Transforming TA into a strategic function that can prove its long-term value to the business has been a critical topic on the show this year.
AI, uneven talent markets and challenging economic factors continue to cause widespread market disruption, and TA leaders need to drive their function in a more strategic direction. As we race towards 2024, I will continue to seek out strategic thinkers who can share the insights we need to move the industry forward.
My guest this week is Marcel Rütten. Marcel is a consultant, author, podcaster, conference organiser and former Global TA Leader who knows what it takes to build a highly strategic TA function.
In the interview, we discuss:
• Talent market trends
• Proving TA’s strategic importance to the C-Suite
• Aligning TA strategy with business strategy
• Uncovering the real issues in hiring and retention
• Tools and technologies
• Root cause analysis
• The balance between time, cost and quality
• Using data to analyse candidate behaviour
• What impact will generative AI have on talent acquisition
• What will recruiting look like in 5 years?
Listen to this podcast on Apple Podcasts.
Transcript:
Matt: Support for this podcast is provided by Paradox, the conversational AI company that’s transformed the hiring process for global TA teams like General Motors, Nestle, and McDonald’s to get recruiting work done faster. What if recruiting and hiring was as simple as this? Yes, this. The conversation I’m having with you right now, with Paradox, it is. The leverage conversational AI to seamlessly automate time consuming recruiting tasks like applicant screening, interview scheduling, and onboarding via chat conversations right on the candidate’s phone or laptop, so recruiters can spend more time with people, not software. Paradox has helped global employers save countless hours and millions in recruiting costs simply by making hiring simple and conversational. Visit Paradox AI to learn how Paradox can work for you. That’s paradox.ai.
Matt: Hi there. This is Matt Alder. Welcome to Episode 567 of the Recruiting Future podcast. Transforming TA into a strategic function that can prove its long-term value to the business has been a critical topic on the show this year.
AI, uneven talent markets and challenging economic factors continue to cause widespread market disruption, and TA leaders need to drive their function in a more strategic direction. As we race towards 2024, I’m going to continue to seek out strategic thinkers who can share the insights that we need to move the industry forward.
My guest this week is Marcel Rütten. Marcel is a consultant, author, podcaster, conference organiser and former Global TA Leader who knows what it takes to build a highly strategic TA function.
Hi, Marcel, and welcome to the podcast.
Marcel: Hi, Matt.
Matt: An absolute pleasure to have you on the show. Please could you introduce yourself and tell what you do?
Marcel: Of course. Many thanks. So my name is Marcel. I’m from Germany. I have worked in HR for the last 15 years in different companies, most recently as Global Director, TA and employer branding. I’m an expert for strategic TA, mainly in Europe, and support global companies as a consultant to transform their TA function. In addition, I’m a blogger from HR for good. That’s a German speaking blog about trends and innovations in HR. I’m a podcaster as well for Clever & Smart, an HR podcast where two agents talk about different topics in HR and try to solve an exciting case every week. I’m an author, so I’ve written the book, Future Talents, as well as the book Recruiting Analytics. Finally, I’m initiator and host of one of the major recruiting conferences which is called Schicht im Schacht, which is a wordplay in Germany for shift in the shaft. So, a dedication to the former coal mine area where I live, and the sentence the shift is over, which is more a dedication to the shortage of skilled workers.
Matt: You’re obviously a very busy man, but you’re the perfect person to ask this question to you. So it’s been a very interesting year from a talent perspective. You mentioned skill shortages there, but on the other hand, we’ve seen layoffs and all kinds of things going on. What are you seeing in the talent markets from your perspective in Germany, across Europe? What’s going on?
Marcel: Yeah, of course, we can talk about generative AI in recruiting. So that’s obvious because generative AI is the main trend so far in every market, I guess. The speed at which new things are created in this matter are definitely remarkable, but it also creates competencies that were not there before in TA. But what I perceive as much bigger trend is that companies are trying to move away from being short-term reactive and create a strategy that has a lasting impact. And to do this, they rely on recruiting analytics or talent intelligence approaches to make their recruiting more data driven than before.
Matt: So let’s dig into this a bit, because I think that lots of people listening will be frustrated by the fact that talent acquisition isn’t necessarily seen as strategic by the business and particularly by the C-suite, and the implications of that have been companies laying TA teams off, then rehiring them. It seems a very transactional thing. How can the TA leaders who are listening convince the C-suite recruiting is strategic?
Marcel: That’s easy. You need to get closer to the business. So that’s an easy answer. Because this can be done, for example, by calculating business cases for your activities or by using data to make your performance of your TA organization more visible. What you have to do is to convince the C-suite is to prove what contribution you make to the business.
