Why your poor recruitment budget and focus is killing your business.

This blog explains why you need a serious recruitment budget and how to make the business case for an increased recruitment budget to your executive team.

If you are like me, human, then most of the time it takes a deadline to get you really thinking and acting in solution mode.

You need to really feel the urgency, otherwise you’re quite content in being a passenger.

So how about this:

We have been quite busy the last few years talking a big game at executive level about agile methodology, innovation labs, big data, and workforces of the future.

Whilst in the real world;

Time to hire across whole of organisation has more than doubled in the last 5 years (from 28 to 68 days), the average lifespans of large organisations continues to shrink (more than quartered in last 50 years from 75 to just 15 years), the average tenures of people in jobs continues to shrink, technology continues to displace or dis-intermediate entire workforces, and society pays the price of a lethargic employment system that prefers to hire for existing “skill” over “will”, with large cohorts of people unable to contribute fully (the participation rates of willing and able workers in the US and Australia are around 67%).

Basically it’s taking companies longer and longer to bring in the talent they need, and companies are dying at an ever increasing rate as a result.

Sounds like an old, unproductive machine grinding to a halt to me. How about you?

So whilst at “thought leader” level we are agile, liquid, fluid little honey bee hives swarming and reforming with creativity and innovation,

At a macro or even an operational level we are lethargic, reactive, lazy passengers that are slowly but surely killing our organisations because we can’t get the people focus, recruitment formula, or recruitment budget right to manage a steady flow of diverse and inclusive talent into our businesses to remain competitive and relevant.

68 days average time to hire. When did that become acceptable?

In a world that is on-demand everything.

I’m not talking about the time to adequately assess ones behavioural, cultural, and able fit for your business, that time is important.

I’m talking about the time to simply find a shortlist of qualified, interested and available candidates.

CEB research shows lost productivity to be ~$407/vacant position in your business/day, So for an organisation of 5,000 employees hiring 1,000 people per year, that’s $27 million in lost productivity per year.

Why did 68 days to hire become acceptable?


It became acceptable because a recruitment team and its recruitment budget is viewed as a support service, not a key executive strategy. When that happens, cost becomes hidden, accountability disappears, the recruitment budget shrinks, and executives scratch their heads in 3 years time and wonder why they are losing market share to some smaller, more nimble disruptors at a rate they can’t contain.

Game. F*#king. Over.

And as an executive you’re about to permanently stamp your LinkedIn profile with the role title:

“Captain of a Sinking Ship”

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Has a nice ring to it, doesn’t it?

So back to my opening line. Do you feel the urgency? Or are you still content in being a reactive passenger?

The first thing I would do tomorrow morning is go to the HR/Recruitment department and ask for their average time to hire data. If they don’t have it, fire everyone and start again.

Fill your new team with a mix of marketers, sales people, and organisational psychologists, because they understand metrics, how to proactively build pipelines, and how to cultivate relationships.

If your existing team does have average time to hire data, and it’s less than 30 days, then that’s a good starting point. Keep them.

I’d then give them a serious recruitment budget for fixing the problem, how about starting with 10% of the potential productivity gain? ($27 million in the above example for a 5,000 FTE business). Sounds like a good investment? $2.7 million?

Ten (10) times return for getting it right? Ask your CFO if you’re not sure that’s a good bet.

Your CFO would probably chew her own arm off for that kind of result.

Next move, stop recruiting reactively for every role.

When you advertise your open roles, you compete with every other internal recruiter for the same small pool of people desperately filling in long winded online application forms, trying to pretend to be what you have stated in the job description.

You get flooded with applicants to each job ad (120 on average) and your team gets caught in this reactive recruitment cycle, processing hundreds of applicants every time using automated emails to try and find one quality hire, and rejecting the rest, leaving them with a horrible and lasting impression of your brand.

68 days.

The smart employer brands today grow Live Talent Communities, and invite their database of past applicants to their new world of humanised candidate experience. Laszlo Bock, the former VP of People at Google proved that going back through past applicants gave a 6 times higher correlation to a successful hire, than going to market again to advertise.

Now grow your Live Talent Community the same way your Marketing and Sales team would proactively build customer pipelines. Use social, referrals, deliver a candidate experience that people share and talk about. All the same rules as Marketing and Sales apply, you just need to invest the right time and money.

You already have these skills in your business. Leverage them.

A Live Talent Community is a world where the candidate is not applying to jobs with hundreds of others, but joining your Talent Community to chat with your team (not just your recruitment team, but your hiring managers, and even people they will be working with).

A world where those candidates are using their one profile to privately join other Talent Communities of other companies, controlling their own data live, and choosing who has it.

Just like a potential customer.

Your Talent Community is part of a Live Talent Ecosystem that understands when people are available, or approachable, without you having to advertise and reject people.

Where you can proactively build Live Talent Pools for every role in your organisation.

Live Talent Pools of perfect gender diversity, cultural diversity, and inclusion. So you can actually achieve your diversity targets, rather than just talk about it.

Live Talent Pools that allow you to hire-on-demand, and keep your business innovative, productive and relevant for years to come.

Your People team, having shrunk time to hire, now have lots of time to focus on hiring for the right attributes, cultural fit, and capability. Your right People Team are not worried about losing their jobs to new technology, they are excited with what it means they can now do to add more value…

Now you are doing your part for the broader economy because people that previously could not participate in the workforce, as they did not have the skills asked for on the job ad, can now participate because you are hiring for attributes like conscientiousness, humility, cognitive ability, and tenacity. Your company culture strengthens as your focus on this increases, your turnover decreases and your productivity climbs further.

So which side will your business be on in the next 3 years?


Reactive or Proactive recruitment?

Applicant Tracking Systems or Live Talent Communities?

Being creatively destroyed or being the creative disrupters?

The path is pretty clear, if you want to win, but technology can’t solve the whole problem. People solve the problems, people force change and choose that the urgency warrants taking charge and accountability.

Your HR and recruitment team is not a support service. With the right people, recruitment budget, and strategy, it drives more long-term productivity and revenue gain than any department, because hiring is where it all starts.

No need to imagine a world that works. Your choice in hiring strategy, people, technology and recruitment budget is what will deliver it. Today.

You can read and share the Getting Started with Live Talent Communities Guide here.

Make fixing the flow of talent into your business the first priority for 2017. It’s easier than you think with LiveHire.

By the way, LiveHire is hiring. Constantly. If helping to create a world that works for every organisation and person resonates with you, then join our Live Talent Community and say hello. You’d be surprised at the diversity of capabilities and attributes needed to work in tech.

If we’re not the right fit for you, there are many other companies with Live Talent Communities that could be the perfect match.

See you next time.


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