Archive for May, 2006

Employee Referral Programmes - NZ needs to lift the game

Friday, May 26th, 2006

NZ is behind the eight ball when it comes to Employee Referral Programmes (ERPs). By ERP, I don’t just mean your organisation has a policy statement. What I mean is that you have an ERP in place, it is used frequently and most importantly, it works!

Consider a typical scenario. We have a vacancy we need to fill so we place an advertisement in the paper, we may use a generalist and/or specialist job board or we may outsource all or part of this process to a recruitment agency. Now let’s be very honest with ourselves - do we actively use our own employees as a key sourcing strategy? Is it worth paying one of our employees say $100 to $3,000 when someone they referred is hired? It certainly beats an agency fee. Is the best source for new hires right under our noses? Is this a way to reach those passive jobseekers? If we are not getting our employees involved in the hiring process then we are throwing money away and not realising the benefits gained from ERPs overseas.

The evidence indicates overwhelmingly that ERPs are a must. Professor Emilio J. Castilla from the Sloan School of Management in the United States recently published a study that demonstrates that ERPs produce employees who are more productive and have higher retention rates than employees sourced through other means. Also in George W Bush country, about three-quarters of Fortune’s 100 fastest growing companies actively use ERPs. Two recent surveys of leading United States organisations (‘2006 Direct Employers Association Recruiting Trends Survey’ and ‘CAREERXROADS 5th Annual Sources of Hire Survey’) placed ERPs as producing the highest volume of suitable candidates and the highest quality recruits compared with other sources. Closer to home, Australian organisations have high expectations of their ERPs. For example, Nestle, which has embarked on a complete overhaul of its regional Asia-Pacific recruitment processes, is introducing an ERP and hopes to source 40% of all new hires through this programme. Suncorp is currently achieving 11% and it hopes to achieve 30% in the next few years. Some Australian public sector agencies are investing a lot of time into cementing ERPs that meet Australian public service guidelines.

In New Zealand there seems to be pockets of employee referral activity, often limited to a number of sectors (eg professional services, financial services, IT, retail, and telecommunications). It appears from my observations that organisations using advanced recruitment technology platforms are finding it easier to implement and manage ERPs.

It is extremely difficult to find information about ERPs in a NZ context - there just doesn’t seem to be the buzz about ERPs that there is overseas. I have come across a lot of resistance to the concept within the NZ public service. The State Sector Act specifies that an employer shall, wherever practicable, notify the vacancy or prospective vacancy in a manner sufficient to enable suitably qualified persons to apply for the position. In this context an ERP is just one sourcing method and doesn’t replace other approaches. Also, all referred candidates will of course need to go through the same objective selection process.

In future blog posts we will look at what differentiates a successful ERP from an unsuccessful one. I was involved last year in implementing a new ERP and learnt heaps from this experience. I’m very keen to hear from any organisations that use ERPs and would love to hear your experiences. What are your thoughts about ERPs? Why is there not the activity here in NZ compared to overseas?

Paul Jacobs

“Revolt - kick ‘em where it hurts!”

Friday, May 19th, 2006

These are the fighting words of towards the traditional job boards. launched across the ditch last month with great fanfare, backed by private investors and a multi-million dollar media budget. Shortlist recently reported that the concept was developed by a group of recruitment and technology executives, including David Buynon and Stuart Douglas from South Australia-based recruitment company Boss Personnel. Stuart Douglas reported to Shortlist that the service is aimed at “becoming the Virgin Blue of the recruitment industry”.

The face of is “Axel”, an extremely quirky and slightly gimmicky character. See Axel for yourself on the website as he talks through the features and benefits of Axel certainly has an ‘interesting’ style, don’t you think?! Axel has featured prominently in a series of television, radio, cinema and outdoor advertisements.

Axel highlights how is not a traditional job board.

The key points of difference include:

  • Free job listings for employers.
  • Employers are charged when a placement is made through the site (5 percent of the candidate’s salary)
  • A quick (within 72 hours) shortlisting service. The model is akin to a “full service online recruitment agency”. Interviewing, psychometric testing and PC and skills assessments, if required, are all free of charge. Apparently the entire process is completed by the candidate online.
  • A “Revolt Card” provides jobseekers with discounts in entertainment, travel, accommodation, restaurants, retail shopping and financial services. According to their website this list will soon include discounts on telecommunications (mobile, internet and landline), electricity, gas and petrol.

I was at a conference in Sydney on online recruitment last year and this very topic of “success-based pricing” for job boards (rather than charging only for advertising) came up. I recall that most of the delegates and presenters said it will never happen.

How is going?

