This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

In a survey of Human Resource Professionals conducted by Quorum Associates and Research in Motion, 92% of respondents said finding qualified candidates was “extremely difficult”. An Opinion piece in the Wall Street Journal dated June 13^th 2011 by Jeff Imeltt and Ken Chenault stated:

“There are more than two million open jobs in the U.S., in part because employers can’t find workers with the advanced manufacturing skills they need. The private sector must quickly form partnerships with community colleges, vocational schools and others to match career training with real-world hiring needs.

On October, 13^th of this year, Jonathan Vizcarra writing for the web site Technocrati, arrived at similar conclusions. Mr. Vizcarra wrote:

“Siemens Corp in the US has over 3,000 jobs open all over the country. Caterpillar and Motorola at any given time has 200 job openings. Some companies report job vacancies from a low of 6 to a high of 200. Some of these positions are left unfilled for at least nine months. Average starting salary? US$89,000 a year. What’s wrong with this picture? “

Vizcarra goes on to say:

“The problem is that there are few qualified people applying for the jobs. Companies are having difficulty finding applicants with the correct job skills. There are fewer American students taking math and science courses than before. Students in Math, engineering, technology and computer science accounted for 11.1% of graduates in 1980. That share dropped to 8.9% in 2009. In this situation, unemployment is a structural problem. Workers lack the skills needed to fill the jobs. US graduates do not have the correct skill set to start with.

This brings to mind a definition of insanity: insanity is doing the same thing over and over again, and expecting a different result each time. Typically, a company posts a brief job description on its web site, various job boards, and social networking sites; then wades through a mass of resumes and cover letters. The company has no control over who sees the ad. The company has no idea if the people they want to hire have looked at the opportunity. Every time there is a position to be filled, the above is repeated, often with less than mediocre results. I call this process “transactional hiring”.

Part of the reason that companies hire this way is because historically, companies have been able to find enough people, with enough of the skills and experience the company needs, to get by. But that is no longer the case. Prospective employees have been able to find work based on a static set of skills and experience. This too is no longer the case.

If you think of a company as a pond and its people as water, then on one side you have a stream of fresh water flowing in filling the pond, and on the other side a stream of water flowing out. What is important here is the concept of flow; people come and people go, like water moving through a pond. So the question becomes how to keep the pond full with good quality water.

Like water flowing through a pipe, employers may want to set up a talent pipeline. A talent pipeline is a regular flow of potential employees who have the skills, education and experience the company needs. A successful talent pipeline is a positive, affirming, and encouraging process that tries to identify individuals with the drive and motivation to update their skills and maintain their professional competence over time.

To find and attract the people you want, you must first be very clear about who you are, why you are hiring, what are the requirements of the position and skills necessary for success. You must also be explicit about how success in any position will be objectively measured. The next step is to design, develop, and implement a process that produces a flow of individuals who “ultimately” have the skills and abilities needed to succeed. I use the word “ultimately” because at first many candidates may not meet the requirements.

If specific knowledge and or skills are necessary, tell the candidates that they will be tested on these skills or knowledge as part of qualifying for the position. If it turns out that they lack certain skills, share with them local resources where they can get the skills. Make it clear that if they have the drive and motivation to develop and acquire the necessary abilities, they are welcome to come back and reapply for the position.

A properly developed talent pipeline relies on and leverages training resources that are available in the local community. These include local community colleges, and vocational schools. All these resources are eager to engage with local businesses and provide them with individuals who meet their needs. There are also online resources available which Candidates can use to update their skills in math and science. One such example is KahnAcademy(www.kahnacademy.org). Another great resource is www.greatcourses.com. To be clear, this is not a cost to the employer, but to the candidate. When individuals come back, let them reapply, be encouraging. If they meet the requirements, they will have demonstrated one more important quality, a drive and motivation to work for your company.

Companies that are successful in hiring and retaining good people, invest in those people, through good times and bad. The best way to ensure you have the skilled employees you need is to retain the skilled employees you have. A properly developed talent pipeline helps identify key skills and uses talented existing employees to help develop those skills in existing as well as new employees.

Increasingly clients have come to Quorum for help addressing issues around recruiting, talent development, and employee retention. Consequently, Quorum now has a menu of services it can offer clients to help them change how they go about defining what they really need, develop processes to find and identify individuals who meet those needs, guide them through the development of a talent pipeline, then identify and help develop follow on programs that enhances the value of each employee.

Please give us a call if you would like to talk about the above. We are here to help.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Signs of economic recovery seem to be sprouting. Companies wishing to reinforce or grow their business must make smart and strategic hiring decisions today, in order to better position their companies to compete tomorrow. This is not an easy task. When Quorum surveyed Human Resource managers regarding the difficulty they have hiring quality executive talent, 92% said it was very difficult. So what must hiring managers do to make sure they are hiring quality talent? There are three critical components to consider, and a few traps to avoid.

The three critical components include: being very clear about why the position is important, and what it contributes to the future success of the company; direct involvement of the hiring manager, including leading the hiring process and being intimately involved throughout that process; and open and honest communication about the expectations and the challenges of the position among everyone involved in the process, especially the candidates.

Talented managers and executives have no interest in moving from a position where they are successful to one where continued success might be at risk. So why do talented executives change companies? In our experience, the single largest factor in an executive’s decision to make a change from one company to another is what we call the “challenge/opportunity”. Just as risk is associated with return, challenge is the flip side of opportunity. Over the last twelve years, the single most important factor affecting a candidate’s decision to accept an offer from a client has been the significance of the challenges and the associated scale and scope of the opportunity.

Talented managers and executives are the kind of people who look for challenges to overcome and problems to be solved, and tend to have a deep desire to make an impact. To attract these executives, hiring managers need to begin by clearly explaining why the position exists within the company, as well as the positions’ significance to the future success of that company. This responsibility falls squarely on the shoulders of hiring managers and executives. Human Resource partners can help frame this understanding, but they are not a substitute for the involvement of the hiring executive or manager. This leads to the second component of hiring quality talent.

