Labcast: Should HR and Recruiters Think More Like Sales?

What can corporate recruiters and HR professionals learn from salespeople?  Quite a bit, says Kris Dunn, Chief Human Resources Officer at Kinetix and founder of Fistful of Talent. In this episode, Kris calls in to discuss some of the sales skills that recruiters can use to do their jobs better, and how company CEOs and founders can help improve overall HR processes.

Should HR and Recruiters Think More Like Sales?

You can also find more from Kris at his blog, The HR Capitalist.

PODCAST TRANSCRIPT

Brendan Cournoyer: Hello again everyone and welcome to this episode of Labcast.  Today we are joined by Kris Dunn. Kris is the Chief Human Resources Officer and partner at Kinetix, a recruitment process outsourcing firm based in Atlanta. He’s also the editor at Fistful of Talent, a blog about finding talent for recruiters, HR reps, consultants, and corporate types alike. That’s in addition to his work as a contributing editor for Workforce.com, and of course his own blog The HR Capitalist.

Kris, did I leave anything out?

Kris Dunn: No, Brendan, I think you got the profile down. Thanks for having me today.

Brendan: Thanks very much for joining us. So I just gave a little bit of an intro on some of the things that you do and how people can find you online, but please, I’d love to give you an opportunity to start to fill folks in, for folks who don’t know who you are, kind of talk a little bit about your background, the company, the sites, anything that you think people should know before we get into this.

Kris: Sure, Brendan. Well, for your listeners who haven’t stumbled upon my online profile, I’m a long-term director/VP of HR. I was originally in the field for a couple of different Fortune 500 firms, and in 2005, I went smaller. I became a VP of HR for a venture capital held software firm. I did that for four or five years. About ten months ago, I bought a piece of a business, and I’m now a partner at Kinetix, that’s a recruitment processing outsourcing firm, also just a general recruiting firm, and we also do HR consulting.

But right around the same time that I took a job with the software firm in 2005, I started a blog called The HR Capitalist, and that’s just my own blog. I blog there daily. It’s kind of from the view of an HR pro in the field. That went well enough that I really got involved and had an opportunity to create a site called Fistful of Talent, which is a little bit different from the Capitalist in that rather than just my own thoughts, at Fistful of Talent, we have a slate of roughly about 14 or 15 contributors, and we write there daily as well. We take turns from a bunch of different perspectives.

So Fistful of Talent is, as I said, a multi-contributor blog, and rather than being totally HR centric, we kind of strip out some of the, what I would say, unsexy parts of HR, like the legal side, probably the benefit side, and we talk more about talent management at Fistful of Talent. My simple definition of talent management is how you get the best people and then what you do with those folks once you have them in the door to maximize their effectiveness, maximize their retention, and basically just make good people do great things for your company. So that’s kind of the vibe at Fistful of Talent. It’s been great for me because I’m a practitioner by nature, but the online stuff and the stuff I do on the side related to HR, recruiting, and talent management really gives me access to a lot of great people in the field. So I’ve learned a lot by doing a lot of these side projects.

Brendan: Very cool. Well, we’re going to talk about a few of those topics you mentioned today. The point that we were really interested in touching upon is based on a presentation that you helped put together, basically on some of the tips that HR and recruiters can learn from salespeople and the actual title was, and correct me if I get this wrong, “Raise Your HR Game by Thinking Like a Money Grubbing VP of Sales.”

Kris: That’s right.

Brendan: Now, lest we insult anybody, that’s actually a complement to salespeople, right?

Kris: Yeah, it is a complement. In my role as a kind of a HR leader, I’ve had the opportunity to recruit a lot of sales folks into the different organizations that I’ve supported. Also, I had an opportunity to recruit sales leaders into those organizations. When I say, “money hungry,” that’s really a proxy to grab attention and get people interested in the topic. What I do find is that salespeople, by the very nature of what they do, are the most results oriented people, generally, within any organization. It’s that results orientation that makes me think that HR people can learn a lot from those folks.

Brendan: Right. So let’s talk about some of the things that they can learn. First to start, obviously, what are some of the areas in general, the perception of HR, what are some of the things that the perception is they’re generally bad at?

