Retention Doesn’t Work

Why do we have layoffs? One counter-intuitive answer is “because retention programs work.” Layoffs happen because the efforts to keep the workforce trimmed didn’t work. Attrition wasn’t high enough. The right people did not leave of their own accord.

Hiring and Keeping the Best People is a standard goal in most organizations. Identifying key talent and promoting them is such a core part of conventional wisdom that we take it for granted. Most leaders aspire to be surrounded by trusted colleagues who are well seasoned and deeply experienced.

When this idea spreads through an organization, it is called “Retention”. In a harsher light, it is the essence of cronyism and featherbedding.

Is it really a sound business practice?

Good, strategic workforce planning is virtually nonexistent. Instead of accurately knowing and describing the specifics of our workforces, we rely on tired generalizations. We want to manage attrition down and become the “employer of choice”. In other words, our HR Departments lead us down the primrose path and make our organizations home to people who retire in place.

It should be no surprise that we have downturns. Preparing for them, hiring wisely and continually pruning the organization is the right way to approach the problem. Too few hands always leads to greater productivity.

Time and again, our organizations act surprised when the downturn comes. RIFs mean that we “hired too many people”. Said another way, “We didn’t let enough people go when times were good.” Retention and retention programs, therefore, are the primary cause of RIFs.

“Why do we have layoffs?” Because the retention programs work too well. The idea that great people should be retained in their jobs for a long time is the exact opposite of growth and innovation. Retention breeds seniority and bureaucracy. Innovation requires youth and inexperience.

Influence Happens In A Context

By John Sumser

As the Top 100 Influencers project unfolds, we’re going to provide a guided tour of the industry. After all, it’s a little illy to say “these people drive the thematic rivers of our industry without being really clear about the industry itself. For starters, we’ll just get the lay of the land.

The HR-Recruiting Industry is a vast assemblage of 80,000 companies and over 1,000,000 working professionals (1.5 Million by some estimates). Generally, one percent of the workforce earns a living in the HR-Recruiting Industry. Depending on who you ask, Recruiters make up as much as a third of the total number.

Tallies of size and complexity are complicated by the fact that the role is performed informally in smaller companies even though vendors deliver HR products and services to the tiniest of companies.

There are two coexisting components of the industry. An ecosystem of experts, recruiters, accountants, payroll processors and benefits managers serve the needs of the professional HR community, their management and stakeholders. The two sides, buyers and sellers, serve the needs (in the domestic American MArket alone) of 50 Million discrete job transactions per year as well as the payroll and benefits of the 150 Million in the American workforce.

The elements of the industry are

• Benefits
• Payroll
• Compensation Analysis / Management
• Training
• Organizational Development
• Talent Acquisition
• Succession Management
• Talent Management
• Workforce Planning
• Staffing
• Recruiting
• Vendor Management
• Labor Relations

Typically, each of these segments has a range of vendors providing a range of services. HR is rarely practiced as a standardized discipline. It’s more common to see each company develop and execute its own cultural approach to the HR question.

Over the last decade or so, larger companies experimented with Outsourcing

• HR in its entirety (HROs)
• Ownership of employees (PEOs)
• All or Part of the Recruiting Process

Recruiting and staffing are unique. According to Elaine Orler, VP of the Talent MAnagement practice at KnowledgeInfusion, “Recruiting must move at market speed. The rest of HR can readily move at enterprise speed.” What she means is that Recruiting focuses on meeting critical needs on the open market while the rest of HR is a purer overhead function.

This bifurcation of HR leads to conflict “in the house”. The administrative component wants careful movement and is a fundamentally conservative function. The Talent Acquisition team, on the other hand, has to be extremely resourceful and competitive. There is real and sustained difference between the mindsets.

There are about 7 Million companies in the American economy. Each of them delivers some form of HR to its employees. It’s a vast market with huge differences based on geography and industry.