To hire quality talent, the hiring manager must lead the process and be intimately involved throughout. Hiring direct reports is one of the most important responsibilities of executive management. However, once a decision to hire a position is made, hiring executives frequently turn the process over to human resources; effectively withdrawing from the process. It is common to hear HR professionals express frustration about the lack of involvement by their internal clients in the hiring process. It is just as common to hear line managers express frustration with the HR function for a lack of motivation, limited understanding, and mediocre results. HR professionals strive to provide quality service to their internal clients. That service can only be as good as the hiring executive’s leadership of and involvement in the hiring process itself.

The candidate experience is directly influenced by the level of executive involvement in the hiring process. During the interview process, candidates frequently comment on receiving radically different explanations regarding the reasons, responsibilities, and requirements of a particular role. When hiring executives are intimately involved in the process, the reasons for the position are more likely to be clearly and consistently understood and communicated by everyone with whom the candidate comes in contact. Problems, contradictions, and inconsistencies must be identified and resolved quickly, making it clear to the candidate that the company speaks with one voice and everyone is in agreement about the importance of the position being hired. Most significantly, everyone the candidate meets during the interviewing process can discuss the position from their individual perspective. This is a clear signal to the candidate that the executive leading the process has taken the time to involve all interested parties and help them develop an understanding of how the position affects them.

The third critical component to hiring quality talent is communication. The hiring manager is the only individual who can make sure that everyone in the process is empowered to communicate clearly, openly, and honestly with the candidates. All candidates bring to the process an external view of the company and its challenges. Candidates often ask simple, direct questions about the company and its business, and get vague, evasive answers or worse yet, no answers at all. Opaque responses, evasiveness, or avoidance of the issues will leave the candidate with the impression that the problems are much worse than generally understood. Open and direct discussion of the challenges and issues helps to promote a better sense of the candidates’ ability to address these critical needs. It also allows the candidate to formulate a deeper and fuller understanding of the challenges to be faced and evaluate the opportunities created by resolving those challenges. Most importantly, it conveys the company’s desire and commitment to resolve the issues.

The hiring manager is also the only individual who can make sure that their HR partner has the information and background necessary to answer important questions from search consultants and candidates. It is the individual leading the process who sets and communicates the standards for the quality of talent to be hired. It is the hiring managers’ responsibility to communicate this to everyone involved in the process, including the candidates.

There are a few traps hiring executives must try to avoid. The first trap is one of misunderstanding. The hiring executive must make sure that everyone involved with the hiring process, especially those developing and communicating with potential candidates, clearly understands what the hiring manager wants and why the manager wants it. To avoid the trap of misunderstanding, those involved in the process must be able to explain back to the manager his/her expectations in a way that confirms their clear understanding. The second trap to be avoided is the scarcity of time. All successful executives and managers have excessive demands on their time. As those demands change day by day, there is a pernicious tendency to delegate away tasks that can be “managed” by others, especially those softer, more indirect tasks that seem less directly associated with the “business.” Hiring executives need to remember that hiring their direct reports and the quality of those hires is one of their most significant responsibilities, and that precious time must be dedicated to that responsibility. The final trap involves compromise. Given that the position has real value to the future of the business then compromising on the quality of the candidate is not an option. If the hiring executive finds they are drifting towards compromise in an effort to fill a position, then the process must stop and one or more of the issues discussed above should be reviewed and corrected before continuing. Compromise on talent is like compromise on product quality; eventually you pay a price.

The war for talent is going to escalate. No computer, machine, or other asset has ever created a new product, opened a new market, solved an important customer problem, or started a new business. Leadership, innovation, and creativity fall exclusively in the human domain. This is why talented people are important; and why they are difficult to find and hire.

The demographic trends in the United States and Europe indicate that the population is aging and that there are declining numbers of younger people entering the workforce. In the United States, this macro trend is creating tensions between immigration as a source of much needed younger employees and social programs, such as Social Security, Medicare, and Medicaid, designed to care for the elderly. I have already written about the value of older, more experienced employees in the article “Walking out the Door”. Thinking about immigration and Social Security, I have taken a “Back of the Envelope” approach to explore a conceivable solution to what seems to be two unsolvable problems.

Back of the Envelope – Social Security and Illegal Immigration

Everyone is concerned about the cost and solvency of Social Security, Medicare and Medicaid. These three programs represent approximately 65% of all federal expenditures; and approximately 16% of GDP. The Congressional Budget office estimates that the trust funds for Social Security, Medicare and Medicaid, are underfunded by approximately 0 .6% of GDP, or $87 billion. Clearly, without meaningful action, these programs are at risk.

Homeland security estimates that there are approximately 11.5 million illegal immigrants living in the United States and approximately 500,000 new illegal immigrants enter the country each year. Many of these illegal immigrants have paid tens of thousands of dollars in fees and bribes to smugglers and officials to come to America. However, once here, The Department of Homeland Security indicates few illegal immigrants are involved with serious crime. It is also noteworthy that a recent study by Professor Robert Fairlie, of the University of California at Santa Cruz, and the Kaufman Foundation for Entrepreneurship has indicated that, in 2009, for every 100,000 adults in the United States, approximately 310 started new businesses.

The study also indicates that for every 100,000 adult immigrants, of all ethnicities, living in the United States, 510 started new businesses. Further, for every 100,000 adult Latinos living in the United States, approximately 460 started new businesses. For hard political reasons, Congress needs to find a way to solve the funding problem for Social Security, Medicaid and Medicare. As an equally hard practical reality, people want to immigrate to America, illegally if necessary, in order to build a better future for themselves and their families. So, the question is: could changing national immigration policy solve the Social Security funding problem?

