The Nuts and Bolts of the Talent Machine

If you’re attracted to the HR-from-the-heart principle that is the foundation of this entire book, you might find this nuts-and-bolts idea troublesome. True, there’s a lovely romance attached to the traditional right-time-right-place love matches between an employer and the perfect candidate. But if you look behind the curtain of even the most epic love matches in history, you’ll find at least one player who is using his or her head. Use your head. This isn’t romance, anyway. This is serious business, with millions of dollars and hundreds or thousands of lives at stake. The talent management process requires extreme discipline and commitment on the part of both HR and the entire enterprise. At Southwest, I often described our hiring philosophy as a religion, meaning that it was so central to our being that there could be no compromise. It was one of our best practices, it was one of our overall corporate objectives, and it had the full support of leaders at all levels. Install these nuts and bolts into your talent machine and you’ll be able to recruit great talent that you’ll love into great jobs that they’ll love.

Employee Referrals

No matter what the organization may be, employee referrals are the most valuable source of talent. At Yahoo! half of our employees come to us through a personal introduction by someone who already works here. This makes all the sense in the world. Friends seek each other out for that nebulous quality that we are all looking for: Fit. As in that famous Amway recruiting chart, for every single circle that represents an employee, there are at least five additional circles of likely candidates attached to that circle. And for each of those five, there are five more, and so on and so on. Turn every employee in your organization into a recruiter. If your employees love their work and the company, they’re going to be recruiting for you anyway. But there are ways you can pump up the process now and then. For instance, you can pay for it. At Southwest, we had an ongoing program called “BYOB” (Bring Your Own Buddy), where we’d offer a free ticket on Southwest for each new hire that came from an employee referral. For hard-to-hire positions, we would offer a cash award. But these programs would get stale, so we had to kick things up a notch by occasionally offering well-publicized contests in which we had a drawing from the names of employees who had successfully referred a candidate. The lucky winner of the drawing would receive a fabulous prize, such as a computer system or a big screen TV.

These programs don’t have to cost a lot of money. At the height of the economic boom, we printed little business cards that looked like miniature versions of the plastic boarding coupons that Southwest is famous – or infamous – for. (Southwest discontinued using those cards after September 11 for security and efficiency reasons.) Each card carried the message that Southwest was looking for more employees, along with information on how to apply online or where to send a resume. We mailed five cards to each employee, with a request to help us find great people. We asked them to hand out the cards to people who gave them excellent customer service: the cashier at the supermarket, the ticket taker at the movies, the waiter, anyone the employees felt especially good about. The employees kept asking for more and more of those cards. And soon it became a way of life. No one made a penny from this program, or won a fabulous prize. They did it because it felt good to be so active in building the company with terrific customer service people.

Public Relations

The Southwest PR team taught me well how incredibly valuable the word on the street is for finding and recruiting great people. If you can have well-placed articles and television or radio coverage about who you are as an employer and where you’re hiring, more people will respond to those stories than will respond to ads that you pay for.

Before the Y2K systems overhaul, we had a huge need for IT professionals. So we decided we’d try to recruit from our customers by running an ad in our frequent flyer newsletter. The deal was, send us a resume of someone you know with certain IT skills and you’ll be entered in a contest for a free computer. We received about 2,000 resumes as a result (and one complaint from an IT executive who said that we were trying to steal her employees and therefore she would never fly Southwest again – so you have to be careful about these things). The number of resumes was mildly disappointing, but the ripple effect was beyond our wildest dreams.

It didn’t occur to us that some of our frequent flyers were reporters. One of those reporters was a business journalist who read the ad and thought it was a great story. The next thing we knew, there were articles about the ad in The Arizona Republic, The Los Angeles Times, and The Dallas Morning News – which happened to serve the locations where we had IT openings. Then a local television network affiliate saw the newspaper articles and came out to film our computer room, interview me and the IT employees, and show what kind of technology we were working on. We got far more resumes in response to the news coverage of our campaign than we got from the campaign itself.

Know Who You’re Going to Want Long Before You Actually Want Them

Most companies launch their recruiting process from a standing start, which means that they’re too late before they’ve even begun. Your ideal goal is to have the candidate ready the day the job opens. The longer the job is open, the higher the probability that you will make a hiring mistake. When hiring managers are desperate to fill a position, it is just human nature that hiring standards will be compromised. Using the dreaded factory metaphor, plant managers know at the beginning of every year or season what the necessary inventory of parts, supplies, and materials must be to get the job done over time. Likewise, your plant should have a talent plan. What is the level of talent that you’ll be requiring at what points throughout the upcoming months? How many people will you be needing? What are the knowns? What are the unknowns?

This approach requires a formula that will evolve and be refined over time. However there are fundamental variables that you can use right away. Start with the predictable patterns of growth that can be seen historically in your company. If you work at a chain of stores, for example, you know that growth happens when you open a new location. Look back at your records to see how many people you typically have to accommodate that kind of expansion. Don’t limit your formula to the extra number of sales associates; remember to factor in the additional people hours at headquarters. At Southwest our growth was most often represented by the purchase of a new plane. When we ordered a new plane, we knew we’d need a certain number of pilots, flight attendants, and ground crew. Our main problem was that we couldn’t always be sure where we’d need them – especially the ground crew. Seattle? Las Vegas? Providence? Baltimore? That part might take some last-minute finessing, but we had made our lives that much easier because we had planned ahead as much as we could.

