What's Your Hiring Strategy?

A primer on market-driven vs. process-driven approaches

In past ERE articles, I've used the amazing iPod story as a metaphor for developing recruiting systems. The iPod is not a music player. It is a fully functioning music system whose design was based on a market-driven product strategy.

From what I've seen, too many hiring processes are neither systematic nor driven by market needs. If you're not consistently finding enough top people, this is probably the underlying reason. So all efforts to "fix, patch and improve" or buy the latest cure-all technology will be disappointing. However, all this can change by implementing a formal, market-driven hiring strategy.

There are two types of hiring strategies: one market-driven, the other process-driven. If you're not finding enough top people, you've got the wrong one. Worse yet, if you haven't put together a hiring strategy in some type of planning meeting with your company's management team, you probably don't have one at all.

Whatever it is, your hiring strategy will affect your company's hiring results later this year, and into 2006 and beyond. Not having a comprehensive hiring strategy in place is the reason most companies haven't yet won the war for talent. In this article, I'd like to cover the basics of putting together a hiring strategy, and in the process let you figure out which one you have now.

A little background is in order. Every business has a strategy. When business conditions change, the strategy needs to change. From this strategy, comprehensive plans are made, resources are developed and deployed, and tactics are implemented. A market-driven strategy is based on customer needs, business conditions, the competitive landscape, and the state of the economy. Microsoft has a new search tool in development based on the success of Google. It also has an Xbox gaming strategy to use a PC as the core of a home-based entertainment and information center. These are both market-driven, growth-oriented and customer-focused strategies. Whether they'll be successful is another matter. But success is much more likely when products are designed based on customer wants, rather than on corporate rules.

A process-driven strategy is internally driven, based not on market needs but on past practices, rules, company policies, existing processes, and past investments. Here's an example. GM's new H3 Hummer was intended to be a smaller, lower cost, but still powerful version of the original. However, to save money and time, the company was forced to use an idle plant with a narrow body production line to manufacture this supposedly GM-saving vehicle. Unfortunately, to fit the new body, a low-powered V6 vs. V8 engine had to be used. In this case, past investment and existing processes overrode marketing and customer needs.

The H3 was a bold marketing idea compromised by process-driven strategies. When companies get bigger, bureaucracy sets in — with processes, procedures and policies dominating decision-making. Hiring strategies in most companies seem to have been developed from this mindset as well.

What's your company's hiring strategy? Is it innovative, based on market and customer-driven needs? Or is it boring and traditional, based on existing processes, governmental rules, and bureaucracy? An informal survey of over 100 companies in the Fortune 1000 that we took in the last few weeks revealed that over 90% of HR and recruiting leaders felt their hiring strategy was more inward focused and process-driven, rather than external and market-driven. This is scary, especially if you don't do anything about it. The flip side isn't: creating a market-driven hiring strategy is all you need to do to begin seeing improvements in your hiring results.

In a recent article I presented a sourcing plan approach to target active and passive candidates, based on how each group decided to look for new jobs. There were four big points made:

1. The more passive the candidate, the more effort is required to find and hire him or her.
2. When sourcing active candidates, the emphasis must be on the effective use of technology. When sourcing passive candidates, the emphasis must be more personal, which requires skilled recruiters and stronger hiring managers.
3. The factors affecting whether you should target active or passive candidates depend on supply versus demand, your employer brand, and the quality of the recruiting team.
4. Sourcing methods should be sequenced, starting with lower cost, high technology solutions, before you move on to higher cost, more personal one-on-one approaches.

Successfully implementing something like this depends on your hiring strategy. If it's process-driven, it won't work too well.

Here are some key differences between a market and process-driven hiring strategy.

In a market-driven hiring process, the candidate/customer is king. In the case of hiring, the primary customer is the candidate. The secondary customer is the hiring manager, and next is the recruiter. In a market-driven hiring strategy, everything is designed around the needs of the target audience.