The Back of the Envelope

What if each illegal immigrants currently living in the US, could obtain a visa at a cost of $15,000, providing the right to work in the United States and, under certain conditions, become US citizens? In addition, what if all people wishing to legally come to the United States and work could get the same visa for $10,000 with the right, under certain conditions, to become American citizens? Lastly, assume that all the money generated by the visa fees, would be exclusively used to fund the Trust Funds for Social Security, Medicare and Medicaid.

The conditions of the visas might be as follows. All immigrants would be required to have a US citizen or business as a guarantor. Until they become full naturalized US citizen, no immigrant would be entitled to any benefits granted US Citizens, by the United States Government. Upon receiving a visa, they would be issued a Social Security number and required to file Federal and State Tax returns; evidence of all three would be required for naturalization as an American Citizen. In the event the immigrantviolates any of these conditions, they would be subject to immediate deportation, their guarantor would be unconditionally liable for any amounts due the Government, and the immigrant forfeits any funds they have paid or that have been paid on their behalf.

If the 11.5 million illegal immigrants, currently living in the US, accepted this deal, that would generate approximately $172 billion for the Trust Funds. If the 500,000 illegal immigrants, who come to the US each year also accepted this deal, then that would provide an additional $5 billion annually to the trust funds. In addition, these now legal immigrants are likely to start almost 45,000 new businesses; wow!

Just because you could do something does not always mean you should

Sounds pretty simple, but lately people and companies have been doing things because they could do them, not because they should do them. It reminds me of a recent conversation with a candidate about a position they were considering. The conversation did not focus on if the candidate could accept the position, but whether the candidate should accept the position. Although the individual was very excited about the role and the client wanted to hire him, accepting the position entailed significant changes for the candidate both professionally and personally. It was not clear if the candidate should take the position. By focusing on the “should” the candidate had to address the complex issue of long- term personal and professional fit between himself and the client.

Human Resource professionals often say that the “holistic fit” between company and candidate is a major factor in long term success. Just because you could do something does not mean you should. There is an important corollary to this idea.

Sometimes you should do something, even if you are not sure you could do something.

This is kind of like getting blowout prevention technology developed, proven and in place, before applying for a permit to drill. Similarly, in executive search, it is crucial to exhibit patience and discipline in order to ensure both you and your client are clear about the strategic goals and objectives of the position before moving forward with a search. Either way a lot of problems can be avoided.

The Black Swan always gets his man

In a nod to Nassim Taleb, it is not the probability of an event that defines the issue, but the severity of the consequences. There are approximately 3,600 operating oil platforms in the Gulf today, none of which have had an accident. Yet it took just one platform to cause a catastrophe. If the consequences of being understaffed in critical functions are sufficiently severe, it is important to get the right people hired now. No good CEO will accept a “systemic” failure because a manager thought the probability of a problem was too remote, almost zero, to warrant the costs associated with hiring. As Mr. Taleb says; “the Black Swan always gets his man.”

If you want to capture and enjoy the reward, be sure you can cover all the costs

The oil business is incredibly profitable, and deservedly so. While oil companies should be allowed to profit from their activities, they should also bear the full costs of doing so. Similarly, when a company wants to hire an individual to help build their business, market segment, or customer base, they want “only the best”, someone who will “beat their objectives” and “drive the business forward”. Although our job as recruiters is to deliver candidates who can clearly deliver on the objectives and bring real value to the company, we often hear “They’re great, but isn’t there someone cheaper?” You cannot drill for oil on the cheap, and, unfortunately, you can’t hire great talent on the cheap, either.

Systems, processes, procedures and controls are all very important, but they do not take the place of good judgment

This is a paraphrase of a comment by the CFO of a global financial institution. He is right. While there were countless systems, processes, procedures and controls on the Horizon platform, failure was a result of the compounding effects of multiple smaller failures to exercise good judgment. No amount of research, fact checking, reference checks, and multiple candidate interviews can take the place of fundamental judgment about either an individual’s or a company’s ethics, character and capabilities. Following processes, procedures, and controls, can never excuse ignoring the voice that says “this does not feel right”, “something’s wrong.” That little voice is good judgment speaking.

When I point my accusing finger at you, there are three more on my hand pointing back at me

Blame fixes nothing and rarely makes you feel better. What blame tries to do is move responsibility, but at best it can only temporarily shift responsibility. Over time, responsibility is efficiently allocated. When looking at the recent events in the Gulf, the financial crisis, Bernie Madoff, or Enron, there are more than enough people, companies, governmental agencies, and regulators, who failed to exercise their responsibility.

So, when something goes wrong, it is generally better to begin with; “I made a mistake, I will do my best to fix it.” Since I cannot fix a mistake I do not know about, I often ask clients and candidates to tell me when something is wrong. This allows the problem to get addressed and removes blame from the interaction. It is amazing how constructive people can be when they know blame is not part of the conversation.

Now what?

Over the last few years, we have had the rare opportunity to watch the world we know fracture and transform before our eyes. Much of this was because people and companies did things they could. They used a broad range of arguments to convince themselves and others that the risks were small and manageable, without knowing the full extent of the consequences if they were wrong.

Once things began to go wrong, they could not cover the costs of the consequences of their actions. When the systems, procedures, processes and controls failed, it became clear that judgment had been on a holiday for a long time. All that left was finger pointing and laying blame.

Now the time has come to pick up the pieces and start building again. To do this, we need people; good people, people who solve problems, people who build, people with experience, people with judgment, people with humility and empathy for others. These people are hard to find. But they are out there.

Recruitment is built on a Strong Foundation

Recruitment has a number of foundational components.  Each building block is important and cannot be ignored without diminishing the intended results.  The first building block of successful recruiting is to identify why your company is hiring.  Although it might seem logical, vacancy is not the reason.  Think honestly about the importance of this position to your company. You and your recruiter will need to articulate the goals and objectives necessary to the role to ensure growth and success of your company.  Once this building block is clear, your recruiter can help you and your company find an individual who can meet your company’s needs.

