Why Talent Management Investments Generate Poor Returns and What to Do About It: The Recruitment Problem

“Find us someone who will be ready for a VP job in 12-18 months but who is prepared to come in and prove it.”  Those in the recruitment business will recognize this request as a growing trend.  As demographics kick in and retirements loom, organizations find themselves with talent holes and a lack of ideal internal candidates to fill them.  Asking recruiters to find and secure high potential talent willing to make a job change on the possibility of bigger things to come is certainly ambitious.  And unlikely to be successful as a talent building strategy.

Why recruiting high potential talent works better in theory than in practice

When organizations have the opportunity to go outside for talent, they take it very seriously.  The goal is, always, not only to attract the best possible candidate for a role but to increase the talent pool.  Then reality sets in:

1. The odds of finding a needle in a haystack.  What are the odds of finding a future star at exactly the right moment, for the right job, with the right culture fit, for a manager who will inspire them, who is willing to relocate companies/cities/countries for the compensation you are willing to offer to work for you?  You have to get awfully lucky.  And the more senior the role, the smaller the pool, the lower the odds.  More than likely, by the time you’ve checked all the boxes, you have hired a very capable individual and left your search for the elusive high potential talent for another day.
2. Recruiters source candidates with experience, not potential.  Sitting in the HR executive chair gave me an immense respect for the work search professionals do.  But they are fundamentally set up to identify and validate past experience, not future potential. 
3. Highly talented people are rarely out looking for new opportunities and if they are, they are probably getting better offers.  The high potential leader is very fussy.  She probably has a short-list of companies and roles she wants to pursue.  Unless your organization is a leader in its space, can guarantee ongoing career growth and provide an inspiring environment, boss and management team, you are probably not on her short-list.  Top-tier talent want to work for top-tier organizations with other top-tier talent.  My 20-something nephew graduated top of his class with several notable professional awards under his belt and was recruited by his dream company to do his dream job for less money than he was currently making.  He took it, packed up his car, and headed east.  Unless you are someone’s dream company offering their dream job, successfully recruiting high potential talent as a way to bolster your pipeline is a tough proposition. 
4. Success is contextual.  People are not successful in a vacuum.  It is often difficult to know how much of someone’s previous success has been tied to the environment and context.  Whether they will be able to transfer their capability and potential to a new setting is unknown.  For an interesting look at this phenomenon, see The Risky Business of Hiring Stars (Harvard Business Review, May, 2004).

Strategies to increase your odds of success

For many organizations, the necessity of using external recruitment to bolster the talent pipeline is a reality.  Here are a couple of suggestions to make this a more successful endeavour.

1. Target aggressive and proactive talent recruitment at lower levels and focus on retention at upper levels.  The earlier you can recruit talent, the better your odds of finding and getting them - the numbers are working in your favour and some of the hooks that grab and hold high potential talent haven’t yet been established. 
2. Introduce the ‘special projects’ role.  It is a mystery to me why organizations don’t simply hire talented people when they bump into them, regardless of whether they have anywhere logical to put them.  Every department has more on its plate than it has the resources to accomplish.  Consider establishing a special projects role and using it to place new recruits and untested talent.  Imagine what your life would be like if, every time there was a vacancy, you had a high potential you knew and had nurtured you could slip into the role.  
3. Make talent scouting a leadership expectation.  The best candidates don’t come from the recruiters.  They come from your own leaders who are out interacting with customers, suppliers, competitors and other stakeholders.  They are also the best people to be out there selling your company’s value proposition. What are you doing to ensure leaders are actively scanning, identifying and hiring talent? 
4. Hire or retain a professional talent scout.  There is a reason hockey scouts travel around the country, sit in arenas, and watch kids grow up and play.  Many companies are making the move toward supplementing external recruiters with internal recruiters.  Social media has significantly eased the task of finding and phoning talent.  But rather than simply focus on filling existing vacancies, this function should be proactively scanning the environment for potential talent and actively recruiting them well before they are in demand.  
5. Make data-driven decisions.  Hiring is always a gamble.  However, there are very sophisticated assessment tools and strategies designed to help you understand, identify and predict potential.   Building these into your recruitment process will significantly increase your ability to pick a rising star who can operate effectively in your organization.

Stay tuned for my next article Talent on Board: How Traditional Board Recruitment Practices Help to Maintain the Status Quo.

Sources
The Risky Business of Hiring Stars (Harvard Business Review, May, 2004).