When, in 2008, the online shoe retailer Zappos began offering new recruits at the company $2,000 to quit as a test of enthusiasm, it prompted much head-scratching in HR circles.
The Zappos approach to talent sourcing
This concept was devised by Tony Hsieh, the Las Vegas-based group’s charismatic CEO – was initially seen to be obviously counter-intuitive. Why would you offer staff money to leave by way of an incentive? Surely, it should be the other way around?
But very soon, it became apparent that this seemingly peculiar form of talent acquisition had some merit to it. In addition, Zappos also developed a double-pronged recruitment process, based around two interviews – one to assess a candidate’s skill set, the other to gauge their cultural fit within the group.
Successful recruits then had to undergo five weeks of training, before being provided with the aforementioned pay-to-quit offer.
Hseih’s methodology was felt to be at odds with traditional onboarding – and corporate culture at large, for that matter. But “the offer” as it soon became known captured the attention of Amazon chief Jeff Bezos, who chose to acquire Zappos the following year, and set about implementing his own pay-to-quit programme.
Just as Hsieh had done before him, Bezos understood both the value of creative onboarding, and also the negative impact of disengaged workers on Amazon’s productivity. Bezos has since put his own spin on the strategy, which differentiates from Zappos’ in so far as the offer is not only limited to the end of training period. Instead, employees at Amazon’s fulfilment centres receive a yearly offer for as long as they are at the company. As of 2018, the offer stands at $5,000.
In explaining the initiative in a 2014 note to shareholders – reported to be sceptical about its value – Bezos wrote: “The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”
If the talent acquisition process is looked at from a long lens, Amazon’s yearly offer makes a lot of sense, as for each year an employee receives an offer – and turns it down – the greater the evidence the employee is truly invested in the company. Longevity of staff is also one of the most important barometers when it comes to assessing the judiciousness of recruitment departments.
Never underestimate the importance of onboarding
Onboarding is a key component of a company’s talent acquisition system. While attracting new members of staff to your workforce might underpin recruitment in its traditional sense, it’s what happens next that really counts in the long run.
From the first day an employee shows up at the office, a process should then begin in which they are encouraged to get grips not only with the nuts and bolts of their role, but also the culture of the company they now find themselves immersed in.
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Organisations that fail to do this run the risk of alienating talent from the get-go, and more often than not this early disillusionment leads to employees heading straight for the exit door.
According to HR consultancy the Wynhurst Group, around 22% of staff turnover takes places within the first 45 days of a new job. Conversely, the group’s research revealed that new employees subjected to structured onboarding are 58% more likely to stay for the next three years at least.
More and more companies are consequently looking to adapt their recruitment processes to make sure they both attain and retain talent. Some are doing better than others in this area. According to a recent survey by IBM Watson Talent, recruiters claimed that 39% of new hires would not be hired if they had the choice again.
As exemplified by Zappos – and subsequently Amazon – talent acquisition requires imagination. For instance, US supermarket chain Whole Foods has introduced a HR process in which after 90 days at the company, new hires are subjected to a vote by their team members on whether they should remain at the company or not.
The new employee requires a two-thirds majority to stay on, with votes cast either by email or a headcount when the employee is out of the office. Such measures are divisive though, with some feeling it pushes talent acquisition into a cruel realm akin to a talent reality show.
Others, however, believe it is important to give team members a voice on who they work with, and is a good means of ascertaining the cultural fit of a new employee. You have to be cruel to be kind – to the company that is.
AI and talent
Given how laborious the hiring process can be – for applicants and companies alike – we are also seeing artificial intelligence come to the fore in order to make recruitment a more seamless process.
Take consumer goods group Unilever, which last year began utilising AI to recruit new employees in its North American operation.
In an interview with Business Insider last year, Mike Clementi, vice president of human resources for North America, said the rationale for the shift to AI was a growing awareness within the group that traditional forms of recruitment – in Unilever’s case, sending reps to elite universities to source new talent – had become outmoded.
“We were going to campus the same way I was recruited over 20 years ago,” said Clementi. “Inherently, something didn’t feel right.”
So Unilever decided to partner with digital HR service providers Pymetrics and HireVue to introduce an automated screening process. After candidates apply for a role at the company – LinkedIn profiles replacing CVs – they are then invited to play neuroscience ‘games’, which test their focus, memory, tendency for risk, and emotional intelligence.
If they successfully pass these tests, candidates then go through to a preliminary interview, through which they respond to pre-set questions on a smartphone or tablet. The technology then provides an analysis – based on keywords, intonation and body language – to be used by Unilever’s HR department.
In the event the applicant makes it through these two steps, they are invited for an immersion day, whereby a hiring manager gives a decision at the end of the session.
According to Unilever, the new strategy has been a quantifiable success in not only speeding up its number of hires, but in establishing a more effective talent acquisition process.
AI, in some cases, can also help to quantify the performance of a company’s onboarding, according to Ideal, a recruitment software company.
“Quality of hire used to be a bit of a recruiting KPI black box due to an inability to close the data loop – such as measuring what happens to the candidates after they get hired,” reads a “definitive guide” on the group’s website.
“As HR data has become easier to collect, access, and analyse over the years, quality of hire has become recruiting’s top KPI. The promise of AI for improving quality of hire lies in its ability to use data to standardise the matching between candidates’ experience, knowledge, and skills and the requirements of the job.”
A recent survey by the group adds to back this statement up. In it, early adopters of AI-powered software claimed to have seen their cost per screening drop by 75%, with staff turnover falling by 35%. Revenue per employee increased by 4%.
But AI is no silver bullet for rigorous talent acquisition and is merely a step in the wider process. For one thing, in order to imitate human intelligence, AI requires a superabundant amount of our data – a commodity some of us are becoming more and more aware of giving away due to recent news stories.
There are other challenges, too, currently facing talent acquisition leaders and recruiters. While the latest figures for 2018 suggest unemployment rates in both the UK and US are down – at 4.1% and 3.9% respectively – undeniably represent good news, it is, adversely, making it harder to locate talent.
As a result, recruiters have to fight off tougher competition to appeal to growing pools of more passive candidates – namely skilled individuals already in employment but would consider a change if approached by the right company. Appealing to these individuals is no mean feat.
Only the most creative employers will win out in the talent acquisition battle. Be it pay-to-quit offers, team member voting or AI, all avenues are worth exploring. Companies and HR teams that stay still can expect attracting and retaining talent to remain a tough task for some time yet.