The second foundation block is to hone in on what kind of individual are you looking for and why.  The person you seek must fit within the existing culture of your company, even if that culture needs changing.

The third building block of recruiting is to articulate what the individual in the role will be expected to do.  This requires a clear and specific description of the scope of the role, the responsibilities, and related authority.

After the third block of your foundation is set, it’s time to move to step four. You will want to be sure your potential hire has the background and skills required to succeed in the role.  It is important to consider relevant and necessary education and work experience as well a related technical skills and ability.

The fifth building block is to craft a detailed list of the expected accomplishments of the individual in order to quantify success in the role.  These accomplishments must be specific and concrete and measured in discrete time frames over a twelve to eighteen month period.

Once this many layered foundation is built, it’s finally time to determine how the position will be compensated in terms of salary, bonus, and other incentive compensation.  If you decide to utilize industry compensation studies, be sure the data is relevant and comparable to your company.

Identifying Specific Individuals

Line managers should not want to interview numerous candidates.  In fact, they should expect to interview no more than five individuals, all of whom will tightly fit the requirements of the role based on the foundational components.

A recruiter must look at both direct and indirect competitors and functions that are related to the role being recruited.  Then the recruiter should identify individuals in those companies and functions who can act as sources.  Sources are individuals who are likely to know of someone appropriate for the role being recruited.  Relying on and seeking the knowledge and expertise of others is a sign of a skilled recruiter and paramount to identifying individuals who meet the requirements of the role and are clearly qualified for the job.

Bring Value to Your Company

As the recruiter speaks to potential candidates, they will gather quantifiable and anecdotal information about each individual.  This information is important for assessing any candidates’ ability to bring value to the company.  It allows the recruiter to ask questions that might not be otherwise asked when interviewing candidates.  Further, when a candidate is mentioned by a number of sources, the recruiter has the ability to gather more detailed information about a candidate and why they might be particularly promising for the role.

Attracting Them to Join the Company

When the recruiter contacts promising candidates, it may be received with caution. In order to mitigate this, the recruiter must be able to discuss all the foundational blocks of the role and articulate the position’s importance within your company.  Although compensation needs to be competitive, keep in mind that good people rarely change jobs for money. People change jobs for unique opportunity, and other personal and professional reasons.  It is the job of the recruiter to learn and understand a candidate’s motivation for change and make it clear to you.

Once the recruiter makes contact with a candidate they begin marketing the company and the opportunity.  Everything they say and do affects a candidate’s decision to remain in the recruiting process.    Both recruiter and the company must remember that there are few secrets in any industry. If the candidate begins to feel that either the recruiter or the company is not being open and forthright, the process will end. Because of this, it is important to be honest about both the positive and negative aspects and of the position and the company.

The recruiter should prepare a report on each candidate in order to provide the full details of a candidate’s professional career and qualifications.  It should also include the recruiter’s recommendation for the candidate, backed up with the reasons why they clearly and specifically meet the requirements of the position.  With a sufficiently detailed report, you will not have to ask basic informational questions about the steps in a candidate’s career during the interview. A successful report does the background check for the company and allows them to focus on substantial issues about the role and how the candidate would address and manage those issues.

Interviewing Candidates

Candidate interviewing, by the company, must be done carefully and professionally.  It is just as important that the company present well, as it is for the candidate.  The candidate should know how many people they will interview with and what their involvement in the recruiting process will be. In addition, information must flow both ways.  The company must answer any question the candidate has, regardless of how uncomfortable or vulnerable it makes them.  Similarly, the company should expect the candidate to do the same.

Making an Offer

Making an offer is often the most delicate part of the process.  If the company has a view about what the compensation will be, share that with the candidate up front and early in the recruiting process.  If all the individuals identified back out of the process due to compensation, then something is wrong; and it is not with the candidates.

When making an offer, be clear, be specific, be complete, and be fast.  Once the offer is on the table, give the candidate time to consider and ask any questions. Do not be surprised if they wish to meet with the hiring manager again.

Ensuring Success

Once an offer is accepted, present the candidate a plan for in-bounding or on-boarding them into the company.  This plan should include who they need to meet, what they need to know, problems and issues they should be aware of, and an understanding of the dynamics of the team they are joining.  Remember, most new hires fail in the first ninety days.  Protect the investment your company has made by bringing new people in correctly.

When done properly, recruiting can be a powerful strategic tool.  It can change a company and its culture.  Successful recruitment is difficult, but when done well, it can be amazing.

In Part 1 of our interview with Richard Edwards of HED Capital, Richard gave a summary of the theoretical basis for the work he does. There are a few comments that need to be made before we begin Part 2. Since mid-2007, Richard had been telling his readers that the bull market in equities would soon be over and that the fall would be steep and severe. In October of 2007, he warned his readers that the high point would be at any moment and then identified the absolute high of the Dow to within 24 hours. In July of 2008, Richard told his readers that the rise in oil prices was over, declines were imminent and in August 2008 he said the back of the oil market was broken. On March 9th this year, Richard advised buying stocks, adding two days later that a long-term bottom was being made. Stocks in most markets around the world did indeed make their post-crunch lows on either the 9th or 10th March. These are but a few of the prescient calls Richard has made over the years, based on the research work that he and his group have done over two decades.

In Part 2 of the interview, Richard will be sharing further details about the methodology and explaining some of the applications. Some of his comments will expand on the discussion in Part 1. Later in this interview, I will provide readers with the contents of Richard’s commentary as it was made at the time. Each will be dated so the forward predictions of subsequent market events can be verified. On that note, I would like to welcome Richard back.

To continue reading this interview and view the charts and commentary, download a free PDF.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Recently, a client asked me; “What is the single biggest competitive challenge Quorum Associates faces?” I thought for a moment and then answered, “It is the pervasive negative perception of executive search and the tarnished reputation of the executive search business.”

