My original article from ERE Media
I wrote an article not too long ago called What does an advanced talent acquisition function look like?, and received a fair few calls about it. A lot of the questions were related to building (or redesigning) a talent acquisition team, so I thought it made sense to follow up that piece with a three-part series on how would I build an advanced talent acquisition team based on conversations and lessons learned in the last 20 years.
Part 1 (this one), I am going into depth on People and TA (talent acquisition) models.
Part 2, optimal process and operations of a TA function.
Part 3, technology.
If you have read my stuff in the past, I generally like to write a few disclaimers up front to set the right context of what you are about to read:
- There is no one-size-fits-all solution, but rather elements of what you read here that could be mixed and matched given the diverse nature of how talent acquisition functions need to operate. Some of you are going to be on the more advanced track and others in the early stages of building.
- Given my TA background and my experience is mostly in the enterprise space for global companies, this piece has more of that lens. But, given my previous role as chief analyst at ERE Media, and my own current advisory firm, I have now spoken to hundreds of diverse companies from small startups to fast-growing SMBs. The POV I am going to offer will try and accommodate these perspectives as well.
- It’s impossible to cover absolutely everything I have learned over the years in these three articles, so obvious things like “you must train your recruiters,” or “build an effective employee referral program,” etc., I have skipped. I tried to focus on the bigger concepts and I want to give you options vs. thinking there is just an easy button answer to the best TA structure. There’s not.
- As stated above, I can’t fit this all into just a three-part series, and maybe it needs to be a book. What I can do for some of the key points is reference more in-depth articles I have written in the past if you’re interested in going deep on that topic.
Let’s start with people and organizational structures first, as people are your most important asset.
People & TA Structure
Recruiters vs. Sourcers vs. Outsource vs. Contractors vs Agencies … that is the question.
But, before I get into the pros and cons of each of the functional roles you can have in a TA function, I need to call out what I think is foundational to your approach, regardless of the model you build if you’re going to optimize the acquisition of talent.
Having a high percentage of hires coming from employee referrals is what I have found high-performing companies and talent acquisition functions aim for as part of their optimal strategy. After employee referrals, I have found that the next highest source of candidates is all over the map. There are many reasons why this could be the case, from industry type to different job families and where you might be physically recruiting different candidates.
What advanced talent acquisition functions do first and foremost is recognize the value of mining the heck out of their own databases. But even with these advanced talent acquisition functions, a much smaller percentage have actually put a robust talent relationship management methodology in place that continues to nurture the relationships with talent that is a better-quality fit.
I am not talking about pushing out content through social media or creating “talent communities.” I am talking about a systematic approach to identifying the better-quality candidates and keeping in touch with them. How you tactically might do that is important, but IMHO, you need the strategy and framework in place as to who are these higher-quality candidates first.
A TRM (Talent Relationship Management) Design Process Methodology
We all know that finding good candidates is hard enough, so why treat every requisition like a brand-new search every time if you don’t have to? If you have invested the previous energy and effort on assessing candidates who were a solid match for your organization, then where it makes sense, formally track and keep in touch with those potential future-fit candidates. Wouldn’t life be a lot easier if the right candidates you are looking for were under your nose in your own ATS/CRM?
Most ATSs will allow you to build some type of either requisition structure, or folder structure, or even #tagging structures where you can move your candidate persona types off that open req into this talent relationship management design structure.
The simple premise is that these persona types are a higher-quality candidate, because you have spoken with them previously, generally understand what motivates them, and have been through some form or interview to validate that they are a quality candidate.
Common sense note: The design methodology is not meant for every role type in your company. If you have certain roles where all you need to do is just post the job and you get hundreds of quality candidates applying, then this approach is not relevant. I bet you can’t say that is the case for every job family type in your company though.
Above is a simple visual (click to enlarge) I have put together in the past to explain.
Depending on your organizational structure, you can replace the role of talent advisor in the middle of the hub with a recruiter or sourcer who’l continue to build relationships with each of the persona types. But I have found more success with a dedicated sourcing team given that most full-lifecycle recruiters are stuck in just-in-time based recruiting and not able to invest the time in scalable proactive relationship building.
Future Fit = You have interviewed them, they have the right skills, good culture fit, but they need a little more experience related to some of your must-have criteria for those ongoing req types in your organization.