Kris: Well, we go into this within this presentation, this slide deck. The entrée into this is that, traditionally speaking, HR people are thought to be bad at negotiating for what they need, what their company needs. A lot of HR people are conflict avoidant. The best example I can give you, in terms of those negotiation skills, is I’m continually shocked, and a lot of people listening to this would say, “Well, that seems so commonplace.” But generally speaking, HR people, and also recruiters, you would think they would be very good about talking about money, but they’re actually not. So within the recruiting process, Brendan, just simply asking someone where they’re at from a compensation standpoint as an entry point into a negotiation that’s going to happen in the near future when you start talking about, “Okay. We’ve confirmed this person is the right fit for our organization, skills we need, cultural fit, all those things. Now we’ve got to talk about money.” HR people are notoriously bad at nailing that conversation in a way that ultimately leads them to success in the negotiation that comes.

So one of the things we talk about in the presentation is the best way to do that. We think that that’s an example of something that HR people traditionally, if you look across a thousand HR people, a thousand recruiters, there’s a lot of room for improvement there, and we think you can learn a lot from how salespeople would traditionally approach that problem.

Brendan: Sure. That’s a perfect area, talking about money, finances, that kind of thing. Salespeople generally live in that realm. But you guys also discuss some of the ways HR can better, not only get information from potential applicants and candidates, but also influence decisions in a way that maybe some of the tactics that a salesperson might find successful can actually be applied to HR recruiters. What kind of decisions were you guys referring to in that?

Kris: Well, within the realm of HR, there are so many decisions that happen when we support operators, whether it’s a venture capital held firm or whether it’s a Fortune 500. Some of those decisions would be employment decisions based on a performance situation, based on just a cultural situation, in terms of whether someone’s a fit or not. We’ve got an issue. Will that person potentially be leaving the company? Now, HR people go into that, supporting operators, of course, supporting owners, and presidents, and CEOs of companies. We go into those conversations as an agent of the company, and generally speaking we have a vibe in our mind of the way that a decision is going to go. One of the things that we think HR people can do better at, in terms of influencing decisions, is starting the conversation in a way that naturally gets them to the outcome that they feel is most probable down the road, whether down the road means one hour from then, or one week, or one month, or even one year from then. If you approach a conversation with the outcome you have in mind, the way you start that conversation might be totally different.

A great example I would give you, Brendan, is if you’ve got a performance situation and you think that someone most likely is going to exit the company based on that performance situation you’re dealing with, why not get there first? If you’re dealing with the manager on that, if you’re dealing with an influence in the organization, why not say what you think is going to happen in that first conversation to really set the bar for where the negotiation goes from there? A lot of HR people we feel have five conversations when one or two could do. It’s the ability to put it out there and to establish what your position is, what you think is going to happen. Just like a salesperson would go in a negotiation and make the first offer or make the first statement of what their position is, all negotiation happens from that point forward. We think that that’s a way that HR people can get a lot of time back in their day and also get better outcomes for themselves and the companies and the executives they support.

Brendan: Most certainly, it makes a lot of sense. Also, a lot of that is about, it seems a lot taking initiative and being proactive. In the presentation, one point that I picked up on was there was a lot talk around not playing the victim. Is there a general perception for HR that they’re too easily walked over? And if so, by who?

Kris: Well, so you’re going to have, I think, a lot of what I would consider the upscale HR pros listening this podcast, just based on who your organization is. But overall, if you look across the United States, there’s definitely a perception that HR at times can be easily walked over. Generally speaking, that’s by the people that they support because HR carries a burden. Really I would term this from the HR manager through the HR Director, or through a VP of HR, kind of into that leadership mode, but certainly starting with the HR manager that’s out in the field supporting the organization. HR bears this burden of having to get along with everyone because there’s this perception that HR is there to be the peacemaker. They’re there to make sure that we retain people. A lot of times they’ll allow conversations and just situations to happen to them without really stating what they believe in and what they think the best outcome is.

Now, almost all HR pros eventually get to that, but we feel like there’s a huge efficiency gain and also an outcome gain by not playing the victim and getting some of these negotiations things we talk about in the presentation out on the table early so that you don’t have this aura of being walked over and influenced. The bottom line is you don’t want to have five conversations when one or two can do.

