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It Seemed Like A Beautiful Day

July 21, 2009 Leave a comment

How to Lose Your Perfect Candidate and Feel Like a Dope

by John Wentworth
Wentworth Recruiting

View bio here

Sponsored by Compendium 2009

“It’s a beautiful day,” Jim, the Recruiting Director of Acceleration Service said to himself as he walked from one building to the next. It was. The sun was shining, the temperature mild and the day was bathed in a gentle breeze.

“And it seems like a fine work day,” he said to himself next. He knew of nothing wrong. All the divisions were on plan with their recruiting. His teams were happy and engaged and their hiring managers were content.

“So why am I trying to talk myself into this?” he wondered.

The answer came when his cell phone rang.

When the call was over, he just sat down on a bench, looked to the sky and muttered, “I am such a dumb piece of dirt.” The sky seemed as if it had clouded over and the air gotten 15 degrees colder. All his earlier contentment was gone.

He had been personally recruiting to fill a critical job…for himself…a recruiting manager for a new division Acceleration had recently acquired. Part of Jim’s technique, and the technique he taught his team, was to close every attractive candidate in every conversation. His theory was that you want every candidate you might possibly want to hire to want you. In each conversation, he closed them a little more. By the time he got to a couple of conversations from making the offer, he had candidates closed, committed and ready to go, making the offer letter just a formality.

He had done that with this person, a very bright, hard driving and wonderfully skilled recruiting manager from a competitor of the purchased unit. She knew the industry, where to find the candidates and how to assess them. She also knew some of the hiring managers, other individuals who had moved her from company to Jim’s division.

Jim had a solid commitment from the candidate. She was being wooed by another company but had said unequivocally that she preferred Acceleration. Jim was under the impression that the candidate must have said something to the other company because they seemed to be backing off…by her telling of the story.

This call had been a reference, an individual from a third company in that same company that had been trying to hire his candidate. The reference had worked with her a few years before. Jim was being a little mischievous by seeking a reference from the company he had been competing with for the candidate, but she had given the reference’s name to Jim and approved his calling the guy.

“I’m really surprised that you asked about her,” the had told Jim a few minutes before Jim found himself sitting dejected on the bench.

“Why’s that?” Jim asked him.

“Well, I understood that she had accepted a job with our company yesterday.”

“You’re kidding,” Jim stuttered, knowing the reference was not.

Jim did what he could to get out of the conversation with his pride at least in part intact, and then sat down on the bench.

And then his phone rang again. It was his candidate. It was a difficult conversation. Jim was mad and embarrassed. Plus, the job was now open again.

“As it turns out, I never really had a chance,” Jim told Sarah Hockney, the general manager of this new division. She had been transferred from the division that provided Jim office space, and he had done a lot of work for her. They had become friends.

“How is it that you never hand a chance?” Sarah asked Jim.

“The president of her new employer called her directly to ask her to forget us and go with them. He’s not just the president of the company; he’s a relative of her husband’s. So her choice was me or a guy who could turn her entire in-law clan into her enemies.”

“So why are you so glum and confessing your sins to me?” she asked.

“Because I did not do it right. I did not set the example for my troops. Not only did the search not work, not only did I make an ass of myself to the reference, but I also will look really stupid to my troops. Hard to inspire confidence making sophomoric mistakes.”

“What mistake?”

“I didn’t defend against this.”

“I thought you told me that she had committed, that you’d closed her.”

“She had. I did. But the controller of our new division was behind the curve in so far as the budgeting for this job was concerned. They had to get the funding sorted out before we could make the formal offer.”

“You had no control over that.”

“True. And I told the candidate what was going on, but I did not call her every day. I relied on her word. I did not defend against a full court press from someone else.”

“Like this guy, but also from her company. They could have countered, too, no?”

“Yes, and there’s a whole technique of anticipatory defense against counters.”

“What’s that?”

“It’s the very simple sharing of the observation that, while the current employer may think that you are very important and wonderful now, and worth all this extra money now, how sincere can they be when they did not think any of those things before they heard you were going to leave? And if they are not sincere, is it not reasonable to think that they are recruiting your replacement right now? They don’t care about you. They just want your leaving to be on their terms and their timing, not yours. And if you do stay, how does your manager feel about your loyalty? Will you ever be in her or his good graces, really?”

