How to use Talent Warehousing to improve recruitment cost, quality and branding Quarsh Whitepaper, September 2013

Foreword This whitepaper will examine some of the prominent issues faced by the recruitment departments of organisations across the UK and why some typical solutions have fallen short of the desired and expected results. We will also look at how organisations can implement a Talent Warehouse, as well as the subsequent improvements this can bring to an organisation’s recruitment metrics and also the wider business performance. The recruitment issues we come across most frequently with new clients tend to be along the following lines: 1. “My top line costs (agency/search fees) are too high.” 2. “Recruitment takes too long.” 3. “I don’t know if I’m getting the best candidates.” There are many issues associated with recruitment, but these are the big headlines that many other problems are a facet of and what we hear more about than anything else. In theory, it is easy to address these problems. Why not simply negotiate harder with agents, push them to work more quickly and demand better candidates? In practice, it should not be forgotten that most (but not all) recruitment agents are paid low basic salaries and are incentivised with high commissions for placing candidates. This means that their behaviour tends to be short-term, motivated by closing deals (candidates offered and accepting a role) and not on providing a long-term service. They are sales people with a target, not HR professionals. They will always favour easier clients - those who are less choosy and who pay higher fees – so pushing them harder is unlikely to generate results. It is likely to be just as difficult with internal recruiters who tend to have a HR focus and may not have worked in a wide variety of recruitment environments. In general, we find that internal recruitment functions are very well-meaning but sometimes lack process or visibility across their business. This means that they may not have the most imaginative ideas on how to deliver recruitment more effectively, so irrespective of how hard they are pushed, they don’t have the support or broader commercial understanding to come up with better ways of finding and securing the best talent. Essentially, much of the worry and stress associated with recruitment comes from a lack of control over the process and uncertainty about where the value comes from when using recruitment partners, such as agencies, or whether internal recruiters are skilled enough to hire effectively. These core issues are quite difficult to address and require a top-down approach to fundamentally reshape the recruitment environment. The key here is in revolutionising your recruitment practices while also reducing costs and effort. It is a tall order, but an achievable one, when done with the right approach and with some medium-term planning over the next 6 to 12 months. The solution lies in Talent Warehousing, and it is possible to achieve in any organisation, from a FTSE 30 consultancy to a 50-strong manufacturer.

Understanding Talent Warehousing as a Recruitment Solution

costs and your time to hire halves; yet the quality of people that you hire will increase significantly and the amount of time your new recruits take to be effective reduces.

A Talent Warehouse is a database of every potential hire who could be useful to your business. These people could work in any discipline, location or level, from the CEO to a Logistics Assistant, from London to Timbuctoo. A Talent Warehouse is constantly managed and maintained so that details are kept up to date and fresh, with new candidates added and changes in circumstances recorded. It is, in essence, a living, breathing database. Managed effectively, a Talent Warehouse is the most powerful tool a recruiter has.

Many people refer to Talent Warehousing when what they mean is Talent Mapping. A Talent Map is a very valuable resource, but it is the starting point rather than the end result. Every Talent Warehouse starts as a Talent Map. It is a snapshot of an industry sector, a discipline or a competitor at a given point in history; if it is not managed, within six months it is useless as candidates move on or are promoted.

Who is in a Talent Warehouse? CIPD statistics indicate that approximately 20% of any workforce is actively seeking a new role at a given time. Around 20% are not interested in a move at all, and the remaining 60% are not looking but could be persuaded. It is this latter pool that the Talent Warehouse accesses and manages most effectively. By reaching out to this group of people, with the intention of getting to know them and to understand their career goals, you can create a much deeper and more meaningful relationship than would ever be possible through other means. Engage them as peers, don’t try to persuade them to move at a time to suit you. There is no hard sell and no pressure, simply an exchange of information. Talk to them about your business, give them the best possible impression of the business and of the opportunities they could be part of in the future.

