This week I attended the Peopleclick Authoria (PCA) Global Customer Conference (#GCC2010). I gave a couple of presentations at the conference on Talent Management market trends which is always fun. In contrast to my usual practice of attending customer case study sessions, I used a different strategy at this conference. I attended the “big tent” sessions where PCA’s relatively new CEO, Joe Licata, laid out their positioning. One interesting tidbit included investment in R&D of $23.4 million expected in 2010 which is comparable to the spend of SuccessFactors in 2009. The clear message was that PCA was investing in growing the business both organically in addition to acquisitions (by parent Bedford Funding).
They also had Jack Welch (@jack_welch), former CEO of General Electric, as a keynote speaker. PCA Chairman (and Bedford Funding CEO) Charles Jones interviewed Welch. The interview covered a wide range of topics (see the Twitterstream at #GCC2010 to see more details). Welch is definitely a strong advocate for HR’s role in leadership development. GE’s goal during his tenure was to be able replace someone in a key position within 24 hours. To do this requires a significant investment in readiness and having adequate bench strength (it also explains why GE has been a furtile ground to find executive talent). There were many great one-liners, but it was an analogy that resonated with me the most. It was around the importance of HR vs. Finance. My apologies in advance to my colleagues that focus on the Finance organization, but the example he used was a professional baseball team. Whose advice should the President of baseball operations (substitute our favorite sport) trust in making a decision on making an offer to a player: the CFO or the Director of Player Personnel? Who is going to know best how to allocate that budget to achieve the best results? It is pretty obvious in this context, but given that people-related costs are anywhere from 20-70% of total costs in most organizations, it makes sense that CEOs should view HR leaders as vital to their success. However, good Directors of Player Personnel bring a lot of player performance data to the table to help the organization make good decisions. HR leaders that do not bring something to the discussion will likely not be heard.
I also enjoyed the other keynote session, a panel discussion with Elaine Orler from Talent Function, Brad Smart from Smart & Associates (best known for TopGrading, a practice developed and used at GE), Kim Seals from Mercer, and Gerry Crispin from CareerXroads. Again, you can check out the Twitterstream for more details on the discussion, but to me the most interesting part of the discussion was around performance vs. potential. Kim was of the opinion that you promote based on potential (assuming at least adequate performance), but reward based on performance. Gerry has the viewpoint that performance is more important. High performers should be given the opportunity to show potential in new roles if it aligns with their career aspirations (assuming at least adequate potential for the new role). I am not sure there is one right answer. To me, a lot of the answer depends on how well your organization can judge performance and potential and your promotion track record. Examining your own data around this will be illuminating. It may also highlight changes you need to make to make in how you do performance appraisals and talent reviews. From a technology perspective, remember garbage in = garbage out. I can have the best succession planning process and best technology supporting it, but if I am not looking at the right attributes of performance and potential, it is all for naught.
Ok, back to the change in my conference routine, instead of going to customer case study sessions (though I did have some good conversations at meals with customers), I went to sessions led by thought leaders I admire and who I rarely get to see present. Gerry Crispin (@GerryCrispin) did a session on candidate experience that was very thought-provoking. For those not familiar with Gerry, he does the most in-depth research on this topic of anyone I know. For more than a decade, he has “mystery shopped” as a “candidate” at all of the Fortune’s 100 Best Companies to Work For.
Near the beginning of his presentation, Gerry asked the audience a simple question: how do you define a candidate? Needless to say, the audience definitions were all over the place. I thought he had an interesting taxonomy for thinking about this in terms of customer experience. In his view, a candidate was someone who has applied for a job (an applicant being someone who is a qualified candidate for a job). Prior to applying for a job, the person was a prospect. Gerry points out that experience needs to be different for prospects, candidates, and applicants (and new hires). Once someone becomes at least a candidate, they have affirmatively expressed interest in your organization. If they are treated poorly through the rest of their experience, there can be repercussions not only for your employment brand, but also your customer brand because in many cases candidates/applicants may also be customers and/or influence other customers. That taxonomy also got me thinking about the parallels with Customer Relationship Management. Many large employers already have people responsible for just candidate sourcing this is akin to the role of Marketing in CRM. Marketing is responsible for generating leads that turn into qualified prospects. Sourcers are responsible for finding prospects and converting them into candidates (I am simplifying here a little to make the analogy, but stay with me). Sales is responsible for taking qualified prospects and converting them into paying customers. Recruiters are responsible for determining qualified candidates (applicants) and facilitating the process to hire the best one. So far so good, there is nothing terribly new in this line of thought. What I had not thought about previously was the third pillar of CRM, Customer Service. In the CRM context, Customer Service helps ensure a customer is happy (based on customer satisfaction, net promoter scores, etc.) as well as to find additional cross-sell and up-sell opportunities (in some cases). It was not so much finding the analog for recruiting (or more broadly talent management for the new hire), but that it made start to think about why we do not have a group responsible for candidate (and applicant) service. If organizations really want to take the candidate experience seriously, it needs to do more than just design a candidate-friendly, employer brand reinforcing, self-service web site. Why shouldn’t a candidate/applicant be able to interact with your organization in a variety of channels as they go through the process. Yes, it can be more expensive to provide this level of service, but for many organizations, especially with the viral nature of social media, it may be more expensive in the long run not to offer a high level of service.
I also attended a session conducted by Dr. John Sullivan and his associate Master Burnett (@masterburnett). Dr. Sullivan is always provocative and expresses a strong point of view. His topic was the important of contingent labor on workforce planning. He cited a study of 200 companies where they looked at the workforce-related spend and found that only about 36% of the spend was on regular employees, the rest was for various forms on contingent labor. That is an eye popping statistic and should give any HR leader heartburn. It means that the vast majority of HR leaders have ignored how their organizations recruit, manage, develop, and separate from a significant part of its workforce. In fact, it is even worse than that. If organizations are actively managing it all, it is driven by procurement whose role it is to help negotiate contracts and manage vendors. This is one of Dr. Sullivan’s arguments for why Workforce Planning is so important. Organizations need to make intelligent decisions about where they source the most appropriate talent based not just on cost, but on agility (the ability to scale up and scale down the workforce), speed (how fast are the capabilities needed if we do not have them internally) and how long the capabilities are required (for example, is it just for a project or is there an ongoing need). We have published a number of research notes on Workforce Planning and Analysis this year, but we still find a relatively small number of clients focused on either contingent workforce management or workforce planning. This should be a wake up call to HR leaders and the IT organizations that support them.
