Executive Search Firms Seek to Make Data and Analytics Less Burdensome
March 23, 2018 – Big Data is changing business everywhere. The explosion of available information in the past few years has created a seismic shift in how companies now operate and go to market. While most organizations already have vast amounts of information about their employees, few companies are truly using their own human capital analytics to the full potential or leveraging Big Data from external sources for hiring.
“Clearly, Big Data is changing our world and there is no end in sight for the ways it makes our life’s easier and more productive,” said Larry Hartmann, CEO of ZRG Partners. “For executive search firms and the clients we serve, the real trick is figuring out how to effectively use the amazing insights and data we gain throughout our processes to drive better hires and quicker fill times. But turning this valuable information into actionable insights without making it overwhelming or cumbersome is the hard part.”
A number of progressive organizations have embraced enterprise HR and business analytics platforms working in tandem to find top talent more quickly, but that is still just a small percentage of companies. “While some of the Big Five search firms are addressing this through adding new business lines, clients seem to be asking for one integrated approach that is simple and business friendly,” said Mr. Hartmann. “Having three different business units work on a search or talent project is not a seamless or cost effective answer. The trick is making the client experience effortless and robust with great insights to drive better results.”
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The Future Arrives
For recruiters, that ability to harness information through technology, understand it and apply it to serve their clients can be the difference between the successful firms and the also-rans in this rapidly changing environment. “While the core strengths of today’s executive search firms that can effectively access, sell and influence top talent to consider new opportunities are still quite relevant, the winds of change are at work in talent management and executive search,” said Mr. Hartmann. “Embracing the best technology solutions, assessment solutions and problem solving approaches are clear differentiators of growing retained search firms that are taking market share. We believe this is the future of executive search and for some, it has already arrived.”
Five Ways HR Can Maximize Data and Analytics
Big data is rewriting the script for how companies around the world do business. The market for big data and business analytics is expected to grow to $203 billion in the next three years. For HR, the implications include better and more efficient talent management processes.
As the driving force behind ZRG Partners’ tremendous growth in recent years, Mr. Hartmann knows this terrain well. Prior to joining the Rochelle Park, NJ-based firm in 2002, he was a founder of Rockford Industries, a NASDAQ- traded commercial lending business that supported the medical device and technology market. While at Rockford, the company went from a pure start-up to an Inc. 500 recognized growth organization through IPO and ultimate sale to American Express. This experience gave him a unique view of growing a business, raising capital and hiring talent through virtually all business stages. After the sale, Mr. Hartmann became an EVP with American Express for three years. He also has broad experience with boards of directors. In addition to his public company experience as a board member, Mr. Hartmann has served on boards in private equity and venture backed businesses as well as in academia and not-for-profit organizations.
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Data, analytics and technology are changing how top companies hire at the senior level in a number of ways, said Mr. Hartmann. Transparency, for example, is systemically replacing the “mysterious black box process of executive search,” he said. Finding candidates is important, of course, but so is the process that produces information and insight to understand the best hiring options.
“Executive search is no longer just about finding the right CEO, CFO or head of marketing, but about the market intelligence, insights and feedback a client can gain throughout the search process,” said Mr. Hartmann. “Helping a CEO or board to better understand the competitive talent landscape through talent mapping work is often requested as part of a search and can precede a full-fledged retained process. Clients who take a deeper look at the type of talent that competitors might have in similar roles often revise their thinking about how to fill an open role or how they might solve a broader business problem with fresh perspective and thinking.”
Compensation is another area from which valuable data can be mined. “A good search process that captures market data will also enlighten the compensation discussion and provide true clarity around how a company should invest in top talent,” said Mr. Hartmann. “While compensation consulting firms can hypothecate about compensation from the 100,000-foot level for a role, the reality is that the market speaks from the ground up.”
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When a client describes a model candidate with 10 specific skills and experiences from 20 specific competitors, for example, the results of that search provide real compensation data for the role, which can be quite useful. Mr. Hartmann said that his firm has converted embedded, search-wide compensation data into graphical compensation analytics that can be broken down in any number of ways.
“As clients assess a slate of candidates, just looking at skills and experiences is not enough,” he said. “Factoring in cost versus benefit with actual compensation data clearly helps to keep projects on point and filled in quicker timeframes. As we at ZRG like to say to our clients, the denominator of ROE is time and anything we can do to expedite a client’s internal processes to complete a critical hire is part of our focus.”
Obtaining broader knowledge about candidates is perhaps the most dramatic change affecting hiring in recent years. Information is available through many approaches. “In the old days, it was the executive search firm’s 10-page candidate report and opinions,” said Mr. Hartmann. “Today, this is replaced by more precise skills and competency charts and graphs that highlight strengths and concerns without having to wade through a ‘War and Peace’ novel about a candidate. Companies want bottom lines, not dissertations about a candidate.”
Analytic and Assessment Tools Gain Traction
Search firms continue to expand into new areas whether it be via acquisition, alliance or launching new services. The trend has been seen at large recruiters and small boutiques alike as recruiters hope to provide clients with best-in-class services for finding their senior level talent.
Savvy search firms are also providing Ph.D.-validated assessment options to help clients get to know candidates better. This helps confirm hiring decisions and better assess culture matches. “The science of assessment has become mainstream for most companies today and adds value to the candidate discussions. It also leads to customized onboarding strategies,” said Mr. Hartmann.
A New Approach
Then there is culture fit, which Mr. Hartmann describes as “the hottest topic we hear from our clients today.” Companies are spending millions of dollars to better understand and define culture and core values, yet science offers little to help them confirm a new hire will fit these precise cultures. ZRG’s response, for one, was to develop a new learning algorithm within the firm’s proprietary “Z Score process,” which aggregates key data points into metrics and scores that help drive better decision-making.
Related: For Executive Search Firms, Analytics Can be a Game Changer
“Being able to understand a candidate, and how they would fit in a culture is quantifiable and measurable, and should not be overlooked,” said Mr. Hartmann.
The area of reference checking is also moving ahead. While reference checks have long been at the core of executive search value, reference input is increasingly being converted into meaningful data that can be quite useful in making the choice of who to hire. “New tools exist that are excellent in addressing this need, that are often part of an integrated technology driven search process,” said Mr. Hartmann.
Overdue for advancement, meanwhile, is the traditional interviewing process. Generally, organizations tend to do well in having five to seven people interview candidates. But capturing the interview feedback and turning it into measurable data and ultimately wisdom is rare. “Panel interview processes require significant time and expense for a company but rarely capture the value of the time and money spent,” said Mr. Hartmann. “Great insights are lost through the lack of process to capture and analyze the feedback over time. These insights are not limited to just the candidates but can illuminate the real stars in an organization that can spot top talent and prevent hiring mistakes. ZRG Partners has addressed this gap through the development of technology solutions that turn the interview process into insight using state of the art tools.”
These days, technology can allow interviewers to rate and evaluate candidates, then provide scored feedback and have the results pooled together in a simple yet enlightening dashboard. “Given the critical importance of client interviewing in the final vetting process, converting the interview team’s wisdom and views into actionable data has been a groundbreaking step in the hiring process for progressive organizations passionate about hiring great talent and learning who in their organizations truly get it,” said Mr. Hartmann.
Related: Five Ways HR Can Maximize Data and Analytics
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media