HRP 4: The Talent Pipeline

Now that we caught up a bit with an interim post in our Talent Building Series, we are ready to proceed to the next big step in our tried and true Human Resource Planning (HRP) system, the centerpiece of which is The Talent Pipeline. As previously described, your company has a great opportunity and realistic shot at hiring a very good worker one in every five job openings– 20% that’s pretty good odds.  The trick is to give yourself that reasonable chance as many times as possible.  Thus, the vacancy itself is the key to the castle.  It all  boils down to having a continuous flow of talent—a pipeline if you will— into your organization at all times, regardless of economic indicators, hiring budgets, headcount and all the rest of the excuses.  By so doing you obviously increase your chances to bring in someone really good, maybe even super-lucky great.

The Talent Pipeline is open wide when forward thinking companies do several basic things.  First, they inventory their talent base and identify the best-of-the-best on the top-side and not so stellar on the bottom rank. Next, they proactively address mediocrity and job-to-people mismatches across the enterprise, especially early on when new-hires begin to show their true colors on the job.  In stark contrast to traditional HR thinking, measured high turnover in most organizations can be a very good thing as long as its the right people coming, going and staying as the case may be. In fact, it is critical to engage higher-than-normal, faster-than-average turnover of very select personnel to move your company from good to great. Let’s go there now.

Proactive Hires

Hiring people when there is no vacancy is counter intuitive to budget conscious manpower planners.  An overlap by paying two salaries at the same time–1.) the incoming new trainee who is not yet fully producing; and, 2.) the outgoing low-performance  incumbent being replaced–seems a bit expensive.  And, while pundits love to pontificate the “high cost” of turnover, there is usually, in fact, a real cost savings in unpaid salary between the time a job is vacated and filled.   Moreover, it feels subversive, in fact, almost dishonest to be interacting with a person every day who you know darn well is going to get fired shortly, as soon as this good soul fully trains his replacement without even knowing it.   It would also surely be a morale bummer over time as other employees witness this plot unfold. It wouldn’t take long for your staff to figure out the game that whenever there is so-called “add” to the team, some one else–Maybe even me, they fear–is about to get the boot can.   These touchy dynamics and real costs are the very reasons why companies do not hire in proactively to fire out eventually.

It’s a dilemma to be sure. Here’s a way to handle it:

TOUGH ONE-TIME DECISIONS: If it is going to be hard, get it over with. Do NOT put your people through painful one-at-a-time firing transactions.  Instead, tough as it may be, do a one-time staff building move whereby you identify once and for all everyone in the department who has to go. Let’s say that’s 4 people among a staff of 22. Knowing the hard day is coming, proactively hire in the minimum number of new people needed to fill the immediate void–say two new hires. Proactively hire in two and train them up fast. Then pull the trigger on all four, preferably on the same day. Then hire in another and, maybe another.

SPEED TO HIRE-FIRE: On a go-forward, speed is the issue. Be very decisive and quick to get rid of that one in five miss-hire as described below. A hiring mistake should be recognized and dealt with in less than 90 days. On the uptake, hire in people fast and get them trained quickly.  Speed is what you need.

BETTER AND LESS: One of the obvious benefits of new, better talent is the amazing human capacity to do more with less. It is absolutely realistic to expect that three new very good hires can replace the four marginal people recently dismissed. That’s the payoff of aggressive HRP!

BENCH STRENGTH DEPARTMENT: There’s a whole other solution to proactively filling the talent pipeline that probably deserves it’s own post.  It involves setting up a “Bench Strength” Department of paid trainees who are ever ready to fill in multiple position vacancies and/or pick up select tasks while vacancies are being filled.

Depending on the type of work, these “generalists” are put through intense training and performance scrutiny to ensure they have what it takes to jump into a department job at a moments notice.  For example, an administrative generalist can be prepared to aspire to either a customer service, collections, billing or accounts payable role.  While each of these  functions certainly has it’s niche and specialty, all such jobs have a lot in common– great organizational skills, rapid service response, detail orientation, PC proficiency, superior phone etiquette, etc.

I have set up such “talent pipeline” functions successfully with several clients.  In essence, it is a sub-department to the HR function where skilled and close management oversight ensures incoming talent is meticulously on boarded, well trained, tested and contributing real work via overflow and special project tasks.
If the incumbent in this role is any less than exceptional, then HR pulls the quick-over trigger aggressively. This takes a lot of pressure off other department supervision and ensures a strong bench strength team to plug into where needed most at a moment’s notice.  It works well when other departments tap this additional valued resource regularly.  It, of course, adds payroll expense, but it’s worth it in the long run.

Quick to Churn

There are two kinds of talent churn in any organization: 1.) Quick-over and, 2.) regular turnover.  Quick-over is about decisive early intervention when you miss-hire that one in five who—upon seeing early how they really perform on the job—you would not rehire.  Regular-turnover is about people who have been around for a while who quit unexpectedly or—as is far rarer—you fire after a long battle with mediocrity and useless performance improvement plans (PIPs).  The one-time hard-decision day described above where four marginal people are let go all at once, is an example of aggressive regular turnover.  If, from that difficult-decision point,  you follow the rest of the HRP formula described below, quick-over covers the rest.

