Hello, I’m Steven Mostyn, CEO of Career Boost Group, the largest privately held integrated Career & HR Consulting Service. I also head Superstar Resume, a premier executive resume writing and executive career coaching service and LP Writers, a leading provider of LinkedIn profile design and content for clients.
I’ve had the fortune of being the author of three best-selling books: Job Search: Fundamentals of Effective Job Hunting, Resumes and Interviews and Recruiting 101: The Fundamentals of Being a Great Recruiter, and Resume 101: How to Write an Effective Resume, LinkedIn Profile, and Cover Letter.
An organization in the scale-up phase is exciting but chaotic and challenging as well. Your business is growing, your customer base is rapidly increasing, you need to increase your company’s headcount but you need a strategy first.
You need to put in place a robust and efficient talent acquisition (TA) team that will help the organization to bring in the right people to help it create the next growth wave. Getting the right resources is critical, so much so that it can make or break the firm’s success. How do you go about it and what are the most important things that you need to keep in mind to do so?
Based on my experiences of having worked with various companies across industries, right from startups to large organizations such as Amazon, Walmart, Oracle, IBM and Deloitte, I am outlining five important factors you need to consider while scaling up your TA team.
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a) Choosing the right leader: This is the first crucial step in laying the base to scale up your TA team. Some of my strong recommendations in choosing the right person for this job would be:
Someone who has been there and done that. You want someone who has been through war in terms of scaling up, especially at a startup. There are major differences between hiring for a startup, a mid-cap and a large cap. If the person has never sourced resources for a startup, then you’ve chosen the wrong leader.
You have to make sure this person has proven experience in that capacity and that includes choosing talent to recruit. I find a lot of firms make the mistake of hiring people outside of TA. They’ll point to an HR person in leadership or somebody even outside of HR. I’ve seen this major fail in many organizations where I’ve had to repair the damages.
It’s a small world now where research should be done about the potential TA leader’s experiences and references are easy to come by. The recruiting world is a tight-knit community where a lot of people know each other. Ask for referrals, check out their track record and what they’ve done successfully. In my opinion, the person should have a minimum of five years experience in recruitment and about 2-3 years of experience in a leadership role.
A large healthcare organization had hired a director for the TA function who only had the experience of maintaining an organization and not in building one from scratch or having mended one. The organization was integrating its healthcare systems and was in the process of implementing shared services as part of its scaling up its operations.
The hired leader didn’t know how to be a relationship manager and explain each and every detail to each hospital in the chain and it was a disaster. I went in and built up the shared services model as a pilot and based on its success, implemented it across the healthcare organization.
In addition, the organization was paying about $350,000 a month to travel (contract) nurses, which we brought down to zero in three months.
b) Hire the right TA staff: Once again, some organizations tend to hire generalists or junior people as part of the TA staff but again, to me, you need those with some experience of having done it before. You can train people but you need a couple of veterans in the team. If there are five in the TA team, it’s okay to train three of them.
To me, what makes a good recruiter? Someone who has tenacity, is great at building relationships (especially with the hiring managers), is great at sourcing and has some selling abilities. When you recruit someone, you are selling and you need to be skilled in those salesy components.
Now, you got your TA team in place. What next? Your systems and tools are a critical part of scaling up your TA process. The first one is to get a Applicant Tracking System (ATS). Sometimes, businesses, especially smaller ones, think that they may not be able to afford an ATS. But you’d be surprised by what’s available in the marketplace now.
You can get half a decent for $50 (in US dollars) a month, which I think is a great deal. And you can get advanced systems for a bit more. But all you need is a system that does full life-cycle recruiting. You can pick the candidate for the whole process from sourcing to screening to, interview, offer and hiring them. It’s pretty simple, really.
My advice is to find an ATS that is really recruitment-HR-centric as opposed to one designed by engineers who may not understand the intrinsic qualities of the system. Do look for ones with maximum free features. One of the mistakes some organizations make is they don’t make use of the available free tools available.
You can hire for positions for over a year, you can parse the millions of data points in the system and you can use Boolean search to dissect information. You can save yourself a ton of money over many years because you have built a database. Just as an example, somebody may have applied years ago and might have been a bit too junior but now, they might be ready and you can approach them.
Some organizations tell me they only keep such data for a year and then they get rid of it. That’s possibly throwing millions of dollars in talent. Instead, they could just keep all their information updated and over time, you have a free way of contacting talent.
Many organizations also fail to use free sites such as Indeed for distribution of your jobs for free. Sometimes, you can get great deals from LinkedIn and Glassdoor too. Indeed databases have value and there’s no question about Indeed sponsored ads if you do them correctly. ZipRecruiter, which is a growing site, has great value as an employment marketplace.
Though LinkedIn is a bit expensive, it’s a great tool, especially for executive or hard-to-fill roles and is a necessity from a research perspective.
Hiring to culture fit is so important. You can have some of the greatest talent in the world who is going to do such amazing things for your organization, but they can destroy your organization if they do not fit in culturally. Do keep in mind that not only is the new hire going to be a fit in terms of doing that role but they’re going to really add something to this organization.
I’m not a fan of behavioral assessments at all and that might seem controversial to some. They are expensive, cause delays in the recruiting process, are based on a very limited set of criteria, they are too hard to gauge for effectiveness and in some regions, there can even be lawsuits. There was a big retailer in the United States that was successfully sued for using behavioral assessments. So, I personally would not recommend that all to any organization.