The Warm = Interested in your organization but the timing might not be right (waiting for annual bonus, finishing up a company-paid MBA, etc). You know they are a high-potential match based of previous conversations, but you need to connect them to the right open opportunity when the timing is better.
The Withdrawn = They meet the key requirements of the role but withdrew from the process before making it to the offer stage. If the business gave them a thumbs-up prior to withdrawing from the process, if the circumstances are right in the future, they might be a future fit.
The Silver Medalist = Came in second on an opportunity. Could they fit elsewhere now or in the future?
The Unknown = This is the only persona that is the exception to the rule and a little different. You have not spoken to them, but given your market and competitive intelligence, they work for certain types of companies that your own company would be interested in by default. Example: If you work for Accenture, then by default, pretty much any candidate identified who works for Deloitte, KMPG, or PwC is of interest to your business. Finding a way to build relationships with these non-candidates is strategically in your best interest.
The Offer Decliner = Made it all the way to the offer but withdrew from the process (could have accepted another competing offer, etc). If the circumstances make sense, you want to keep in touch. History has shown me that this is one of the highest-quality candidates in the persona set. I have lost count of the number of times my teams have gone back to people who turned down our offer six months later to hear from the candidate that they made a mistake and would like to re-engage. If you made an offer once before, then if/when the right opportunity arises, you will offer them again.
To give you a real-world example that taught me a value lesson to creating a robust future fit talent relationship management strategy:
Back in my early Microsoft career we decided to identify all the college/campus candidates in the last five years who turned down our offers. We ended up with a list of about 600 names. We could only connect with half of them (this was before LinkedIn became what it is and the research tools we have today). Out of the ones we did connect with, the majority of them were blown away that we were even following up all these years later. The following month we generated 16 hires from this one activity.
To this day, I wonder how many we could have hired if we had a future fit methodology and kept in touch with them over the years as they continued to pick up more career experience.
Let’s now look at the different resources at your disposal to build an advanced talent acquisition strategy and organization.
Recruiters (Full lifecycle)
There is nothing wrong with a TA structure where all your recruiters are doing full lifecycle. Less hand offs means fewer things can go wrong or get lost in translation. We had been doing it this way for years before corporate sourcing came along as a way to split the specialization. There is no one perfect way to structure your TA function. Sometimes decentralization works where the recruiters are imbedded into the business units. Other times leveraging a CoE model where sourcing/branding/marketing/ops/recruiting coordinators are sitting in a virtual centralized model works as well. My only advice on the full life-cycle recruiter model is there are only so many hours in a day. You must be operationally strong and diligent to make sure your recruiters are:
- A) Given the right req load balance based off the complexities of the role. Not the vanilla one-size-fits-all approach where you best guess that 50 is the right number of reqs open per recruiter at any one time. I am super impressed with the data-centric thinking that the OPOWER talent acquisition team did as to creating req load balancing based off req complexity. You can read the case study here if interested.
- B) Continually inspect where are your recruiters spending their time. How much is being spent on activity that is driving to the primary objective of making hires v.s activities, that yes, while necessary, may not be the right thing to have your recruiters owning because its taking critical time away from driving to a hire. I will go into this in more depth in the process and operations section. Some additional strategic and tactical things to consider with this model:
When you’re a smaller company, recruiters are going to do it all. As you grow and scale, think carefully when do you make necessary headcount investments in resources involving specialization of the recruiting function: hiring a branding/social/marketing person; hiring a sourcer; hiring an ops person to create consistent process at scale, key metrics and reporting; own vendor relationships; hiring recruiting coordinators to take the heavy lift of scheduling interviews and the continual reschedules/cancellations/changes.
The topic of resource balancing is always front in center for TA leaders. Why hire a dedicated sourcer when I could just hire another recruiter? Why hire a recruiting coordinator when I could hire another recruiter and reallocate some of the recruiting tasks around to the whole team? Why not just hire a contractor given I am getting pinched on budgeted headcount? So logically, this last point leads us to the next point….
I have been doing this long enough to know that when/how/why you hire a contractor really falls into a couple of buckets. There might be some other scenarios beyond what my observations are, but I think they are more one-offs. Here is why:
Scale = If the business comes at me with an increase in hiring demand above what is possible to slightly increase the req loads of my current team, then I have some choices to make. Is this demand short term (now) and is the need long term (sustained increase for the next few years)? If I need to ramp up quickly but the need is not a sustained need, then obviously this is where you would use contractors (or staff augmentation).