Candidates tell us they feel treated like commodities and traded for a fee. Line managers frequently comment that search firms rarely have real knowledge about their business, their industry and/or the commercial issues facing their industry or company. What’s more, the person who sells the assignment is often not the person who does the work. Line managers, HR professionals and candidates all perceive a general unwillingness by search consultants, including those from the big firms, to invest the time and energy necessary to really understand the client’s business. As a result, positions are not really as represented and candidates are not as expected. The relationship of trust between clients, candidates and recruiters is damaged.

The feelings of clients and candidates applies to all types of search firms, retained as well as contingent; and all sizes of firms, large brand names and small boutiques. Many of the metrics typically used to evaluate search firms have little bearing on the quality of future service provided. A long list of prior assignments is no guarantee of future performance. Standard selection processes such as beauty parades, preferred provider lists and placement history may be convenient and easy to use, but they are, at best, poor measures of future service quality or assignment success. What should line managers, their HR partners and candidates expect from executive search firms?

The only way to establish trust is for clients and candidates to experience a quality search process. And that requires time, energy and commitment on the part of everyone involved in the process. So how does one identify a quality search process?

A quality search process begins with knowledge about the client and a commitment to client service. This means line managers and HR professionals need to find executive recruiters willing to commit the time and intellectual capital to get to know and understand the client’s business and company. Specifically, they need to find search consultants who will do fresh research on the industry, the manager’s line of business and competitors.

HR professionals should remember that when a recruiter says, “I know the market,” he or she often means, “I know some people in your business.” It does not necessarily mean, “I know and understand your business and the challenges and issues you are facing.” Nor does it mean the consultants are willing and able to obtain the knowledge and understanding required to effectively complete an assignment.

A quality search process requires clarity about what the client really wants and why. In our experience, it takes a number of thoughtful and probing conversations to fully explore the scope of what a client wants from a particular role. This requires both time and effort on the part of the line manager, HR and the search consultant. This is not easy, but it is very important because, to get the search right, you have to get what the client really wants right.

The search consultants must be able to write a document which clearly articulates knowledge of the company, clarity about the position, understanding of the culture of the company and the specific performance expectations of the client. Putting the scope of the role down in writing, allows the line manager and the HR partner to be sure the search firm understands what is needed. It also allows everyone involved in the process to clarify any ambiguity, carefully consider exactly what they expect from a position, and resolve contradictions between the expectations for the role and the specific measures of success. A quality recruiter should be willing and able to do this before the search begins.

HR professionals will know this is done properly when the line manager, as well as everyone else involved in the hiring process, can read the final document and say, “This is exactly what we want and if you bring us someone who fits this document we will hire them.” Potential qualified candidates should react to the document by saying, “I know exactly what they want to do, why they want to do it, what it takes to do the job and how performance will be measured. This document is clear and specific.”

Most clients and candidates experience the process of executive search as bumpy and chaotic, which leaves everyone feeling uncomfortable. Many recruiters stumble from candidate to candidate, working their existing network of contacts or some internal database. When these efforts lead to dead ends, the search grinds to a halt. Both clients and candidates are left to question the value provided by the recruiter.

Quality search consultants understand that a strong search process has structure for the search firm and transparency for the client. It allows the client-both line manager and HR professional-to have timely input, provide valuable guidance, help steer and direct the search, and ensure a successful outcome. It requires a team effort. Any issue, confusion or misunderstanding must quickly surface and be resolved. Lack of commitment and engagement by the client is the best way to ensure poor search results. A well-defined process with clear benchmarks and deliverables at each critical step is the optimal way to keep an assignment on track towards success.

There is a point in a search process where focus shifts from the client to the candidate. Culture and chemistry are why a candidate succeeds in a given position. The candidate with the best cultural fit with the company and ease with the style of management will be most likely to succeed. It is always a mistake to place any candidate, who is not a good fit for the company, the manager and the role. And these concerns are just as important for any candidate.

When it comes to candidates, Quorum is in the business of dreams, aspirations and ambitions. If we can match these dimensions with the strategic and tactical objectives of a client, the results are always powerful. Consequently, our focus is on developing a holistic view of candidates, in terms of their lives, not just their professional interests. We also caution candidates, that if for any reason they hear a little voice telling them that something is not right, to tell us. The process stops until that voice is carefully heard.

Fees are probably the most volatile issue. The rage clients feel is profound. They become angry when they have paid an entire fee upfront only to have the search drag on for months with few quality candidates and sometimes no placement. Quality search consultants get paid as they perform. They believe clients should not pay full fees for assignments that are not completed. Honest and fair dealing is important for both the client and the search consultant.

On the other hand, when the circumstances of a position change, clients must be open with the search consultant and the candidates about the change and the reason for the change. Problems and issues with the role or the company need to be disclosed up front as the assignment begins, not once the candidate joins the firm. Many search consultants feel angry when clients and their HR professionals try to hire candidates presented behind the search firm’s back, attempt to renegotiate fees and/or reinterpret retainer agreements after candidates have been hired.

Quorum believes that clients should be charged for work performed based on agreed objectives and benchmarks. In return, clients and their HR partners have an obligation to work openly, honestly and diligently with their service provider to facilitate the completion of the assignment.

There are many good professional search firms dedicated to quality service and strong client relationships. Clients should be open with these firms, share issues and concerns, allow these firms to help them and, finally, let them demonstrate the level and quality of service they can provide. Quorum wants relationships with its clients. This means we will do what is right and best for our clients, and we hope and expect that our clients will do the same in return.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

If one could list the five major functions of a quality HR department, what would those five functions be and which of those have the greatest impact on management’s opinion of HR?

