The process of identifying an organization’s talent needs and identifying, acquiring, and retaining talent for those needs is essentially human capital supply chain management.
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving something of value (a product, a service, or a person) from a source to a customer/consumer.
Conventional supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer.
In recruiting, human capital supply chain activities transform relationships and data (ad responses, resumes, social networking profiles, etc.) into candidates that are delivered to hiring managers.
So why is it that there is quite a bit of resistance to applying proven supply chain management principles and practices to human resources and recruiting functions?
Let’s take a look at how Lean principles and Just-in-Time concepts can and should be applied to recruiting. I’ll be covering this topic at TruLondon 3– so if you will be in attendance (live or virtually), this will be an excellent prep for you.
What is Lean?
Lean is a management philosophy derived heavily from the Toyota Production System (TPS), a socio-technical system developed by Toyota.
The main principles of the Toyota Production System are:
- Continuous Improvement
- Respect for People
- Long-term philosophy
- The right process will produce the right results
- Add value to the organization by developing your people and partners
- Continuously solving root problems drives organizational learning
Sound principles for any business or organization, yes?
Because Lean has been highly refined by Toyota, many people associate Lean almost exclusively with manufacturing. However, Lean principles can and have been applied to a wide variety of non-manufacturing processes and organizations, including services. What I find especially interesting is that many companies have been applying Lean and continuous improvement principles to various parts of their organization for years, but very few think to apply them to their human resources and recruiting organizations. I hope to change that!
The primary focus of Lean is creating more value with less work, and considers the expenditure of resources for any goal other than the creation of value for the end customers to be wasteful.
Would your customers (candidates, employees and hiring managers) have any issues with you focusing primarily on creating value for them? I didn’t think so.
Activities that don’t add value or are unproductive are wasteful (Muda is the Japanese term for waste).
Critical to effectively leveraging Lean is the identification of which steps in a process add value to customers and which do not. After classifying process activities into these two categories, the focus is to take steps to improve the former and eliminate the latter.
Having a good understanding of the hidden wastes inside of the recruiting process will aid in your appreciation of what Just-In-Time recruiting is designed to accomplish.
If it Doesn’t Add Value – it’s Waste!
In Lean recruiting, anything that doesn’t provide value to candidates, employees, and hiring managers is waste.
There are 7 wastes identified by Lean/TPS, and I think that overproduction, inventory, defects, over-processing, and waiting are among the most rampant in recruiting.
Overproduction
Overproduction is production ahead of and in excess of demand.
In sourcing and recruiting, overproduction happens every time you attract, identify and engage more candidates than needed to deliver to your customer. Traditional proactive candidate pipelining ahead of actual hiring need almost always leads to overproduction.
You’ve never looked at proactive candidate pipelining this way have you?
Posting jobs online also leads to overproduction, because more people apply than can be realistically processed. Many companies don’t even attempt to respond to all applicants, while others will send an automated reply. If you get so many responses that you can’t reply to them all or have to resort to auto-responders, isn’t that a clue that it is a wasteful process?
Inventory
In recruiting, your candidate pipeline is your inventory. More specifically, your work-in-process (WIP) candidate inventory.
Work-in-process is a production/supply chain concept, used to describe “unfinished” inventory in a production process – this inventory is “either just being fabricated or waiting in a queue for further processing or in a buffer storage.”
A group of candidates that a recruiter stays in routine contact to maintain a relationship with, without a specific and current hiring need is essentially a work-in-process (WIP) candidate inventory.
When most recruiters talk about proactively pipelining candidates – they’re really referring to building work-in-process (WIP) candidate inventories. Candidates in a work-in-process pipeline are typically people identified by a sourcer or a recruiter as people whose work history/experience somewhat closely matches the kinds of positions that an organization typically recruits for. Once identified, these candidates are contacted and screened (to some extent).
These are candidates that are waiting on further “processing” (interviewing, networking, etc.), and the vast majority remain permanently “in process.” In other words, a relationship is maintained with them indefinitely, as the vast majority of these candidates never become a “finished product” (are never hired).
Candidates in a WIP pipeline may be active, passive, or not even looking, and may or may not precisely fit any current hiring needs. However, time and effort is expended to build and maintain a relationship with these candidates to be ready when an opening does arise, or when the candidate’s situation changes and they become available, or to simply network with to gain intel and referrals.
Lean thinking would tell us that the time and effort expended to maintain a WIP inventory of pipelined candidates is pure waste.
Sitting indefinitely in the “relationship maintenance” phase doesn’t provide any real value for the candidates or clients. Let’s not pretend we don’t know what happens to those candidates when the positions you pipelined them for get filled by other candidates, never get approved or never become available.
We are all also painfully aware of the perishable nature of WIP candidate inventory. People do not remain “recruitable” indefinitely – everyone has a shelf life. As such, recruiters are constantly trying to keep their candidate inventory fresh (finding new people to pipeline, maintaining contact with everyone to see if they are still available, etc.) because good candidates are perishable – they don’t stay ripe for recruiting long.
Defects
According to Lean, a “defect” is something that does not conform to specifications or expectations.
When it comes to recruiting, I’m not suggesting that the people themselves are defects. However, candidates that are sourced, contacted, screened, and with whom a relationship is maintained that do not ultimately match the actual hiring need are defects of the recruiting process.
Defects arise whenever job specifications/requirements change from forecast, rendering pipelined candidates no longer qualified, or when candidates are no longer interested, available, or when their motivators change away from your opportunity. Forecasts are never perfect – they can’t be. Positions and requirements change, and people don’t stay interested or available forever.
