Planning and Defining your hiring Strategy

The most critical decision a company makes about employees is the decision to hire them in the first
place. Whether a company succeeds or fails ultimately depends on whether it hired the right people to
effectively execute its strategies. In spite of the importance of hiring the right talent, many companies
persist in using outmoded hiring processes that have evolved haphazardly over time without serious
analysis of how well these processes deliver business results.
There are two fundamental problems with hiring processes that are all too common in todays business
world. The first is that most hiring decisions are driven from the bottom up by the needs of individual
managers. This approach is suitable for meeting short-term needs, but it is not well-suited for addressing
long-term strategic goals, and it makes companies vulnerable to a sudden under-supply of critical talent
due to lack of advanced planning.
The second problem, which is related to the first, is that the success of the whole hiring process tends
to be measured in terms of administrative efficiency, using metrics such as time-to-hire and cost of hire.
As a result, hiring is neither optimized for long-term strategic needs nor for quality of individual hires.
HR organizations can play a major role in aligning the hiring process with strategic business goals and
maximizing business execution, but to do so they must themselves become more strategic and
consciously design hiring processes that produce the desired results.
This paper poses three questions that can form the basis for planning and defining a winning hiring
strategy.
They are qualitative as well as quantitative in nature
1. What types of jobs are we hiring for? (Qualitative)
2. How many people will we need to hire and when will we need them? (Quantitative)
3. What sort of people do we need to hire? What attributes do candidates need to become high
performing employees? (Qualitative)
It also addresses problematic issues associated with confusing time-to-hire, time-to-fill and time-to-start.
No single individual or HR department can answer these questions in isolation. They are intended to
provide a starting point for a dialog that should include senior management representing operations and
finance, as well as HR.
1. What Types of jobs are we hiring for?
The table below provides a description of four broad categories of jobs and discusses how each one
might influence recruiting process design. Recruiting for pivotal jobs where small differences in
performance have significant business outcomes requires much more aggressive strategies for sourcing
and selecting talent. Staffing critical jobs that require specialized skills that are in short supply often
emphasize a long-term recruiting process where candidate relationships are developed years in advance
of actually hiring candidates into specific jobs. High volume jobs that require filling a large number of
positions year after year tend to require highly efficient, repeatable recruiting processes.
In contrast, operational jobs that have sporadic staffing requirements require recruiting processes that can
be quickly scaled up or down based on shifting hiring demands. Large organizations may find it necessary to

have several distinct recruiting processes to support the variety of jobs they must fill.

Type of Jobs

Examples

Recruiting processes for these type of

jobs typically emphasize

Pivotal jobs where small

differences in performance
significantly impact company
profitability

Strategic leadership roles such Aggressive strategies for sourcing

as CEO or other senior executive
talent
Key operational roles such as
manufacturing plant managers or
technical experts in software
companies

In-depth processes for screening

and selecting the best candidates

Critical jobs that are necessary

to maintaining company
operations and where there is a
significant shortage of talent

Jobs requiring specialized skills

such as nurses in healthcare or
maintenance specialists in utility
companies

Identifying and developing

candidates early in their educational
career, often years before they are
qualified as hires

Hourly, frontline retail jobs

Creating strong employee value

propositions to attract qualified
candidates
Efficient, repeatable methods to

High volume jobs where the

company hires large numbers of
employees each year

Entry level college graduate jobs

such as engineers in a large
aerospace company

Operational jobs that are

Shared services jobs such as
necessary to maintaining
administration, security, or
company operations but are not a facilities management
key source of competitive
differentiation for the organization

attract, select, and onboard

candidates

Recruiting processes that can be

quickly scaled up or down since the
company may only hire for these
positions intermittently

2. How many People Will We need to Hire and When Will We need Them?
If a company is trying to staff hard-to-fill jobs with high performing talent, then it is crucial to adopt proactive
recruiting strategies to ensure it has access to the talent required to support its business needs (for more
discussion of this point see the sidebar, The Difference between Time-to-Hire, Time-to-Fill and Time-to-Start
and Why It Matters .) The only way to effectively shift from a reactive to proactive recruiting stance is to
make a serious commitment to workforce planning. This means establishing processes where business
managers work together to anticipate the companys future staffing needs. At a minimum this involves created
structured processes and collecting data to accomplish the following:
Agree on likely business growth scenarios extending at least three years into the future. Looking more than
three years out is desirable because the labor market trends that impact recruiting unfold over years, not
quarters

