10 Ways to Align Recruiting Plans with Your Corporate Goals and Strategy: How Recruiting Can Prove Its Business Impact
By Dr. John Sullivan, HR author and thought leader
A key goal of nearly every recruiting leader and staff member is to be recognized by corporate executives as providing a major contribution to executing the corporate strategic plan and its goals. After decades of research, I have identified 10 critical action steps that can lead to the recruiting function being considered as a corporate strategic hero.
10 action steps that will allow recruiting to become a strategic function
The action steps are listed in the order in which they should be implemented.
1. Accept the need for a direct, measurable impact on corporate goals.
Many recruiting leaders mistakenly settle for the ambiguous and lower-level target of “aligning with corporate goals.” Obviously there is nothing wrong with aligning, but if you really want to impress executives, you must raise the bar and instead target directly impacting the strategic goals that emanate from your corporate strategy. So you must adopt as your goal to directly impact strategic goals and to quantify and increase your measurable strategic business impacts to the point where you convince executives that you are a major strategic contributor. One way to assess whether you have succeeded in providing a strategic impact is whether recruiting gets mentioned in the corporate annual report.
2. Partner with the CFO to ensure that your approach for demonstrating your impact on corporate goals is credible.
Many recruiting executives mistakenly move ahead with a strategic recruiting impact plan that they have developed independently. Instead, a collaborative approach is needed in order to pretest the plan, to ensure that it is defendable and that it has no major flaws. Because the CFO is the king of corporate metrics, if he or she agrees that your mutually developed approach to demonstrating and quantifying your goal impact is credible, it is highly likely that they will help you defend it. The CFO’s office can help you establish a hard to dispute “impact chain,” which demonstrates a clear and direct connection between improved recruiting results and a subsequent improvement in business results. The direct connection between improved recruiting and business results can often be made even clearer if the CFO calculates a positive statistical correlation between the two results.
3. Identify the goals to target from the strategic plan.
The next step for recruiting leaders is to identify the goals that emanate from the corporate strategy. Make sure that you identify the correct set of goals by working with the CEO’s office. Alternative ways of identifying these strategic goals include reviewing the annual report, reading the CEO’s speeches and blogs, looking at the executive’s bonus criteria or by reading the strategic plan itself. Once you have a complete list of the goals, you should prioritize the ones that recruiting has the biggest opportunity to impact. Corporate strategic goals often include increasing results like revenue, profit, product innovation, market share and the stock price
4. Accept increasing revenue as the most important strategic goal to impact.
Because increasing corporate revenue (a.k.a. top-line growth) is almost always a primary goal, it is critical that recruiting focus on directly increasing that revenue. Recruiting can best increase revenue by focusing its recruiting talent and resources on filling jobs in high revenue-generating business units and by filling revenue generating jobs faster and with high performing talent. The increase in revenue created by recruiting can best be quantified by designing a process to measure the increased performance and output that occurs as a result of hiring better performing individuals. Begin the calculation by finding the average revenue per employee at your firm (which is simply the number of employees divided by the total corporate revenue). Next, use performance appraisal scores (or employee output data) to identify the percentage that recent hires perform above the average employee. Then multiply this on-the-job performance improvement percentage by the revenue per employee number to get the dollar value added by each new hire. Next, multiply this final value-added dollar amount by the number of new hires, in order to get recruiting’s total revenue impact for the year. Obviously, if you can show that an improved hiring process results in hiring individuals that perform a significant percentage better on the job, the dollar impact of recruiting will be easy for everyone to see. If the average new hire stays longer than expected, you may also be able to quantify the value added by improved new hire retention rates.
5. Accept job prioritization as the key driver for increasing your business impact.
Every strategic function sets priorities so that it can devote its limited resources to the areas that produce the highest return. So it is an absolute requirement for recruiting to adopt a job prioritization approach. This means that recruiting (in collaboration with the COO) must identify which jobs create the highest dollar impact when they are filled with top talent. The highest priority jobs are usually revenue-generating jobs, mission-critical jobs, executive positions, jobs where innovation occurs and any job in a high growth/revenue business unit. Prioritization means recruiting for these jobs first and then assigning more resources and your top recruiting talent to them. (You do not have to broadcast which jobs get a high priority; this keeps managers that have lower impact jobs from feeling slighted.)