This question was asked in a number of human resource groups on the professional networking site Linked In. There were approximately 41 individuals who responded to the question and provided a broad range of thoughtful, intelligent answers. This article is a summary of the thoughts and comments provided by human resource professionals and consultants. The purpose is to make the information available to all and allow additional comment and debate.

“I don’t think it’s about which HR function has the greatest influence but rather which HR person. That person most assuredly will be the one who builds credibility as being a business person first and an HR professional second.”

In reviewing all of the comments and responses, a few general themes became clear. A major theme that seems to be important is the idea of human resources as a strategic, business-focused function. Many respondents used language that implied a strategic value to the functions and capabilities of HR. Clearly, respondents felt it was very important for HR to demonstrate commercial sense, knowledge of the business, the competitive landscape and a strategic understanding of how the business needs to develop.

“I think these are all great answers. But the one I have found to have the biggest impact of an HR professional on upper management is to have an understanding of the business. By truly understanding what the company does, who they are, what services they provide and where they want to go, upper management will be more likely to see HR as a business partner, and not an administrative function.”

Therefore, it is perhaps reasonable to assume that there are HR functions that are clearly focused on the commercial and strategic aspects of the business. Additionally, it might follow that most HR professionals would include those in one of the top five or six functions of a quality human resource department.

As a follow up to this, many people made comments about human resource functions and the importance of those functions connecting together in support of the business.

“We have to connect the delivery of our activities with their business impact. We’re delivering talent so that clients are served by smarter people. We’re delivering motivation so that we generate better solutions for customers. We deliver employee relations so that we retain a stable and knowledgeable workforce our customer’s value. We deliver all these things so that our company’s people create superior value for stockholders.”

These comments imply a relationship between the delivery of talent and the achievement of strategic objectives. This might mean that talent acquisition and recruitment would be very important.

“I would like to say that recruiting the right person for the right place, keeping in mind business requirements and retaining him as per organization requirement is so important that he or she should be kept by any mean, i.e. motivational or tools.”

This would also imply that talent management is very important.

“I really believe talent management will have the biggest impact on the perception of HR.”

Respondents also commented on the importance of being trusted by those managers they support. The issue of trust with respect to HR is one that Quorum has seen come up in a number of ways.

“HR is privy to information that is not to be shared. Managers need to know they can trust you. They also need to receive the customer service experience where they feel that you are there for them, that you are concerned with their efforts and that you are taking it seriously to partner with them to reach their goals.”

Yet the negative perception of human resources by management continued to surface and some comments seem to express a deeply felt frustration.

“Unfortunately HR is yet widely considered as a support function and not an initiative (innovative) one. And the fact of the matter is that when HR tries to be initiative (innovative), the management would shoo them off by saying, "You don’t understand the market. Please do what you are asked to." Unfortunately, this is the fact! But if we don’t understand the market, then how do we provide them the best of the available human resource to do the business?”

Summary of Respondent Ranking by Major Category

Given the breadth and range of responses, the individual functions that were listed by respondents, were organized in their order of importance. These were then grouped into nine major categories. Only those respondents who gave a list of important functions were included. Some respondents seemed to agree with a particular list, but did not provide their own.  In this case, that particular list was not included twice.

As an example of how functions were categorized, functions like change/transformation management, leadership succession, organization design, organization development and succession planning were all grouped in the category organizational development. Functions like delivering HR information, HR metrics, HRIS (human resource information systems) and HR reports for decision making, were all put in the category of analytics.

Below is a table that summarizes the ranking of important functions by major category. The number of functions per category indicates how many functions were mentioned that were reasonably grouped in to a specific category. The percentage of mentions by respondents is a measure of how many respondents mentioned a function that applied to each specific category. For example, 78% of respondents mentioned a function that applied to the category of talent management.

The ranking of importance is based on the indicated importance. Larger percentages imply respondents seemed to place a greater importance on the functions in the category. A category with most functions ranked fourth or fifth, would imply a lower importance to respondents than a category with functions ranked consistently one or two.

What struck Quorum as interesting was the contradiction between the percentage of individuals mentioning functions within categories and how they ranked the category in terms of importance. For example, the category of talent acquisition ranked 83% on importance (mostly first in importance) yet only 19% of respondent’s listed functions associated with this category. Alternatively, talent management ranked 46% on importance (mostly fourth and fifth in importance), yet a full 78% of respondents listed functions associated with talent management.

There may be a number of reasons for the seeming contradictions between which functions were listed and how they were ranked on importance. What is important is not the absolute numbers but the directional indication of the numbers. Business knowledge and strategy are very important to those who mentioned it; but not very many respondents mentioned it. The same is true of recruiting. Talent management was mentioned as a key function by a significant majority of respondents, but was noticeably lower in importance. The reasons for these answers needs further study.

COMMENTS AND CONCLUSION

This report is an attempt to share the comments and views of respondents to a question posed about key human resource functions and their influence on management’s views of HR. The liveliness of the debate and the range of comments indicate that there are a number of issues that need to be better understood.

As some readers may be aware, Quorum Associates is engaged in a study of human resource professionals. The purpose of the project is to develop a better understanding of the challenges and issues human resource professionals face in today’s environment. This project entails a series of short and simple digital surveys conducted by the independent national research firm Action Research Institute. A full and detailed analysis of the results of the first survey has been sent to participants and is available in PDF format to those who join and complete the study.

We have completed the first survey and a few of the results are relevant to this discussion.

In response to open-ended questions in the survey, many respondents indicated that how human resource executes its capabilities has a relationship to how human resource is viewed by management. Others indicated that effective HR capabilities begin with the support of senior management. A majority of respondents felt that issues of capabilities (talent management and talent acquisition) were most important, followed by the perception of the HR function as strategic. This seems to parallel many of the comments made by respondents in this case.

However, an important finding of the first survey is that the perception of the human resource function is independent of the perception of HR capabilities. Based on the answers of human resource professionals, who participated in the survey, there was little meaningful relationship between how the human resource function is perceived internally or externally and the perceived quality of processes to attract, hire and manage talent.

