January 15 , 2018

CEOs Expect A Competitive Advantage, So Why Aren’t Recruiting Leaders Providing It?

This think piece is designed to stimulate recruiting leaders to the point where they will commit to providing their firm with a competitive advantage over their top recruiting competitors.

There many things that recruiting can improve on, but there is one important area that is almost completely absent from corporate recruiting. And that is proving that the recruiting function provides their firm with a competitive advantage. This omission can seriously damage recruiting’s image among senior executives, who almost uniformly have a “competitive advantage mentality.” Their expectation for every major business function to provide a competitive advantage has its origins in the extremely competitive nature of most CEOs. Most see nearly everything in business as an “us against them” fierce head-to-head competition.

Unfortunately, even though recruiting itself is also an intense head-to-head competition, I only know of a single current corporate recruiting leader (Jim D’Amico of Signature HealthCARE) who can credibly show that their recruiting approach provides their organization with a measurable competitive advantage. This goal of providing and then reporting out their competitive advantage is certainly rare in corporate recruiting. However, it is a primary goal in sales, marketing, finance, supply chain, product development, and product branding. Unfortunately, after over 40 years in recruiting I’ve only encountered two recruiting leaders during that entire time that set a goal to measure and report the competitive advantage provided by the recruiting function.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” — from The Art of War by Sun Tzu

The Many Benefits of Providing a Competitive Advantage in Recruiting

If you’re not familiar with the concept of providing a competitive advantage in business, it occurs when a firm undertakes a planned effort to build and maintain a competitive edge over its competitors in one or more business areas. It gains that advantage by producing superior results because it begins using new, unique, and more effective strategies, tools, and approaches. In the case of recruiting, its leaders would pay more attention to developing a competitive advantage if they realized the many benefits that come to a leader who provides their firm with a competitive advantage. Six of those advantages in the area of recruiting include:

  • Superior recruiting results — a competitive advantage strategy requires a recruiting function to use unique, advanced, and more effective recruiting approaches that no other firm has. And as a result, it will have much better performing new hires (i.e. quality of hire) than all of its talent competitors.
  • Increased executive respect — because executives expect to have a competitive advantage, you will gain a much higher level of executive respect because as a recruiting leader, you have demonstrated that you understand the value of knowing and then beating the competition. That is because executives always respect those who have an external focus, but also because it is quite unusual for anyone in HR to strive to dominate their aspect of their industry. Being able to prove that you dominate the recruiting aspect of your industry may also lead to higher budget allocations for maintaining that edge.
  • Winning head-to-head competitions — every firm competes head-to-head over top candidates who are actively in the job market. However, when you know exactly how your competitors operate (but they don’t know the same about you) and you also have unique and more effective recruiting tools, you will certainly win more than your fair share of these head-to-head competitions. This competitive advantage means that your firm will become more productive and innovative because of the top talent that it recruits. While simultaneously without a steady supply of top talent, your competitors’ productivity and innovation will decrease.
  • You can more effectively counter their attempts to poach  because you continually track and learn about how your talent competitors recruit, you will be able to anticipate their attempts to poach your employees. And that knowledge will make it easier for your managers to counter each of their easy-to-anticipate recruiting moves. Knowing their recruiting approaches will also help you poach top employees away from your competitors.
  • Continuous improvement becomes ingrained — seeing the results of your competitive analysis motivates everyone, and it also alerts them that they must continually improve. And knowing how fast the recruiting functions at other firms are changing allows you to pace yourself so that your firm continually stays ahead. Over time the constant growing and changing will become second nature within your recruiting function. And that capacity to continually evolve and innovate will allow your firm to strengthen its lead in recruiting.
  • Cross-industry pollination helps you see the future of recruiting — benchmarking similar firms in your industry only allows you to keep up. So recruiting leaders will be forced to look to other business functions and to other industries in order to learn. This cross pollination is especially valuable because most other business functions are way ahead in marketing, branding, social media, and analytics. The key to staying ahead when there is no one to copy in your industry is to focus on identifying other successful business processes (and recruiting processes from other industries) that can be adapted to recruiting. Using this method, you will be able to stay ahead of organizations that only learn from firms in their same industry.

