Advanced RPO – The Invisible Costs Of Open Jobs With Pam Verhoff

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This is Recruiting Daily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one overcomplicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup

William Tincup:
Ladies and gentlemen, this is William Tincup and you’re listening to the RecruitingDaily podcast. Today we have Pam on from advaanced RPO and our discussion topic today is the invisible cost of open jobs. Can’t wait to talk to Pam about this and learn from her. So without any further ado, Pam, would you introduce yourself and Advanced RPO?

Pam Verhoff:
Thank you. My name’s Pam Verhoff and I’m the President of Advanced RPO. I’ve been in recruiting and talent acquisition for the majority of my career. Prior to starting Advanced RPO, I’ve worked in the RPO industry and primarily working with very large enterprise organizations and we started Advanced RPO really to bring the expertise that we had in the industry to growing mid-size companies. So Advanced RPO is, we really partner with clients to create recruiting scalability and workforce agility and we do that through a high touch, but technology enabled approach to talent acquisition. So we look at each customer and their needs uniquely and develop programs to move the needle wherever they are in their talent acquisition journey.

William Tincup:
I love that. I love that on so many levels, but we’ll, that’s another podcast. So with today’s topic, it’s the invisible cost of open jobs. First of all we need to unpack that for the leadership team. Like, okay, if something’s 21 days open versus 200 days open, what’s the impact of that and I think sales leaders get this more often than not. Sales leaders are like every day that someone’s not there, someone’s not selling. Okay. I think they get it. It’s the rest of the organization I’m worried about.

Pam Verhoff:
Exactly.

William Tincup:
So, and you might have a different experience with sales folks, but how do you talk to leaders about open jobs?

Pam Verhoff:
It’s and I think you’re exactly right. I think sales leaders, they’re so revenue focused. I think most of them look at revenue per employee per day as a target they’re measuring and so for every day the job’s open it’s an obvious formula for them. For other leaders it’s a much more gray area and we really try to help them understand the broader impact that it has on the organization and I look at it as it’s a really compounded issue and if it’s not addressed the real cost of this to the organization, they multiply.

Pam Verhoff:
So first and foremost, we start to work with hiring managers to help them understand what is the work that isn’t getting done, or if the work is getting done, who’s doing it. And what’s that doing to the team? Clearly if, most jobs the work does have to get done, so teams get stretched and when you really start to unpack that, people are working long hours. That impacts their engagement, that impacts quality of work therefore as quality goes down, your operational costs go up. I could go on and on and on, but that’s really where we start.

William Tincup:
How do you dial in how long a job should be open? So again, some of this is managing expectations. Hiring managers aren’t in there, or even paying attention to the market every day. Recruiters might not actually know exactly how long something should be open. How do you get that expectation at least close to what it should be for them?

Pam Verhoff:
We look at it really functionally. So an HR job, the average link that is open in a particular market is likely very different than a product manager or an IT role. So we work with the hiring manager to understand where, first of all, the job description itself. Is it a job description for one role or are they trying to pack three into one? The more complex that becomes the longer it will be to fill that role. How competitive are they in the marketplace? What’s their employee brand out in the marketplace and so on. So we take those factors and when we kick off the engagement or the job with the hiring manager and we learn and dig into those details, that’s when we really set expectations with regard to what to expect from a average time it should be filled.

Pam Verhoff:
The other piece of that is, a big piece of it, especially today, is the process. Candidates in today’s marketplace really have different expectations than they did even six months to a year ago and helping managers understand that we need to be very intentional with every engagement with these candidates through the process in order to keep them engaged and interested in the role versus some still have an old school mentality of, we need to run them through the multiple hurdles and talk to lots of different people and so on. Today’s candidate marketplace just isn’t very tolerable of that.

William Tincup:
So we’ve nibbled around the edges of some of the invisible costs, like in technology it’s technical debt and our potential technical debt, in sales it’s lost revenue. If it’s in demand gen it’s lost leads. We can see every moment that person isn’t there. What other aspects of invisible costs should we be thinking about?