Additionally, the industry behaves differently based on company size. The Fortune 2,500 are typically referred to as “enterprise companies”. They use industrial strength solutions like Oracle, SAP or Microsoft. Workday, a newcomer founded by the fellow who started Peoplesoft is a promising up and comer.

The remainder of the industry, the other 6,997,500 (or so) companies use a patchwork quilt of products and services,

Over the coming weeks, we’ll look deeper into the details of the industry on a niche by niche basis.

This is the environment n which influence is earned, delivered, purchased and deployed. While most marketing discussions treat the HR-Recruiting MArketplace as if it were monolithic, it is tremendously fragmented with most companies developing unique solutions.

Influence is therefore really important. Each company tries to navigate its way through the hurdles of regulatory requirements, talent needs and employee perks. The greatest HR-Recruiting Managers think for themselves. The issues are complex enough that the hint of truth is good enough to make decisions, sometimes.

Talent is the Problem

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Talent is the Problem

By John Sumser

(April 03, 2009) I spent the first part of this week at the San Diego ERE Expo. It was an amazing get together with lots of interesting people. Everyone from the north and the east was celebrating the climate. It’s not such a big thing for those of us who already live in paradise.

As I watched and listened, I started to realize that we’re witnessing a sea change. Our little universe is transforming along with the rest of the economy. The blood is running in the streets so deeply that it sometimes obscures our view. Change is upon us.

Everywhere I went, people were talking about talent. No one had a definition of talent, they just talked about it. That’s how it is in HR and Recruiting, people have long theoretical conversations without ever defining terms. Talent this, talent that, talent the other thing. No shared definition, lots and lots of generalizations.

It became clear to me that talent is code. It means “the best and the brightest” until you ask someone. I spent all day Monday asking people what talent was. The best I could get is the “it’s something everyone has.” “Bulls**t,” I thought to myself.

It doesn’t pass the Emma Sumser (she’s my mom) test. If I tell her that everyone is talented, she’s liable to say something like “That’s why they’re all on the Knicks” or “Hmmm, you handle that shovel like a ballerina” or “I guess I was dealing with the only untalented person in customer service yesterday.”

Talent does not mean “everyone”, it means “the best and the brightest.” The War for Talent is not a war for everyone, it is a war for a specific class of people. The term, talent, demeans most people. They don’t want to be lumped in with the class of people who enjoy being called “the best and the brightest”.

Talent Management System is a misnomer. Those things manage people. Most people are not particularly talented.

The “Talented” ones have been allowed to operate unsupervised. The adults are coming. We’ve been celebrating innovation and creativity at the expense of good old fashioned hard work. Hard work is making a comeback; it’s the new black. Just Work.

Here’s the problem. You just don’t want everyone in your organization to be talented. It’s very likely the case that we are suffering from the fact that there were too many talented executives at AIG. The term “Talent” and all of the philosophy about managing this “scarce” commodity, is at the root of the misbehavior of the first part of this Century. People who are hired and coddled because they are “talent” do the stupid sorts of things that we’ve just witnessed.

The degree to which you need “talented” people is a function of your organization. R&D Centers need lots of innovation. McDonald’s franchises need relatively little. In fact, most companies need very little talent. What they do need is persistent, hard-working, determined, honest people who bring all of their resources to bear on the job at hand.

I expect to see the term talent used less and less frequently. When you make it a question of “talent”, you insult people who create value for a living; you demean the vast majority of people with jobs. Calling people “talent” is short sighted and demonstrates a failure to understand the problem. They are not “talent”, they are “people”.

Digging Into RecruitingBlogs.com v2.13

Talent Is The Problem

(April 03, 2009) I spent the first part of this week at the San Diego ERE Expo. It was an amazing get together with lots of interesting people. Everyone from the north and the east was celebrating the climate. It’s not such a big thing for those of us who already live in paradise.

As I watched and listened, I started to realize that we’re witnessing a sea change. Our little universe is transforming along with the rest of the economy. The blood is running in the streets so deeply that it sometimes obscures our view. Change is upon us.

