Hiring the right person

Darien George has been in the executive search business since 2001 and leads Mackenzie Eason’s Talent Consulting and Executive Search divisions. He recently took some time out to talk about how companies and organizations should approach hiring employees.

You often say, “Corporate HR people usually are not ‘talent acquisition’ people, but they could be.” Are you suggesting this is a training issue?

Yes, but more importantly it’s a mindset and skill-set issue. In companies outside of Fortune 500, HR tends to be very tactical, which makes sense because the departments are mostly focused on benefits, compensation and HR policy. HR at this level has learned to be tactical and that’s what most companies are willing to pay for.

What we see in many organizations is that their “talent acquisition department” or “recruitment department” is actually just posting a position and waiting for resumes to come in, the “post-and-pray” model. That, by itself, is not recruitment or talent acquisition.

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Recruitment involves the process of actively developing a pipeline of top-level talent, attracting them to the organization, then selecting the appropriate candidate. Most organizations are only focused on selecting the right candidate. In reality, they are leaving more than two-thirds of the potential marketplace out of their pipeline by only looking at candidates who are actively looking.

Research shows that the majority of candidates who are actively looking are looking to leave their employer because they are unhappy. And subsequent research shows that the majority of people who are unhappy in their current position will be just as unhappy with their new employer.

We work with the executive team to provide a strategic viewpoint for talent acquisition and talent management, and provide the processes and training to HR so it can easily follow up.

LinkedIn quickly became a huge recruiting opportunity. You’ve said it’s a start, but not the be-all and end-all. What are the highlights and lowlights of recruiting on LinkedIn?

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LinkedIn has become social media for business. It’s a great way to connect with people and subsequently has become a great way to recruit people.

The problem with LinkedIn is that most people who use it for recruitment use the “post-and-pray” model. This is no different than Monster, CareerBuilder or Indeed; you are still limiting your potential talent to less than one-third of the market. And most of that online talent isn’t top-tier.

In the talent acquisition/recruitment industry, top talent has to be recruited away because it usually is compensated well and is happy at its current organization. What LinkedIn has done well is build itself as a great connector and you can use it to do quite a bit of research and initial outreach to top-tier talent. LinkedIn puts you within reach of anyone in any industry within a few small connections.

Your bias aside, how do you answer companies that say they can’t afford an executive recruiter?

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I say you can’t afford not to hire an executive recruiter. One thing in business that never will change is that great talent that is the right fit for a company drives innovation and profit. In my 17 years of recruitment experience, I’ve never once heard an organization or a CEO tell me that hiring low- or mid-level talent is what made it profitable or better than its competitors.

If you look at the cost of hiring the wrong person, then the cost of finding someone right the first time is extremely inexpensive. A good executive search firm will guarantee a placement for at least a year or it will re-do the search. You’re typically going to find higher level talent through an executive search firm than you would on your own.

That doesn’t mean that you need to use an executive search firm for every search; there are many models that you can implement in-house to develop a talent acquisition program, as well as developing people internally to move into senior level positions. We are a proponent of having a good balance of developing your people internally and occasionally bringing in senior leadership. Research shows that it should be a 70/30 split. Promoting 70 percent of people internally provides an institutional knowledge, culture and stability. Bringing in 30 percent of your senior leadership from the outside provides new ideas, keeps group thinking from taking place and provides innovation.

Recruiters talk about the cost of a hiring mistake. What are the factors that determine those costs?

There are mountains of research and articles from Harvard Business Review that discuss the cost of hiring the wrong person or hiring a person who leaves within the first year. These estimates range from double the person’s salary to as much as 10 times the person’s salary.

The factors that go into this are time and investment into the candidate that’s just lost, the cost of benefits, the cost of producing the search again, the cost in lower morale and often a disruption in the culture. Many of these costs are hard to quantify, but anyone who has run a business understands that the intangibles are often more costly than the actual dollar amount lost.

I’ve heard countless stories in senior level positions where the wrong person was hired and it caused a major disruption after that person only being there three to six months. I think the biggest issue that organizations don’t keep in mind is not whether someone has a past track record of being a great talent, but are they going to be a great fit with the organization’s culture, core values and vision.

One mistake an organization makes in recruitment is the actual interview process; many organizations follow a process that scientifically has been shown to have zero reflection on whether a candidate will be the right hire. Most hiring managers tend to hire based on gut feeling, though research shows you have zero chance of finding the right hire that way.

Another common problem organizations have is not having a talent philosophy, which guides an organization’s hiring, management of its people and strategy on talent. I always refer to it as the Lighthouse or your North Star. Without it, it’s really easy to get lost.

What do you see as an ideal recruiting process for a company and how big does a company have to be before a process is needed?

I would say that a recruitment process is needed for a company that is as small as four to five people. Every hire is that much more important for a small company than a company the size of IBM. One bad hire could sink a small company; IBM easily can absorb those costs.

The recruitment process doesn’t have to be onerous; the best ones are simple. As long as a company understands the research and science behind what makes a recruitment process successful, then you can easily craft a simple recruitment process. The first step is to develop your organization’s talent philosophy. Then, identify how you’re going to find and develop a pipeline of candidates, develop an interview process, and finally, select the best candidate based on the traits that you’ve previously defined.

Darien George is the managing partner of Mackenzie Eason, has been in the executive search business since 2001 and leads Mackenzie Eason’s Talent Consulting and Executive Search divisions. His focus for every engage¬ment is to understand a company’s culture, core values, vision and long-term goals, and provide it with solutions that are a synergistic match with the organization. He can be reached by e-mail at dgeorge@mackenzieeason.com