Steps in Building a Competitive Advantage in Recruiting

Building and maintaining a competitive advantage requires some careful planning. So if you strive to provide that advantage, here are some steps you should take: 

  1. Identify your talent competitor firms — obviously, you can’t stay ahead of your talent competitors if you don’t know who they are. So the first step in providing a competitive advantage is to identify your talent competitors, which in many cases will include firms that are not direct product competitors (e.g. competition for customer service talent in a location will occur across many industries). It also makes sense to periodically interview a sample of your top prospects, applicants, candidates, and new hires in order to determine what other firms that they considered. And whenever you lose a top recruit to another firm, make a note to include that firm on your list of talent competitors (you can find out where the missed candidate landed by reviewing their LinkedIn profile).
  2. Identify the recruiting approaches used by your major talent competitors — building and maintaining a competitive advantage in recruiting requires a continuous process of gathering information about the strengths and weaknesses of your talent competitor firms. You should then use that knowledge to devise strategies, action plans, and tools that will enable you to “leapfrog” their recruiting efforts. There will be a need for some limited benchmarking and competitive intelligence gathering because you will need to know as much as possible about the current and the planned recruiting approaches of your talent competitors. Start by visiting their web and social media pages, and then review their job descriptions and employer branding efforts. Next, identify where they post most of their jobs and how they conduct college recruiting. You should also interview your new hires who were also recruited by your competitors in order to better understand their offers and their approaches to recruiting. Obviously, you should also conduct Internet research and look for their presentations at talent management conferences. You should also collect data to identify the months in which recruiting competition was high and low, so that you can recruit when the competition is low. And finally, attempt to identify the recruiting software, technology, and the vendors that your talent competitors use because using the same ones means that you won’t have a competitive advantage.
  3. Understand that a competitive image requires a unique approach — every business leader already knows that even when you are fortunate enough to exclusively use highly effective approaches, those approaches can’t provide much of a competitive advantage if your competitors also use the same array of approaches. Your approach needs to be unique, but unfortunately, few recruiting leaders understand the value of maintaining uniqueness. I learned about the value of taking a different path early in my life when I was a motocross racer. It only took a few heats of racing for me to realize that you can’t win if you take the same exact line as the leading rider. Although a unique approach is required, I have found that recruiting leaders are much more comfortable with the more common “follow the pack approach.” In fact, when you continually benchmark best practices, you are essentially guaranteed a “degree of sameness” with other firms.
  4. Your strategies, approaches, and tools must be more effective — being different doesn’t provide a competitive advantage if you are different for the wrong reasons (i.e. because you are out of date or because you use recruiting approaches that are simply less effective). Maintaining a competitive edge requires the continuous replacement of your current recruiting approaches with new ones. And realistically you can’t continually develop more effective replacement approaches without a highly innovative recruiting staff. Providing continuous replacements often means developing your own recruiting tools or continually tweaking existing ones so that they produce better results than the tools of your competitors. Also be sure and quantify in dollars the impact of having a competitive advantage so that you win a high percentage of head-to-head recruiting competitions.
  5. Hire recruiting staff who are highly competitive — you are never going to develop and maintain a competitive advantage with a recruiting staff satisfied with simply keeping up. As a result, when you hire recruiting staff look for individuals who have an external perspective, that hate your competitors, and that expect to be first in both recruiting methods and results.
  6. Forecast your competitors’ future plans  if you’re going to continuously maintain your lead in our fast-moving world of recruiting, it’s obvious that just knowing what they’re doing today simply won’t be enough. So you must add to your competitive analysis forecasts and projections covering what each talent competitor is likely to do next. Take this projection to your senior managers and show them how with a little investment, recruiting can not only counter their upcoming moves but perhaps also implement similar approaches months earlier.
  7. Add competitive analysis learning to your interviews — if you’re a true competitor, you want to learn as much as you can about what your recruiting enemy is doing. So if you’re bold, consider making it a standard practice when a key job is open to include at least one candidate from your competitors in the interview slate. Recruiting should encourage the interviewers to glean as much business and recruiting competitive intelligence as they can throughout the candidate’s visit. 

