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White paper
Creating the people edge
How to overcome the critical
factors holding back the
recruitment function in your
business
Jeremy Paynter and Nick Simcock
April 2012
Talent with impact
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
02
Introduction
People provide the main competitive
advantage in organisations; forming the
lifeblood, driving profit, revenue and
growth. Yet, even recognising this critical
factor, there is a dangerous disconnect
between talent leaders and business
leaders when it comes to measuring the
language of success for recruitment.
How do people affect business
performance and how close is the link
between a well aligned recruitment
function and business performance?
Futurestep invited a number of
Australasian business leaders to discuss
“how recruitment provides your business
with competitive advantage” and combined
the insights with input from 50
Australasian talent leaders from a variety
of leading companies.
This whitepaper draws on the findings of
those discussions and our own expertise to
reveal how a disconnect between talent
and business leaders can be bridged to
provide companies with, The People Edge.
Nick Simcock
Managing Director
Futurestep New Zealand
futurestep.com
Talent with impact
03
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
The people edge
“People are our point
of difference so our
success is
intrinsically linked to
the acquisition and
growth of talent.”
Keith Muirhead,
Head of Recruitment
Air New Zealand
Business leaders across all industries
agree that having the right people in place
was a fundamental necessity to ensure
competitive business advantage and
success. Brent Waldron, CEO, Carters said
ensuring the right people were onboard
was “the single most important part of my
job” and that without the right people
businesses cannot deliver on their
potential.
Many business leaders agreed that while
technology and other efficiencies could be
duplicated by competitors, the workforce
could not be replicated. The people factor
was viewed as the biggest lever available
to create competitive advantage.
Driving change
With the right people in place the ability to
affect change quickly and successfully is
far greater. Business leaders saw
implementing change quickly as a key
factor in times of rapid growth, competition
and economic pressure. “Recruitment
provides the opportunity to reshape the
business over a period of time, to change
the benchmark and expectations of
performance.” Ian Blair, General Manager
Business Banking, Westpac
What do talent leaders think?
Talent leaders across all sectors agreed
that employees both directly and indirectly
impact product delivery, customer
experience, service provision and therefore
revenue potential. Ensuring the right
people are hired is critical for maximum
profit return. “People are our point of
difference so our success is intrinsically
linked to the acquisition and growth of
talent.” Keith Muirhead, Head of
Recruitment, Air New Zealand
The lifeblood
While not directly questioned in the
original research, a significant number of
business leaders also discussed the
cultural impact of having the right people.
“The right people have a huge cultural
influence and create positive momentum”
Tony Oldham, General Manager Sara Lee
NZ Ltd. Having the right people can
significantly enhance an organisation,
creating a culture of success and
productivity, or transformation where
needed. Of note, Mark Dewdney, CEO
Livestock Improvement Corporation said
the people transformation at LIC over the
last five years was the company’s most
impactful achievement.
Driving profit
The majority of business leaders voiced
that talent is a game changer that can
make or break a business. Having the
wrong people can affect bottom line
drastically. “Especially in smaller
businesses, the impact is more dramatic
and mistakes become more critical.” Mark
Hamilton, CEO, Bell Tea & Coffee
Company
Copyright©2008. Korn/Ferry International/Futurestep, Inc. All rights reserved.
Talent with impact
04
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
A dangerous disconnect
“People can make the
business go
gangbusters and
good hires can make
or break 100% profit
in a week”
Rob Kitson,
Sales Director
Goodman Fielder Home Ingredients
Whilst our findings indicate an almost
universal recognition of the importance of
people to business success, there exists a
major disconnect in how business leaders
view and define recruitment success
compared to the way talent leaders are
being measured. The language of success
for business leaders is quality, while talent
leaders are being measure on success
through efficiency measures. The lack of a
common language in this respect will
severely limit your ‘People Edge’.
Business leaders see quality hires driving
business performance and resulting in
business success. Quality employees
provide the ‘people edge’ by enhancing
organisational culture, driving profit,
growth and change. Engaged motivated
employees will act as company brand
ambassadors, demonstrate significant
productivity impact and save on retention,
hiring and training costs. “People can
make the business go gangbusters and
good hires can make or break 100% profit
in a week” Rob Kitson, Sales Director,
Goodman Fielder Home Ingredients
All business leaders said they were most
interested in the quality of recruitment
(when asked to rank quality, cost and time
measures). But half of talent leaders felt
their organisation was most interested in
time or cost measures.
futurestep.com
Talent with impact
05
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
So. what's missing?