Matt: I suppose following on from that, how can you align TA strategy with business strategy? What are the mechanics, the practicalities of actually doing that?
Marcel: From my perspective, there can be no TA strategy which is not derived from the business goals. So there has always to be a connection. And in addition, it’s not about setting goals for the next five years, and then stubbornly working through all of the managers that you have defined for this period. But that’s why it’s even more important that you get involved in the strategic, as well as the operational personal planning in order to always be able to influence how TA can help the company continue to grow.
Matt: You mentioned goals and things like that. There are obviously lots of things going on with organizations. How can people really discover what the real issues they’ve got are in hiring and retention, and then obviously use that to map onto the business goals?
Marcel: Yeah, of course, there are many, many tools available that solve different issues in TA. So what I wouldn’t like to do is to do name dropping, to name any tool that I would recommend to use exactly in your TA organization. But what should be part of the standard setup in every TA is a modern ATS that offers a comprehensive BI solution and is connectable to many other tools that you have one central tool, so to speak. And in addition, web analytics is, or in my case, so to speak, it’s part of every standard setup for me, because if you are able to analyze how candidates perceive the entire candidate behavior on your career side, on landing pages, on the job market, on job ads and so on, then you are really able to influence the candidate experience in a positive way.
What is also supplement are SEO tools that boost a little bit your organic reach. And in addition, companies definitely should always use a CRM, so a candidate, a relationship management tool or something that we know from the marketing or the online marketing and tools that help you to direct approach candidates individually.
Matt: I know from seeing you present before that you put a big emphasis on root cause analysis. Tell us about your methodology there.
Marcel: If we talk about root cause analysis, it’s about not focusing on symptoms. It’s a little bit like I told before, the two agents trying to solve a case. It’s really to find the root cause. For example, if people are leaving the organization, that’s just a symptom. Then you are not focusing on that people are leaving the organization and try to hire someone new, but you focus on finding out the reason why they are leaving. Perhaps, they are leaving because the leadership is poor or the benefits are not that attractive. There can be different reasons why people are leaving the organizations. And instead of hiring new people, which will leave again and again, if you don’t solve the problems, then you really have to dig deeper and find out what your root cause is.
Matt: How should people do that?
Marcel: That’s very easy. Always try to question, why things are doing. Let’s take the example people are leaving the organization. Then you start with your first why. Why are people leaving the organization? Perhaps, the mood is bad. Why is the mood bad? The mood is bad because the leaders are behaving like assholes. So why are they behaving like this? Perhaps, they have never done a leadership training in the company or they don’t know the leadership values. So why they are not aware of the leadership values? Because there was never budget to train them. So therefore, one of the root causes could be that you have to provide any leadership training in the next fiscal year, for example, and then you have to focus on the penetration or the participation of these leadership courses, for example, and then really try to focus on these topics. So methods like the five Whys method for example, to dig deeper, in this case.
Matt: In talent acquisition, we often talk about a lot of the big KPIs, time to hire, cost per hire, quality of hire, all those kind of things. How does that work from your perspective? What are the most critical KPIs TA leaders should be focusing on, and how do you define them?
Marcel: Yeah. For me, it’s always important to find a good balance between the perspectives of time, cost, and quality. It’s useless if you’re fast, but the quality isn’t satisfactory or the budget isn’t met. The same is true if you hire cheap, but it takes too long or the business is not satisfied with the quality. And in addition, if you just focus on quality but it takes a long time until you hire someone or if you don’t meet the budget, it will also lead to dissatisfaction. So therefore, it’s always good to have the balance between these three perspectives.
If we talk about time, from my point of view, the time to hire is the worst metrics of all time because we punish recruiters who have finally managed to fill a difficult position. If you say, time to hire should be 60 days, and finally after six months, you have really found a unicorn, and then you are punished or get a penalty, so to speak, or penalized because you have found someone after six months. It doesn’t make no sense. So therefore, it’s better to focus on a metric like filled on time that you match the expected start date and the real start date, and then try to really dig deeper if you have matched your goals in this case.
In terms of cost, I like always to compare the cost per application from job boards against agency in combination with the average quality, because then you can really make visible if it’s really worth to spend 20K, 30K for any head-hunter in comparison to doing a really sustainable social media campaign, for example. So therefore, that’s really important for me.
In terms of quality, my favorite, KPIs are any satisfactory metrics. If you ask candidates for their feedbacks, new hires, hiring managers and so on, how satisfied they are with the previous or the current process, and with their expectations or the things that we have promised them before, and the real world that they see in the company then.