“And you say that to the candidate?”

“Again and again, before they get our offer. Again when we present the offer. And again and again as we talk to them through their notice period. We rehearse with them what the company is going to say, how they feel when they hear that, what they are going to say in response, how they feel when they say that, etc. We also start getting them into the email traffic from their new department, and we get their new boss to call them, so they start of feel that they belong with us. We work hard to build the emotional connections during the notice period.”

“So what did you do with this young woman you are so anguished about?”

“Not enough. I did not talk to her every day. I did not ask what else was going on. I did not ask if her employer was proposing a counter offer. I did not ask what was happening with her new employer. I did get her into the email stream. And I did talk to her, but not often enough. It’s a stupid, sophomore move. I feel very stupid.”

“You are.”

“Hunh?”

Sarah smiled. “Being concerned, as I am, about your state of mind and emotional well-being, I want you to feel good about your analysis. You are right. You screwed up.”

“Your kindness overwhelms me,” Jim smiled back.

“However, I’ve known you for a long time. This division that I’ve been given like a bad white elephant gift, that I’ve been given to integrate into Mother Acceleration Service, that I’ve been given to fix, turnaround and do major surgery on. It will be fine, in great part because, while you do not yet have a halo or wings, and you occasionally screw up, you will support the person who replaces this person and your team will fill our halls with some of the best people available.

“I’m actually happy that she’s not coming because of how she handled it. She should have called you when she got the big call from her in-law and worked the problem with you. Her not doing so suggests a certain lack of understanding how teamwork actually works and that, were she still coming, would make me worry about her.

“So get out of here and find a replacement. I’ll bet you a coffee that you have the job re-filled within a week.”

“Thanks for the pressure.”

“Now it’s time for you to leave and go feel sorry for yourself in someone else’s office.”

Jim did. The first thing he did was tell everyone what happened. He wanted to support his reputation of being forthright by telling everyone in sight. They were, to a person, understanding and supportive. That felt good.

As Sarah had predicted, he started to get referrals that had not arrived during the first part of the search and were of better people. This was good because one of the consequences of the first part of the search is that the candidate he tried to hire was so much better than the others in the pool, that the others had lost their luster. Normally, Jim had one or more back up candidates for every job. But his lead candidate made the back up candidates back up candidates no more.

But the referrals were great. “I should write this down,” Jim thought to himself: “Sympathy produces great referrals. I can use that.” By the end of the week, he had a great candidate who wanted the job and had just come back to the area and was, therefore, available!

Jim walked into Sarah’s office. “Done! You owe me coffee.”

“Really?” She smiled. “How about now?” She reached for her purse.

“Now is great.”

As they walked to get coffee, Jim told Sarah how the new hire had come to happen. It was raining, so they had to trot to the next building to keep from getting soaked.

Even though they ran, they were good and wet when they trotted through the door. “It’s a beautiful day, don’t you think?” Jim said with a big grin on his face.

“It is a beautiful day. And I believe it will be all week,” Sarah replied and she patted him on the back, “because of the good job you did.”

All Jim had to say was, “Whew! Too close for comfort!”

Why Hiring is Paradoxically Harder in a Downturn

July 14, 2009 2 comments

by Auren Hoffman
Read bio here

Sponsored by Compendium 2009

Why hiring is paradoxically harder in a downturn
Noise goes up but the quality stays the same
Hiring is always hard. The hardest thing to do at a company is the recruiting and hiring. It was really hard when the economy was doing well. Paradoxically, for certain industries (especially those reliant on innovation such as those in the tech space), it’s even harder when times are tough.

That’s right … hiring in tough economic times can actually be much harder than when times are good. In a downturn, the amount of resumes from C-Players massively increases while the amount of resumes from A-Players probably remains the same.

Never settle

First, let’s assume you’ve already bought into the “When Good Isn’t Good Enough” philosophy of always trying to hire A-players because they are just so much more productive than B-players (an ‘A-Player’ by definition is incredibly productive and smart and has that ‘it’, that rockstar-esque factor that makes everyone want to work with her). That means you won’t settle for people who are good but instead hold out for people that are great.