While close to 70% of
talent leaders
measured time and
cost to hire, only 11%
measured new hire
productivity and 39%
measured new hire
performance.
While talent leaders and business leaders
recognise people as the driving force
behind the success of the business, the
reality is that the majority of recruitment
functions are still not measuring the
quality of hiring decisions.
What recruitment measures do you
currently use?
While close to 70% of talent leaders
measured time and cost to hire, only 11%
measured new hire productivity and 39%
measured new hire performance.
For those who didn’t currently measure
quality factors, the main barriers were
limited time and resource. Other lesser
factors included inadequate technology,
perceived lack of appetite for this data and
functional expertise gaps.
Many Talent leaders felt the current lack of
analysis of quality of hires measured
through employee performance, retention,
time to get up to speed in a role could
mean that more readily available efficiency
Copyright©2008. Korn/Ferry International/Futurestep, Inc. All rights reserved.
measures like time and cost of recruitment
were being over relied on and could be
compromising fit and quality of candidates.
Not surprisingly talent leaders across the
board recognized a missing opportunity
to integrate workforce planning into
business planning. Having effective
workforce planning to align sourcing with
future hiring needs, and integrate
succession and internal moves could
enable the talent acquisition team to lead
activities around the buy and also build
and bounce of talent.
Talent with impact
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
06
A significant impact
With a primary focus on efficiency,
Futurestep believes recruitment functions
will be prevented from moving beyond
operational recruitment activities – and
unable to provide competitive business
edge through hiring decisions.
By omitting quality measures, recruitment
functions are unable to accurately gauge
the impact of their hiring decisions.
Businesses will continue to operate with
incomplete information and may be
unaware of the complete impact (success
or failure) employees are having on the
business.
If recruitment functions are fully aligned to
the organizations strategy and focus on
both efficiency and effectiveness measure
they will be able to challenge the business,
offer expertise on talent decisions, assist in
delivering on organisational strategy and
ensure business priorities are reflected and
aligned in all recruitment activities.
A shared language of success
For organisations that believe talent can
drive business performance, quality should
be the shared language for success and the
key recruitment measurement.
futurestep.com
Talent with impact
07
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
How to move forward
Performance and productivity
“Developing and
implementing robust
analytics and
measures that relate
to the objectives in
the company strategy
and add value to the
business”
Catherine Taylor,
Group Manager
People & Business Services,
Kiwibank
Operational efficiency in recruitment is
expected. As outlined in Futurestep’s 2010
research paper The Evolution of the
Recruitment Team , the nature of the
recruitment function has evolved and while
efficiency metrics are necessary, a fully
evolved recruitment model must also focus
now on quality measures, measuring
output and aligning recruitment activities
with business strategy. “If you get the
quality right then the cost and time is just
part of the process” Kevin McKenna,
General Manager Roads Australia & NZ
and Executive Director, Transfield Services
From our research it is clear that
transformation is necessary. Businesses
need to build a framework to ensure a
shared language of success, measuring
quality and aligning recruitment activities
with business needs. This will help
recruitment contribute to business
performance by maximizing hiring
opportunities and using the ‘people lever’
for a competitive advantage.
Businesses need to be concerned about the
lack of measurement, given the correlation
between people and success. Our research
consistently shows that people are the
single most important factor driving
success. This must be demonstrated
through measuring both the recruitment
function process and also the quality of the
people who join an organisation.
To help maximise the impact of the
recruitment function, Futurestep has
outlined a framework below with three key
components that can be used.
1. Implementing quality
measurements
Businesses should measure the value of
the hiring process based on a number of
key measures, for example:
Copyright©2008. Korn/Ferry International/Futurestep, Inc. All rights reserved.
Immediate assessment - job specific
skills and capability to exceed
performance
6 month assessment - consequential
culture fit and contribution and team
interaction
12 month assessment - ultimate
measure of impact - recognizing
individual and team contribution and
potential for future
Candidate engagement
Retention and turnover
Hiring manager satisfaction
By combining these measures with the
cost to the business of bringing in talent
(cost of hire) and the speed at which
functions can discover and recruit that
talent (time to hire), organisations can
uncover powerful information about the
impact of each hiring decision.
Recruitment teams will better connect their
activities with business performance by
“developing and implementing robust
analytics and measures that relate to the
objectives in the company strategy and add
value to the business” Catherine Taylor,
Group Manager People & Business
Services, Kiwibank.