Now about quick-over: Ut-oh, you say 30-days in, Something don’t feel right. The new employee  hasn’t done anything really bad yet. And he’s a nice guy to be sure. Still, it irked a little when he asked for that day off when only the third week on the job. And he was at lunch for an awful long time last week—twice in fact, now that you’re counting. He picks up the phone less than his peers too and he was trained on the standard twice. Then there’s the HR-observation that he didn’t take a single note during new hire orientation. He wasn’t listening when we showed him how to use the out-of-office e-mail functionality either.  And still haven’t heard back on that question about the lost form. Now he has been late three times this week because his kid was sick and his wife had to leave town for a family emergency. Nice guy, though. We’ll see.

We already see. Are these early warning signs and “minor” infractions enough to make a judgment to fire your new hire? Absolutely yes. The statistical chances that this early behavior is going to suddenly cease, turn around and go positive—at a time when making a good impression should be at its peak—is almost zero. In fact, if you study the behavior patterns so far, it’s getting worse, not better.  Only the excuses are getting better.

Remember, this kind of thing is going to occur with your new-hires about one in five times.  In a bad (particularly unlucky) hiring month, it may happen three in five times. It’s a reality, not a rare exception. It happens frequently. And you don’t need a lot of time to figure it out either—all you need is a pattern. Human behavioral patterns emerge for observation in days, not weeks. And it is all very predictable. All you have to do is look!

Decisive Data

Dealing decisively with an employee who appears marginal early-on is completely within the employer’s right.  Despite all we learn in HR school, piles of warnings, endless second chances and lengthy PIP documentation are not required. Every good recruiter knows that the best predictors of future behavior are past and current behavior. So don’t wait to count your lumps after the fact. Do it now. Okay, he’s been here only a month and he has been absent once already (that’s 12 call outs per year), late five times so far that you know of (a 25% lateness rate), three  occasions he was unauthorized over-the normal break time (on mark for 36 infractions annually there); he is unremarkable in response to retraining and 90% of the time when he is on task, he doesn’t appear to pull his weight. What’s not to fire?

Moreover, if your standard is that an employee must demonstrate high-performance behaviors—coming in early, doing more than is requested, and responding immediately to every request, having near-perfect accuracy upon training, telling people what he will do (not ‘I’ll try’), assimilating information quickly and demonstrating knowledge by paraphrase and example—if that’s the job description, then your prospect described above ain’t even close. He is an obvious mismatch. You would not rehire.  Let him go now.  Quick-over should happen decisively within 90-days of hire at least 20% of the time. That alone will virtually guarantee a perpetual talent pipeline.

The Big Bad Choice

Admittedly, it also makes being a new hire at your company hazardous for one’s career health. But that’s as it should be for companies truly committed to going from good to great.

For many fair and square, all this decisiveness sounds too Machiavellian. It seems harsh.  If corporate culture is more akin to second chances, coaching patiently, kindly reminders, repeatable training and all that nice stuff, then I respect it with all sincerity. However, this kinder, gentler way will not take your company from good to great.  Keeping people around as good-enough for the long haul is an easy choice. It’s a bad choice, but it is easy. And that’s how most companies do it to be sure. But it turns off the talent pipeline to a trickle.

Look at this way: for every mediocre nice staffer retained, there is a great would-be employee in the job market held back who deserves to work at your company.  Just because you have not yet discovered this diamond in the rough, doesn’t mean the person isn’t there. And your nice manners with the marginal-person who you know, ain’t all that kindly to the good strangers out there who want to contribute exponentially more if you would just let him and her in the door.  My recommendation: Be nice to the high-performance masses in the job market. Don’t shut off the talent pipeline. Open it.

Objective Not

The business-bite tough guy applauds. He likes the quick-over idea.  Very decisive. Maybe. Meanwhile we all love to boast how “objective” our management practices are.  But our actual behavior (being humans and all) is not so.  Managers, for example, are far more inclined to jump on the quick-over bandwagon so described rather than deal decisively with a longer-term problem that has arguably cost the company a lot more. Why is that?  Emotion pure and simple.  We can fire a good soul a lot easier if we don’t know her.  So that’s what we do.  Let’s go again to the VP Client Services example.  Guess what he decides to do now?

Remember that new hire from the Initial HRP Assessment? Link to it again now and take a quick look.  Her name is Jennifer Jenkins, the newest Service Coordinator hired on December 22, 2009. Listed originally as “Too New to Tell” in color-code Yellow, the VP Client Services, after being challenged by the President, now reconsiders and decides that poor Jennifer has to go.  The VP knows that the President wants decisive action and Jennifer is an “unknown.” She hasn’t the critical on-the-job knowledge and experience of so many others.  So our VP Client Services selects Jennifer over other employees with more time, even when others have negative behavioral patterns that far exceed Jennifer’s short-lived track record.