For a quick gauge of this, just determine whether your processes and systems are designed to meet the needs of great people — or do candidates need to conform to your existing processes? If your processes were developed based largely on meeting government rules, company policy, comp and benefit guidance, and legal pronouncements, you probably have a process-driven hiring strategy. If your ATS or IT group decides how candidates need to apply, the website they'll see, and what information you can track, you probably have a process-driven hiring strategy. If your IT department has a bigger vote on what system to use than your recruiting department, you probably have a process-driven hiring strategy. Worse, you probably don't have any hiring strategy at all. Your company's hiring processes probably just evolved based on who had the loudest voice, not on some fundamental strategy.

In a market-driven hiring process, ads are compelling; job descriptions describe opportunities instead of simply listing them; candidates/customers can find the best jobs almost instantaneously; and they can apply in only a few minutes. Even if you use questionnaires, they are so compelling that people are excited when they fill them out. They are not barriers to entry; they are inducements to hang in there. After these great people apply in droves, the best can be instantly sorted to the top of the list in moments and called within hours.

Most companies aren't even thinking this way — let alone acting on it — but here's a real world example of a comparable customer-centric system design issue. Microsoft is contending that the Google way of searching is archaic, forcing searchers, like us, to open up poorly sorted and endless lists of potential hits in a manner (according to Microsoft) not very efficient. In their new search strategy, the best hits will hopefully sort themselves more accurately and be easier to open and read. That's the hype, anyway. It's probably similar to what Apple offers now in their new OS.

The point here is that this is what HR/recruiting technology vendors should and would do in a market-centric world. Technology vendors can't do this alone. They need to be pushed by their clients. If their clients — us — don't demand these market-driven changes, we can only blame ourselves for this lack of progress. If everyone in your company is not continuously thinking about these market-driven changes, your hiring strategy is probably process-driven.

Here's an idea. Talk to your ATS vendor and ask them to list the top five changes that will be implemented in their next revision. Then categorize these as process improvements or market-driven changes. This will clearly reveal whether your hiring strategy is market- or process-driven.

In a market-driven hiring process, recruiter and hiring manager needs would be fully met and designed into the system upfront. Recruiters shouldn't have to wade through hundreds of unqualified resumes to find a few hits. Nor should hiring managers have to select from a pool of least-worst candidates. Nor should they be forced to use cumbersome technology that has been designed by overzealous techies who haven't talked with real candidates, recruiters, and managers in years.

But don't blame the techies. They were forced to code processes that were designed by committees of so-called experts consisting of lawyers, government regulators, comp and benefit experts, and some OD guru. Of course, a few recruiters sat on the committee, frustrated, because no one listened to them anyway. In a market-driven hiring strategy, technology is optimized — based first on primary user needs. Compromises are then made based on available resources and system constraints. In a process-driven approach, users are given lip service and minor roles in defining functionality and designing user interfaces. The result is cumbersome technology that doesn't deliver as promised, with recruiters and hiring managers filling in the gaps with Excel spreadsheets and inputting more information than needed.

So what's your hiring strategy? Let's take a quick survey. Send me a short email of no more than three sentences. In the email, first state your hiring strategy. If it's process-driven, describe your biggest frustrations, and what you think needs to change. If it's marketing-driven, first justify it, and then describe how it happened. Your responses will probably look like this.

"Process driven. I spend too much time managing too many reqs, pushing paper, and handling lots of admin stuff. Our company needs to get every manager and executive committed to hiring better people."

"Market-driven. All candidates find the hiring process experience remarkable and positive. The executive team is committed to hiring the best and provides the resources to do it right."

Everything you do every day as a recruiter depends on your company's underlying hiring strategy. This must change first if you want to see lasting improvement in your company's ability to consistently hire top people. It's a goal worth fighting for.

There's a common complaint among company executives that HR/recruiting is not strategic enough. If your hiring processes evolved based on tactical choices and bureaucratic rules and regulations, they're right. Here's a chance to prove them wrong. Start thinking about putting together a market-driven hiring strategy. Everything you do from then on will change. Don't wait.