Everywhere I went, people were talking about talent. No one had a definition of talent, they just talked about it. That’s how it is in HR and Recruiting, people have long theoretical conversations without ever defining terms. Talent this, talent that, talent the other thing. No shared definition, lots and lots of generalizations.

It became clear to me that talent is code. It means “the best and the brightest” until you ask someone. I spent all day Monday asking people what talent was. The best I could get is the “it’s something everyone has.” “Bulls**t,” I thought to myself.

It doesn’t pass the Emma Sumser (she’s my mom) test. If I tell her that everyone is talented, she’s liable to say something like “That’s why they’re all on the Knicks” or “Hmmm, you handle that shovel like a ballerina” or “I guess I was dealing with the only untalented person in customer service yesterday.”

Talent does not mean “everyone”, it means “the best and the brightest.” The War for Talent is not a war for everyone, it is a war for a specific class of people. The term, talent, demeans most people. They don’t want to be lumped in with the class of people who enjoy being called “the best and the brightest”.

Talent Management System is a misnomer. Those things manage people. Most people are not particularly talented.

The “Talented” ones have been allowed to operate unsupervised. The adults are coming. We’ve been celebrating innovation and creativity at the expense of good old fashioned hard work. Hard work is making a comeback; it’s the new black. Just Work.

Here’s the problem. You just don’t want everyone in your organization to be talented. It’s very likely the case that we are suffering from the fact that there were too many talented executives at AIG. The term “Talent” and all of the philosophy about managing this “scarce” commodity, is at the root of the misbehavior of the first part of this Century. People who are hired and coddled because they are “talent” do the stupid sorts of things that we’ve just witnessed.

The degree to which you need “talented” people is a function of your organization. R&D Centers need lots of innovation. McDonald’s franchises need relatively little. In fact, most companies need very little talent. What they do need is persistent, hard-working, determined, honest people who bring all of their resources to bear on the job at hand.

I expect to see the term talent used less and less frequently. When you make it a question of “talent”, you insult people who create value for a living; you demean the vast majority of people with jobs. Calling people “talent” is short sighted and demonstrates a failure to understand the problem. They are not “talent”, they are “people”.

Digging Into RBC v 2.07

Digging Into RBC v 2.07

(Feb 20, 2009) Last night, I got into a long conversation about the meaning of “media”, how it has evolved and what it means for the HR/HCM/Recruiting Industry. It all spiraled out of a round of appreciation for Rayanne Thorn’s new vehicle, “Bonus Track”. The idea behind “Bonus Track” (graciously sponsored by MaxHire.net) is to provide deeper insight into the business aspects of recruiting from philosophy to time management.

The model is a conversation starter, that might include an interview, coupled with a ripping good discussion on the merits of the topic. This is a form of training that was not possible before the web. This new media, “interactive conversation as courseware” is shifting the power base all over our industry. Recent debates about the value of motivational speakers with no immediate feedback loop are part of the evolution.

It’s worth looking over our shoulders for a moment.

The idea of a “medium” comes from painting. The “medium” is the liquid in which pigment is mixed by a painter.” The medium carries the pigments. Pigments supply the color, the medium supplies properties of adherence and spreadability.

Every definition of medium is a metaphor based on the physical medium used in painting. Media is simply the plural of medium ie, one medium, two media.

Radio is a medium, Radio waves carry sound. Record albums are a medium. Vinyl carries sound. Television is a medium. Radio waves carry video. Cable is a medium. Paper is a very important medium. Cassettes, eight track tapes, posters, PA systems, ink, and CDs are all forms of media. Each form of media has its own characteristics.

They are so unique that Marshall McLuhan is known for saying that “the medium is the message” (Actually, he said “massage”) He meant that the way that information is transmitted profoundly influences its meaning. Take tattoos on your bottom, for example. That’s the evolution of today’s usage of the words media and medium.

A process through which information is transmitted.