Budget Approval = Or should I say lack thereof. Many a time a TA leader will ask for additional full-time headcount, and yes folks, we all know that we can’t always get what we want, but get what we are given. Lots of associated reasons on how/why budget headcount dynamics comes into play, but that is another separate article for another day. In short, people will use their programatical dollars to pay for contractor headcount to meet the hiring demand because the budgeted headcount approvals did not come through to the levels a TA leader might ask. This is not the right approach, but it is the reality we live in.
Short-term Specialization = There are times where I needed to engage a contractor because of requiring specialization in hiring a group of candidates we had no historical expertise in. We were also not sure if the business thought this was more of a short-term play, vs. a more sustained effort where the volume of hiring would be consistent enough to support a full-time person.
Like anything to do with recruiting demand and the model you build, you will be faced with many times during your career where you are going to have to mix and match as best as you can with what you are given. If the YOY demand increases were large and sustained, then the contractor option diminishes significantly.
If I was the head of TA for a company that needed to hire hundreds of similar job families, lower complexity jobs (Example: customer service, warehouse workers, retail salespeople, etc.), I would seriously think of engaging an RPO vs. building it all in-house. My experience is that RPOs (not all of them though) can do it faster, more consistently, and for less. Additionally, when I partnered with them the right way on correct brand representation, it mitigated some of my historical reluctance. But, depending on the location, role complexity, and whether it’s a spike vs. a constant need, I might err on the contractor/staff augmentation path as well.
While RPOs have gotten more sophisticated over the years, I would not outsource the lower-volume, higher-complexity, mission-critical roles. I just have not found that they can do it as effectively as building your own internal capability. It’s not always about low cost. 😊
But … make sure you have very tight SLAs and KPIs in place. Make sure the RPO has the data-centric thinking and horsepower to proactively identify areas for improvement. If your hiring an expert at high-volume recruiting, then expect demand you want these insights as part of your quarterly business reviews. Demand, that you want opportunities identified before they become problems. You want options with suggested alternatives. You want metrics and analysis with a dollar lens associated. You need to be able to show your internal executives what the ROI is. You need to have the RPO help with showing how TA is making or saving the company money.
Treat the RPO as a partner, not a vendor. Your success is dependent on their success. Make sure your aligned recruiters (if that’s the preferred model) understand this. I’ve seen too much finger pointing in my career by recruiters playing the blame game with the RPO vs. treating them as an equal partner. Lots of times it’s not the RPO at fault, so stop using it as a convenient scratching post just because it is the “vendor.”
As a final note of interest with some RPOs … they have much deeper pockets than you do when it comes to technology. They are going to have access to more technology and tools. Remember, they have multiple clients, so they have tested the effectiveness of these tools and approaches in a diverse array of industries and markets. They are going to be able to do and try things that you can’t, so keep that in mind as you evaluate if/where an RPO is right for your strategy.
The last point on RPO partnering is just as much, and maybe even more, important when you have or are building an internal sourcing team. Most sourcing team models are built on sourcers supporting/partnering with recruiters, who are the primary point person for the business. You must remove the friction as quickly as possible between recruiters and sourcers, because if you do not, you’re going to end up creating and “us vs. them” culture in your own function. I know, because in my early career, I was the idiot who unfortunately created some of this friction when building early sourcing teams. I learned this lesson the hard way, so be mindful as you build your own teams.
Creating mutual goals is one way to accelerate success.
When it comes to what the actual sourcing team does … Here what I would do today based on lessons learned:
Have them focus on low volume/high complexity reqs. They must be focused on mission-critical, high-impact roles. Creating a sourcing function needs an investment mindset from all stakeholders, not a cost-center mindset. By focusing on what’s most important and impactful to the business, you will accelerate buy in.
Don’t “goal them” on hires. Goal them on quality of candidates being submitted/accepted. If your kickoff call and requirements gathering is solid, then if the sourcers are not hitting 80+ percent of the recruiters/hiring managers accepting those candidates, then you have created the opportunity for the right dialogue. Is it a sourcing quality issue, or poor job requirements gathering that is not crisp and clear, or is the hiring manager moving the goal posts on the need? Great TA functions clearly understand how important, and how impactful, the requirements gathering and validation at the beginning of the process is. Remember that shit flows downhill.
