Transitioning From a Recruiting to a Talent

Management Function
Monday, September 08, 2003 | by Dr. John Sullivan
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by Dr. John Sullivan

Generally, everyone in HR and recruiting says that they want to be more

strategic. But it takes more than just using the word "strategic" to actually
become strategic. As a former chief talent officer, I can assure you that most
recruiting managers have not yet made the transition into becoming strategic. In
fact, there's little chance that recruiting will transition into "talent management"
unless everyone completely rethinks their approach and understands how a
strategic "talent" function differs from traditional recruiting.

Many in recruiting use the term strategic without actually knowing it's meaning.
In business, the term means having a long-term impact on corporate goals and
objectives. To the traditional recruiting function, making the strategic transition
means that rather than focusing on short-term HR goals like filling reqs or
setting up interviews, they must instead directly impact corporate goals like
revenue growth, customer satisfaction, product development, market share or
profit.

These measures of success are dramatically different than most current metrics,
where success is measured in recruiting terms like cost per hire and time to fill.
It must become obvious to everyone that cutting the "cost of hire" by 10% in a
function that costs less than .01% of all corporate expenditures cannot have any
strategic impact on corporate costs. A true "talent manager" instead tries to
impact the revenue side of the profit equation by focusing on the business units
and jobs with the most impact. Rather than just putting "butts in chairs," the
talent function also focuses on the quality of hire, the fit (manager, team and
job), retention, and forecasting future problems that impact the productivity of
talent.

Added Functions of Talent Management

The scope of talent management is broader than recruiting because it also

involves not just new hires but workforce planning, redeploying workers within
the company, and "on-boarding," or orientation. Talent management is the
acquisition, retention, movement and release of workers in order to maximize
the productivity of a company's talent inventory.

In addition to the traditional functions of recruiting, a talent manager also

impacts:

• Orientation
• Retention

• Internal job placement

• Large-scale redeployment within the firm

• Succession and replacement planning

• Workforce forecasts

• Releasing non-productive or surplus workers

A strategic talent manager doesn't necessarily "own" each of the above activities,
but he or she certainly coordinates with each and ensures that the entire talent
pipeline is constantly supplied and being updated so that the net measurable
impact on a business is an increase in workforce productivity (workforce or
employee productivity is the measure of the increased output, relative to its
costs, of the workforce).

This might seem like an impossible goal for such a small function as recruiting.
But being strategic means just that: having a large-scale impact on business
goals, regardless of the size or the budget of your function.

The First Step

The first step in becoming strategic is to "align" or improve the connection

between TM (talent management) budget and time expenditures and corporate
priorities. This step is essential, because no business unit can impact a strategic
goal unless it allocates the majority of its resources toward those corporate
priorities.

Once a talent manager realizes the need for this connection, their first step is to
identify the specific corporate goals and objectives that talent management has a
chance to impact. Once those corporate objectives are identified (increasing
productivity is almost always one of them), the talent manager must next
develop a process that ensures that the recruiting/talent management function
allocates its budget and time in direct proportion to the corporation's priorities.

In other words, talent priorities and expenditures must "mirror" corporate

priorities and expenditures. Unfortunately, most recruiting managers make no
formal effort to coordinate their budget and time allocation with any goal
(corporate or HR). This common "misalignment" is a primary reason why
recruiting functions don't become strategic.

The following chart illustrates some typical "disconnects" between talent

management and business priorities:
Talent management budget and time Corporate priorities

Percentage of corporate resources devoted to business

Percentage of talent management time spent in unit "A": 50%
business unit "A": 10%

Priority given to improving and maintaining customer

Priority given to hiring, retaining, or developing service: #1
customer service reps: 0

Percentage of projects that are running behind schedule

Percentage of the talent management budget because of an inadequate supply of talent: 44%
allocated to recruiting: 50%

Percentage of open positions that have been unfilled by

Percentage of recruiting positions that are funded recruiting efforts: 47%
which remain vacant: 47%

Percentage of the corporate budget spent on

Percentage of talent management budget spent on technology: 22%
technology: 2%

Priority given to retaining top performers in key

Percentage of the talent management budget positions: #2
allocated to a separate retention program: 0%

Priority given to increasing productivity: #4

Percentage of the talent management budget
allocated to improving workforce productivity: 0%

The Second Step

After aligning talent management priorities and budgets with corporate priorities,
the next step is to ensure that the talent management function meets each of
the essential elements for becoming strategic.