And Don’t Forget “to Raid the Bastards”

By building a competitive advantage you are obviously trying to raise your own recruiting results. But you can also widen the competitive difference between your firm and the competitors by recruiting away their top talent. If you’re really bold, two approaches to consider include:

  • Raid your talent competitors when they are in trouble — when you are seeking a competitive advantage over a particular product competitor, hinder them by poaching away their top talent. That means especially when a competitor is going through major difficulties like mergers, layoffs, a stock price crash, or a major product failure. Realize that your competitor’s employees are likely to be disillusioned. If you’re a true competitor, this is the ideal time to begin making calls and to offer their best employees better opportunities at your firm, with more certainty and security. And if poaching bothers you, remember that employees are not owned, and all that you are really doing is offering these employees an opportunity to get out of a bad situation. And shame on the competitor for not offering superior opportunities to their employees than your firm is willing to offer.
  • Hire away their best recruiter — having the best recruiters is a significant part of building any recruiting competitive advantage. One of the best ways to reduce the recruiting capability of your competitors (while the same time improving your own) is to hire away their top recruiters. Because on a daily basis you compete with them head-to-head, it is highly likely that your own recruiters already know the best recruiters at talent competitor firms. The best way to capture these recruiters is probably through an employee referral. However, if you want to increase your chances of success, consider adding a “bump-up bonus” for successfully hiring away a top recruiter from a competitor firm (Uber offers a similar bump-up bonus for recruiting away highly valuable driver trainers).

An Extreme Example Illustrating How One Recruiter Maintained a Competitive Advantage

When it comes to building a competitive advantage, I have found that most in recruiting are extremely timid and they are often not willing to even discuss the topic. However, the best recruiter I have ever known achieved his extreme level of excellence by viewing recruiting as a competitive battle. Not only did this individual track what his firm’s competitors were doing, but he also held quarterly “recruiting roundtables.” Under the roundtable intelligence gathering concept, he sponsored an event each quarter that invited all of the best recruiters in the geographic area to his firm. The goal of the event for the attendees was to share ideas and best practices. But his goal was to gather competitive intelligence on recruiting and to know in advance his strongest competitors. Yes, he still shared, but he focused on sharing the approaches that although they were effective, they would soon be replaced by superior ones.

Why this approach? Because one of the best ways to beat an enemy is to know them and keep them “close to you.”  He didn’t gain many actual ideas from the meetings, but he was able to continually gauge how far ahead his recruiting effort was in his locale and industry.

Final Thoughts

It’s part of their DNA for businesspeople from every function throughout the corporation to be constantly seeking to develop or maintain a competitive advantage. This desire to maintain a competitive advantage doesn’t have to be encouraged or taught because it comes naturally in fields like marketing, sales, and product development. Unfortunately, it’s not even a goal in most corporate recruiting functions, because few have any formal process for even elementary external competitive analysis. This is a serious problem because, at least in my experience, I have found it almost impossible to beat any recruiting competitor firm when you know very little about how they brand and recruit.

At least to me, it’s long past the time to catch up with the other business functions and to develop a competitive advantage plan for the recruiting function.

The process of building a competitive advantage shouldn’t be put off because knowing exactly what your competitors are doing and planning helps to build excitement and the competitive fire in your recruiting staff. It turns out that reporting where your recruiting function resides on the industry’s “leaderboard” will by itself energize your entire staff.

The last key thing to remember is that if you are in a “war for talent” (or any war for that matter) you cannot expect to have a realistic chance to win without competitive intelligence gathering. And the subsequent side-by-side competitive analysis which unambiguously shows where your organization is superior to and inferior to your competitors will serve as your guide to continuous improvement.

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As seen on ERE Media.

 

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.