6. Increase your business impact by focusing on the most effective recruiting tools.
After prioritizing, the second best way to increase recruiting results is to exclusively use the most effective recruiting tools, while dropping the less effective ones. Begin by developing a process for utilizing results metrics to identify which employer branding, sourcing and assessment approaches actually have the highest impact on producing both innovators and top-performing hires. Obviously recruiters, at least on their high priority openings, need to be directed to use the most effective tools. Budget resources must be shifted to support the most effective tools. In order to further improve recruiting results, the function must also develop an effective process for hiring better performing recruiters and for increasing their on-the-job performance.
7. Build a process that demonstrates your contribution to corporate expansion and growth.
Corporate expansion into new regions and new product areas is almost always one of the key corporate strategic goals. As a result, it is critical that recruiting work with the COO’s office to be able to convincingly show how recruiting directly contributed to that growth by hiring employees with the appropriate new skill sets and by rapidly filling positions in these growth areas so that the talent was ready to go when needed. Recruiting should also be able to demonstrate that it took a proactive leadership role in convincing managers that they could successfully move into brand new areas as a result of the firm’s recruiting capabilities. There should also be a metric showing the increased value that resulted from recruiting’s actions to minimize the number of existing projects and product development efforts that were delayed because of unfilled positions or low-quality hires.
8. Develop a process for proving that you provide the firm with a competitive advantage in recruiting.
Building a competitive advantage over product competitors is almost always one of the strategic goals. As a result, the recruiting function must develop a process for demonstrating that its recruiting processes are both more advanced and that they produce superior results when compared to each of the firm’s major product competitors. A targeted approach that proactively recruits top performers away from your direct product competitors could contribute to showing added value because of the ideas brought to your firm by your rival’s employees and the corresponding loss of ideas at your competitors.
9. Make sure that your recruiting metrics mirror the corporate metrics.
In order to maintain your focus, the metrics of the recruiting function must be shifted so that they directly mirror the corporate strategic goals, using the same words and covering the same outputs. Some of the “strategic results metrics” that recruiting might adopt include its overall dollar impact on increasing revenue, the dollar impact of hiring innovators, and the dollar impact of hiring top performers in revenue generating jobs. Once again, work with the CFO’s office to ensure that they agree that the adopted recruiting metrics mirror the corporate strategic metrics.
10. Develop a process for effectively guiding and influencing hiring managers.
Because hiring is a shared responsibility between recruiting and managers, high-impact hiring cannot occur without well-developed hiring managers. As a result, recruiting must be able to develop a process to convincingly show that the recruiting function influences and develops the firm’s hiring managers to the point where they continually hire top-performing and innovative talent. Surveys of hiring managers should also reveal that they agree that the recruiting function effectively develops them and provides them with effective recruiting tools and high-quality candidates.
It may initially seem like a daunting task to show that any functional plan is aligned with and impacts the corporate strategy. However, you should be aware that other once lowly regarded administrative functions like supply chain, customer service and technology have successfully made the transition to the point where almost all executives understand that they can be profit centers. The key lesson to be learned is that recruiting can easily follow the path that they took to make transition by taking the 10 steps outlined above. If they make the transition, they can expect recruiting to be recognized in business, like it is in sports, as a major contributor to meeting corporate goals.
Dr. John Sullivan is an internationally known HR thought-leader whose strategies and insight into HR metrics have set new standards for the hiring industry. Sullivan has authored 10 books and over 900 articles covering all areas of talent management. Sullivan and his ideas have appeared in The Wall Street Journal, The New York Times, Fortune, the Financial Times and many other print and television outlets. He has been called “the father of HR metrics” (staffing.org) and “the Michael Jordan of hiring” (Fast Company). He has served as the Chief Talent Officer of Agilent Technologies and the CEO of the Business Development Center and has been a Professor of Management at San Francisco State for over three decades. His work can be found at http://www.drjohnsullivan.com.