There are many lists of the top companies to work for, including well-known lists from LinkedIn and Forbes. They typically include global giants like Google, Facebook, Salesforce, Walt Disney, Coca Cola, Johnson & Johnson, Tesla, and others. You can view the LinkedIn list of top firms here.
Although those top companies come from a host of different industries, all those firms have two things in common: a very strong emphasis on recruiting top talent and important elements of strong recruiting cultures. There’s not even one exception. The elements of successful recruiting cultures include CEO and executive messaging that supports the goal of hiring the best talent; a high percentage of employee referrals being hired; programs that support recruiting; and, most importantly, adequate recruitment department funding.
We reviewed more than 20 talent acquisition departments and came away with a number of factors that set successful companies apart.
There is a clear connection between highly profitable companies and strong recruitment cultures. To begin with, they have all been consistently profitable. Despite some exceptions, we find a highly significant statistical correlation between a strong recruitment culture and profitability. Of the companies we reviewed, more than 90 percent were profitable. Right now, if it walks and talks like a duck, it must be a duck, or in this case, a strong recruiting culture.
So, how can growing a recruiting culture make attracting and retaining talent easier? The answers lie in what it is and what it does. Basically, a recruiting culture is one that successful companies employ to make recruiting an integral part of their corporate culture. That is, they make recruiting a corporate imperative.
We found that strong recruiting cultures comprise the following:
- TA departments with adequate funding
- Executive support beyond just messaging
- Best practice TA strategies
The Talent Acquisition Department: Well-funded, or Is That a Contradiction?
If you go through the lists of top companies to work for and researched each of their talent acquisition teams and their structures, you would find some common themes. Of the firms we reviewed, approximately 33 percent felt they were adequately funded. Within this group, 10 percent thought they were well funded. The issue here is whether a company has adequate funding to build a world-class TA team, hire top recruiters, and keep them at manageable requisition levels. We also believe that adequate funding for employment branding, sourcing tools, ATS, and other technology (CRM, social media platforms, etc.) are critical if a company’s TA department and its leaders are to achieve their goals.
Doing more with less is a skill, but we see so many cases in which expectations are unrealistic and the usual churn of TA leaders and recruiters happens in only 12-18 months. And these firms wonder why they’re having problems!
Show Me the Money — at Least for Now
Most TA organizations are chronically underfunded. There’s a constant battle between HR and Finance and rarely does HR or TA have a strong formula for how they should be funded effectively.
One way poor funding shows up is in the requisition levels per recruiter. Underfunded TA organizations always burden recruiters with many requisitions. There is no perfect formula. However, we frequently see recruiters handling professional roles with 30 or more requisitions and 80 or more for high-volume positions. In either case, given so little available time, recruiters can become paper pushers and be forced to do very little screening.
At Palo Alto Networks, the VP of TA has received the support of the CEO to drive a model where recruiters have, on average, 10 to 12 requisitions each. There is variation depending on the level of the roles but the goal is to keep it at a level where the recruiter can be a true partner — a talent acquisition business partner. This means being consultative, discussing the talent market, driving the interview process to completion, and closing offers. When we’re overloaded with requisitions, our recruiters end up being mere paper pushers, rather than true business partners.
At Intuit, the VP of TA works to ensure adequate funding for enough TA staff to allow for budgeted, forecasted hiring growth, but also for spikes. Their TA team for professional roles also ensures that recruiters are not overloaded. Although there is variability on the number depending on types of roles, 12 to 15 requisitions are typical.
Another interesting case of high-volume recruiting is that of WellPoint, now Anthem. Some years ago, it had a problem with a customer support role that was at 45 percent turnover and had many problems hitting headcount targets. The recruiters supporting the company were handling close to 90 requisitions at any given time. Granted, these are high-volume roles. WellPoint found that recruiters were not able to screen the candidates effectively. In response, The talent-acquisition group created a business case requiring an investment that was approved by the CFO. It invested in talent acquisition using am RPO model that incorporated better screening as part of the service-level agreement. Wisely, talent acquisition partnered with HR as well and the role was enhanced to allow employees to resolve calls quicker by empowering them. The recruiter requisition levels were closer to 40, which, while high, was much improved. Those two steps resulted in a 24 percent turnover after 18 months, which was a huge improvement for the business.