Matt: Absolutely. That makes perfect sense. Towards the start of the conversation, you mentioned AI and the effect it was having. Obviously, there’s been a lot of hype about what it can do, and I think now maybe we’re starting to see some reality that actually might even live up to that initial hype. But what impact do you think AI is going to have on talent acquisition over the next two years, for example?
Marcel: Yeah. So if we just focus on the next two years, then I would say, on the one end, it will massively increase the quality in organizations that are less strongly positioned at the moment. To make it concrete, so the copywriting of job postings or career pages will be significantly upgraded. So campaigns will be better planned and executed, or interviews will be prepared in more detail or take place in a more focused manner, because all of these tasks can be prepared a little bit better if you are in a general HR role, so to speak, and you have a lot of hats on. So therefore, then you can use the AI like ChatGPT and ask them for any advice or any support to reach a new level, so to speak.
The requirement for this is of course that HR departments learn how to prompt that they start really to get to, yeah, grips with it and really start trying how to use the generative AI tools. But on the other hand, AI will also lead to the elimination of redundant elements, such as cover letters or appointments setting with candidates. So for example, cover letters, there is no point in reviewing a cover letter that was also written with an AI. On the other hand, I don’t hire someone just because they have written a great cover letter. If I want to hire an accountant, the main purpose of the job is not writing cover letters. So why should I hire someone just because of great words? Why they want to work exactly for this company?
Matt: It’s interesting, because you highlight there something that has been crazy about recruitment for many, many years that we’re relying on these cover letters and CVs, resumes, these kind of written documents to try and guess whether [chuckles] someone’s going to be good at a job. As you say there, AI explodes that because everyone’s going to be submitting effectively the same thing or the same quality. What are you seeing or what do you think we’re going to move to in terms of assessment and selection, if we’re moving away from those previous very crude methods?
Marcel: I guess it will increase the quality of hire. Because if we focus on the main criteria that are important, if a new employee will be successful or not successful in the future, then we will increase the quality of hire and also increase the retention of people, because if we just focus on these stupid methods like cover letter, as we said, then it’s not the best indicator why people should stay for a long time in a company.
Matt: I suppose there’s a big transformation there for lots of companies, maybe companies without recruiters or with smaller recruiter teams, or where hiring managers have a lot of influence, because that upends the way that lots of companies have always worked, doesn’t it?
Marcel: Yes, of course, but I guess there will be something like a two-tire society in the future, because there are companies that are more engaged with technological advancements and proactive with candidates, and those that fall back in more administrative role because they don’t embrace the transformation. In any case, these companies, it will be increasingly difficult for them to survive here because one thing is clear, the demographic trend in Western societies will increase the pressure on employers to make people as their central focus of their efforts.
Matt: I think that leads nicely on to the final question, which is, I asked you about two years’ time. Let’s go even further. What do you think talent acquisition is going to look like in five years’ time bearing in mind everything that you’ve already said there?
Marcel: Honestly speaking, the recruiting process itself will stay as it is. So we as a company, we have jobs to offer. There are people which are looking for jobs, we invite them or we directly approach them. We make them an offer and they accept it or they decline it. So this will stay the same. But it will be interesting how local markets will react on this, because what you can see in some countries that there is a trend that people are getting more and more self-employed and not want to be employed by any employer. So therefore, in addition to the demographic trend, the market trend will also vary a little bit. In addition, there will be more technology. The speed, as I said, of upcoming AI tools will be more and more every day. So therefore, I don’t want to do some hocus pocus because five years are– [laughs]
Matt: It’s a long time.
Marcel: It’s a very long time. But yeah, as I said, the main recruiting process will stay the same, but it will have a lot of shades.
Matt: Marcel, thank you very much for talking to me.
Marcel: Many thanks for having me.
Matt: My thanks to Marcel. If you’re a fan of the Recruiting Future podcast, then you will absolutely love our monthly newsletter, Recruiting Future Feast. Not only does it give you the inside track on what’s coming up on the show, you can also find everything from book recommendations to insightful episodes from the archives and get first access to new content that will help you understand where our industry is heading. For a limited time, subscribe to the Recruiting Future Feast newsletter and get instant access to the video recording of the recent remixed webinar on AI and talent acquisition featuring some of the smartest thinkers in the industry. Just go to mattalder.me/webinar to sign up. That’s Matt Alder dotme slash webinar.
You can subscribe to this podcast on Apple Podcasts, on Spotify, or via your podcasting app of choice. You can find and search all the past episodes at recruitingfuture.com, and don’t forget to sign up for the newsletter, Recruiting Future Feast. Thanks very much for listening. I’ll be back next time, and I hope you’ll join me.