Great people – the A-Players – are a very different breed from the good (B-Players) and mediocre (C-Players). Great people are more likely to be employed with a company since a great person is often over 3 times as productive as a good person. Joel Spolsky argues in Smart & Gets Things Done that an A-player is anywhere from 5-10 times as productive. Joel looked at coursework data from a Yale computer science class and found that the fastest students finished their workload as much as ten times faster than the slowest students (average was 3-4 times faster).

table
Spolsky, Joel. Smart & Get Things Done. Berkeley, CA: Apress, 2007. p 6.

The (Un)Employed A-Player

In troubled economic times, anyone can get laid off, but a disproportionate number of layoffs tend to fall on C-players. This is because they are the lowest performing people in a company and there generally are more C-players at a company than any other caliber. Note that this isn’t always true, as evidenced with Yahoo!, a company that has recently experienced many layoffs but doesn’t have many C-players. In Yahoo!’s case, majority of the lay-offs fell on B-players and even some A-players. Yahoo! is an exception and is an exceptional company — most large companies, however, are chock-full of C-players.

A smart company would (or should) never lay off a great person unless her/his job function is eliminated. For instance, if a smart company had to lay off one of two software engineers with one being great and other being good, it will very likely lay off the good engineer and retain the great one (and might even give the great person a raise). Again, this is the logic that smart companies should follow. Then again, there are many dim-witted companies that lay off their great people for odd reasons and so you’ll find some great people out of those laid off.

Where to find that A-player

Some A-players are less likely to be looking to jump ship during tough times due to a risk adverse profile, security, financial reasons, or other reasons. They are happy where they are and more likely to hunker-down in tough times. On the flipside there are A-players that are MORE likely to leave. Tough times often paint companies into a corner and force them into maintenance mode rather than continuing to innovate. Great players love to innovate and usually NEED to innovate. It’s usually very hard to keep these type of A-players caged-up and thus this presents a big opportunity for recruiting.

For instance, in the past it was really hard to hire great software engineers out of financial behemoths like Goldman Sachs, Morgan Stanley, and JP Morgan Chase. These companies have outstanding people and pay these people really well (often 50% above the salary at a tech company). Nowadays, even if these people have not been laid off, the great people are going to be leaving in droves. Why? Because in the next two years, it is really doubtful they will be doing anything remotely innovative. Instead they will be maintaining current systems due to the understaffed and underfunded technology departments. No fun there so expect a big exodus out of these companies.

It’s also worth noting that great people are often first to leave sinking ships. They don’t feel they need to stick around for a severance because they are confident they can always get another job.

How to deal with the paradox

Let’s face it, these great, A-Player type people are just really hard to find. Let’s say for sake of argument that A-players make up 1% of the population that could do the job, B-players are 19%, and C-players comprise the other 80%. It’s uncertain if these percentages are accurate, but there definitely are more C-Players than B-players and more B-players than A-players. Now if people find out you are hiring (through a Craigslist ad, posted on careers page, etc.), it probably means you are going to get a massive influx of resumes from C-players. Many of these resumes will be indistinguishable from those of A-players (it’s always hard to distinguish on paper). Which means the amount of noise (aka undesirable hires) will likely increase. Which means more work sifting through these resumes and talking to many more people.

It’s important to screen for great people in order to turn the volume down on all the noise.

Unfortunately, it is really hard to tell the difference between an A-player, B-player, or C-player just from a resume. Which means you need to engage with candidates and therefore you’ll have far more candidates to deal with given this economic climate. My guess – for a standard job announcement, you’ll have three times the number of C-players applying, twice the number of B-players, and the same number of A-players. Wow…your noise level has just massively increased!

graph

At Rapleaf for instance, we have a written one-hour technical interview as the first screen for resumes we like. Last year, our pass-rate for the test was 17% … meaning 17% of the candidates passed the written interview and moved on to a second round (a live chat with a Rapleaf engineer). Today our pass rate is about 6-8%. Our noise level has really increased.

One way to decrease the noise level (and thereby increase the amount of quality) is to specifically target candidates rather than to post a job ad. I would suggest targeting a company you think has great people, call into that company, and try convincing the talent to meet with you. I know if I was based in Manhattan and was recruiting software engineers, I’d be calling on the people in the top banks. While not everyone at a top bank is a great player, your ratio of great-to-good is going to go up substantially (assuming they haven’t already left).