While many companies generally have FTE recruiters, there is a mix of RPO and in-house recruiters that makes more sense (yes, I’m biased as an RPO guy). At Shutterstock, a $2 billion marketing firm, it has striven toward having recruiters at 10 to 15 requisitions and model that mixes RPO with FTEs. Emma Hooks, TA director, says the mix “allows us to be more flexible and prepared for upcoming spikes in hiring.”
We see that when organizations are poorly funded, they will keep recycling TA leaders, managers, and recruiters and vendors along the usual 18- to 24-month cycle.
Now, there isn’t any one particular formula for funding a TA organization. I’ve observed various formulas and different approaches being used. At Palo Alto Networks, the goal is a specific headcount target.
The other key element within the TA function is the structure of the organization. Having a ratio of two to three recruiters for every sourcer is another example. Some firms flip the ratio when they’re more focused on pipeline.
Organizations with strong recruitment cultures demonstrate executive support from the CEO to other senior leaders. At Palo Alto Networks, for example, the CEO invites recruiters to call him, and on occasion will drop-in to meetings. He’s a powerful proponent of having a strong recruitment team.
Similar situations can be found at Intuit, Google, and others. Google puts hiring and keeping the best talent as one of its core operating principles, and the commitment from the executive team demonstrates it like very few companies today.
Companies that promote hiring manager engagement are far more successful in hiring than their counterparts with less-engaged hiring managers and leadership. At Intuit, the CEO has called individual recruiters (which can be quite a surprise to the recruiter). We don’t see too many examples of such high engagement with bigger firms with. We see it much more with startups.
These executives, along with TA & HR leaders, realize that recruiting should become the responsibility of everyone in the organization. Recruiting isn’t about ordering parts from a catalog. Successful recruiting is a highly collaborative process. A company’s recruiting and hiring practices become collaborative in nature and involve the entire organization. In our current business climate that requires the involvement with and collaboration among an ever-widening group of stakeholders within the organization, well beyond HR and hiring managers and including bosses, their bosses, co-workers, potential mentors, and even managers from other areas of the business who may well have a legitimate interest in any number of different roles. Like life, it’s not a destination, but a continual journey or process.
Proactive Talent Acquisition Strategies
There are various best-practice TA strategies — in our review, most firms did a good job of generating referrals above 25 percent. Companies with strong recruitment cultures have employee referrals accounting for 40 to 50 percent of hires. Some say that having a high referral rate could hurt hiring diverse talent. Firms like Express Scripts do a great job of including diverse talent in the slates presented to hiring managers. They take the time and effort necessary to develop relationships with diverse employees through internal diversity organizations.
Another strong best practice is having a clear employment branding strategy. It’s no surprise that General Electric does a great job here. It has a very strong global brand ambassador program. Shaunda Zilick, GE’s employment brand leader, shared this link. GE is going through a massive transformation to a digital-industrial company. It had to tell the public about it, but most of its communication channels were B2B, so it developed this program four years ago and it has been a great success.
Humana has done a great job of developing incentives for recruiters, which is very close to an agency model in which they chargeback their services to the client. That enables some creative goals and incentives for recruiters to hit their monthly goals.
Another important element of a strong recruiting culture is the technical foundation and strategy these firms employ. In our survey, we found that 80 percent have CRMs as well as an ATS. Most use sourcing tools beyond just LinkedIn. Few, like GE & Intuit, have developed roles such as “social media recruiters,” which are sourcers who also act as brand ambassadors. They’re sharing positive content and responding to issues and complaints. One large client that engages my firm uses Hootsuite with more than 10 recruiters to disseminate positive content.
It’s no wonder then that companies like GE, Palo Alto Networks, Intuit, who have created a recruiting culture, consistently perform well and experience lower turnover and lower recruiting costs than comparable companies that don’t employ such a holistic approach.