Goal them on how many targeted quality people who are not looking they are engaging with every week. Goal them on them on how many candidates they are moving through a talent relationship management methodology pipeline: Cold to Warm to Hot to Matched to an open req each month. Though they should not be goaled on hires, the activities and measures should be tied to showing progress through the funnel which ultimately produces a hire.
They should be spending the majority of their time trying to identify and attract talent that is not looking. They should be spending their time nurturing talent against your talent relationship management strategy. Having an experienced sourcer searching job boards is just a bad use of resource allocation. Have your recruiters handle the inbound. Let the sourcers deal with the outbound for those mission-critical reqs. I wrote about this very topic this a lot time ago, but it’s even more relevant today as you ponder this for your own organization. Are Passive Candidates a Waste of Time in a Volume Hiring Model?
Have some experts on your team who are good at market and intelligence research.Know supply/demand data. Understand the competitive landscape and where the talent is. Having people help craft this story, so you as the leader can use the key data points to drive the right talent-acquisition strategies, is a must-do if you’re going to be more proactive vs. reactive to the market.
When to use agencies changes related to the size and sophistication of your company and your own talent-acquisition function. Here is what I have observed, learned, and how I’d approach the partnering with agencies. Yes, I said that word partnering again, like I did with RPOs.
Just too dang small = Companies that only do a handful of hires a year are going to be more inclined, and rightfully so, to engage a handful of specialized agencies to fill their needs. With the company being able to get a reasonable amount of hires from referrals, posting jobs to a few local sites, it makes sense to partner and parse out the balance of those harder-to-fill (could be more senior-level roles) to a good old third-party agency. But when does this change?
It is a little bit of a “depends” question, but here would be my guidance. When the total annual agency fees start getting up around the fully loaded headcount costs of a good senior recruiter + any tech/licenses your might want to invest in, then that should be your starting point as to whether is a better mouse trap. Let me put a bogey out there of $100-150,000 a year in agency fees. The assumption is that the company is going to continue to grow, so with this comes more roles (growth + attrition). As part of your go-forward recruiting strategy, you of course are not initially (not short-medium term) going to jettison all agency hiring, but you will of course get more strategic about when and where to use agencies vs. using them all the time.
Executive Search = Where executive search comes into play is also dependent on a few things related to your talent-acquisition structure, but also the C-suite behavior. Let me address behavior first.
C-suite behavior = I met one senior HR leader who, while saying it cost too much money to hire people for the company, was not even remotely willing to discuss having the internal talent-acquisition function help with those traditional executive search roles ($100,000+ fee roles) to help reduce the cost to serve. I raised my eyebrow at that hypocritical statement.
The more I probed on this, the quicker it became apparent why some of the C-suite are in this mindset. He said to me: “Just like no one ever got fired for hiring McKinsey, no one gets fired for engaging one of top big executive search firms.” Did I think we could do it just as well and even better given that we had a solid handle on company, competitors, culture with a solid interviewing methodology in place? Heck yes. Some of the larger TA functions have overcome these perception hurdles, which leads me to structure.
I eventually got them to a different way of thinking by doing a bake off. Our candidates vs. the executive search firms. We did not get all the reqs, but we got the majority vs. the historical and default executive search firm approach from the C-suite. We proved our value by showing the results.
Structure = While you might now have a reasonably sized internal corporate recruiting team, they just don’t possess the capability, confidence, and experience to effectively engage with the C-suite on filling these open positions. Very rarely will you see junior (less than three years) recruiters engaging with the SVP of enterprise sales on filling a GM need in their financials services market. The role is just too critical and they are not going to hand it over to have a junior recruiter to engage with very seasoned professionals.
Now were this starts to change is if the talent-acquisition function has built credibility and trust with the C-suite, and the C-suite is also trying to reduce the cost to serve through talent acquisition. This is where you will find that larger organizations have dedicated recruiters/sourcers filling these roles internally. It does not take a rocket scientist to work out the math … $250,000 roles @30 percent fee x 10 roles a year adds up to $750,000. I’m not dissing on executive search firms’ value, but I gave up on the myth years ago that they have some secret selection process better than anyone else … Bahooie, they don’t!
Yes, specialized executive search firms have potentially deeper access to talent in their database, plus pre-existing relationships, but I also know and have seen dedicated internal corporate executive search teams do a great job of building these relationships as well over time.
So, if you believe you have the trust with the C-suite, the sourcing strategy, and assessment infrastructure in place, then if reducing agency spend, while not impacting speed/quality, is important, then this is where I see internal executive search functions being built.