See, this is another problem with weak leaders—he makes decisions about people based on the ease of the decision in terms of how it affects him, not based on the correctness of the decision.  Now, as it turns out, Jennifer Jenkins is not stellar by any means.  In fact, she has shown early to be marginal at best.  And, now that our esteemed VP knows he can go out to the hiring market proactively and try his luck again, Jennifer is a goner. Bye-bye.

The typical Human Resources function, meanwhile, would normally step in right here and stop the injustice of it all by protecting just-ok Jennifer from getting the boot.  That’s the knee-jerk HR-to-the-rescue people loving thing to do after all. But that’s not the correct thing to do either.  The correct thing to do is to challenge our wimpy VP Client Services to demonstrate the same intolerance for mediocrity with the people who have more service time, yet fall to the bottom of the performance distribution list. Yes, Jennifer has to go; but so should a few others who demonstrate the same patterns of mediocrity.  That’s objective. That’s fair. It’s also decisive. And, most important, it opens the new talent pipeline far and wide. The truth is, there are at least four people who are marginal performers on the VP Client Services team.  One of them is Jennifer. The rest are being protected and are stopping the company from discovering far greater talent that the world has to offer right now.

Speed to Hire

Opening the talent pipeline is a good start. The more critical step, of course, is to fill it.  Here again, traditional HR and headhunting firms miss the mark in spades. They market their unique abilities to magically produce quality candidates by proffering to have the best crystal ball in town.  Nonsense.  There are some times when quantity is as important as quality and filling the new talent pipeline is definitely one of them.  As described above, the all important quality screen happens far more effectively upon hire when you can see daily your prospect’s ability or inability to produce one-the-job.  So if you are indeed decisive about quick-over, you have that one covered.

Now about bringing in new talent: The same rule applies, of course. One in five is a hit! A real-good employee to be sure comes your lucky way about 20% of the time.    The game then is to get as many of these good people in the door as fast as possible. Speed to hire (recruiting cycle time) is the metric that matters.  Speed to competency (learning curve completion) is real important too.  For HR-types who love their little metrics, speed to hire and speed to competency is worth tracking and continuously improving.  It’s all about the talent pipeline—get them in quick and get them up to snuff in short order.  The real-good new hires want that; the great new-hires demand it.

Hire Process Excellence

Unfortunately, most HR people are not well trained or experienced in process improvement discipline.  Regardless of flavor—Lean, Theory of Constraints (TOC), Sigma-whatever, etc. you need to have a methodology to map and analyze your current pipeline from “vacancy to hire” and from “new hire to proficient” and continuously, measure and improve each.   Remember, talent intake is a pipeline—a process flow—that has definite steps and motion between steps. The goals are to constantly improve talent throughput by speeding it up.

Explaining process excellence methods here is far beyond the scope of the current post. Suffice it to say that Switch HR has developed a definite and effective methodology to apply process excellence across your HR-enterprise (and company wide for that matter) with speed and simplicity.

However, for this post, we do have a  starter quick list of actions and goals that can get you to the end game and that we are happy to clarify in future posts or by direct inquiry.   Here goes:

Offer an aggressive employee referral rewards program—not just as a recruiting tool—as a compensation program.  Make referring qualified candidates a centerpiece to your above and beyond performance award system. Offer, for example, $1000 for every successful referral hire that makes it in the door and lasts for 90 days. If you do it right, 70% or more of your new hires will be gotten this way.

Teach employees how to use social networks to refer friends. Linked In is good one for professional positions and executive hires and Facebook is the latest, greatest entrant to pick up recruiting steam for many rank and file and entry jobs.   However, probably the best source is local, professional networks in the industry space and job market that you are tapping.

Switch HR has gotten away from pay job boards and we are not fans of Career Builder or Monster.com—they cost too much and produce too little value.  We do recommend the many job board freebies out there and have an entire program to offer our clients on job search engine optimization and online recruitment advertising landing pages.  Take a look see here if interested.

Hold your recruitment team accountable to speed to hire and speed to competency metrics—this includes the HR staff and the hiring manager.  It is easy to measure and easy to reward.  Again, it takes another post in itself to show you how. But get it on your list and Switch HR is happy to address for you.

Sometimes traditional HR gets it right believe or not  and a sharp focus on a copious new-hire on-boarding (including high scrutiny of new hire performance and a plethora of  new-hire training opportunities) is a good idea that can be made far better with a few simple Switch HR twists.

Again, all these deserve posts of their own and we address them specifically with our clients and will blog about all this ardently in the near future.  In the meantime, get okay with quick-over, move out lingering mediocrity and speed up your hiring pipeline.

Next we get back on the high-performance bandwagon by showing you how to focus the vast majority of company training resources (including on-boarding), compensation strategies and material rewards on the top-notch.

Stay tuned.