Creating, managing and exploiting a Talent Warehouse is very straightforward. It takes time, effort, patience and skill to make it achieve its potential, but any business can benefit from setting one up and running one. Managed properly, you will find your hiring

A Talent Warehouse vs Recruitment Agencies A Talent Warehouse may sound suspiciously like an agency database, but there are some very significant differences: • Exclusivity: The people in your Talent Warehouse are engaged with material and updates about your business and no other company. You won’t have to deal with agencies telling you that you need to make a decision to hire someone right now as they’re under offer elsewhere. • Strategy: Candidates are engaged with over the long-term. You can highlight their skills and potential to the management of your business so that you can make key decisions based on current and future talent, both internally and externally. • Commitment: As candidates know so much more about your business, they are much more inclined to talk about when they will join you, not if. This means they accept jobs and are productive much more quickly than would otherwise be the case. Agencies are a really valuable resource and sometimes they are the most appropriate way of getting talent into your business. Good examples of this are when looking for niche skills, searching overseas or dealing with graduate intake. However, around 80% of hiring is predictable, and this is when a well-managed Talent Warehouse comes into its own. Even unforeseen resignations can be remedied by the presence of a good Talent Warehouse.

Creating a Talent Warehouse Turning a Talent Map into a Talent Warehouse is not difficult but does take time, effort and dedicated resources. The people named in the Talent Map need to be contacted to assess how useful they are to the business. Along with the usual housekeeping information – salary, notice period, contact details and so on - you need to determine how well their skills and potential are aligned to the needs of the business; are they looking for work? What are their skills? How do they compare to current employees? Could they fit an existing skills gap by having the potential to drive parts of the business forward? These questions need to be teased out through interviewing, which need be no more than a half hour telephone conversation in the first instance. Follow up with more detailed discussions for those who show real potential or who can address an immediate need. This forms the foundation of the Talent Warehousing process.

Managing a Talent Warehouse Effectively Getting the best out of a Talent Warehouse will largely depend on what your goals are. Most commonly, a Talent Warehouse is set up to address immediate and longer term hiring needs. Other examples include understanding an employer’s branding compared to its competitors or carrying out a detailed and highly accurate salary survey. When managing a Talent Warehouse for hiring purposes, it is really important that the Warehouse stays fresh and current. This means regular phone and/ or email contact with the people within the Warehouse, at the very least updating them on what is happening within your business and ideally maintaining a dialogue to understand their career development, such as promotions or geographical moves. It also means feeding the Warehouse with new talent, through advertising, research or referrals. A Talent Warehouse is a valuable repository of information and of candidates. The people engaged with and managed in a Talent Warehouse should be your first port of call when resourcing for a new vacancy or when looking at how your business is evolving and which direction it can take. The Warehouse therefore

fits two needs: aligning talent with strategic direction and addressing immediate needs. Both can add huge value to a company.

1. Immediate Need In terms of reacting to immediate need, having a well-maintained Talent Warehouse at your disposal means that you you safeguard your business against any changes to your workforce, such as unexpected resignations. When significant members of the team resign, the response is either to call an agency to find someone to replace them quickly or to try and convince them to stay. Both of these options are entirely understandable but are rarely suitable, sustainable solutions for the individual and the business.

Did You Know? Around 90% of people who resign and who subsequently accept a counter offer from their employer leave within 6 months. The reason for their resignation hasn’t gone away, and if they were offered more money or a different role to stay, why weren’t they worth that before they threatened to leave? Responding in this way creates a very definite message to the rest of the employee community, too; it suggests that threatening to resign is the only or best way of getting a promotion or a raise. This in itself breeds resentment and a lack of trust. Happy, rewarded, long-term employees feel confident that their managers are behind them and are thinking of their career development.

Calling an agency, or ‘hitting the red button’, is very useful when considering an interim solution while a permanent replacement is found. However, bear in mind that statistically, this approach will reach roughly 2-3% of the target candidate population, especially if multiple agencies are called and the agents work on a no-win, no-fee basis. They rush around like headless chickens, often calling anyone and everyone they know is available. The first candidates they manage to contact will be in your inbox very quickly, probably without having been formally interviewed and certainly without being given a suitable brief about your company or the long-term potential of the role.