Pam Verhoff:
I think about, and can’t be engagement, I’ll go back to that person that is the teams that are stretched. Their engagement decreases the quality of work. Social media is pretty critical in today’s world so one unhappy employee goes out and shares that experience. It goes viral, as does everything else and so that then impacts your ability potentially to recruit and guess what, the harder it becomes to recruit, then the more extended you’re going to extend the timeline to fill your roles and it just compounds and we look at it as it’s a snowball and that snowball is going downhill. The bigger it gets, the more velocity it has, and it can become just a significant issue and so those are the real costs that we’re talking with our customers about.

William Tincup:
I love that because you brought it back to engagement and morale and productivity. These are things that everyone in HR and recruiting understands, but they might not understand that the longer that the jobs are open there’s the cost of that job being open. Okay, that’s what we can calculate that and then there’s the cost for that job being open, being a burden of that work or work being done or not done is fallen on everyone that’s there.

Pam Verhoff:
Right.

William Tincup:
So how do… You know again, it gets back to expectations and things like that and you said something earlier that I wanted to ask you about, because you said job descriptions, which always gets me into a place, but how do you recalibrate or help the hiring manager calibrate? Okay, you want these 20 things, that’s fair enough. Okay, these 20 things are going to yield a thousand candidates. These five things are going to yield 15,000 candidates or, those are horrible numbers, but the idea is that getting them to understand what they put into a job description impacts the aperture in which you can then look for candidates. So how do you walk them through that process?

Pam Verhoff:
It’s very similar to what you just described. It’s our hiring funnel. So the more criteria that you require, the smaller the top of that funnel is, and the funnel, we look initially at just the skills available across the globe, even in a lot of cases and then depending upon the client it may be that then you have to look geographically within their region and that immediately impacts the top of that funnel. So, helping them see that and we have access to a tremendous amount of market data. We’re sharing the supply and demand data with them and the other, I think the key piece that often isn’t considered with the hiring managers is, who you’re really competing for talent with? So oftentimes they think about only their competitors within the industry, but the reality is the company across the street may be recruiting for the same skill sets.

Pam Verhoff:
They may be in a different industry, but they’re recruiting for the same skill sets therefore you’re competing for that talent. So we bring that data to them and really walk through it to say, here’s the reality, it’s supply and demand and then you layer into that the compensation and how competitive are they relative to the competition in the marketplace and really work through that. We have to iterate that multiple times with hiring managers, but those that really trust and spend the time to understand the data, that’s where we’re really able to make an impact for these organizations because they, then we do start to talk about, okay, what are your top three absolute must skills for this role and help them rewrite the job posting and perhaps the job description to then go out and really identify those individuals. And oftentimes what happens is organizations start to understand where they need to develop training and bring perhaps individuals into the organization at a bit of a lower level and then train. So hiring to the capability as opposed to hiring to experience.

William Tincup:
Yeah. Couldn’t hit the directive, couldn’t find any. Let’s go get a manager and then-

Pam Verhoff:
Absolutely.

William Tincup:
… put them on a career path, put them in training and get them up to that level maybe within six months you can get them to that level with some really intense training. I want to get your take on when the business looks at it here, because you know you do annual planning I’m sure and you think about your goals, your initiatives, and of all the things that you want to do. Some of that is also tied to some bonuses for some folks, especially leaders in different positions. There’s a relationship there with open jobs. So if you’ve got an engineering leader and their job is, whatever, 40,000 lines of code that’s got to be put out, if they’ve got open jobs and those lines of code aren’t written, it potentially could impact the initiatives, the goals, the business as a whole and their bonus, which we haven’t talked about, but just there is even a selfish thing to think about in getting these jobs filled is it’s going to help you be more successful at your job.

Pam Verhoff:
Right. Right. And you know, what we have found is there are some organizations that are good at… I don’t necessarily want to call it gaming the system, but in some cases where they have the ability to contract out some of the work in order to get the work done. We notice if that’s the case they are sometimes not as motivated to get the position filled.

William Tincup:
Right.