Of course, not every position is harder to hire in this downtown. It is easier to find great people whose industries have been totally decimated by this recession. You’re in luck if you are looking to hire investment bankers, corporate lawyers, construction workers, or people in manufacturing.

This downturn looks to affect us all for the next couple years, so be sure to fill your company with only A-players and thereby creating your own A-Team.

mr. t image

The Bad and the Ugly – Violence at Work

July 8, 2009 Leave a comment

By David Bush
Read bio here

HR Leadership Sponsor

The Wall Street Journal has just emailed the following:

“Police continued to surround a building in downtown Binghamton, N.Y., after a gunman shot at least four people and kept more than 40 people trapped inside, local media reported, amid fears of fatalities. A man went into the building and started shooting around 10:30 a.m., local media reported, citing police scanners. The building is home to the American Civic Association, which assists immigrants with counseling and citizenship, according to its Web site.”

As I write this, the news on the radio is telling us that the hostage situation remains unresolved.

Perhaps it has started. The uptick in the frequency of work place violence that has been associated with economic downturns seems overdue. Yesterday, I was conferring with a colleague who has shared my interest in Work Place Violence for many years. We know that most workplace violence consists of non-fatal bullying and harassment, including such problems as being bitten by patients, being intimidated and threatened, or being stalked. But when people are stabbed or shot, the press wakes up with cameras and lights, and alarms us with stories of multiple murders in classrooms or postal stations or human resource departments. My colleague and I have consulted with companies attempting to prevent such events, and we have noted that fewer organizations attempt to prevent such behaviors than those who succeed in ignoring them.

Will the current recession lead to elevated rates of homicide at work? Will the outrage with Mr. Madoff lead to attacks on him and other Ponzis? Will people who are associated with the perception of undeserved bonus payments become the victims of disturbed murderers? Are the politicians and members of the press who appear to demonize people who can be blamed for the economic “down-turn” risking a stampede akin to those that may result from shouting “fire” in a theatre?

We live in a country that has a history of righteous violence such as riots and lynching. When many feel threatened and under attack, the potential for such behaviors appears to have been elevated in the past and we would not be surprised if history repeats. Do you hear people making remarks that sound like scapegoating? Who started this mess? Who will be blamed?

Perhaps we need to anticipate the potential for such problems and start to build early warning systems to prevent such bad and ugly events. Some organizations have created violence prevention committees led by representatives of HR, security, safety and legal. They create a form of “rumor central”, a clearing house for information about potential danger. Unlike the failure to share information that led to the 9/11 disaster, this approach encourages having critical information flow to the four person committee that consists of the top decision makers in HR, Legal, Security and Safety. This system also ensures that policies and procedures will be up-to-date on such issues as “you may not bring weapons to work.” On the latter issue, however, be sure to examine your state laws, since some states have laws that “protect your right to bring guns to work”. You may also wish to examine how secure your building entrances are. Can armed non-employees easily invade the company buildings? Are doors intended to be locked fire doors left unlocked for the use of smokers? Can anyone who knows this simply come in the back door? I have seen such high risk activities. The sooner they are fixed the better. Let’s hope that there is no uptick in violence at work. If there is, we all may ask to work from home. But that is another article.

The Downfall of My Favorite Restaurant

July 7, 2009 Leave a comment

PerformancePrinciplessponsor

by Eric Herrenkohl
Herrenkohl Consulting

Read bio here

I went to my favorite restaurant in West Philly yesterday for lunch. I found this place a couple of years ago. The food was phenomenal and it was always packed with Penn students and faculty. Business was good enough that, this past summer, they closed down for a month and did a complete renovation. They gutted the place, redid the dining room, and brought the décor of the restaurant up to the level of the great food they served.

There is only one problem: yesterday, the food was mediocre. Some of their best dishes were missing from the menu, and the food was not up to its usual level. It was on the whole a very average dining experience. I sat in the restaurant and thought to myself: you can do whatever you want to the decorations, to the point-of-sale system, even to the staff. But the food had better be excellent. Because it was not yesterday, I am on the lookout for a new restaurant.