Things really changed when media became digital. Up until then, it took a great deal of capital to create content and distribute it. The media was so expensive that only the wealthiest could broadcast, publish, record, write, distribute or recycle. The ownership of media was concentrated in a few hands. In general, they were the very spoiled great grandchildren of really interesting 19th century entrepreneurs.

The personal computer changed all of that in under a generation. What was once the province of the wealthy became everyman’s playground. It’s easy to do things today, like publishing a blog or posting your status on twitter, that were not even possible to imagine 20 years ago. The focus on the technology, however, keeps us from seeing the real revolution. Education, news distribution, creativity, experimentation have all become personal. We each are able to do what could only be done by corporate giants 15 years ago.

It’s easy, fun and profoundly better.

So when Rayanne adds another Bonus Track, she is exercising a pioneering process. She’s homesteading, as we all are, in a great new world. Our forty acres and a mule are blogging tools, netbooks and wireless connections. The amount of opportunity that has been thrust upon us is staggering.

That’s why it galls me to see Recruiters acting like old fashioned media owners, lazy, spoiled and stupid. The new media fosters such quick intimacy; so, sending out mass quantities of bulk email is embarrassing for our profession. Spamming (sending many copies of the same email to a large group) is an ineffective use of the new toolset. It’s a way of repeating the errors that were allowed when media ownership was concentrated.

We could be setting powerful examples of how to make social media really work, we seem to prefer the thoughtless imposition of our sloth on already overburdened potential customers. It’s sad.

The good news is that folks like Rayanne are setting a more positive example.

Digging Into RecruitingBlogs.com v2.05

Unsung Hero Sings

(Jan.30, 2009) Amitai Givertz, Mr. Recruitomatic, works tirelessly to aerate the featured content on RBC. Ami, as he is known to his friends, compiles the daily feature articles and his exhaustive “best of the week” collections. His blog here on RBC is an inventory of the great posts that top the site each day.

Ami is widely known for content density (he’s really smart), link mania (his stuff is heavily annotated with really useful pointers). a dry, self-deprecating sense of humor (bless Mother for that), limitless intensity (at last count, seven observable blogs), passion and dogged persistence. He has been in and around the recruiting industry since before the first sailor was shanghaied. He recently won the Recruiting Animal’s 2008 award for Recruitosphere Excellence. It sits on his trophy shelf alongside his Mikey’s Monkey Award from 2006.

These days, Ami is turning the world upside down with his humbly named Brown Bag Recruiter program. The innocuously titled webinars are the gateway to Recruiting mastery. Like a bottle of Absinthe, the seminars are deliciously mind expanding. Ami has discovered an enormous cache of riches and is busily trying to give them away to any recruiter who wants them.

Ami’s webinars show you how to crack the code. Using Google accounts and Google toolkits, the programs teach recruiters to construct astonishingly rich and complex resume databases. Rather than focusing on hitting a home run like some search seminars, Ami teaches the virtue of looking ahead. Building an arsenal of data that can be reused and renewed is the ultimate object of the class.

Here’s the upcoming schedule. You’ll be glad you made the investment. Each webinar is $45 and lasts a generous hour. The entire series price is $95

* Wednesday, February 4, 2pm EST G-Recruiting: A 60-minute Digest (Register)
* Tuesday, February 10 2PM EST Search Engine Secrets, Part 1: Customized Candidate Search (Register)
* Wednesday, February 11 2PM EST Search Engine Secrets, Part 2: Vertical Search and Sourcing to Profile (Register)
* Thursday, February 12 2pm ESTSearch Engine Secrets, Part 3: Purposeful Sourcing to Drive Meaningful Relationships (Register)
* Tuesday, February 17 2pm EST Search Engine Secrets: A 60-minute Digest (Register)
* Thursday, February 19 2pm EST Search Engine Secrets: A 60-minute Digest (Register)

Population Distribution Diagrams: Dear Ray Ozzie

Dear Ray Ozzie

(November 25, 2008) Ray Ozzie is the Chief Software Architect at Microsoft. It’s a role and title directly passed down from Bill Gates. Ozzie is a software wonder-child. The current Wired magazine features a really solid article on Ozzie’s desire to restore entrepreneurial attitudes in the mammoth company. The article is by the other Steven Levy.