Douglas reported to Shortlist this week that 150,000 jobseekers have registered on its database and, according to figures from Nielsen Net Ratings, the site reported 15 million hits within the first three weeks. Douglas said more than 50 recruitment companies have signed up to use as a sourcing strategy.

I have read some negative press posted on some Australian-based blogs, especially around jobseekers having to supply all their details before they can see the jobs. The cynics out there would argue this is a way to hide the lack of jobs on the site.

Has there been any response from the ‘traditional job boards’?

Seek joint chief executive Andrew Bassat recently told The Age that he had little concern about newcomers, such as, eating into margins. He said was more of a “slimmed down” recruitment firm, while Seek was predominantly a job board business. “Their key proposition isn’t high volume, so they won’t have a job board of anywhere near the volume of a Seek or a,” Mr Bassat said. Close to 90 per cent of Seek’s revenue is generated by its core job advertising service. By the way, Seek said it now expects earnings before interest, tax, depreciation and amortisation (EBITDA) of $46 million to $47 million for 2005/06, up from previous guidance of $43 million and ahead of a prospectus forecast of $40 million.

Does the model have appeal in a NZ context? Is it a winning formula for employers and recruitment agencies? There are some synergies between the model and the NZ newcomer QJumpers. I will explore QJumpers more in a future blog post.

Paul Jacobs

Is your competency model ugly?

Wednesday, May 10th, 2006

I have recently seen some really hideous competency models in both the public and private sectors.

What’s so wrong with them I hear you say?

Well - they are too lengthy, not well-clustered, do not reflect the organisation’s unique language, are overly complex, not specific enough, ambiguous - and it is just too damn difficult to measure them. Deep breath!

But why does it really matter?

‘Competencies’ (capabilities, dimensions, behaviours - call them what you will), should be the foundation of any job definition, recruitment, development, performance management, or workforce management model - they define the desired skills, knowledge and personal qualities that a person should bring to the job and to the organisation to be successful. They are clusters of similar behaviours that can be observed and measured. They define high performance in a role. They define organisational and team fit.

So what does best practice look like then?

Quick employee recall:
Employees need to live the competencies. If you ask any employee what the key competencies are for them in their organisation, they should be able to reel them off without hesitation. When you have assigned them 25 key competencies (and believe me this is not unusual), how can you expect them to remember three, let alone 25? My psychology studies taught me that people can only remember seven plus or minus two chunks of information.

Unique to your organisation:
The model needs to be unique to your organisation -using the language and flavour of your organisation. I am not a fan of using off-the-shelf products in developing a competency model for this very reason. There are a number of overseas ‘card sort’ type tools that have been adopted in New Zealand and unfortunately I think that some of them have contributed to the problems mentioned above. Also do not just blindly choose your psychometric assessment provider’s recommended competency model that integrates with their products. I recommend using these tools only as a guide in developing your own model. Rather, determine from your senior managers, managers and employees what defines high performance to achieve success. They will have all the answers. I do acknowledge that there are across-public sector competencies, but this should not be a complicating factor and if integrated well it can actually make your competency model stronger.

Clear, specific, observable and measurable:
The behavioural indicators that underpin the competency label, or ‘action points’ as sometimes referred to in overseas models, should be able to be observed. How the heck can you observe is a “good leader”? What constitutes a good leader? Drill down! Also try to keep the list of desired behaviours within the seven plus or minus two rule. The more specific you can be the better the model will work for everyone down the track. It is worth investing the time upfront in getting it right.

Well clustered:
“Planning and organising” behaviours just don’t fit with “relationship management” now do they?! There is a real art in clustering comments gleaned from senior managers, managers and employees.

I am a big fan of using a number of different but complementary methods when I have developed or refined competency models in the past. Some of these methods include:

  • ‘Futuring’ - looking at the organisation’s future goals and values, industry trends, and external factors.
  • Repertory Grid Technique - this approach involves getting a manager or team leader to look at the next level down and to actually think of exceptional and OK/poor performers and what in their eyes differentiated between them. A lot of questioning is required to get as specific as possible, but similar themes start to emerge. This is a great way to capture an organisation’s unique language.
  • Critical Incident Technique - in short, this involves going to high performers and asking them for their success stories and what knowledge, skills, or personal qualities contributed to these successes.

I came across a large, well-known organisation a couple of years ago that didn’t have a competency model for one of its biggest front-line business groups. The HR practices in this group were in disarray, employee retention was shot and performance was a real issue. Things have taken a 180-degree shift with the introduction of a robust and relevant competency model.

I dare you to take a good hard look at your organisation’s competency model - is it something that only a mother could love or are you truly proud of it? Your comments as always are welcome.

Paul Jacobs