Brendan: Now, I’d like to just switch gears just a little bit for this next question. We have a lot in audience, a lot of the listeners and readers are entrepreneurs, early-stage founders, CEOs. For the argument that HR doesn’t affect the bottom line, what they’re focused on right now, they have a lot on their plate, especially at the expansion stage and early stage of a company, what is your counter argument for investing more into HR and paying more attention? What is your argument for the ROI provided by Human Resources?

Kris: Well, ROI is always a difficult thing for the HR community. What I would suggest is you start probably with a macro approach rather than a micro approach. What I mean by that, Brendan, is when the ROI conversation comes up, many times HR pros and the leaders who hire them will go right into the weeds. They may think about retention, they may think about engagement, things like that. What I would suggest to you is to keep it simple. When you’re thinking about the ROI of what any HR pro can provide an organization, especially for some of your startup CEOs who are thinking about hiring their first HR pro, I would suggest go macro instead of micro to start with. Then start looking at all the inputs that go into that macro measurement.

The best macro measurement that any of your CEOs of these startup firms are going find is really revenue per employee. So if you start looking at revenue per employee as your macro, kind of, measurement of the, I guess, the effectiveness of your people function, then you can start thinking about all the things that impact revenue per employee. It’s a great way for some of the executives at the firms you represent and support, to get their head around, in a very macro sense, whether the people function, the HR function, the talent function is actually providing value. So think about that, Brendan, think about revenue per employee as just your general metric.

Now let’s start thinking about the micro things that influence that. Certainly your ability to retain people influences that. The level of talent you’re attracting into the organization, the productivity of that talent, all of those things are still macro factors, but they’re micro factors compared to the overall measurement of revenue per employee. I don’t know of too many companies that when you starting talking about HR and metrics will lead with revenue per employee. The good ones do and everything else is really an input to that measurement. So for your CEOs, Brendan, I would say start with that macro measurement because it leads into a lot of fascinating conversations about the best place for, maybe, their initial HR leader to spend their time and where they can have the most impact.

Brendan: Oh, great, yeah. We talked a little bit about some of the things that recruiters and HR reps can learn from salespeople and do to improve their processes. What are some things that the company founders and CEOs themselves can do to help improve that process and make things better?

Kris: Well, I think the best thing they can do, regardless of where their HR function is, Brendan, I think any CEO should automatically demand that the organization and any HR team members that work for that organization do everything they can to minimize the amount of time they spend on transactions. So for your CEOs within the types of firms that you represent, the types of firms that come to this website looking for ideas and support, the whole goal should be, over time, to minimize the amount of time spent on transactions. That’s things like payroll. That’s things like insurance. I could go down a list of things that are purely transactional, but like with every other part of the business, if you don’t automate transactions, if you don’t look for process improvements to really minimize the percentage of time that your HR team is spending on transactions, then if you don’t do things from a process perspective to minimize that time, then transactions will expand to fill capacity, so to speak. All of a sudden you’ll look up three years into the creation of your HR team and you’ll have an HR team that’s really focused on transactions rather than truly focusing on things that can improve, that are allied that I mentioned in terms of revenue per employee.

So, for example, if I have an HR team of 4 people in a startup firm and I do a work study, and I figure out that that team is spending 50% to 60% of their time on transactions, then I need to do some process improvement to get that percentage down to 20% to 30% of the time because the theory goes that if you’ve got the right type of people on your HR team, minimize the transactions, that means they’re going to have more time to spend on things like recruiting, more time on things like performance management, and things that really improve the revenue per employee line that go into the productivity of your company and things like that. So that’s the best way that your founders and CEOs can really focus on improving HR processes, focus on reducing percentage of time in transactions.

Brendan: Excellent. Kris, really, I appreciate you taking the time. That’s great insight.

Once again I want to remind our readers and listeners that they can find more from you at a FistfulofTalent.com and of course The HR Capitalist blog.

Thanks very much for taking the time. Hopefully we get to do this again soon.

Kris: Brendan, thanks for your time. It was great.