They might be interested, but probably not for the right reasons. Contrast this with calling four or five people who know all about your business and have been researching your business for several months; people who have been engaging with marketing literature that you have been sending regularly to keep them informed about how your business is developing; people who are waiting for the opportunity to join your exciting team. It is, I hope, a no-brainer. There is also a very distinct opportunity to improve your organisation’s employer branding through the channels used to communicate with your Talent Warehouse. Dedicated social media channels and branded email campaigns can be applied to improve external image and communicate the various components of the employee value proposition that make you an employer of choice.

More than four fifths of organisations report that using social media has increased the strength of their employer brand and three quarters have reported reduced resourcing costs -CIPD,

2013 Resourcing and Talent Planning survey Recently, we had a call from one of our clients informing us that a key member of their management team had resigned, probably with an element of pique. Rather than having to make a rushed and inappropriate counter-offer, we had two people in our Warehouse that we have been in discussions with over the last twelve months, both with the skills to do the job and with the right cultural fit. There is likely to be a short period where the role is vacant while we wait for notice periods to conclude, but it is no longer a business critical situation. All of the potential stress of the situation has been alleviated and the message to the rest of the business

is very clear – the company can go on without you. This should all be possible to achieve for the equivalent of 10-12% of annual salary per hire, which is well below market averages for recruitment fees, and even less when you take into account additional benefits such as saving management time and increased productivity, among other factors.

2. Strategic Hiring One of the most powerful aspects of a Talent Warehouse is its ability to identify the best talent in an industry. By tracking people’s career development, it is truly possible to identify the high fliers- those who are likely to benefit a company the most. One of our most successful examples of this is with a cosmetics business which is going through a period of significant strategic change, realigning its offering to the market with a new set of products and services. Instead of identifying a role that needs to be filled, we discuss the industry’s movers and shakers as part of an ongoing dialogue in which we have a deep understanding of the various directions the company is considering. We are able, then, to help the company determine which direction is most suitable for them given the talent that already exists in the market, along with who we have been engaging with and who is the best cultural and strategic fit. As a result, we are able to create roles around individuals. There are several significant benefits to such an approach; quicker hiring time, cheaper hiring costs, better candidate engagement, as well as quicker and more effective onboarding.

More Effective Succession Planning Having a better understanding of the available talent in the market means that you are able to be much clearer and more inventive with your talent development plans. Succession Planning can incorporate external as well as internal talent. It is really important to be clear with both the external and internal stakeholders about what your intentions are. This means being honest about where succession is going to come from, so that an internal individual isn’t left wondering about whether your plans

are genuine and an external candidate knows that you really do have intentions to bring them into the business. Internal members of the team are generally aware of the landscape around them and can see straight through a lack of depth in plans to promote them. This in turn makes them doubtful of the likelihood of developing their career with their current employer, and consequently makes them much more prone to searching externally for a new challenge. Too often, external candidates are told that they will be contacted about suitable roles in the future and never hear from an employer again. Just by doing the right thing for both internal and external candidates, you will stand out from your competitors in the job market.

The Importance of Maintaining the Engagement of Rejected Candidates Rejected candidates are often ignored when examining the hiring process. It is quite common and understandable for a hiring manager to consider candidates that are rejected as not good enough for the business, rather than just simply not being right for a specific role at a particular time. This is a huge waste of resources and potential. Most businesses have a significant number of potential candidates somewhere in their files – previous applicants for an advertised job; candidates who were pipped to the post by the number one choice; candidates whose personal circumstances meant they couldn’t change roles or location at that point. It is important to remember why a candidate was not hired. Were they very nearly the right candidate, but someone came along who was just a little bit more qualified for the role or who simply gelled better with a particular hiring manager? Were they a great cultural fit but didn’t quite have the right skills for the team you needed to appoint in to? These are the building blocks of your Talent Warehouse. Treated well, they will remain interested in your business and the door will stay open to hire them in the future.

