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Value of Recruiting



(January 19, 2007)
  What's the real business value of Recruiting?

That's going to be the subject of a track at the Talent Unconference hosted by Raghav Singh and yours truly.

Raghav is the champion of the idea that P = S (SC + CC + EC), that the financial value of Recruiting is equal to profit per employee.

That's certainly the most it could possibly ever be.

The difficult thing with Raghav's notion is that it means that Recruiting isn't valuable in companies that lose money, non profits or government organizations. With over 45% of the workforce nestled in those sorts of organizations, that's a lot of worthless Recruiting. His approach also makes the value of Recruiting contingent on management decision making (outside of the control of Recruiting) and shifting market conditions.

There's an alternative view of the value of Recruiting that many in the audience are familiar with. Roughly, Recruiting is as valuable as the intern who gets the coffee. In many organizations, that's exactly the status of the recruiting department (and a realistic statement of the value). "We're too busy, could you get us some candidates? Could you pick up some bagels while you're at it?"

In a lot of places, Recruiting is treated (and behaves) like a pure administrative function. It adds no value, supplements no strategy and fundamentally makes no difference. Like Raghav's assertion that Recruiting Value equals Net Profits, the idea that the value of Recruiting is near zero is also untrue.

In the sessions at the Talent Unconference, we're going to try to find the middle ground and articulate it in a way that can be used for decision making (and that is not laughable at the C-level). The morning session will be a conversation among a group of peers to try to define a working statement or model of Recruiting Value.

In the Afternoon, we'll use the morning's work to navigate through an outsourcing decision. The underlying question in that conversation is something like "Does Recruiting have to be performed onsite to deliver its value?"

If you haven't signed up for the Talent Unconference yet, time's a wasting. If you have, see you there.

PS. We're wearing mirror shades to the poker game and plan to stand behind Jason Davis.

John Sumser © TwoColorHat. All Rights Reserved.
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