A large number of defects are caused by posting jobs online. Yes, I know you probably think I am crazy to question job posting – but it is the dirty little secret of recruiting and it is a global phenomenon. We all know that a huge percentage of people who respond to jobs online do not meet the basic qualifications of the positions they are applying for.
The fact is, posting jobs results in a very high number of defects – applicants who do not meet the basic qualifications.
Over-processing
Over-processing occurs any time more work is done than what is required by the customer.
Engaging, screening and building and maintaining relationships with candidates that will never ultimately be submitted to a client/manager in consideration for an interview can be seen as performing more work than necessary and be classified as over-processing.
Your hiring managers don’t actually require you to maintain relationships with a large number of people who will likely no longer be available or interested or even qualified when you actually have a need. What value do these candidates ever provide to hiring managers?
I don’t know any active or passive job seeker that actually wants to have you contact, engage, and maintain relationships with them if you’ll never actually submit them in consideration for a position they’d be interested in accepting an offer for.
Waiting
Lean defines the waste of waiting as any time that something is held in wait of the next production step.
In recruiting, waiting occurs whenever candidates are not being advanced through the recruiting and hiring process.
In most recruiting processes, a large part of a candidate’s life is spent waiting to be moved forward in the process. Most candidates that respond to a job posting or are contacted by a recruiter are never advanced past an automated response (at worst) or the relationship maintenance phase (at best).
Any candidate that doesn’t actually progress through the hiring process (at least to an interview with the hiring manager/team) is essentially stuck in a permanent holding pattern – indefinitely waiting.
Maintaining relationships with candidates is not moving forward – it’s a holding pattern, which for many candidates, is permanent.
What is Just-In-Time Recruiting?
Now that you have a good understanding of what Lean is all about (providing value to customers and reducing waste), let’s focus on the concept of Just-In-Time.
Just-In-Time (JIT) production is a pull-based production strategy that is also called the Toyota Production System.
A critical Lean concept, Just-In-Time strives to enable companies to react to specific demands with agility and speed with the goal of producing the exact product (or performing the exact service) that a customer wants, when they want it, in the amount they want.
Applying this concept to talent identification and acquisition, Just-In-Time recruiting is a pull-based strategy of providing hiring managers/clients with candidates that exactly match their needs, when they want them, in the amount they want.
Just-In-Time strategy is designed specifically to reduce the wastes of overproduction, inventory, defects, over-processing, and waiting. Instead of proactively building and maintaining work-in-process (WIP) candidate pipelines without an actual hiring need (a push-based strategy), JIT recruiting has a primary focus of tapping into “raw material” candidate inventory (resumes, LinkedIn profiles, your network, etc.) and contacting, qualifying, and delivering candidates only in direct response to a hiring need.
A fundamental principle of Lean is demand-based flow production. In this type of production setting, inventory is only pulled through each production center when it is needed to meet a customer’s order. In Just-In-Time recruiting, recruiters only contact, screen and submit candidates in response to a client’s (internal or external) “order” – these processed candidates are pulled through the recruiting lifecycle based on actual demand.
When properly executed, a recruiter can source, contact, screen/interview candidates and submit the best to a hiring authority for consideration within 24-48 hours of being given the “green light” for a specific position – all without having a traditional pipeline of candidates that have been “kept warm.”
Yes, even for very rare hiring profiles.
Grow or Die
“Lewis and Clark were lost most of the time. If your idea of exploration is to always know where you are and to be inside your zone of competence, you won’t do wild new $%&#. You have to be confused, upset, think you’re stupid. If you’re not willing to do that, you can’t go outside the box.” – Nathan Myhrvold, former CTO of Microsoft.
I am sure that for many of you, I seem crazy for applying Lean principles, the Toyota Production System, and Just-In-Time to sourcing and recruiting processes and organizations.
To convince you of my sanity (and that I am on to something here), it may help for you to know that I am not writing in theory, but from practical experience in applying these principles that goes back to 1997.
I did not read a bunch of books and try to adapt Lean and Just-In-Time production to recruiting. Practically everything I write about comes directly from experiences I had during my early years in the recruiting industry, in the trenches, working a recruiting desk in a highly competitive staffing agency, 10 years before I even heard of the concepts of Just-In-Time and Lean.
What I learned largely through my own trial and error in the process of trying to not only keep my new job but also become the top performer for the company ended up being uncannily aligned with core Lean and Just-In-Time philosophy – creating more value for my candidates and clients with less work, giving them exactly what they want, when they want it, and reducing the wastes of overproduction, inventory, defects, over-processing, and waiting.
I think it is critical to constantly question status quo and to always be looking to innovate and improve. The desire to keep doing things the way you’ve been taught, and “the way they’ve always been done” can be considered as evidence of the desire to remain comfortable.
I’m asking you to step outside of your zone of competence (and comfort!) and explore Lean principles and Just-In-Time methodology. I’m challenging you to spend more than just a few minutes to examine your recruiting processes and organization with a critical eye for creating more value for your candidates and your hiring managers, and to identify waste, such as unnecessary WIP candidate inventory, over-processing, excessive waiting, overproduction, and defects.
Many companies talk a good game about innovation, but in my opinion, I think one of the last areas in every company to focus on innovation is human resources and recruiting.
Which is totally backwards if you really think about it.
The people you hire are the ones who create new products and services and find new and innovative ways of doing business.
Being more innovative in sourcing and recruiting can give you a sustainable competitive advantage by enabling you to find and hire more of the right people who can drive innovation throughout your entire company!