are likely to conclude (and also to tell their colleagues) that while the organization may talk a good game, it is not reflected in the actual job. To avoid mixed messages, make sure that your "local" on-boarding is stimulating and gets them up to the expected level of productivity quickly. Such a program might focus on coordinating meetings with the top people right away, providing new hires with a mentor, and periodically asking them what can be done to bring them up to productivity faster. During orientation, ask candidates specifically "what is the best way to manage you?" By identifying what management approaches they personally have found to be effective with them in the past, you can avoid the need for a lot of trial and error on the part of their manager. Some of the "factors" you want to identify relating to "how to best manage them" include what motivates them, what frustrates them, what is the best way to communicate with them, how often they like to see their manager, what challenges them, and what would they like to learn during orientation. With this information, you can provide their new manager with insights into the management approaches that make them the most productive (note: managers can also provide new hires with a profile outlining how they manage their employees). Ask new hires during on-boarding why they accepted the job and what led them to quit their last two jobs. Passing those reasons on to their current manager can help ensure that they know which factors might cause the new hire to leave again.

5. Recruiter involvement after the hire. If you want to reduce future turnover, maintain a relationship with new hires during their first six months in order to ensure that they don't become frustrated (this approach was championed by Michael Homula at FirstMerit Bank with great success). Recruiters can add value because good recruiters routinely know what motivates and frustrates their candidates. It only makes sense that they maintain a relationship with new hires for a few months after they come on board to gauge whether the candidates' expectations are being met. I call this process "closing the sale." In this case, recruiters don't take over a manager's role in retention; instead, they only supplement it. Recruiters can be a source of advice and information, help reduce new hire frustration, and provide insight on how to navigate inside the company. Recruiters can also help new hires understand the "what" and "why's" within the firm. As many as 60% of new hires fail, not because they're bad hires, but instead because of a bad initial job placement. Recruiters who keep in touch can help to speed up internal redeployment of initially "mis-placed" individuals.

6. The lack of diversity orientation and retention. Many organizations have a diversity recruiting function that endeavors to hire diverse individuals. Unfortunately, once they are hired, diverse individuals frequently receive no further special attention. This is unfortunate, because by definition, diverse individuals have different expectations and needs than the average hire. If you treat all new hires exactly the same, you should not be surprised when you find that diversity turnover rates are higher than your average turnover rates. The solution is simple: offer variations in on-boarding to ensure that the unique needs of diverse people are met. Next, add a diversity retention function or process to ensure that your organization gets direct feedback from diverse new hires about factors that might cause them to be frustrated or to begin looking for another job.

7. Manager rewards for great retention. Less than one in three organizations reward managers for having low turnover rates among new hires. If you want managers to pay attention to retention both during and after a new hire's induction period, show them the impact that turnover has on their business results. Then, tie every manager's bonus to "performance turnover." Performance turnover differs from traditional turnover in that the loss of a top performer, a diverse individual, or an individual in a mission-critical job is weighted significantly higher than the turnover of an average performer. There is no punishment for losing a bottom performer.

8. Being aware of the most common causes of turnover. If your organization conducts delayed or "post-exit" interviews, you probably already know that most top performers leave because they had a bad manager, were not challenged, were not growing, or were mistreated. Don't place a top candidate with a mediocre or bad manager. If your organization doesn't have a bad manager identification program, look at the processes pioneered by FedEx and Dell.

Shifting to other turnover causes, if you want to ensure that new hires are challenged, learning, and growing, ensure that all new hires have an individualized plan for learning, growth, and challenge (Qualcomm, for example, requires every employee to have a learning plan). Next, focus on the lack of differentiation.

In my experience, it's hard to get compensation professionals to realize the important role they play in great recruiting and retention, but every effort must be made to convince them that you can satisfy most top performers' need for differentiation by ensuring that a significant portion of pay and bonuses are based on performance.

Few things frustrate top performers more than being paid, recognized, and treated exactly the same as poor performers like Homer Simpson.

Final Thoughts

HR has justifiably been accused of creating numerous functional "silos" that hinder cooperation between the different HR departments. New hires must be "maintained" just like any other new asset. There needs to be a planned maintenance schedule that is personalized to the needs of each new hire. That maintenance process must be coordinated and systematic and must "force" integration of the actions of the various silos. Almost without exception, one of the thickest walls between HR functions is the one that separates the recruiting function from the retention effort.
In my experience, the interaction between these two functions is, all too often, minimal to nonexistent even though bad recruiting directly "causes" future turnover and conversely, poor retention efforts unnecessarily increase the future workload of all recruiters.