Moving beyond operational recruitment
metrics and a traditional cost and time
focused mentality to a quality focused
measurement system will help
organisations understand their hiring
decisions in more depth. This will provide
recruitment teams with the ability to more
closely align their activities with business
priorities and future talent needs.
Recruitment teams that can impact quality
in a measurable way will receive more
business leaders attention than those that
don’t. Being able to demonstrate you find
and selected the highest quality, most
capable and best suited talent for the
organization is what is top of mind for for
business leaders.
Talent with impact
08
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
Only 20% of talent
leaders surveyed felt
their current
recruitment
strategy was strongly
aligned to
organisational
priorities
2. Workforce planning
3. Business alignment
Organisations around the globe are finding
that robust workforce planning processes
provide a competitive advantage. Through
a systematic approach, the recruitment
function can ensure that its resources are
focused on finding and keeping the right
talent – the talent which has the skills and
potential to provide business advantage
both now and importantly, in the future.
Recruitment functions must align their
strategy, activities and measurements
across all business functions. Business
leaders surveyed reflected on the huge
impact that recruitment can have on their
business. Recruitment strategy (as part of
an overall integrated people strategy) must
be tied to business goals.
Doug Rippey, Global Practice Leader,
Workforce Planning, Futurestep said by
aligning the business strategy to a
workforce strategy, an organisation can
provide a workforce plan that integrates
talent management areas to provide
answers to questions such as:
Should I promote from within or hire
externally?
What are the critical skills and roles I
should be protecting?
What are my tough to find roles where I
should be focusing recruiting resources?
How can I best spend on talent
management programmes to ensure
business success?
Talent leaders said it was critical for the
recruitment function to help lead and build
organisational capability in workforce
planning across their businesses.
In staffing.org’s Corporate Recruitment
Recruiting Report (released 2010) reference
is made to connecting ‘day to day’
recruitment activities directly with CEOs’
preoccupations and concerns. This is
necessary to ensure the recruitment
function is working towards a shared set of
objectives. Recruitment can impact an
organisation by demonstrating an
understanding of business direction and
strategy, and providing the talent to meet
the need. “Getting the right people is the
most critical component of business
growth. We have made the most wins by
getting a line of sight into what the
business strategy and growth plans are”
Ant Hall, Head of Talent Acquisition,
Telecom. Business alignment is critical to
success.
Many talent leaders surveyed indicated
their biggest successes to date resulted
from having a clear line of sight into
business strategy and growth and their
ability to implement activities and recruit
accordingly.
Talent leaders shared a number of ways
they felt recruitment activities could be
better connected with business
performance:
Building business partner capability in
recruitment function
Contributing to business planning
Having a clearer understanding of
critical talent gaps
Developing analytics relating to
company strategy
Aligning more closely with other HR
functions
futurestep.com
Talent with impact
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
09
Summary
A shared language of success across
business leaders and talent leaders is
imperative. This language must be about
the quality of hiring decisions, not purely
the process efficiencies of a function. A
recruitment function will significantly
contribute to organisational success and
maximize competitive advantage through
hiring decisions if this common approach
is adopted. The key elements that need to
be in place to allow this to happen are:
Quality: Quality should be the key
recruitment measurement, given the
important link between people
performance and business success. It is
critical to measure success by looking at
hiring outcomes, rather than purely the
recruitment process. Organisations must
accurately measure beyond
housekeeping metrics of time and cost
and ensure that the shared language of
success is quality.
Workforce planning: A recruitment
function must have integrated business
relationships to be able to identify
organisational gaps – the future demand
- and also current capability. A line of
sight into future workforce needs is
crucial.
Through our research, talent leaders and
business leaders acknowledge the impact
of people in an organisation. The challenge
is to move beyond recognition of this fact,
and hold the business to account for its
hiring decisions. To ensure optimal
recruitment function success, quality
measurements must be in place, workforce
planning across the business must be
defined and the recruitment function must
be truly aligned to the business.
Likewise, given that business leaders place
high value on bringing talent onboard they
must be prepared to invest in the
recruitment function and ensure the
function is part of the business planning
cycle, able to align with strategic goals and
given access at a decision making level, to
ensure a common language of success.
Only when organisations begin to action
this will they be able to fully optimize the
recruitment function completely; making
strong hiring decisions, obtaining staff that
bring impact, be it long-term or immediate,
thus taking full advantage of one of the
biggest competitive levers available to a
business today – people.