When you compare and contrast strategic HR functions and non-strategic ones,
you find that they both have dramatically different ways of goal setting,
organizing and producing results. These 10 essential elements include:

1. TM increases employee productivity. Obviously, because we are

experts in people management, workforce productivity is the primary
corporate goal where HR and talent management can make its biggest
contribution. Increasing productivity is always one of the top corporate
goals, and because it's not uncommon for more than 50% of corporate
variable costs to be spent on "people costs," it is a high potential impact
area. The goal for talent management is to hire, retain, and redeploy the
 most productive workers in an effort to increase the overall productivity
of your workforce.
2. TM impacts other business goals. Corporations have many strategic
business goals, like market share, product development, revenue, and
profit. So, in addition to the primary goal of increasing workforce
productivity, there are additional corporate goals that TM must impact.
For example, talent management can contribute to speeding up product
development by hiring better quality individuals faster and by keeping
vacant positions to a minimum. Talent management can also increase
revenues by hiring better salespeople and increasing the retention rate
of your top salespeople.
3. HR uses performance culture tools. TM utilizes tools and approaches
that emphasize performance. For example, key jobs and business units
are identified and each receives priority attention and resources. Metrics
systems are set up to continually measure both TM and every manager's
effectiveness. Reward systems are set up to incentivize and reward
recruiters and managers for increased productivity.
4. HR provides a competitive advantage. A talent manager cannot act
in isolation. It's essential that whatever he or she does is superior in
results to the programs and processes of your direct competitors. As a
result, TM develops a competitive analysis with side-by-side comparisons
between "their" programs and yours. TM then adjusts resource allocation
to ensure that each of your systems and programs provide your firm
with a sustainable competitive advantage in each key area of talent
management.
5. HR makes fact-based decisions using metrics. If talent
management is to have a direct impact on the business, it must act
more "businesslike." That means shifting away from the traditional
recruiting approach of making intuition-based decisions and towards the
corporate method of decision-making, which is known as fact-based
decision-making. That means that HR and talent management must
begin to make most of its decisions based on data and facts, not
intuition. As a result, everyone must seek out information which tells you
which TM programs have the most and least impact on workforce
productivity.
6. HR is proactive and future focused. Rather than being passive, talent
management must aggressively seek out and identify areas within the
business where it can have the most impact. Being future focused means
that talent management must develop a longer-term workforce plan that
includes accurate forecasts of both the supply and the demand for
talent. It also means that TM must develop systems that alert or warn
managers about upcoming talent management problems. It must also
provide managers with effective tools to handle each of these potential
situations.
7. There is a coordinated effort. No part of HR can have a strategic
impact working alone. The strength of talent management is that it
 formally ties together the traditionally disparate functions of orientation,
recruiting, retention, workforce planning, and redeployment into a
unified effort. This unified effort increases the likelihood of having the
most productive workforce in the industry.
8. HR has a global approach. Talent management, like all business units,
must expand its impact beyond the U.S. borders. Strategic talent
management professionals must be experts in attracting and retaining
top talent in every geographic area where your organization does
business. It must also play a part in planning the "offshoring" of
activities, in order to take advantage of high-quality but low-cost labor
areas around the world.
9. HR builds a brand. Talent management cannot have a strategic impact
unless it takes a long-term approach, and the most effective approach to
guarantee a long-term supply of talent is internal and external brand
building. TM must take responsibility for building up the company's
image as a great place to work by taking the lead in getting listed on
"best places to work" lists. Then it must make your organization a
"talked about" firm by building your image as a great place to work both
internally and externally, so that the best talent in the world wants to
work for you.
10. Technology permeates everything. For any business function to be
fast and global, it must utilize technology in everything it does. Talent
management is no different, so it must go beyond the basic applicant
tracking systems it currently uses and instead look at technology as the
foundation of everything it does. Technology allows the extensive use of
metrics and to provide its managers with real time information and
pools.
Transitioning from traditional recruiting into talent management is admittedly a
long-term effort, but still a desirable one. Meeting each of the essential
characteristics listed above requires a shift of resources and focus. At the end of
that long road however, rather than just filling reqs, you will be responsible for
ensuring a steady supply of the "right talent" in the "right job."

The net result of this coordinated effort, will be a dramatic increase in workforce
productivity, corporate revenues and profits.

Dr. John Sullivan (JohnS@sfsu.edu) is a well-known thought leader in HR. He is a frequent

speaker and advisor to Fortune 500 and Silicon Valley firms. Formerly the chief talent officer for
Agilent Technologies (the 43,000-employee HP spin-off), he is now a professor of management at
San Francisco State University. He was called the "Michael Jordan of Hiring" by Fast Company
magazine. More recruiting articles by Dr. Sullivan can be found in the ER Daily archives. Information
about his numerous other articles, books and manuals about recruiting and HR can be found at
www.drjohnsullivan.com. Dr. Sullivan is also the editor of VP of HR, an e-newsletter providing "out
of the box" solutions for senior HR managers. Free subscriptions can be obtained on his website.