In high growth businesses (or in these days of
high turnover) businesses are often faced with delays in the product
development cycle due to a shortage of talent. Pre-need hiring is a
strategy that is designed to make sure that there is no significant
"lag" or delay in the product development (or delivery) cycle
as a result of a shortage of talent. Hiring the necessary talent in
advance of the actual need can prevent the lag problem. Pre-need hiring
does add some cost if you hire them too early or if don't forecast the
need accurately. The result can be bad if you can end up with surplus
talent; but in a fast-moving environment the costs associated with a
surplus of talent are much lower then the cost of delays in getting
the product to market. In fact, in high-tech firms, having a surplus
of talent is almost unheard of these. The following is a list of some
of the tools and approaches to consider when you use pre-need hiring.
Yield Model - A yield model is a workforce
needs forecasting model that indicates how many people a manager will
need to hire in order to reach their projected dollar amount of top
line revenue growth. Firms need to calculate the average revenue for
an employee and then divide that number into the projected revenue growth.
That will give you are rough idea of the number of jobs that you need
to fill.
Some yield models also take into account the time
to fill a typical job and the average number of hours a manager spends
in the actual hiring process for each job. This is done in order to
educate the managers about the amount time they need to allocate for
each new hire and how many days prior to the actual need that must they
begin the hiring process.
"Pre-Need" Hiring - Pre-need hiring
is when you hire an employee for a particular job a month or more before
they are actually needed. By stretching out your hiring, you can increase
your chances of getting quality hires simply because as you stretch
out the sourcing period. You also increase the odds that a top performer
will become available during your search period.
Designate Evergreen Jobs - Evergreen jobs/req.'s
are jobs that are continually open no matter how hard we search. Such
continuous shortages demand that we stop waiting for an open requisitions
and instead shift into a continuous search and hire mode. For evergreen
jobs you hire candidates regardless of whether there is available headcount
or an open requisition.
"Ramp Up" Time Hire - Certain
jobs have a significant learning curve and thus a long "lag time"
(more than 2 months) between the hire date and when the employee normally
reaches the minimum levels of productivity. In other words, new hires
have a long ramp up time before they become productive. As a result,
applicants need to be sourced, screened, and hired well before (months)
the date when the recent hire must be up to acceptable productivity
levels. By measuring the "average time to productivity" HR
can both give the manager a heads up on when to start the hiring process
and they can also identify any weaknesses in the orientation and training
program that can delay time to productivity.
Rapid Growth Jobs - Rapid growth jobs are
those that are projected to grow rapidly (by over 25 percent) in number
within the next 18 months. If there is an anticipated shortage due to
rapid growth in this job, a firm must hire people "pre-need"
in order to insure an adequate supply of talent. By forecasting which
jobs that will grow rapidly you can do a number of things including
increase the referral bonus, hire sourcers specifically for that job,
or begin filling them well in advance to ensure there is no product
delay due to having to wait for talent.
Gradual Hiring - Gradual hiring is where
you stretch out the hiring of a large number of people in a particular
job family in order to prevent any shortages. This way you also avoid
the "bidding" wars that can occur when a large number of jobs
come on the market all at once. This is especially prevalent in tight
or small job markets where bidding is much more likely to occur. Using
gradual pre-need hiring in rapid growth jobs or during new facility
openings also minimizes the strain on your employment systems, which
invariably increases the quality of the search and the candidate screening
processes.
Identifying Turnover/Growth Aberrations
- When you have the occurrence of a large amount of turnover or a sudden
jump in new job requisitions you have to be careful because many of
these "jumps" are just cyclical occurrences and not a true
indication of a long-term need. In order to be sure the these jumps
are not aberrations you need to "chart" or plot req.'s and
turnover rates over time to see if there are any identifiable sharp
jumps or drops in your talent needs. You need to find out whether such
variations are really just cyclical patterns of growth and turnover,
rather than an indication of a permanent need for new talent. Some jobs
have predictable (cyclical) turnover and hire rates. If you are not
careful, misinterpreting these cycles in job growth and turnover as
permanent changes can lead to some bad decisions. Often there are seasonal
fluctuations and predictable growth patterns in a country or in a business.
Turnover can also vary with product cycles. In order to guarantee accurate
decisions, growth and turnover should be plotted by month over a three-year
period to see if there are any "predictable" jumps or drops
that should not permanently impact our recruiting and retention strategy.
Pre-Identify any Targeted "Key Senior Hires"
- Firms need to pre-identify any senior talent hiring needs well advance
of the actual need because of the long length of time it takes to "court"
and convince senior executives. Top executives and technical "thought
leaders" (and occasionally recruiters that are hurting us) must
be pre-identified and targeted in order to be able to successfully "poach"
them directly from a competitor. These individuals require long-term
"personal courting" prior to any offer of employment. By building
the relationship over time you can dramatically increase your offer
acceptance rate for these senior individuals. An added advantage of
hiring the senior people is that not only do you bring their talent
to your firm but you also slowdown your competitor by taking away their
top talent!
"Pre-Prepare for Promotion" Jobs -
Often a large percentage of hires for a projected "rapid growth"
job come directly from promoting people in the position just below it
in the job structure. In these cases, a firm must prepare the people
in the lower job with training just before their advancement. However
this also means that the "lower job" must become a "pre-need"
hire job where a large number of people are hired in advance of the
promotions in order to ensure a smooth transition and no loss in productivity.
Pool Names and Pre-Qualifying Candidates
- With pool hiring, the "names" of potential hires are sourced/identified
and put into a "who's who" (job pool) database for retrieval
when a req. actually comes open. The pool might also include those ever
rejected for jobs who were just short of our experience qualifications,
those that were finalists but were not selected, and those that rejected
a previous offer from our firm. An advanced variation is to go to the
next step and actually pre-assess the candidates and pre-qualify them
for the job. This allows you to start the process of building a "someday
you will work here relationship" with them so that when they (or
we) are ready for new job they can just call.
Conclusion - If you were going to hire Santa
Clauses, you could plot your hiring trends and know well advance that
you would need to hire them right after Thanksgiving. You might also
find that when you wait to hire Santa Claus around Thanksgiving that
the quantity and quality of the available talent goes down and the costs
invariably go up. A smart pre-need recruiter would pre-hire the very
best Santa Clauses right after Christmas for the next year. Their secondary
hiring period would occur in early November, weeks before others. By
starting early they would have to pay some additional wages but that
time could be used for training. By starting early and doing more training
you would insure that you would have the best Santa Clauses. And odds
are that great Santa Clauses would produce a quantum leap in revenues
well in excess of any pre-need costs.
Employment professionals need to become more like
sports coaches. Coaches are renowned for pre-identifying talent, for
pre-qualifying it, for "over hiring" when there is a surplus
of top talent and for hiring the majority of its players in critical
jobs using the pre-need model. Most employment professionals and managers
are the exact opposite. Are you ready for some football....
Pre-Need Hiring and Workforce Planning
Most
employment systems were designed in the "dark ages" when business
moved at the "speed of rock." In the past when people resigned,
a requisition was created and after a relatively long lag time, another
person was hired. If the new hire required initial training at the time
of their hiring or if there was a long learning curve before the new hire
became productive, the business and the manager just accepted it as the
way it was. On some occasions, the vacant position was even frozen for
a period of time in order to save money. However in the new economy where
things move at Internet speed, such hiring delays (in a key position)
can cost a firm over a million dollars per week in lost margins and market
share. Agilent Technologies is developing a workforce planning model which
reverses the old post-resignation (need) hire model and replacing it with
a pre-need hiring approach. Some of the elements in this model are outlined
below.