In addition, it was a basic assumption in the survey, that positively perceived talent management and talent acquisition processes would allow easier identification and recruitment of top talent. Regardless of how respondents viewed their talent management or their talent acquisition processes, the identification and recruitment of top talent is still a challenge. 93% of participants indicated that identifying and recruiting top talent is very difficult. Furthermore, this was true regardless of the internal or external perception of the HR function. Yet only 19% of respondents from Linked In mentioned functions associated with talent acquisition.

Lastly, 73% of our survey participants, ranked “the human resource function is perceived by the company as a strategic function and the professional within HR are viewed as proactive, helpful, constructive and engaged” as in the top two of importance. However, only 16% of respondents here listed functions associated with the category business knowledge and strategy.

The responses to the question at the beginning of this article are a helpful check on some of the assumptions Quorum is making in developing the surveys. Furthermore, we are trying to listen to some of the unspoken factors that influence the relationship between management and human resources.

We want to thank everyone for taking the time to share their thoughts, views and experience-and encourage continuation of this discussion. We invite all human resource professionals to participate in our study.

Summary
Quorum Associates LLC and Action Research Institute have completed the first in a series of surveys for the Human Resources Professionals Research Project. This project examines issues facing human resource professionals in order to develop a better understanding of the challenges these professionals face in today’s environment.

The first survey looks at four key dimensions: the HR relationship with line management, talent management, talent acquisition, and professional reputation. These dimensions were chosen based on anecdotal evidence that all of these dimensions are closely interrelated. Based on the results of the first survey, these dimensions revolve around four distinct themes. Theme A pertains to the perceptions of the HR function. Theme B is about the talent management and acquisition processes. Theme C indicates limits to current talent management and talent acquisition processes. Theme D highlights the difficulty that HR Professionals have acquiring and recruiting talent. Lastly, survey participants were asked to rank four statements, related to these themes, in order of importance.

Background
It was deemed important to present a framework that might describe the effective and well-respected human resource function. Based on conversations with Human Resource Professionals and line managers, the framework consists of a few closely interrelated dimensions.

• The human resource function should be perceived as positive, proactive and strategic by the management it serves and respected by its industry and professional peers.
• The human resource function must be more than administrative.
• It is important for the company and human resources to understand what is required to help employees succeed and be willing to make that investment.
• There should be a talent management process that is comprehensive, rigorous, and valued by the entire company.
• The framework requires a talent acquisition process that is thorough, consultative, and produces expected results.
• Lastly, identifying and recruiting top quality talent should be straightforward and uncomplicated.

A basic assumption of this framework is that each of the major conditions and capabilities listed above are closely interdependent and mutually reinforcing. For example, it is assumed that how the human resource function is perceived is closely dependent on the quality of each of the significant capabilities and vice versa. It is also assumed that each capability is closely dependent on the others. Talent management is closely dependent on talent acquisition, which is dependent on effective recruiting.  Each of these is also closely dependent on the company and human resources’ understanding what it takes to help employees succeed. All of which is dependent on human resources being more than an administrative function.

Results
When the dimensions of the framework are examined, they form four distinct themes. These themes involve the perceptions of the HR function; talent management and acquisition processes; limits to current talent management and acquisition processes; and the difficulty that companies have acquiring and recruiting talent. In all instances, the responses indicate how HR professionals view each of the respective themes.

• 73% of respondents indicated that most senior management that they principally work with perceives the HR function as helpful, positive, pro-active and a strategic function.
• 60% of respondents indicated that the HR function at their company was respected in their industry and by other human resource peers.
• 69% indicated that the responsibilities of human resources include the assessment of all employees and the development of effective training programs for employees from CEO to entry level.
• 65% of respondents indicated that to attract, hire, motivate and retain quality employees, and make sure they are successful over the long-term, that they (management and HR) understand and accept what is required to help employees succeed in terms of competitive compensation, continued professional training and development, and that they are willing to make that investment.
• 56% felt their talent acquisition process is thorough, consultative and always produces the expected results.
• When looking at the responses to questions 4, 5 and 6, 79% of respondents answered the questions the same way. If they answered any single question 4, 5, or 6, positively, they answered the other questions, 4, 5, or 6, positively and vice versa. These questions are also clearly interrelated.
• 62% felt that their company does not have an effective talent management process.
• Only 38% of respondents felt that their talent management process is comprehensive, rigorous and valued by the entire company.
• 44% of respondents felt that their company’s talent acquisition process was ad hoc, informal and often unsuccessful.
• Fully 92% of all survey respondents indicated that identifying and recruiting top talent is very difficult.

Question 9 asked HR respondents to rank four dimensions based on the order of importance. When the answers were analyzed, the two questions about human resource capabilities, collectively received the majority of the top two ranking in terms of importance:

• 65% ranked “Identifying and recruiting top quality talent as important to the future of the company and a talent acquisition process that was thorough, consultative, and always produces expected results” as one of the top two of importance.
• 35% of respondents ranked “Our Talent Management Process is based upon the comprehensive assessment of all employees and is designed to retain, motivate and engage employees by providing a broad range of compensation, professional development, and motivational tools and programs” in the top two of importance.

As stand alone questions, the question about the perception of human resources was equal in importance to respondents to that of recruiting top quality talent.

• 62% ranked “the human resource function is perceived by the company as a strategic function and the professional within HR are viewed as proactive, helpful, constructive and engaged” as in the top two of importance.
• Lastly, on the importance of the external view of the Human Resource function: 73% of respondents felt that “the Human Resource function at their company is highly respected in their industry and by other HR Professional peers” was the least important.

Conclusions
There were a few broad findings in the first survey. These major findings are consistent across all respondents, the levels of management they serve and respondent subgroups by industry and geographic location.

