AUSTIN, Texas—Organizations with the most mature talent acquisition functions perform 30 percent better on business outcomes and are 160 percent more likely to achieve higher recruiting performance results than organizations with strictly reactive recruiting processes.
Robin Erickson, vice president and talent acquisition research leader at Bersin by Deloitte, a research and advisory services firm based in Oakland, Calif., presented those findings and a breakdown of the firm's Talent Acquisition Maturity Model to attendees at the Human Resource Executive Talent Acquisition Tech Conference in November.
Talent acquisition (TA) is a complex, multifaceted function, and understanding the key performance drivers that propel an organization toward maturity is essential for TA leaders and recruiters, Erickson said.
Employers with more-mature talent acquisition operations have moved well beyond the reactive recruiting stage in which organizations are less devoted to planning and more reactive to immediate talent needs. Mature talent functions embrace new technology, forecast future openings, and rely on predictive data to identify and attract quality hires, she said.
"According to our research, organizations [move through] four different levels in their journey toward developing a fully optimized TA function. The organizations at the lowest levels typically use a more inconsistent approach that is often managed at the business-unit level by HR generalists, while the most mature organizations have wholly upgraded their TA functions, which are seen as strategic enablers of the business."
Bersin by Deloitte's Talent Acquisition Maturity Model has four levels, with level 1 being the most basic, reactive stage and level 4 being the optimal, proactive stage.
Based on a study of 297 companies with at least 100 employees, Erickson found that:
In terms of organization size, 46 percent were small (100-4,999 employees), 30 percent were medium-size (5,000-24,999 employees) and 24 percent were large (25,000-plus employees). Fifty-nine percent were global, and 41 percent only operated in the United States or Canada.
Researchers found that mature level 4 companies invest almost 50 percent more than level 1 companies on careers sites and typically spend more per hire while experiencing lower new hire turnover and lower time-to-fill. Level 4 employers have 10 percent new hire turnover and take 44 days on average to fill a position, compared with 17 percent new hire turnover and 55 days for level 1 companies.
"You get what you pay for," she added. "You're making up for that higher cost-of-hire with the larger savings from lower new hire turnover."
Erickson said that there was no correlation between company size and where they fell on the model. In other words, organization size does not predict TA maturity.
She summarized the four levels of maturity for talent acquisition functions.
Level 1: Reactive
Most employers' TA practices are in level 1, according to Bersin by Deloitte research, exemplified by "post and pray" recruiting methods. These companies generally have HR generalists performing recruiting along with their other responsibilities. In this stage, recruiting is often "automatic," with positions being filled as they become available.
"Hiring managers throw open requisitions at HR, and recruiters throw unsifted resumes back," Erickson said. "There are no organizationwide standards or strategies related to TA. Some are still using spreadsheets to track applicants. Tools and systems are purchased by individual departments. One company I interviewed had six different applicant tracking systems."
Level 2: Standardized
Companies that have reached level 2 on the maturity model have developed a greater appreciation for the importance of talent acquisition, Erickson said. They are starting to define a TA technology strategy, and processes are often standardized across the organization.
Job descriptions are clearly defined, and employer branding is better managed. "Recruiters at this level may start building talent pipelines and working more closely with their managers and senior leaders, but truly integrated systems are not yet in use."
Level 3: Integrated
The jump from level 2 to level 3 is the hardest and requires a larger investment in technology combined with stronger internal relationships.
Level 3 employers have instituted a strong employer brand, integrated talent acquisition with other HR processes and defined a TA technology strategy. They have begun integrating their TA technology systems with other HR systems and use more tools such as candidate relationship management, social search and video interviewing platforms.
"Senior leaders support proactive changes in HR, and recruiters take a leading role in cultivating the employer brand," Erickson said. "Social media sourcing, employee referrals and community recruiting programs are all in place. And hiring managers can utilize data to provide real-time results and define new KPIs [key performance indicators]."
Level 4: Optimized
Erickson called level 4 the aspirational level: TA systems are completely integrated within HR and an organizationwide TA tech strategy is in place and updated regularly. Maintaining at this level takes a lot of work, however, including investing in training recruiters. "Talent acquisition teams at level 4 combine all of the proactive tactics they've been developing to forecast future needs, improve their decision-making, invest in new products and command a more-active role within the company," she said. "The recruitment of top talent is expected at this point, along with [having] an irresistible employer brand and an engaging candidate experience."
Erickson said talent acquisition leaders can help their organizations move toward greater maturity by:
The Bersin by Deloitte research showed that developing strong relationships with hiring managers is the top driver of talent acquisition performance and four times more influential than the other performance drivers studied, which included employment brand, social media, recruiter training, employee referral programs, reporting and analytics, and leveraging of TA technology.
"The impact of effective relationships with hiring managers is seen not only by smarter hiring decisions and increased productivity but also through the greater perception and value of talent acquisition as a whole in the organization," Erickson said.
Candidate pool development is the second most influential talent acquisition performance driver, two times more influential than the remaining performance drivers.
"The key to maximizing candidate pools is quality over quantity," she said. "Good recruiters know not only where to find the talent they seek but also understand how to engage and, finally, how to nurture and sustain communications with prospective targets over time."
By Roy Maurer