What I do recommend is behavioral based interviews with a strict set of criteria in addition to department panel interviews. The potential hires not only meet with the leaders but everyone in the team. I’d recommend they meet as many people in the organization for them to understand who the individual really is in order for the new hire to add to the potential success of the team.
How does a TA team evolve into multiple sub-specialties and scale up on. So this is, I get asked this question a lot. Once you have enough staff, let’s say five, I would then begin to create an actual sourcing function.
To me, the sourcing role is very important within talent acquisition. It can literally save you tons of money that you might pay for agencies, which are quite expensive. You’re talking about 20-30% of first year’s salary. If you’re hiring a $300,000-350,000 executive, we’re talking about a lot of money. A sourcer can have their weight in gold with literally just one hire.
Sourcers and recruiters have completely different skill sets. Recruiters do the full-cycle in terms of interviewing, sourcing and building relationships with the hiring manager and are almost like HR generalists in hiring. Sourcers are more into bringing in those hard-to-find candidates, researching them using various methodologies, getting them excited about the jobs and passing their profiles to the recruiters. It’s extremely important for the sourcers and recruiters to build great relationships and without that, it’s likely to be a failure.
A big misstep with many organizations is their long-drawn-out hiring processes. This is a crucial mistake because even during a pandemic, it’s going to be hard to find great talent. Candidates with rare or great skill sets will have many offers to pick from and can get hired quickly. The reason why companies have such long hiring processes is because they are afraid to make mistakes and they want to ensure they’re getting the right fit for their organization.
While that’s valid, my advice is yes, have as many people to interview the potential hires but ensure it’s done in a short span of time. Have an eight-hour interview process but complete it in one day. If you can do that and avoid other steps in the process, you might save yourself a week and will be able to sign up the candidate before your competitors do.
Time is everything when it comes to recruiting. The metric time-to-fill is based on this very principle. If you are faster and more effective, be it sourcing your candidates, getting your candidates through the process faster, you will be very successful.
Time is money. Money is cost. You can source and save money as opposed to, say, getting the help of an agency. In one hire, you’ve more than made up for that. Also, it’s all about cost and cost opportunity.
Sourcing is fairly new and it’s probably been around for around 20 years or so. In the beginning, the idea was to have full life-cycle recruiting. Recruiters are hired to do everything, right from administrative, relationship, sourcing and hiring but I’ve seen this to be a failure.
During the .com days, I worked with a lot of startups. Back then, Java developers were a lot in demand and were being paid around $100,000 a year. If you talk about 20% in agency fees, that was a lot of money for a startup. It was about $200,000 for 10 hires. Startups didn’t have the understanding capacity to use their internal teams to source candidates. My idea was that they could hire someone from an agency background as part of their TA team where you would be paying them a flat salary.
Even if they make 2-3 hires for your company, it would more than make up for that. I’ve given this advice to multiple startups where instead of paying $20,000 per hire to an agency, you pay around $50,000 as salary to a sourcer who would help you find the talent your company is looking for.
a) Recruiting industry’s measurable metrics
Cost per hire: Basically, it means the cost of hiring a candidate and covers the cost of all the processes implemented, tools employed and labor costs to bring that hire into the company. In the United States, if the cost per hire is under $1,000, I would consider it to be an optimal figure.
In some industries, under $2,000 is considered to be okay but anything above that, to me, is pricey. Once again, this depends on the industry and in some cases for very hard-to-fill executive roles, you might be paying a lot more. There are always exceptions to the rule.
Time to fill: The universal metric in recruiting, it measures the time you begin the process till you actually fill it. This varies from industry to industry – it’s about 30 days for most industries, about 40 for healthcare and 90 days for the executive level. For really easy-to-fill positions, it should be about 20 days.
As I mentioned before, having a fast life-cycle is critical in recruitment. Recruiters should develop relationships with their hiring managers that they’re not just sharing the candidate profiles via email but the dynamics should be such that they can actually block the hiring managers’ calendars, which will help them save at least a week’s time. If recruiters have to wait for feedback on the candidate profiles they’ve shared with their hiring managers, it can cost them a week. In this way,
b) Sourcing metrics to track
Hours-to-source ratio: David Szary, to me, is probably the greatest metric-driven sourcing guru. The last I heard from him, I think he said the rule-of-thumb is seven hours to source a candidate in most professions. Again, for some roles and in some industries, this is going to take longer. These are for hard-to-fill roles.
Contact-to-acceptance rate: This is how many people recruiters need to contact for them to get interested in the job vacancies you have and the standard locally would be about 20-25%. This is really based upon how successful your recruiters are in engaging with the potential candidates and how they are marketing those roles to them.
Submission-to-interview ratio: The number of candidate profiles recruiters submit to hiring managers for interviews to the number of interviews given. I would say the rule of thumb for this is 50% but to strengthen the recruiter-hiring-manager relationship, it should increase to 80% in the long-term.
Interview-to-offer: This is the number of offers given to the number of interviews conducted and I think if the number is at around 25%, then it’s just about right.
Offer-to-hire: The number of hires made to the number of offers handed out. To me, it should be around 90-95%. If the recruiting team isn’t hitting this percentage, then there’s something wrong somewhere. It could be that you’re offering a lower salary for that particular role or it could do with the reputation of your company.
These numbers are standards according to my experiences and are likely to vary depending on the industry, the type of roles, the geographical locations, the economic factors and the seniority of positions.
Hope the points I’ve outlined are useful to you in your journey of scaling up your talent acquisition teams. If you have any queries or comments, please post them below. Would love to hear from you!
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