Performance Principle: Understanding what makes a fantastic customer experience and creating that experience every time is one of the secrets to a successful business. In the end, if you create a fundamentally strong customer experience, you can make a lot of other mistakes and still survive. Conversely, you can do all the peripheral things well, but if your customer experience is lousy, your business is in trouble. Here are some points to consider in this light:

Are you doing fundamentally high-quality work? If you are selling computer supplies, do the right products arrive at your customer and do they arrive on time? If you are selling professional services, do you create the results your customer is looking for? If you sell kitchen & bath remodeling, do your clients get the kitchen of their dreams for a price they can afford? These are the fundamental value propositions of your business. While there are things you can do above and beyond these deliverables to turbo-charge a business, you won’t be around to do them if you are not delivering on the fundamentals.

Every business rises and falls on word-of-mouth. We all want to make buying decisions based on the reference of people we trust. To the extent that your customers are singing your praises, you will maintain strong revenues and profitability. In order to guarantee this, you have to make sure that everyone in your business is committed every day to making the basic quality and delivery of your product excellent. You must ensure that the customer experience surrounding the purchase and use of your product is extraordinary.

There is nothing more important than serving customers. In some businesses, employees want to “graduate” from serving customers to doing more “professional” things like buying product, talking to vendors, or creating marketing events. Of course those things are good, but you need a business filled with people who have a passion for serving the customer. That should be the best job in your company.
Business is simple, but not easy. Make sure that the fundamental customer experience around which your business is built is getting better every day. If you do this, good things happen.

So What Do We Do Now?

June 30, 2009 Leave a comment

By Michele O’Connor
JobsOver50.com

View bio here
HR Technology Report

To answer that, we need to look at this question from the angle of a job seeker, employer & recruiter.

As job seekers we may want to remember that "Employment Starts with Education." We’ve all attended school in some form – high school, college, grad school, tech school, etc. Our underlying education may have been to learn the English language. Or maybe it was finance, history or healthcare. Either way, education is the basis of many of our talents and skills.

During these tough economic times and periods of intense layoffs & downsizing, people should feel comfortable freshening up their skills. Maybe it is time to switch gears into other areas and start a new learning curve. If you lost your job as a financial advisor on Wall Street, maybe consider an accounting or finance job in a different industry such as biotech, insurance, healthcare, "Green", etc. You can always visit your alma mater (or other educational facilities in your area) to hone in on those skills or take the courses you may need. You can also look to your old career service center for up-to-date pointers on resume writing, interviewing and job search techniques.

As employers & recruiters we may want to consider "Contrarian Hiring." Let me illustrate,
Rick Fecteau runs a chain of automobile dealerships in New Hampshire & Massachusetts. One would think that his dealerships are suffering like many other dealerships during this tough economic time. However, there is a light at the end of the tunnel that is causing his business to hold it’s own and even improve – the availability of top performers from other dealerships that lost their jobs.

Instead of waiting around for the market to turnaround, Rick has taken a proactive stance and has been hiring top talent from other dealerships that have closed. “It would normally be impossible to get these people to leave their old jobs and join other dealerships,” says Rick Fecteau of Port City Nissan/Suzuki & Amesbury Chevrolet. New hires include managers, salesmen, technicians, etc. Once the economy gets back on track, Rick will reap the benefits of hiring talent at this stage. Consider it “Contrarian Hiring.”

Popular job boards are seeing the same trends. “Job seekers are certainly registering on our site in massive numbers but we are also seeing employers world-wide using this opportunity to hire the best talent that would normally be hard to source,” says David Mezzapelle, Director of Marketing & Development at GoliathJobs.com.
Due to the current economic climate, employers should also consider hiring interns as a means of building a cost-effective, motivated staff. The benefits are endless. Plus, as things improve, the better performing interns can fill permanent roles post-graduation.

“Internship” is a word that is often used to encompass employment while attending school (or during the summer). The internship is a means of gaining experience in the applicable field of study. Most of the time it implies receiving college credit, in lieu of pay, while gaining real-life experience. In other cases pay is received but at a reduced rate. If no credit is earned the pay scale is generally higher.
Employers benefit greatly.