Pam Verhoff:
When in reality, even from a tier cost perspective and P and L, there are some immediate impacts to filling that role with an internal, long term hire as opposed to a contractor, but absolutely, and I will be honest, it’s generally the relationships that we’ve been in for multiple years with our customers, after a year or a year and a half is typically when we really start to understand how they’re compensated from a bonus perspective and we work to then impact that. We do our best. We try certainly to really understand that so that we can put goals in place to impact it directly, but oftentimes it just takes, general relationships it takes a while to gain the trust and understanding to open that up for us.

William Tincup:
It’s interesting when we talked about morale earlier and there’s another aspect of morale is, and I want to get your take on this is that if we’re not, if we can’t have the inability to fill positions, it also for a lot of folks it doesn’t show that we can, there’s a career mobility or internal mobility. Again, we’re trying to fulfill from the outside externally, but even if we weren’t that job being open for months on end, it’s sending another signal and probably an unintended signal to the rest of the team that there’s not a path forward or path to a different thing for them so it impacts morale on a number of different levels. Do you-

Pam Verhoff:
Absolutely.

William Tincup:
See some of the same things?

Pam Verhoff:
Yes and even to the point where sometimes there are individuals at a lower level that are actually asked to do that work.

William Tincup:
Right.

Pam Verhoff:
The work of a higher level person and so therefore it just, that really drives morale down because individuals that are doing part of the job today may not be considered for the role, but yet they’re expected to do some of the work and that’s where you really start to see that’s going to drive turnover in the organization and again, make this issue of aging requisitions even a bigger issue.

William Tincup:
I wanted to ask you about aging requisitions because first of all, in my mind I think of this as like the real estate market, the way that they do, how long the house has been on the market. So, that’s externally, you can look on realtor.com and you can actually see how long a particular thing has been on the market and so it’s interesting. Could we, or should we do that internally and think about, hey, listen, if this job’s been on the market for 30 days, we’ve got to change something, something in the aperture of the job description, the comp, whether or not it’s remote or hybrid. Something’s got, it’s just like if you were selling a home. If you’re selling a home you bet it out there for six months and no one, you didn’t have any nibbles, you do something different. You might take it off the market, but you would do something different. What do see? What’s the relationship there whether or not it’s external or even internal?

Pam Verhoff:
Absolutely and that’s a standard practice with our recruiting teams, is that at… And we determine this with our customers up front and it depends what types of roles, right?

William Tincup:
Sure.

Pam Verhoff:
And what that increment is, but typically it’s 30 to 45 days and at that point we do surround it, if you will, with a broader group to take a look and say, where are the challenges and why isn’t it getting filled? And coming out of that meeting there has to be some change. To your point we may close the job, close the requisition or re-scope it and then repost it, but unless there are circumstances such as a project that’s priority so the manager isn’t able to free up time to interview or something internally, unless it’s something like that we do require that there be some change made in order to make progress on that requisition and that’s typically where we see the aha moments with hiring managers. Oftentimes they’ve been in this space for long and they feel, they’re pretty, they’ve got compelling evidence to say, this is, I know we can fill this role. We’ve always done it this way and typically it’s at that 30 to 45 day review that we get them to start to move and really make the right decisions in order to move the requisition to close.

William Tincup:
Do you see different stages in the funnel? So maybe we have a top of the funnel problem or we get down to, and you even mentioned it, hiring manager doesn’t have time to interview as a great example, or even further, we get in to offer letters and for whatever reason our rejection rate is really, really, really high. Do you all look at that and then, especially at that 30 day mark, or even sooner, do you all start to analyze that and go, okay, here’s where the problem is.

Pam Verhoff:
Absolutely and worst case scenario is problem is all three, right?

William Tincup:
Yeah.

Pam Verhoff:
We can typically identify the top of the funnel challenges pretty early in the search because we’ve got the market data, we know what they’re looking for. We really, at the onset of an engagement with our customers, that’s where we address the process piece. More often than not it then becomes a how competitive we are in the market so that we get to that offer, in looking at the data around the offers or candidates just falling out of the process and understanding why they’re falling out of the process. And I would say 70 to 80% of the time it’s total compensation and I’ll bucket into that whether the position is remote, hybrid or must be in person five days a week.

