Throughout my career as a senior Recruitment Leader and now as an Organizational Talent advisor to a number of companies, I have been fortunate enough to work with a large number of great organizations who gave me the opportunity to partner with them on developing and implementing new practices to enhance their recruitment function and hiring outcomes. A few years ago a large Canadian organization asked me to come in and partner with them to build an in-house recruitment function for them from scratch – what a great opportunity to put my recruitment experiences and beliefs into place. The company had no centralized recruitment function in place and the business had been responsible for their own recruitment over the previous 5 years…..this organization was a true recruitment agency “cash cow”. The year prior to me working with this company, they had spent over $8 million in permanent recruitment fees and weren’t happy with the level of quality hiring across the organization.
My first action on this project was to meet with each of the separate business unit SVPs and gain an understanding of their needs and wants while managing their expectations of what could be done and how quickly. Obviously to build a new recruitment function, there needed to be a budget. I knew through my experience the best way to do this was to set up a budget separate from HR and paid into directly by the business units themselves. Most people will immediately assume this is a tough sell trying to solicit money from the business units. Based on my experience of working on a number of similar type of projects over the years it is actually a very easy sell. The reaction from the business to my budget proposal is consistently “whatever you need for this company to hire better talent”. These leaders recognize that great recruitment leads to great talent which leads to better outcomes for their business. This mindset is ideal when it comes to changing the way an organization pays their corporate recruiters…….changing the pay model to more closely mirror how sales people should be compensated - based on success and outcomes!
The SVP of Sales with this company said to me “Simon, if your new recruitment team can hire top sales people for my team and the new sales talent exceed their first year sales goals, I will gladly ensure your team receives a cut in recognition of their role in our team’s success.” This started the ball rolling as I was able to work with the Compensation, HR and Sales leads from the company to build a great compensation model for the recruiters supporting the sales division. We built a compensation structure modelled similar to their sales roles in the company. The Recruiters would be offered a lower base salary but a significantly higher variable pay component. We designed the variable pay component of this Recruiter role based on specific performance milestones and achievements. The performance milestones were primarily recruitment outcome focused (Quality of Hire and Recruitment Service Delivery Excellence) and not the traditional recruitment process focused metrics (Time to Fill, Interview to Hire ratio). There were no ceilings put on the variable pay component so there was an opportunity for the Recruiters to make significant earnings but based on real performance. We wanted to design the compensation to reflect the need for these Recruiters to be fully engaged to do the best job possible. It would be a true WIN-WIN scenario – the Recruiter recruits better sales talent who in turn drive increases revenues for the company who in turn rewards the Recruiter for the better organizational performance.
This company had no problem attracting the top Recruiters in the market to join them using the different compensation plan as the carrot. Knowing a number of great Recruiters like I do, I know they are all confident in their abilities to succeed and would have no hesitation in accepting this type of opportunity. Great Recruiters share many of the same personal attributes and behaviours as great sales people so why not offer them the opportunity to align their earnings more closely to their success and outcomes.
So what was the outcome for this company? Well, three years later this organization continues to use this compensation model for their Sales Recruiters and they have tweaked it for the other Recruiters on the team to follow who work with the other business units within the company. Annual sales from the new sales talent have exceeded the company’s goals every year. The Sales Recruiters are still fully engaged and committed to the success of the organization and have more than doubled the salaries they made prior to joining this company. The entire recruitment function has also made its mark saving the company over 80% of what they had been paying for recruitment previously mainly through recruitment agencies. The organization is very happy with their return on investment with their new in-house recruitment function.
Simon Parkin is recognized as a global thought leader in the acquisition and management of top talent and has successfully transformed the Talent function for organizations of all sizes. Simon works closely with clients to build, develop and innovate their Recruitment, Talent and HR functions. He is a former global leader of Recruitment and Talent for a Fortune 100 company. Simon is a featured speaker at a number of HR and Recruitment conferences across North America and an author of many acclaimed articles on innovative Recruitment, Talent and HR trends and best practices. Simon’s full profile can be found at http://ca.linkedin.com/in/simonparkin1