To avoid this common problem, identify the direct connections between how you recruit and orient and future turnover. Then take the necessary steps to stop this wasteful, preventable turnover.

Ref: Dr. John Sullivan

The Future of Contingent Search

What does the future hold for the age-old industry currently in transition?

The traditional contingent search business model is a risky one in that it is incredibly susceptible to macroeconomics, technological innovation, and population demographics. While many industries can balance their product and service portfolios to survive the most brutal application of the laws of supply and demand, many smaller contingent search providers ride a one-trick pony.

In 1999, contingent search providers were riding waves of success that made those on the North Shore of Maui look tame. Search commissions were rising steadily, exceeding 45% in some markets, newbies to the profession were pulling down six-figure incomes, and the influx of job orders seemed unending. Then 2001 hit, and one contingent firm after another cut back, laying off thousands. Now that double-digit employee growth is once again a challenge for most companies, you would think that the glory days of contingent search are back. But, as many firms will attest, they aren't.

Revenue Is There, But Not From the Same Sources

While industry revenue is forecasted to grow from 10.4% in 2005 to 11.6% in 2006, the industry is deriving the greatest percentage of newly booked revenue from value-added services, namely temporary or contract staffing and professional services. More companies are relying on contingent workforces than ever before. It is estimated that in 2006, as many as two-fifths of newly created jobs are first offered on a temporary basis. That's a fourfold increase in the growth of contract labor in just 10 years.

While the job orders being placed with traditional contingent agencies aren't drying up, the increased use of contingent labor and a confluence of technology driving candidate visibility is forcing such firms to change or die. With the opportunity to maintain minimum placement volume needed to sustain a business in jeopardy, many contingent search providers are increasing the scope of value-added services they offer, and are finding clients more receptive than ever.

The contingent search industry has long been one that defined success too early, in that it never sought out opportunities to extend the value of its services beyond the initial placement transaction. This lack of prior industry development has made the industry ripe for a series of progressive, qualitative transition cycles. Early leaders embracing this transition are already blurring the lines between temporary staffing, contingent staffing, retained staffing, professional services, and training. With this transition firms like Adecco and Kelly, which had few urban competitors, today have thousands, ranging from local companies of one to foreign companies of thousands.

The Confluence of Technology Driving Candidate Visibility

Traditional contingent search firms take advantage of their ability to find candidates who have not been found by companies or who have been overlooked. It is, for the most part, a low-volume, high-margin business. However, the confluence of numerous technologies that service the recruiting function and the proliferation of the Internet have made a majority of the world's workforce more visible to corporations and, in the process, eroded the value proposition contingent search providers once banked on.

In this new era, contingent search professionals are finding it a lot harder to find a candidate who:· Doesn't appear on a lock-out list (a list of the agencies' other clients or strategic partners of the client organization);· Hasn't already been introduced to the company via the employee referral program; or· Doesn't already appear in one of a multitude of databases that employers have purchased access to; or· Hasn't already applied directly to the company sometime in the past four years; or· Presents a background so stellar that companies don't balk at paying search fees.

In short, the inventory of talent that contingent search providers can trade upon for permanent placement is in extremely short supply.

New Services on the Horizon

As stated earlier, those agencies embracing change are finding more ways to extend the value inside the organization. The most common extension is, of course, the move into supporting temporary labor. While many large service providers like Randstad and Kelly have the market economics to secure the largest companies in a metropolitan area, a number of small- and medium-sized firms desperately need help leveraging contingent staff.

In addition to temporary staffing, a number of other potential services are on the horizon, some that many large organizations should consider taking advantage of.

Outsourced Referral Program Management

Employee referral programs are quickly becoming the predominate source of hire inside most organizations. Those firms that lead their industries in hires attributed to employee referral can attest that providing world-class customer service to both referees and referrals is essential to maintaining program momentum.

Unfortunately, most HR organizations are not adept at even spelling world-class customer service, let alone delivering it. For years, HR organizations have focused on containing costs and enabling self-service, two objectives that don't always drive customer satisfaction. Contingent search firms, on the other hand, have built their businesses around customer service, servicing not only the client but the candidate as well.