Applying Your Talent Warehouse Across the Business The principle that needs to be used when creating your Talent Warehouse is the Executive Search methodology. Most headhunters will tell you that Search doesn’t work below management, and when time constraints are part of the equation, they are absolutely right. There are a few reasons why this methodology is typically used at the executive level rather than across the whole business, and why in theory it doesn’t work at a more junior level. • Time: It is very time-consuming to directly contact people who are not looking for a role. Search techniques take at least two to three weeks to get candidates ready for interview, by which time any agencies you are using will be flinging their registered candidates at you and you will be under pressure to make a judgement before you are ready.

“One

third of organisations report candidates have been lost due to the length of their recruitment process.” -CIPD,

2013 Resourcing and Talent Planning survey • Visibility: More junior candidates tend not to be known to switchboards for a specific role or aren’t generally differentiated in terms of their professional profiles through, for example, LinkedIn. Try asking the switchboard at P&G for a Brand Manager and their response will be “which one?”. Asking for the Head of Product Development is a different matter. • Volume: If you are looking to appoint a sales person for a technology business, for instance, there are many potential candidates to reach. Trying to contact every one of them over a short time frame is futile and unmanageable.

The key to applying Search methodologies to the lower echelons of business is planning and longer term thinking. We are generally able to predict about 80% of hiring, and the remainder should be possible to cover with a wellmanaged Talent Warehouse. You know what functions are in your business. With a bit of thought, you can probably identify the people who are likely to leave if they are not promoted, or the ones who you would like to progress. Add this to known growth areas or new strategic channels you would like to create and this gives a solid picture of how your business is likely to shift. Although this is generally oversimplifying the process, it demonstrates what line of thinking needs to be adopted.

recruits come up to speed more quickly and your quality of hire increases, so your attrition rates reduce.

Conclusion

CIPD research suggests that in 2012, the main hindrance to organisation’s recruitment efforts was a lack of professional specialist or technical skills. The same research shows that managers and professional specialists are also reported to be the most difficult to retain. As competition for talent in the UK is fierce, both SME’s and large businesses risk deteriorating organisational performance if they fail to adapt their processes and address these employment issues. None of this is likely to be news to you; When you know what your business is likely to however, a proactive and cost-effective recruitlook like, you can begin to populate your Ware- ment solution that helps address these well house against likely eventualities. Remember, documented issues might well be. you are not promising people a job. You are not even interviewing them or sending them a brief. You are simply talking to them about their careers, what they want to do long term, Just one fifth of UK and giving them some information about what makes your business a great place to work. organisations state that

Measuring the Effectiveness of a Talent Warehouse The impact a Talent Warehouse has on your recruitment process will depend entirely on how much time and effort you can spend contacting people. Until they are contacted and spoken with, they are just names, and are no more useful than a telephone directory. It takes lots of time and effort to have a conversation with all of the people you want to engage with, but you will reap your rewards in the future as you become an employer of choice and your open vacancies take just a week or two to fill. You should find that you are filling your roles primarily through your Talent Warehouse within six months, with the potential to do it sooner if you are able to dedicate enough time and resources to populating it properly when it is initially set up. The key, if possible, is to avoid being distracted with day-to-day HR or recruitment deliverables and look at your Warehouse as a deliverable in and of its own right. Over the course of a year you should find that your time to hire halves, your cost of hire halves, your new

employee retention is not a ma jor challenge -CIPD, 2013 Resourcing and Talent Planning survey

Whether you deploy a Talent Warehouse as a standalone addition to in-house recruitment or use it as a bolt-on to re-invigorate a tired RPO, the scalability and efficiencies that can be created through a Talent Warehouse can provide your organisation with the answer to the questions being faced by recruitment departments across your industry. Every part of a business benefits from better, more accurate hiring. If you want to find out more, or if you would like to talk about how you can set up your own Talent Warehouse, we would love to hear from you.

About the Author Lucy James, Director [email protected] Over the course of her career, Lucy has worked in every field of recruitment, from contract to Executive Search, and has delivered assignments across most industry sectors and disciplines. As a headhunter, she has been a partner in a boutique search business and a Director with Norman Broadbent. Lucy’s expertise is in working closely with our clients at a strategic level to design and evolve talent acquisition plans that combine with internal talent development plans to fit their commercial needs. She also runs our Executive Search and outsourced HR teams.

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