Here are a few of those benefits:
• When employers hire interns, it clearly displays the employer’s involvement in the local community. This is important for corporate development and civic duty.
• Interns are “bright-eyed” and motivated to learn. They want to gain experience towards their career and, quite frankly, need that experience to compete.
• Interns are cost-effective and flexible.
• Top Performers are spotted early and can be groomed for full-time employment later.
• Interns that are hired full time post-graduation have already learned your culture. No need to retrain.
• The surge in the 50+ population is reducing the amount of young people available to fill key roles. By hiring interns and retaining them full-time, you are protecting the long term growth of your workforce.

Hiring interns is no longer reserved for law or healthcare. Internships now exist across all industries including technology, business, education, skilled labor, hospitality and much more. Job seekers & employers have nothing to lose and everything to gain.

Top Sports & Top Management

June 23, 2009 Leave a comment

by Marjon Oosterhout
Passion for Talent
View Bio Here

52 Performance Principles

Recently I was asked by a journalist of the Dutch Financial Daily to comment on the increasing number of executives who step aside with health problems and burn-out symptoms.

I basically told him that I wasn’t surprised and expect more to follow.

I made the comparison between top sportmen and top management. The similarity in my view is that for both you need a combination of passion, talent and hard work.

When I compare top sportsmen (and women) and top managers I see less similarities. The biggest difference I see is the way top sportsmen take care of their physical and mental health.

They understand they cannot deliver peak performance all year round. They carefully plan a balance between training, performance and recovery. They surround themselves with people who advise and support them on the technical aspects as well as the mental aspects, they understand the importance of “feeling good between the ears” .

So why do top managers think they can continue to deliver peak performance while working 80+ hours a week, crossing time zones, poor eating habits, no time for hobbies, a lack of physical exercise and hardly any time to take a step back and reflect?

I have observed this with some concern during the “good times”, but it concerns me even more in the current economic climate. As the demands and stress increase, the need to take good care of oneself increases equally.

This doesn’t just apply to top managers or top sportsmen. It applies to managers and sportsmen in general.

Some years ago I ran marathons, (New York amongst others). My main goal wasn’t a fast time, it was finishing in an enjoyable way. Yet in preparing I lived for that marathon. I listened to the trainer and read books about what food to eat, how to balance training efforts and rest, anything to help me run the 26 miles successfully.

To be honest, I cannot remember I ever prepared myself like this for a professional challenge.

Nor do I know of executives who do.

In many of my coaching conversations with leaders we talk about this. All these leaders agree they are more effective when they are fit and take time to relax and reflect. Recently one of them actually looked very sad when he admitted “I don’t know how to find the time”.

My belief is he will have to if he wants to lead his organization successfully through these turbulent times. This is not about preventing health problems for himself, it’s also about setting the right example to his teams.

We now have plenty of data on the cost of stress related illnesses such as burn-out. Yet I still observe too many environments where making long hours is seen as a sign of strength, where people who do balance work and life are seen as lacking ambition. This means heading for a lose- lose situation.

How well do you take care of yourself in these challenging times? Who do you turn to for support and advice?

What do you do as an HR professional to help your executives to change the way the live their lives. What do you do to drive this culture change?

Recruiting Costs Too Much!

June 15, 2009 1 comment

by John Wentworth
Wentworth Recruiting

Read John’s bio on the HR Performance website

upsidedownworker

“Costs too much!” the CFO growled.

“I agree,” the VP of Logistics chimed in.

“How much should recruiting cost?” Jim asked.

“Less,” both of the others said.

“Oh, you are a bunch of help,” Jim said cheerfully.

“You need to take this seriously,” the CFO threatened.

Jim pulled out a piece of paper, a report by Staffing.org, and read:

The overall Recruiting Cost Ratio for employers has fallen to 9.5%, with a range of 7.8% to 11.2% and relatively little variation. The average for suppliers remains at 14.2%, close to last year’s overall measurement.

“We average under 10%,” Jim said.

“That’s above average,” the CFO barked, as only CFOs can bark when complaining about cost.

“And we have the highest productivity we’ve ever had and no turnover. Not a little. Not less than average. NO turnover.”

“No turnover. So what?”