• The data clearly indicates that the perception of human resources and the capabilities of the HR function are independent from each other. This is not the answer that was expected and warrants additional research.
• The data also indicates that the perceived capabilities of human resources are closely related. How respondents answered any single question 4, 5, or 6, was a strong indication of how they answered the other questions, 4, 5, or 6. The answers to these questions are clearly interrelated.
• It was a basic assumption that positively perceived talent management and talent acquisition processes would allow easier identification and recruitment of top talent. Regardless of how respondents viewed their talent management or their talent acquisition processes, the identification and recruitment of top talent is still a challenge. The results of the survey do not explain why this is the case. But this issue is clearly important and needs to be better understood.

This first survey provided meaningful insight and guidance for further study. Each of the conditions and capabilities could be the subject of a number of surveys. Clearly, there is more to be learned around each of the themes that developed. This is a continuing project. Based on what we have learned, Quorum Associates and Action Research Institute are preparing the second survey.

We wish to thank everyone who has participated in this survey. A full and detailed analysis of the results has been sent to participants.

We wish to encourage other human resource professionals to join our study. Sign up to participate and you will receive the complete results via PDF.

Thank you,

About The Sponsors

Action Research Institute

Action Research Institute provides high-quality strategic consulting and research to businesses in various industries.  It has pioneered research methods in business-to-business branding, customer experience management, and employee research.  Operating since 1987, the firm enjoys strong relationships with its clients, who entrust their valued assets, and future viability, to Action Research Institute.  The firm has the ability to conceptualize an opportunity & operationalize information creation that lets clients capture that opportunity.

To learn more please visit the Action Research Institute website: www.actionresearchinstitute.org

Quorum Associates LLC

Quorum Associates LLC is an international executive search consultancy providing strategic and advisory service to global clients in financial services and consumer products. Quorum Associates was founded in 1998 and has offices in New York and London. Our success is the result of focused relationships with clients founded on the principles of hard work, honest advice and constant focus. Quorum views every assignment and candidate placement as an investment in the future of both the client’s business and the candidate’s career.

To learn more please visit the Quorum website: www.quorumassociates.com
Or contact us at: 001(212) 231-8343.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Headlines proclaim the loss of jobs in the financial services industry, particularly on Wall Street and in London. It has been six or seven years since the last major purge. As I read the stories and hear the news, I ask myself, if there is anyone working in financial services who remembers any of the following events: the S&L implosion, the New York City Financial Crisis, Prime Minister Healy’s request for a loan from the IMF to prop up the Pound, the Mexican Peso Devaluation of 1976, Fed Chairman Paul Volker’s attack on inflation and, lastly, the market events of October 1987.

Markets have a serious advantage over people. Their knowledge is cumulative and deep, and at each opening bell, they know how all the cards are dealt. It seems that markets never forget and are incredibly intolerant of mistakes. George Soros once said, “I am far to rich to suffer the indignities inflicted by markets.” Markets are happy to teach their lessons over and over again, or at least until your money runs out. Yet markets are a product of people; they exist only when there are people to trade. The more people involved, the more trading, the better the market. But what about the people who make up the markets?

People actively engaged in capital markets are forced to constantly learn. Remember, the market is a ruthless teacher. It is what traders do not know that costs them money. The breadth and scope of this knowledge seems limitless. It is more than the knowledge of finance, a company or industry, a particular asset. It includes understanding how the market behaves and what calms it down or makes it jumpy. It also requires past experience, knowing how the market behaved under similar circumstances in the past. Some of this is captured in aphorisms senior traders know: the trend is your friend; never catch a falling knife; there is no crime in being wrong, the crime is staying wrong; the shorts always know more than the longs. But some of the knowledge, the deeper knowledge, cannot be distilled into pithy sayings. Sometimes market participants will express this in terms of how the market “feels” or how they see it “behaving.”

I was once talking to a seasoned portfolio manager who said to me that we were heading into a recession. I asked him how he knew that and he said “all I have to do is watch my screen; I can see it in how the market behaves.” He had been managing money for more 40 years. He was more than just smart; he was wise. Experience had made him so.

My personal background is not in capital markets. Economics, accounting and finance are my intellectual foundation. However, for a brief moment, I spent some time working at a small hedge fund. After laboring diligently on a particular company, applying all my knowledge and skill to assessing the investment, I sat with the senior partner as we began to build the position. I will never forget the painful baptism I received. As the ticker went from green to red, the market coolly informed me of exactly how wrong I was, in instantly calculated dollars and cents.

Though my wounds have healed, the lesson of that day will never be forgotten. It was a lesson I could only have learned by being in the market. I learned many more, some painful, some joyous, all priceless.

Many have commented on how Wall Street manages its human capital; few comment positively. When times are good, people are hired with abandon; when times are bad, the baby is tossed out with the bathwater. Room is made for the younger by removing the older. It may be that ambition and energy are more valuable attributes of human capital than experience and wisdom. It may also be that some of the recurring cycles the industry experiences are due, in part, to the continued departure of those who have long suffered the indignities of the markets.

Given the time it takes to “learn” the markets, it seems a terrible waste to let this valuable knowledge walk out the door. These individuals with 20 or 30 years of experience are still young and many, if not most, have one or two entire careers ahead of them. Why expose the institution to the market risk of inexperience when a guiding seasoned hand is available? That is not to say that they should stay in their prior positions. It is to say that there are a wide range of other functions that would benefit greatly from their knowledge; risk management immediately comes to mind.

Regulators should also be mindful of the value of this talent. Maybe the shrewd young trader can fool a regulator, but the former head of a desk? Who better to understand what the trading strategy of a hedge fund might be, than someone who traded the other side in a prior life?

So the over-riding theme here is that there may be a relationship between how firms regard experience-based wisdom and some of the cycles of the industry. As they say: the crime is not being wrong; the crime is staying wrong.