Friday, December 18, 2009

Applying Six Sigma Principles to Corporate Staffing Departments

Applying Six Sigma Principles to Corporate Staffing Departments
By Alice Snell

The corporate staffing department performs a critical gateway function in a company, bringing people from the outside world into the organization. As such, recruiting has a huge impact on the quality of the assembled workforce. Attaining quality in recruiting and deployment is therefore a natural aim of an organization. How do you pursue quality in hiring and placement? Let's look to a highly influential school of thought in quality management, called Six Sigma, as a model.

Developed at Motorola in the 1980s and practiced by large corporations such as GE, Dow and Honeywell, Six Sigma is a quality initiative that uses data and statistical analysis to measure business processes and their outcomes. The cornerstone of the Six Sigma methodology is the concept of a defect. A defect is defined as a failure to deliver what the customer wants.

The central principle of Six Sigma is that by measuring the defects a process produces, one can systematically identify and remove sources of error, so as to approach the ideal state of no defects at all. The standards of Six Sigma are very high: a business process has attained Six Sigma quality when only 3.4 defects occur per every one million opportunities. Six Sigma was originally applied in a manufacturing environment, but its principles are applicable to customer service and even internal services such as recruiting.

Six Sigma "Defects" in Corporate Staffing
Following the Six Sigma methodology, the process to be improved must be defined and mapped out. A process map is a graphic representation of the process, showing it broken down into its detailed steps. A process map helps visualize the entire process and identify key metrics for measurement and analysis. Measuring the performance of the process is a data-driven exercise, so there must be steps in the process that perform the critical data capture necessary for measurement and reporting. A thorough statistical analysis of all data endeavors to identify those elements of the process that have a direct impact on the quality of its outcome. Once the source of defects has been identified, an improvement program can be defined and implemented to remove these causes of defects.

What is a defect in internal recruiting? The Six Sigma methodology defines a defect in terms of the expectations of the customer, which in the case of an internal recruiting department is the hiring manager. Hiring an unqualified candidate, a below-average performer, or even an employee that demonstrates a lack of fit to the corporate culture could all be considered a defective outcome of the recruiting process. How can you reduce defects in corporate recruiting?

Screening out Unqualified Candidates
Recruiting can be viewed as a screening process. This is especially true during periods of high unemployment, when the job market is characterized by an oversupply of talent. Under these conditions, the recruiting function in an organization is to eliminate unqualified people as much as to seek out talent. To improve the quality of an overall recruiting process, each step of the process must be designed to maximize the probability that the candidate ultimately selected meets the expectations of the hiring manager. One way to do this is to maximize the chances that an unqualified candidate is screened out at each step. The following are some key areas in which to focus on quality.

Talent Definition
To drive quality into a selection and recruiting process, you must first define what quality is. The selection process must be grounded on the foundation of a proper specification of the requirements of the job. You must articulate the abilities, credentials and experience that will bring about success at the job. Once set, these objective criteria inform all aspects of the recruiting process for the position, from the writing of the job description to the criteria employed by an online pre-screening function.

Employment Branding
The employment brand you project to jobseekers has an important screening role. The corporate Careers website should present a consistent employment brand, and provide visitors with good quality information about the organization, even a realistic portrayal of life working at the company. Cultural fit is as important a factor to the overall quality of hire as the possession of requisite hard and soft skills.

Sourcing Strategy
It is the function of a sourcing strategy to ensure that employment advertising reaches the right audience. The goal is to maximize exposure to qualified candidates while minimizing exposure to unqualified candidates. A job posting appearing in a media vehicle that has too low a proportion of qualified candidates to unqualified candidates will increase the burden on later stages of the selection process to screen unqualified candidates out. A formal sourcing strategy should be informed by actual sourcing yields.

Job Description
The job description for a vacancy should provide the candidate ample opportunity to self-screen. It should describe the role, and the activities and responsibilities involved. Moreover, the job description should describe the abilities, credentials and experience possessed by the ideal candidate. Other pieces of information on a job description that give candidates the opportunity to self-screen are salary ranges and details on logistics, such as the location of the vacancy and the amount of business travel involved.

Shortlist
Even an informed sourcing strategy and a carefully crafted job description will not prevent the unqualified from submitting a resume. The selection process must be armed with systems and procedures that ensure these unqualified candidates do not make it to later stages of the internal recruiting process, where costs increase.

Historically, the next check for quality in the recruiting process was the resume screen. Screening on the basis of a resume is a highly subjective process, wholly unsuited to bringing consistency and quality to an organization's workforce. Resumes are candidate-driven and generally do not contain information sufficient for a recruiter to assess a candidate's ability to do a job. Furthermore, there are no standards for resume content, meaning that the information common on all resumes received by a recruiter is insufficient to make an accurate ranking of candidates. At best, all a recruiter is able to do is look for an indication that the candidate may move forward to the selection next step, such as a phone screen.

iLogos Research found a small but quickly growing number of large companies in 2002 (9% of the Fortune 500, for a year-over-year growth of 104 percent) turning to the interactivity and self-serve environment of the Web to place a significant pre-screening function on the corporate Careers Web site. A pre-screening function using a questionnaire on the corporate Careers Web site provides the recruiter the opportunity to pull standardized data from candidates on predefined criteria related to job performance, which can be used for automatic analysis and comparison of candidates. An online pre-screening function on the corporate Careers Web site gathers from candidates at the initial point of contact the information needed to narrow the initial applicant pool.

Focusing on Quality from End-to-End
Dow Chemical has been measuring Sigma for its staffing processes on a global basis since 2000. In order to improve its processes and yield higher productivity, Dow Chemical has implemented staffing management technologies globally in more than 60 countries. Dow Chemical's Human Resources Information Technology Global Director Jon Walker states, "Best practices and proven methodologies are key to improving the staffing process enterprise-wide. Since we've been able to engineer new processes and staffing management technology, we have achieved an increase in Sigma by at least 50 percent." He added, "An increase in Sigma will typically result in bottom-line efficiency and cost reduction of five percent or more. As it relates to staffing management, we attribute our productivity gains to finding quality candidates faster, faster-time-to contribution and a reduction in cycle-time by forty percent."

Six Sigma may be viewed in terms of accuracy: a process that has only 3.4 defects out of one million is one that achieves its goal 99.9997 percent of the time. The function of a selection process is to predict who will be successful at a job. Unlike the raw materials and steps in a manufacturing process, people have an element of unpredictability, so it may be asking too much of a program of continuous improvement of an internal recruiting and selection system to attain a high degree of accuracy in the prediction of quality of fit for a job. However, the fundamental goal of Six Sigma—to strive for process perfection through continuous improvement—is eminently applicable to the processes of corporate staffing departments.



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