Business alignment: Talent leaders and
recruitment teams must understand the
culture, business strategy and levers to
pull to ensure a business succeeds.
They must hold sound industry
knowledge and specific knowledge of
the business they operate in and
represent. The recruitment function
should be viewed as a core part of
business to drive growth and profit.
Recruitment must be aligned with all
business functions.
Copyright©2008. Korn/Ferry International/Futurestep, Inc. All rights reserved.
Talent with impact
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
10
Acknowledgements
We would like to thank the Australasian talent leaders who participated in the
online research and the following business leaders for their participation in the
qualitative discussions:
Mark Hamilton, Chief Executive Officer - Bell Tea & Coffee Company
Stephen Mockett, Former Chief Operating Officer - Bank of New Zealand
Brent Waldron, Chief Executive - Carters
Doug Paulin, General Manager NZ Fish - Sealord
Tony Oldham, General Manager - Sara Lee NZ Ltd
Mark Dewdney, Chief Executive Officer - Livestock Improvement Corporation
Ian Blair, General Manager Business Banking – Westpac
Chris Buddle, Country Manager - Simplot New Zealand Ltd
Ian Ward, Board Member Auckland District Health Board, Board Member NZ Blood
Service, Director C4 Consulting Limited
Katrina Ritchie, Group HR Manager Projects and Planning - Fonterra
Rob Kitson, Sales Director - Goodman Fielder Home Ingredients
Geoff Norgate, Managing Director - Vitaco Health (NZ) Ltd
Kevin McKenna, General Manager Roads Australia & NZ, and Executive Director Transfield Services
Gerard Egerton, Programme Leader Performance & Productivity Improvement Department of Internal Affairs
Steve Donkin, Programme Manager - Department of Conservation
Tim Deane, Director Global Sales - Fonterra
Mark Powell, Chief Executive Officer - New Zealand Rental Group
Juergen Link, General Manager Engineering & Mainenance - Fonterra
Tania Pauling, Managing Director - Godfrey Hirst, NZ Ltd
Duncan Rutherford, State Manager - Orrcon Steel
Peter Styles, General Manager Business Improvement - Downer EDI
Ryan Sanders, Sales Manager - OneSteel
Simon Hewson, Principle Geotechnical Engineer - KCGM
Phil McKenzie, Chief Executive Officer - Widex Australia
Graham Egli, Director, HSEC Mining & Metallurgy SNC Lavalin
futurestep.com
Talent with impact
Creating the people edge
How to overcome the critical factors holding back the recruitment function in your business
11
About Futurestep
Futurestep is the global industry leader in high-impact recruitment solutions; offering
fully customized, flexible services to help organizations meet their talent and
recruitment needs.
Futurestep can meet a variety of workforce requirements; from RPO and project
recruitment, to search and consulting, our services apply a truly world-class capability
to deliver talent with impact, providing the experience and global reach to identify,
attract and retain the people who drive business success. With locations on four
continents and a record of success in securing top talent around the world, Futurestep
provides the experience and global reach to identify, attract and retain the people who
drive business success.
To learn more, visit www.futurestep.com
About Korn/Ferry International
Korn/Ferry International, with a presence throughout the Americas, Asia Pacific,
Europe, the Middle East and Africa, is a premier global provider of talent management
solutions. Based in Los Angeles, the firm delivers an array of solutions that help
clients to attract, engage, develop, and retain their talent.
Visit www.kornferry.com for more information on the Korn/Ferry International family
of companies, and www.kornferryinstitute.com for thought leadership, intellectual
property and research.
Local expertise
For further information on the research and information included in this whitepaper,
or to find out how Futurestep can help you address your critical talent needs, please
contact:
Jeremy Paynter, Director Client Solutions, Futurestep New Zealand
Phone + 64 9 355 1881 or Cell +64 27 222 1157
[email protected]
Jeremy leads the consulting and solutions practice for Futurestep New Zealand and
holds overall responsibility for the delivery of consulting assignments for Futurestep’s
clients. Jeremy’s focus is to partner with clients to advise them on how to best
achieve business success through delivering their people strategy. His experience
includes assessment and design, strategic resourcing, talent management,
organisation design, career management and coaching.
Copyright©2008. Korn/Ferry International/Futurestep, Inc. All rights reserved.
Talent with impact