 Determine what sort of talent will be required to support different business scenarios. This involves
analyzing the kinds of jobs required to support various business strategies and determining what skills and
experience candidates will need to perform these jobs.
Analyze the skills and experiences of the current workforce and forecast the likelihood of losing
employees with particular skill sets due to turnover, retirement, or movement within the organization.
Calculate the gaps between the employees currently in the organization and the ones likely to be needed
over the next several years. Use these gaps to guide the development of staffing processes to ensure the
company will have the talent it needs when it needs it. This may involve external hiring, internal employee
development, succession planning, the use of contingent workers or a mixture of all three. The possibility
of addressing workforce deficiencies by increasing the productivity of current employees should also be
considered.
Moving to proactive recruiting shifts recruiters from an administrative orientation focused on responding to
hiring managers requests to a strategic orientation that involves actively working with business leaders to
figure out what sort of people the company should be hiring and when they will need to be hired. To be
effective, staffing departments need to be both reactive and proactive, but it is through being more
proactive that staffing has the greatest opportunity to become a true competitive differentiator for business
execution.

The Difference between Time-to-Hire, Time-to-Fill and Time-to-Start and Why it matters
Outlining all of the various metrics that are appropriate for measuring the success of recruiting
processes as they relate to business execution are beyond the scope of this paper. However, three are
so common
and so commonly misunderstood that they deserve attention: time-to-hire, time-to-fill and time-tostart. These metrics, when properly applied, can go beyond measuring efficiency and actually contribute
to improving the quality of hires.

Time-to-hire is one of the most frequently used metrics for evaluating recruiting performance, and one of
the most poorly understood. Usually measured in days, time-to-hire refers to the total elapsed time
required to staff an open position. The first thing to acknowledge about time-to-hire is that it is primarily
a measure of process speed, not candidate quality. There is little value in making bad hires quickly.
Time-to-hire also suffers from poor definition. Some organizations measure time-to-hire starting with the
initial approval of a requisition, while others do not start measuring time-to-hire until a requisition has
been assigned to a recruiter or posted to a career site. Another critical difference in time-to-hire
definitions is whether to stop measuring when an offer is secured from an approved candidate or to
include time that elapses after the candidate accepts an offer but before they actually start the job.
These are in reality two different metrics, more appropriately referred to as time-to-fill and time-to-start.
Time-to-fill reflects the elapsed time between the initial approval or posting of a requisition and the
final acceptance of a job offer from an approved candidate.
Time-to-start reflects the elapsed time between the initial approval or posting of a requisition and
the actual day when the newly hired candidate begins work in the position.
When these metrics are properly understood and decoupled, they can be adjusted to play a role in the
quality of hires. The following case studies illustrate how adjusting time-to-fill and time-to-start can improve
a companys ability to execute business goals.

SUCCESSFACTORS / WHITEPAPER
PlAnnIng AnD DEFInIng yOUR HIRIng
STRATEgy

Increasing time-to-fill to increase the chances of a better candidate applying. Company A was in a
business where its ability to hire candidates with certain rare qualifications had a major impact on
revenue1. These star candidates generated extraordinary levels of revenue. The company wanted to hire
them all the time, but there were rarely enough of them available at any given time to meet operational
staffing needs. The company solved this problem by intentionally increasing time-to-fill.

It is important to remember that star candidates are by definition rare, and receiving applications from star
candidates is a relatively infrequent event. Companies that focus on minimizing time-to-fill are not as likely
to hire many star candidates simply because they do not wait around long enough for a star candidate to
apply. Company A determined that if it intentionally waited 5 days before filling positions it would receive
an additional $300,000 per year by hiring better quality candidates. Of course these gains had to be offset
against costs associated with leaving positions unfilled for five days. But the potential to make $300,000
simply by waiting a few days before making a hiring decision would certainly seem worth exploring to
most companies.
Decreasing time-to-start to improve recruiters ability to find better candidates. Company B, a retail
operation, wanted to keep time-to-start to less than one day for store managers to avoid disruptions in
operations caused by vacancies. The problem was how to achieve this goal without lowering hiring
standards to meet aggressive time-to-fill targets. The company solved the problem by decoupling the
process used for hiring new store managers from the one used to place them into specific store
positions.
It then intentionally over-hired so that within a given region there were always slightly more store
managers than store manager positions. After initial on-boarding, newly hired store managers
were provided with additional in-store training until a vacancy occurred in their region. They were
then transferred into the vacant position immediately.

In addition to increasing operational continuity, these changes have also led to improvements in the
process used to hire new store managers. Although recruiters still feel constant pressure to keep the
pipeline filled with good candidates and minimize time-to-fill, they are no longer under the gun to staff a
specific position in a specific store as fast as possible. Recruiters are able to hire in a more systematic
and measured fashion, focusing on candidate quality instead of constantly responding to the hiring crisis of
the moment.
These two examples demonstrate that even the most conventional, time-based metrics can be put to use
in the service of strategic business objectives with the proper analysis and a little creativity.