By outsourcing the management of the employee referral program to a trusted search provider, the client organization could gain several key benefits, including:

· The search provider could more easily ramp up and down the human resources attached to the client employee referral program to maintain pre-established customer service standards.
· Under a split-type agreement, the search provider could provide referrals with additional placement services should the client organization opt not to hire, thereby creating a revenue source to self-fund the employee referral program.
· The search provider could provide more advanced analytics regarding the success or failure of the employee referral program because traditionally agencies have been more adept than HR functions have been at applying metrics internally.
· The search provider could leverage economies of scale and build internal staffing proficiencies in marketing and sales skills to support the employee referral program that would not make sense for small- and medium-sized firms to invest in.

External Brand Assessment

While most lock-out list scenarios prevent companies from using an agency to raid another employer, they don't prevent organizations from hiring services to help identify and understand their position in the market as employers. Because contingent search providers have a proven ability to blueprint a competing talent organization, target specific talent, and establish contact with said talent, it makes sense to leverage that ability to identify and gauge an employer's reputation in specific talent markets.

Professional recruiters may be more adept at getting an honest perception than market researchers because they have a proven ability to keep talent talking. Under such a scenario, search providers would:

· Build contact lists of target talent in competing organizations.
· Establish relationships with said talent over time.
· Use the established relationship to gather research on how the client is perceived in key areas by the target talent.
· Aggregate the research and report back to the client perceptions that limit the client's ability to attract said talent.

Competitive Landscape Mapping

Nearly every contingent staffing professional can tell stories about when it introduced a candidate to a client who came from a competitor whom the client was unaware of. While companies like to think that their marketing teams are adept at identifying potential competitors, staffing professionals often do a much better job at mapping who-competes-against-whom for customers, and especially for employees.

They are more adept at recognizing industries that hire compatible talent, and much more adept at identifying new entrants to the talent market. Client organizations can use contingent staffing firms to build competitive talent landscape maps as a precursor to organizational benchmarking initiatives. Maps can help insure that organizations have a realistic picture of who is after what talent in a specific geography, and what each player's strengths and weaknesses are.

Recruiter Training

While the visibility of candidates may have improved, the ability of the typical corporate recruiter to acquire said candidates has not. Most corporate recruiters are phone averse, and seem to think that proactively contacting any potential candidate before they have applied to you is an ethics violation!

As such, a number of contingent search firms have started offering training seminars and certification programs that help prepare recruiters to be successful in the role of corporate recruiter. Some aspects of these training programs focus on sourcing techniques, while others focus on how to engage candidates and deal with the all too common objections. A number of Fortune 200 companies now rely heavily on recruiters who have undergone said training.

Under this service, contingent search providers:

· Recruit entry-level recruiters onto their payroll.

· Train the recruiters in full life-cycle recruiting or a life-cycle specialty, depending on client needs.

· Provide the newly trained recruiters with on-the-job experience for a minimum period of time.

· Contract out or place the new recruiters with client organizations and guarantee their on-the-job performances for a set period of time.

Vendor Management

Another service that is growing in popularity among traditional contingent agencies is vendor management. Many corporations are horrible at managing the multitude of services that support the staffing function and could not optimize the deployment of searches or resources if the future of their staffing function depended on it.

Despite years of challenges and a host of software products that have sprung up to do the job, most companies still need help. Because agencies are generally better at using metrics internally and have a profit incentive to use resources wisely, outsourcing vendor management to a contingent staffing vendor again makes sense. They can leverage the same metrics that they use internally for assigning recruiters to job orders to assign subcontractors to accounts. Because their profits are tied to helping you maximize both the efficiency and effectiveness of your staffing efforts, you build in accountability to a corporate function that traditionally hasn't been held accountable.


Contingent search firms have existed for years and will continue to exist for years to come. But like all industries, the contingent staffing industry is not subject to life as we have known it forever. It too must evolve — now more than ever. The position of search firms is one that lends organizations a great deal of power to identify what does and does not make sense to do internally. In short, it gives organizations the strength needed to force trusted search providers to become mini-recruitment process outsourcers. Are you progressive enough to leverage your partners?

Ref: Dr. John Sullivan & Master Burnett