Driving Costs Out of the Human Capital Supply Chain - an interview with Dustin Mattison from Logipi

Having helped more than 800 staffing and recruiting firms automate their operations, Tim Giehll, CEO of Bond Talent US, brings an interesting perspective to the subject of continuous process improvement, and he does not believe the days of Six Sigma are over. He does acknowledge that, without the star power of Jack Welch and Larry Bossidy, Six Sigma is no longer grabbing the attention of the media the way it did in its heyday, but says it is still "alive and well."

Today, Tim believes, Six Sigma has simply become imbedded in the way companies operate. That isn't to say that it isn't occasionally re-examined and refreshed. Just within the last year or so, Tim noted, Ceridian, the largest payroll processor in the world after ADP, brought a Six Sigma "guru" on board to help the company improve its payroll and human resources process.

Six Sigma for Human Resources

People are beginning to see other uses for Six Sigma beyond manufacturing and distribution. From Tim Giehll's point of view, adapting the concepts and philosophies of Six Sigma and applying them to HR makes good sense.

Six Sigma is built on a foundation of three principles: improving customer satisfaction, reducing cycle time, and reducing defects. Here is how Tim envisions adapting those principle for use in human resources...

Improving Customer Satisfaction: In HR, driving improved customer satisfaction can be applied to three groups of people: existing employees, external hiring managers and new hires. In terms of existing employees, companies should focus on areas that can improve employee retention. When working with hiring managers from external staffing firms, companies should stay focused on that relationship to make certain that they are seeing the best possible candidates for every new position. And, whether a candidate is applying directly to the company or through a staffing firm, companies should focus on providing a positive candidate experience at each step in the process from the first interview to onboarding.

Reducing Cycle Times: The Six Sigma analogy to be drawn here revolves around what is known in the HR world as "time to hire." When a corporation identifies the need for a new resource, the hiring process typically begins by jumping through a number of requisition "hoops" to secure approval. Once approved, it can take between 60 and 120 days to identify the right candidate, shepherd them through the interview cycles, and make sure everyone is comfortable with the decision to hire -- all before the onboarding process begins. Tim Giehll believes this is an area where the principles of Six Sigma can easily be applied.

Reducing Defects: Reducing defects is an area for which Sx Sigma is best known. It may seem strange to talk about a "bad hire" as a "defect," but when tying Six Sigma to human resources, it is necessary to make that leap. After all the time and money invested in identifying, interviewing, onboarding and training a new employee, it can take six months to a year before a company determines that the person is not right for the job. The result is months of wasted time and salary only to start the hiring process over from scratch. This too, is an area that Tim Giehll sees as a natural for leveraging the principles of Six Sigma.

Driving Costs Out of the Human Capital Supply Chain

Six Sigma stresses continual process improvement, and Tim Giehll thinks it is time for the HR and staffing industry to embrace its principles, learn from its proven techniques and apply them driving costs out of the human capital supply chain by improving operational processes.

One area for concern for corporations and associated staffing partners, according to Tim, is staying in control as processes become increasing global. "As with any processes, the further away you get from the core, the more deviation you get in that process," Tim said. That becomes especially true with outsourcing -- something he experienced firsthand inside Bond International Software. For many years, Bond had software developers and programmers employed by the company. When the decision was made to outsource to the company's partners in India, Tim's company essentially moved away from its own core processes and no longer had direct control over them. The result was more project management time spent on the company's outsourcing teams in India than they were spending on their internal teams.

As companies become more comfortable with what Tim refers to as "non-traditional human capital," such as outsourcing, he believes it represents yet another opportunity to apply the principles of Six Sigma to those processes. For example, about ten years ago, a trend known as Human Resource Outsourcing (HRO) emerged and some large corporation, including British Petroleum, literally outsourced their entire HR departments -- payroll, benefits, recruiting, everything -- to Ceridian, ADP and other groups. Unfortunately, Tim says, five and ten years later, those same corporations are now pulling their outsourced HR operations back in-house, because in many cases, the processes weren't kept under Six Sigma control.

"That isn't to say that HRO isn't right for some companies, it's just that Six Sigma becomes twice as important as it was when it was under your control," Tim said. The point of outsourcing is to reduce cost without sacrificing quality, which also happens to be two main pillars of Six Sigma. With HRO, in many cases, the predicted cost savings never materialized, and quality that should have been maintained, languished.

"Whenever you start to hand over your corporate responsibilities and your corporate workload to people outside of the company and outside of your direct control, you’ve got to be careful, and you’ve got to make sure that those processes and those operations are tightly controlled -- and from everything I’ve seen, using the principles of Six Sigma is the best way to do it," Tim concluded.

Tim Giehll Applying Six Sigma principles to HR from Dustin Mattison on Vimeo.

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