If hiring great people is vital to long-term organizational health, why do so many companies take shortcuts when it comes to recruiting?
One reason is obvious: Recruiting means spending money on people who may never join the organization. That's not always plausible, if you're a growing business with a tenuous cash flow.
Those funds might be better off staying in-house, developing talent that's already there. In the same way that continuing to dazzle existing clients -- and gradually bolstering the amount of business they give you -- has for decades been a staple of cash-efficient growth, continuing to please (and therefore, retain) existing employees remains an equally frugal tenet of post-startup scaling.
The good news: You can actually boost your recruiting of new talent while remaining faithful to the frugalities of fast growth. Charles D. Ellis, founder of the consultancy Greenwich Associates, wrote about some of these recruiting methods in his most recent book, What It Takes: Seven Secrets of Success from the World's Greatest Professional Firms.
Make no mistake: the McKinseys, the Goldman Sachs, and the Mayo Clinics of the world spend lavishly when it comes to courting prospective employees. But many of their hiring habits cost little -- and are therefore highly replicable for companies like yours. Here are three quick tips from the book:
1. Make recruiting the top prioritiy of top executives.
Ellis tells a story illustrating how recruiting is the top priority of partners at Goldman Sachs -- more important, even, than courting big-ticket clients.
Years ago, a young partner received an urgent call from the Ford Motor Co. -- which, at the time, was the firm's "most prestigious client." The partner needed to go to Ford's headquarters in Dearborn. There was one problem: he was already scheduled the next day to conduct interviews with potential employees at Stanford Business School. Not sure what to do, he turned to a senior partner for advice. The senior partner told him: "You go to Stanford. I'll cover you at Ford."
Ellis also cites the habit of a Goldman Sachs partner named Robert M. Conway. "When Conway was out recruiting at business schools, he always checked competitors' signup sheets to see who represented each of the other firms. Every time, it was the same: Goldman Sachs always sent the more senior team."
Now consider this tactic from the standpoint of the prospective employee. All things being equal -- compensation, location, job description -- a recruit is more likely to feel coveted by the organization when the recruiter is a high-ranking executive, as opposed to a talent specialist or human resources generalist.
2. Conduct more interviews.
One thing that stands out, reading Ellis's tales of the talent wars, is that professional services firms interview the living heck out of potential candidates. Capital Group, the legendary investment-management firm, has as many as 20 different employees interview serious candidates. While some Capital associates wonder about the productivity of such an exhaustive evaluation, Ellis notes, most feel that the lengthy process is the best way to screen out which candidates are engaged by the work itself, as opposed to (merely) the compensation.
Here's another nugget: McKinsey's analysis concluded that the optimum number of interviews is eight. "After that," Ellis writes, "the incremental accuracy of predictions of success in consulting does not justify the incremental cost."
All told, then, there are two lessons here. First, if you're conducting only two or three interviews for each candidate, you should conduct more. Ideally, different employees at your company will be conducting each one, and comparing notes. Second, it might be smart to evaluate your "magic number" for interviews. At McKinsey, it was eight. Yours might be more, or it might be less. But it's probably more than two.
One more thing: If you're worried about devoting resources to the lengthy evaluation of candidates, one solution is to give actual work assignments to the candidates. Sometimes called "appliject" or a "projeclication," the idea is that you can ask legitimate candidates to do legitimate work as a way to assess their readiness. And as a bonus, you'll get some tangible returns from the resource-allocation of an extended candidate-evaluation process.
3. Hire ahead of need.
Growing companies often err on the side of hasty, real-time hiring. The reason? During periods of breakneck growth, the urgency to get new bodies in the building -- to handle unforeseen escalations in demand -- trumps the ability to calmly evaluate candidates for long-term fit.
It's understandable. But one way companies can manage this common scenario is by hiring ahead of need -- or at least cultivating a talent pipeline to call on when demand suddenly escalates. "Managers had to cultivate an on-deck circle of talent, or they'd live with mediocrity," is what Dan King, a senior executive at Allconnect (which is a five-time Inc 500 company), once told me about Allconnect's first burst of rapid growth. "This was in years one and two of our five-year spurt."
According to King, who is now the founding principal of CloseReach consulting, it took Allconnect 24 months to institutionalize the talent-pipeline mentality -- in other words, it took the company two years to get comfortable with the idea and implementation of hiring ahead of need.
Of course, hiring ahead of need is risky -- even for deep-pocketed firms like McKinsey. Ellis describes how in 2008 -- when new jobs were scarce -- McKinsey got 2,800 acceptances for 2,000 open positions. "Even though it obviously hurt their compensation for a while, the partners accepted the costs so McKinsey would be ready for growth when the economy recovered."
And that's the main idea: To use your recruiting efforts as a way to bet on your own growth. The worse-case scenario is having too much talent in the building. Which is a problem all companies, large and small, would love to have.