William Tincup:
Yeah. I’ve gotten the same feel. In fact, I’ve gotten comp. With some folks I’ve gotten comp put second under remote versus hybrid, which is really interesting. You mentioned employer brand and how the cost of open jobs could impact your employer brand because people just talk everywhere on Twitter or they’re going Glassdoor, or whatever else, they just, you become not referencable and so people aren’t referring you, which you know, that happens all the time. Somebody else sees a job and goes, you know what, Janet would be really good at that. That stuff happens all the time. How do you give them advice on their employer realm. When they have a wonderful one, it’s really easy. Sure, it makes things easier, but when you come into a situation, do you all audit the employer brand and give them recommendations on how to make it better.

Pam Verhoff:
Yes, absolutely and that is… Actually during the sales process that’s part of our due diligence, if you will, and we bring that forth as we are talking about a potential solution with them. So when we go forth with an engagement that’s first and foremost is helping them improve the social, their engagement scores on social and we do that, there are the obvious. Have employees go out and share experiences and so on, but oftentimes it’s really holistic and that is not something that you can change quickly. It’s just as our own, it’s like trying to change the perception others have of you overnight. It doesn’t happen because we build those perceptions over time and it’s a result of multiple posts in this case.

Pam Verhoff:
So, we really look for opportunities and when we go out and engage candidates on behalf of our customers, sharing positives, sharing what’s happening with the organization, strategic initiatives, growth initiatives, and so on, so to override and get them excited about what’s happening within the organization as opposed to relying and there is always some percent of a post or Glassdoor reviews and so on that are just disgruntled employees, right?

William Tincup:
Right.

Pam Verhoff:
And so we just work with them to understand all the great things happening within the organization and then we are sharing and going out to the market with those very positive, exciting things.

William Tincup:
Yeah, I’ve had the experience that’s kind of falls into your 70, 30, 80, 20 rule of, if it’s all positive candidates don’t believe it.

Pam Verhoff:
Right.

William Tincup:
And if it’s all negative candidates don’t believe it. So, if there’s a little bit of negative sentiment, it’s like, well, okay, it becomes more believable. Now there’s a threshold. If it’s heavily indexed and it’s negative then, and no one’s really managing it and nurturing the conversations and responding to people and things like that then that’s just going to be a negative experience. Last question and this is just, I want to get your take on this is because we haven’t talked about this particular part of, the invisible cost and maybe the impact of those open jobs on HR and TA professionals. So, you’re managing many jobs and that your job is open for six months. What’s that emotional toll that gets levied on the HR teams and the recruiting teams?

Pam Verhoff:
Right. It’s huge and what it does is it distracts the HR team from really working on those strategic initiatives that they should be focused on and that’s a very real cost because hiring is emotional for every hiring manager and so therefore when things aren’t going well it can become all consuming. In some cases we see heavy turnover in HR and talent acquisition organizations because of it, because they just simply don’t have this. Everything I’ve talked about, it takes resources and a strategy to go out and actually do all of these things and oftentimes HR and TA teams simply don’t have the resources to do it really well and therefore it just distracts and takes away from what they should be doing and drives again, it goes and now guess what, it drives people out of the organization and it compounds this issue that we’re talking about.

William Tincup:
It almost seems like in that situation becomes an unwinnable game.

Pam Verhoff:
Right.

William Tincup:
But whenever something becomes an unwinnable or untenable situation, it’s like, ah, it’s easier to do something else because it just it’s too much emotionally. Pam, this has been wonderful. Thank you so much for coming on the podcast. Thank you for talking about this particular topic because I haven’t covered it yet and I think it’s really important for folks to talk about.

Pam Verhoff:
Great. Thank you. I appreciate the opportunity to spend time with you this afternoon.

William Tincup:
Vice versa and thanks for everyone listening to the RecruitingDaily podcast, until next time.