Specialization = Like where you would engage a contractor, where the need is specialized and not in high volume, then partnering and engaging an agency makes most sense.
Hiring Manager’s Buddy = I have met many a hiring manager in my career who will just default giving their open positions to an agency buddy they have worked with in the past. It could have been from previous organizations where they did it this way, or could have been that the recruiting function does not effectively deliver.
If I was a hiring manager who was working with an internal recruiting function that sort of sucked, and I knew a great agency recruiter who got things done, and if I also owned the budget, then why wouldn’t I? If you find yourself in these situations and have a dedicated recruiting function, and the hiring manager is not budging, then you have some credibility and trust issues to work on. The best suggestion I can make here, is to get other hiring managers in your organization who are fans of the internal recruiting function and have them act as champions to help show the value in the relationship they have with your team. It takes time, but it works nearly every time.
Now that we have covered some of the whys and where on the resources at your disposal, let’s look at some of the different organizational structures.
Decentralized vs. Centralized vs. CoE
If you have worked in a large enterprise for long enough, you are probably going to see changes to the way the talent-acquisition organization is structured more than a couple of times. Logically, part of why a talent-acquisition organization needs to change its structure is related to how the business units in an organization are structured. As the business changes its organizational structure, generally so does talent acquisition.
There are lots of pros and cons in every TA organizational structure, but in my experience, the closer you can get aligned to the way the business is structured, the better off you will be.
Yes, I know some of you reading this just want the easy button answer, but the best way to give you my point of view on the different TA organizational structures, based on my own experience and hundreds of conversations with other TA leaders, is to give you the pros and cons. It’s not my job to tell you how you need to line up your organization model, unless you pay me of course! 😊
Decentralized — Pros
- Tighter alignment to supported business groups.
- Partnerships and relationships develop quicker and more deeply.
- Ownership, control, and accountability increases.
- Recruiter/sourcer gains deeper knowledge and expertise in the supported area.
Decentralized — Cons
- Creation of siloes and lost opportunities for sharing talent and best practices.
- Accountability only to the area you support.
- Lose broad competitive and market Intelligence. Missed opportunities.
- Tendency to reinvent the wheel on tools and processes … “We are different than group X”
Centralized — Pros
- Ability to move and deploy resources quickly against enterprise demand.
- Collaboration and knowledge sharing happens more fluently.
- Retention of IP can be maintained broadly.
- Ensures consistent processes, SLAs, and standards.
Centralized — Cons
- Ownership issues of resources and control by supported customer groups becomes prevalent.
- Harder to foster deep and close partnership with supported recruiters.
- Depth of Industry and business group knowledge diminishes.
CoE (Center of Excellence)
Center of Excellence started to come more into prominence in the early 2000s. If you are not familiar with the model, think of it as a blend of centralized and decentralized, with trying to extract the benefits of both. In talent acquisition terms, you might find the sourcing, operations, marketing/branding, and recruiting coordinators residing in the CoE to support the recruiters and/or HR business partners who are aligned to the business.
- Business generally likes the one primary point of contact for all things HR.
- Subject matter expertise knowledge resides in a central location where everyone knows where to go.
- Consolidation and consistency of process and policy.
- Resources can be more easily deployed across the enterprise related to priorities.
- With HRBPs generally being the primary point person for the business in a CoE enterprise model, they can:
- Lack the depth of knowledge
- Become the bottleneck
- Think they are the customer vs. the business
- Functions like sourcing can get pushed to the back office and not add the needed value during the kickoff call/intake meeting.
- Relationships can fray given that the CoE resources are not tied specifically to an area. Not everyone feels they are getting the equal amount of love.
- Rather than recruiters accessing the greater pool of sourcing/coordinators, they go to their favorites, causing strain on the model.
I have given you some broad strategic and tactical things to consider. Yes, many organizations will mix and match the above models and resources to most effectively identify, attract, and assess the talent to meet the business demand. I am yet to find a one-size-fits-all, and as you go on your own individual journey, keep in mind that just because something worked perfectly for you in your last company, never assume that you can cookie-cutter the approach in your new organization.
In part 2, I will spend time digging into lessons learned on what optimal process and operational governance looks like when building/fixing a talent-acquisition function.
Need some Intelligent Advice on how to? Come visit me at McINTOSH & Co.