When your business is successful, there are only two variables that really matter: growth and decay. Sustained growth creates pressures on the system that continuously energize decision making. Growth ensures that the average tenure (and often, the average age) of the workforce stays low. Lots of new people coming in lots of people going out.

In high growth environments, there is little room for precedent or planning. Recruiting and talent acquisition get optimized for speed. The long term consequences of decision making are nearly impossible to see when the growth requirements are relentless.

When the growth is over, the organization tends to be an aging workforce with lots of precedent and lots of “This is the way we do it around here.” The company ceases to be attractive as a source of professional oportunity because average tenure is high. New employees learn quickly that the way to the top involves waiting for your boss to die or get promoted.

The American metals industry is an interesting worst case example (the auto industry runs a close second).

In the Metals industry, the average employee age is in the mid fifties. Often, the youngest person in the company is in their late 30s. New employees who join through college recruiting programs quickly discover that the difference between their age (25) and their boss’ age (50) is a very long time to wait for increased responsibility and a real promotion.

So, what do you do when you have a stagnating company and want to restore it to vibrance?

You can get quick results with Skunk Works style operations and Ozzie is doing that. Building intraprenurial operations is a stopgap measure, however. There are no examples of companies that restored their early vibrance with Skunk Works. It’s a work around.

Over the long haul, it’s a question of whether you can manage the overall workforce into the right mindset. Admonitions about performance (no matter how persuasive or how loud) play to deaf ears when tenure is rewarded. Some of the necessary spirit is structural.

Population Distribution Diagrams can help identify workforce problems, diagnose productivity disorders and model the solutions. There are significant policy adjustments required when you want your battleship to be as nimble as a small speedboat.

For instance, retention is not a single attribute. To manage agility, one wants differing levels of retention and attrition in differing areas / age bands / geographies. A clear picture of the desired demographic shape of the operation is essential. You need a good theory about what the organizational shape of agility looks like.

To return to the metals industry example, there are only two ways to restore vitality in those companies: real organic growth (acquisitions won’t work) or creation of opportunity through the elimination of veterans. You either grow or eliminate real organizational assets to pave the way for opportunity. In the end, a lower average tenure is the key to vibrance.

Digging Into RecruitingBlogs.com v1.19

RecruitFest Intro

(September 19, 2008) I was sitting in the bar of the Toronto Intercontinental with Claudia Faust. We talked about friendship, community, recruiting and the value of RecruitingBlogs.com. We agreed that ‘following your nose’ is the key to the unfolding of things you don’t understand.

We’re in town for the RecruitFest.

I’m getting to know Claudia (and a host of others) because of my involvement in the universe of people who are the online community of Recruiting. While RecruitingBlogs.com is the current center of that cyclone, the community is spread out across a slightly larger terrain.

Like it is offline, online community is a set of intersections rather than a permanent and exclusive place. We connect in our place. We meet in others. Community is something we’re from, something we have in common.

Claudia, as you might know, has invested her energy and passion into her new business. A seasoned recruiter, she moved from her lifetime home in Seattle to the Ft. Lauderdale area about five years ago. Kids grown, she was ready for new adventures and experiences.

When we talked about the utility of RBC, it turned out that our experience was similar. RBC is a place where we engage colleague on a variety of levels. From professional relationships to deep friendships (and everywhere along that spectrum), the scene provides a platform for connection.

Recruiters network. Networking is not a monolithic approach to friendship. Rather, each of us does it in our own way, in our own rhythm. A community is something that allows the process to unfold.

John Sumser has been chronicling the Recruiting Industry forever. You can catch his work at JohnSumser.com. He’s the CEO of the Recruiting Roadshow. Join the fun in Dallas (9/25), Silicon Valley (10/23) or Atlanta in early December