“The Department of Labor says 2008 separations were 48.7% of total employment! One out of two employees leaves! We have zero turnover. Some people say an employee turning over costs 30% of that person’s pay, some say a lot more. Let’s take the low number. Logistics hired 50 people last year. The average salary was $70,000, so if one of our people left, it would cost $21,000 to replace them, pay for lost productivity, training, cost of recruiting, etc. And let’s say half your people turned over. 25 times $21,000 is what?”

The CFO scribbled. “Just over a half a million dollars.”

“What was our cost per hire?”

“You said it was around 10%.”

“Yes. 10% of salary and zero turnover. How much is 10% of salary?

The CFO got busy again. “Fifty hires at an average of $70,000 is $3,500,000 in salary. Ten percent is $350,000.”

“And zero turnover saved us how much?”

“$500,000.”

“So I can’t promise you that we would have had that much turnover, but if you accept both averages, it looks like our recruiting made you $150,000 this year in avoided expense.”

The CFO and VP of Logistics weren’t happy, but they were stumped. So Jim left.

“It’s never that easy,” Jim told his wife that night. They were sitting on their deck, enjoying the last light of the day. Their kids were playing in the yard.

“What do you mean?” his wife asked.

“Around four, the staff analyst for Logistics strolls in my office and drops the news on me that the cost of talent acquisition isn’t the issue at all. They were just whupping on me because they could not whup on each other.”

“Hunh?”

“Logistics is over budget. The villain is that they hired too many people.”

“So why are they beating up on you?”

“Because the CEO has made them promise to be nice to each other. So the real issues are not surfacing because they can’t figure out how to deal with them without getting grumpy at each other and getting the CEO mad at them.”

“You work with a bunch of children.”

“And those very same children sign the paycheck that pays for this palace, your jewels and the fabulous round-the-world trips we take all the time.”

“Ho. Ho. So can you do anything?”

“Maybe yes, maybe no.”

When Jim went to work the next day, he started his sleuthing.

The CFO told him, “I have a directive from the CEO to make sure that we do not spend more than we can afford. The staffing levels are too high, too expensive. So you and yours are the choke point. I’m going to cut your budget.”

“What will that do?”

“It will save the company money! And keep you from hiring more people.”

That didn’t make any sense to Jim, so he left and went to the SVP of Operations.

“We need the people. We are getting new business and we have to staff it. You need to keep filling our jobs. My people are dropping like flies we are working them so hard.”

“Do you ever talk to the CFO?” Jim asked her.

“All the time. Why?”

Not being sure of his ground quite yet, Jim slipped the question. “Just asking.” Then he left.

Sitting on the deck again that evening, Jim said to his wife, “This is too absurd to be true. The CFO really wants fewer hires. He tells me but does not tell the line people. And he wants to cut my budget so I don’t have enough money to fill the jobs.”

“Why doesn’t he just talk to the line people?”

“Dunno, but there must be a reason. Gotta find out. This is a lot harder than it needs to be.”

“Dinner is ready,” Jim’s daughter, who had volunteered to cook that night, yelled from the kitchen. Jim and his wife gathered up their things, looking forward to a fine meal.

“You daughter cooks?” Sarah Hockney, the CEO, asked Jim. They had worked together off and on throughout the years and liked and respected each other.

“She’s been taking classes and thinks she might go to the Culinary Institute.”

“Wish my kids cooked. I think their MacDonald’s addiction blinds them to that ambition.”

“Yeah, but maybe they’ll go to a state school, so you’ll trade fine food for low tuition.”

“Never thought of it that way. So why are you here in my office? What are you going to try to torture me with?”

“We have a problem and I need your help.”

“I don’t remember your ever coming into my office when that was not so. What is it this time?”

“Your operations people are getting more business and feel strongly that they need to staff up. The CFO feels that staffing levels are already too high and, following a directive he ascribes to you, is getting ready to cut my budget so I cannot provide the recruiting service your operations people need. He also says I cost too much.”

“How much do you cost?”

“Ten percent of salary.”

“That’s pretty good. I seem to remember that the national cost per hire average was higher.”

“It’s about the same, but it’s a squishy number. There is no standard for what data go into it. Everybody does it a little differently, depending on whether including data or excluding data gores their ox.”