3. What Sort of People do We need to Hire to Ensure High Performing Employees?

The ultimate objective of recruiting that is focused on business execution is to hire employees who will deliver
higher levels of job performance. To achieve this objective, it is critical to clearly define job performance and
4

SUCCESSFACTORS / WHITEPAPER
PlAnnIng AnD DEFInIng yOUR HIRIng
STRATEgy

understand how it relates to different candidate attributes. What specific business outcomes does the company
want to achieve by recruiting new employees? Is the goal to improve employee retention, increase productivity,
provide better customer service, achieve higher sales revenue, or to impact some other outcome?

Every staffing process should start by asking hiring managers to clarify the business goals they want to
support through hiring new employees. This necessitates making decisions that emphasize certain outcomes
over
1

This case study is based on: S. Hunt (2004). Understanding time to hire metrics. Electronic Recruiting Exchange (www.ERE.net)

others, and probably involves trade-offs, because there is no such thing as an ideal candidate. There are of
course some candidate attributes that are universally counterproductive, e.g. dishonesty. But in general,
attributes that are strengths in some jobs are weaknesses in others. For example, being highly agreeable may
be a desirable trait when applied to things like fostering teamwork and getting along with others, but can be a
weakness for jobs that require taking a firm stance on an issue or holding others accountable for their
behavior. There is a similar trade-of related to salaries vs. competence. Candidates with the strongest levels of
experience and technical capability typically cost the most to employ.

Another common trade-off is productivity versus stability. The most highly productive employees in jobs are
often the first to leave to pursue new opportunities2. These employees are usually driven by a desire to move
to increasingly challenging positions, tend to have more job opportunities elsewhere, and may quickly tire of
jobs after they master them. While there is value in having highly productive, short-time employees, there is
also
value in having a stable workforce. The financial value of maximizing productivity vs. maximizing retention
varies substantially depending on a companys business model. Discussing the relative value of different
business outcomes such as these is an important part of designing a recruiting strategy that will make the
most sense and deliver the best results.

Developing a clear understanding of what drives job performance in a certain role can be harder than
expected. When managers are asked What makes a great employee?, they tend to answer in vague
generalities about passion, dedication and a can do attitude. These characteristics sound good, but they
reveal next to nothing about what makes high performing employees noticeably different from average or poor
employees.
Fortunately, there are many job analysis techniques available to quickly and accurately define the employee
behaviors and characteristics that drive job performance. Job analysis is not an overly complex discipline to
master, and there are many books available that cover the different job analysis methods . Any worthwhile
job analysis method will require direct involvement from hiring managers, current employees, or other subject
matter experts familiar with the job being staffed. Most methods require subject matter experts to clarify
specific tasks performed on the job. Subject matter experts might also be asked to provide examples of
things current
or former employees have done on the job that illustrate effective or ineffective behavior.

A well-conducted job analysis provides a clear picture of the functions fulfilled on the job and the employee
attributes that are required to perform the job successfully. This includes having clear definitions of the
following
6 categories:

Job Title. A job title that external candidates will understand so they can tell whether they are interested

in and potentially qualified for the job.

Job Tasks, Responsibilities and Objectives. The goals people in the job are expected to accomplish or
the tasks they will need to perform (e.g. maintaining customer service levels, building new products,
achieving sales quotas).
Job Requirements. Credentials or licenses candidates must possess to be eligible to hold the job
regardless of their other qualifications (e.g. U.S. citizenship, licensed degrees).
Relevant and/or Minimum Qualifications. Skills and experience that candidates are expected to
possess to be considered qualified for the position (e.g. years of experience, job-relevant training and
coursework).

Hom, P.W., & Salamin, A. (2005). In search of the elusive U-shaped performance-tenure relationship: are high performing Swiss bankers more liable to
quit? Journal of Applied Psychology, 90, 1204-1216.

 Job Competencies. Behaviors people are expected to display on the job (e.g. supporting team
members, planning and organizing, thinking analytically).
Conditions of Employment. Things people must accept in order to perform the job (e.g. work hours,
job location, physical job requirements/ADA requirements, travel schedule, pay).
Clearly defining these categories will provide clarity and focus for subsequent decisions concerning what sort of
candidates to source, how to select among different job applicants, and what actions will be required to
on-board newly hired employees. All of this information can also be used to create more effective
performance management and career development processes to maximize the productivity of employees
after they are hired.

Summary
There is no one best way to do recruiting. What works extremely well for a regional healthcare organization
may be disastrous for a multinational software company. The processes that are appropriate for hiring new
college graduates are much different from those used to hire senior executives. But companies that have the
most successful recruiting processes do have one thing in common. They have carefully analyzed their
processes to make sure that they lead to better candidates and better business results.

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