Hire Mainly at the Entry Level and Promote From Within

This philosophy has several advantages: It perpetuates your culture, it encourages your people to be constantly learning and growing, it cultivates loyalty, and it keeps the knowledge inside. It is also a great way to build the company from the ground up in that for each job above the entry-level positions, there should be sharp, custom-trained, and custom-developed entry-level people who are ready to move up into it. If you do this, you should never suffer a severe talent shortage. And you may not even have to engage in the talent war that is waging outside your walls. (At least not as much – no matter how excellent the workplace culture may be, turnover will always be with us to some extent. The idea is to keep that extent minimal and as healthy as possible.)

Make the most of this process by installing an internal hiring process that is just as rigorous as your external system. Post all jobs above the entry level internally so that your employees have the first chance to fill them. Create career development initiatives that prepare people to take charge of their own careers and give them the tools and skills that they need in order to qualify for the next likely opportunities. Be sure to create a culture in which going after new opportunities doesn’t put employees’ current jobs at risk. In many companies, if a boss gets wind of the fact that an employee is taking action to move on and up, that boss may make life very difficult for that employee. A supervisor may give an employee a lousy recommendation, either as retribution for perceived disloyalty or to keep the employee from advancing out of that department. Even in the best of companies, a certain amount of possessiveness can occur. So try to help supervisors understand that the greatest compliment to them is that they have groomed someone to be ready for advancement. Reward them accordingly.

Likewise, make sure it’s safe for employees to try for a promotion and then not get it. In typical situations, employees may be reluctant to consider internal job changes. Because they know that if they fail to receive the offer, they will have to keep working for a boss who knows that they attempted to leave. Under the best of circumstances, the potential feeling of failure and embarrassment can discourage talented employees from taking the risk. Under the worst of circumstances, a vengeful boss can make their lives miserable as they try to settle back into their current job. For every new job opportunity, you’re going to have many disappointed hopefuls returning to their original job and only one successful candidate who gets to make the move. Make absolutely certain that all bosses welcome their employees back.

Also make sure that bosses don’t cut loose troublesome employees just because they don’t want to be bothered with them anymore. The internal hiring process can be misused as a recycling program for poor performers and misfits. If you don’t want that kind of waste, you must have a discipline in place that says, “We don’t pass a problem employee on to another manager.” If an employee has issues, the manager should work those out before approving the move. Make your managers commit to that principle, perhaps by signing a contract that says, “I am recommending this person for this job. And if the person is not selected, I will be happy to take her or him back.”

Aggressively Seek Out the Stars

This is a whole new class of employee out there who defies any kind of prefabricated job description and whose resume your recruitment software would spit out, as it doesn’t match any of the keywords you’ve programmed into the software. Yet, to quote Rodgers and Hammerstein, “once you have found them, never let them go.” These individuals have always been with us, but they achieved critical mass during the last boom economy, when they were generally assembled under the category of Free Agent Nation. They may have dropped out of the conventional employment track – especially those who were among the first to recognize that the employment contract was dead and that there was a big market for project-based work for a variety of companies and clients. Or they may have stayed inside the employment world but have dedicated themselves to a purpose, a profession, or an industry. Those are the ones who have been writing books, who have been speaking at conferences, who have been consulting independently. They may also be the ones who, for the right opportunity, would welcome the chance to work at your company. Make sure there’s room in your talent plan to slow down, attract, and grab these thought leaders when they come into your line of vision.

Where do you find these visionary mavericks? They may be regulars at your trade association meetings. Or they may be speakers, or authors, or often quoted in articles. Find a way to bring them in for a get-acquainted conversation. It’s very possible, maybe even likely, that they will welcome the opportunity to contribute their talent to the cause that your company stands for. If, after careful consideration, you decide you want one of these people, but there’s no officially open position available for the person to step into, create one. That newly created title could be the hot spot for innovation and leadership that will put your company on the map. (In addition, if you’re known for hiring stars, more stars will gravitate to your company.)

But move carefully with this group. Just because someone is a star doesn’t mean that that person will shine brightly inside your particular corporate culture. Even though this person is great and you’re great, you may not end up being all that great together – especially if your culture isn’t so wild about the maverick approach to life and work.

Don’t Forget the Stars You Already Have in Your Ranks

Throughout your organization, you have people who are essential to the future of your business. These people would be difficult, if not impossible, to replace. They are developing new products, they are keeping your most important customers happy, they have deep institutional knowledge, and they are rising to positions of leadership. Place a special emphasis on nurturing these stars. It should be deliberate and should include high-touch executive attention, career development opportunities, more frequent compensation reviews, more stock options, or whatever else is important to keep these folks engaged.

Remember the Important Link Between Hiring Talent and Growing Talent

Staffing and organizational development should be attached at the hip. Their roles, when they are combined as a function, are talent acquisition and talent development. The process of talent management is much more than just matching people with job requisitions. The greatest organizations invest in career development, leadership development, and internal career pathing. Not only is their external online job site rich with branded information for external job seekers, but their internal placement site is richer and better and includes online learning and development opportunities. Recruiters don’t just interview external qualified candidates who are seeking to join the company, they also interview qualified internal candidates who have been working toward the next step in their career. And they help people move through traditional and nontraditional roles and responsibilities. Recruiters are responsible for selecting new leaders in partnership with department heads. They are available as career coaches, while learning facilitators design and deliver opportunities for internal candidates to prepare for their next steps and to meet the organization’s needs. Recruiters working with learning facilitators help leaders to mentor their team members and develop the competencies that will be needed in the future.

To create a talent machine where there previously was none will require a significant culture shift that will take some time, some patience, and some tolerance for missteps here and there. It’s worth the investment. What you will get in return is a smoothly functioning process of talent acquisition and development with just-in-time delivery.