“Funny how that works.”

“It’s also squishy because different jobs are variously difficult to recruit. So comparing the cost per hire of hiring teenagers to work at a movie theatre – big supply, low requirements – to hiring programmers in some esoteric and rare software like Ruby on Rails, is apples to oranges.

“So I don’t mean to hold out the numbers as gospel, but we are about two tenths of a percent over a reasonably reliable national average. And, we have no, count them, zero, turnover of the people we hired last year.”

“So your costs are OK.”

“I think so.”

“And no turnover should be saving us a ton of money in replacement, training, lost productivity, supervisor’s time, etc.”

“I think so.”

“And you have talked to all the parties concerned?”

“I have, but they do not seem to be talking to each other about this. I think this is an unintended consequence of your ‘play nice’ directive.”

“I am consistently astonished at how people can find ways to screw up even the most simple and direct instruction.”

“What should I do?”

“Analyze the problem for me,” Sarah told Jim.

“There are two problems: number of hires and the resulting salary cost and the cost of acquisition. The second is about 10% the size of the first. Both problems have two parts: total cost and run rate. I’m sure you have a formula that tells you how many people you need for how much business you sell. So that gets us to total cost. I have not traditionally been involved in that, but I can be if you want.”

“Keep going. You are now going to talk about run rate.”

“Yup. I’m sure we can plan out when new hires should be on the job. Once we do, we can lay out a schedule of salary and acquisition costs. The CFO will want to stretch the hires out to reduce the cost this year. Your ops people will probably want it sooner, but maybe they will be sensible.”

“Can you make that schedule?”

“Consider it done.”

“Thank you for your visit.”

“Thank you for your help.”

Sara went to work with her people, constructing the issue for them. The CFO was, in fact, being very protective of cash, but was not focusing on his putting the new revenue at risk having too few people to do the work. The CFO was also conveniently ignoring the fact the requisitions for the jobs had been approved by all the needed individuals, including him.

The operations people were being reasonable, having already built a schedule of when they wanted their people to be in their seats.

The sales people, on the other hand, were chuckling and feeling mischievous about all the trouble they had created by selling so much business. And, being commissioned, they were chuckling all the way to the bank.

Jim got his hands on the schedule and priced it, cost of acquisition and salaries, all based on fill dates.

He took it first to the head of HR who nodded. He understood the problems and was very glad that Jim was the front person on this. Jim then took the spreadsheet to the CFO.

“This is the schedule they want. Every requisition has been approved. The analysis shows when each person will start. If you look at the weekly cost graph you will see a huge bump in the middle of the year, but then you will see that once the jobs are filled, the cost of recruiting goes to nearly zero.”

“That’s too much money,” she CFO growled.

“It’s the same amount of money if we do it on their schedule as it would be if we did it more slowly. We just spend it faster. But it’s the same amount.”

“That’s not true for the salaries, though. The sooner the jobs start, the more it costs us.”

“True,” said Jim, “but these staffing levels are consistent with the business we’ve booked. We can’t do the work without the people and the deadlines came from the client. Our ops people didn’t just dream them up out of thin air.”

Some months later, the CFO growled, “Costs too much!”

“I agree,” the VP of Logistics chimed in…again.

This time they were not talking about the cost of staffing. They were talking about the cost of dinner which they had agreed to split to celebrate a banner year. Sales had booked all the troublesome business. Jim’s analysis had created the platform for a rational dialog between the CFO and the operations people, so recruiting had been allowed to get their job done.

The cost per hire had dropped, in fact, to 9% of salary and they still had no turnover.

Their profit for the year was great. They had beaten all their client deadlines, in great part because they had talented people on board when they needed them and they stayed, so time, money and energy did not need to be diverted to replacement and retraining.

“Easy children,” the CEO said. “I’ll pay.”

She smiled at Jim.

“But before we end, I want to single out Jim for helping to break up the log jam that was threatening to keep us from getting people on board. Jim, thank you.”

“You are welcome,” replied Jim. “Does this mean you are going to recommend to my boss that I get a raise?”

“You cost too much!” the CFO growled, grinning from ear to ear.

“I agree,” the VP of Logistics chimed in also grinning.

The entire group raised their glasses in a salute.