Why do some companies thrive while others fail? One word: Talent. Hiring the wrong people can cost a company millions of dollars, while hiring the right people can boost the bottom line and ensure a company’s success. This is especially true in the medical device industry, where recruiting top talent is a highly competitive endeavor that involves a wide range of philosophies on how to develop a best-in-class organization.
Most device industry executives are all too familiar with this scenario: A critical hiring need arises, and the right person for this role was needed weeks ago. Should the job be posted? If so, where? Should a recruiter be called? What method should be used to ensure the right person is being hired for the position? Once the candidate is chosen, what needs to be done to get him or her to accept an offer? And what’s the risk that the candidate would simply use the offer to negotiate a better counter-offer from the current employer?
To answer these questions it’s important to know that three key areas of the recruiting process can make the difference in finding the best talent to fit a device manufacturer’s organizational goals. They are sourcing, interviewing, and hiring. Best practices in these key areas, however, begin with foundational philosophies that undergird successful recruitment.
Commit to the Best Candidates
The term A player is used to define the best candidates. In Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People (Portfolio Hardcover; 2005) Bradford Smart defines an A player as a candidate in the top 10% of available candidates for a given role. This ranking takes in all factors, including job responsibilities, company, compensation, and location.
After conducting several surveys with respondents from Boeing, Rockwell, and dozens of other companies, Smart concluded that the average cost of hiring the wrong mid-level manager is 15 times the annual base salary on average, and the cost rises the longer the employee is in the role. To quantify, a poor hire with a $100,000 annual base salary costs the company $1.5 million.
Consider all the potential cost impacts that decisions by a senior-level manager can have: driving the top performers to leave the organization because of discontent with leadership; lower levels of productivity, innovation and quality; and a greater potential for costly mistakes, such as a warning letter or product recall. That’s not to mention the direct costs of recruiting, compensation, and severance pay.
Sadly, in this situation, the best-case scenario is that a bad hire only performs below expectations, stays under the radar, and doesn’t produce the expected results. The worst-case scenario is often much more damaging to an organization.
Talent Attracts Talent
On the other side of the spectrum, when a device company commits to hiring the best talent, it not only brings immediately measurable results, it also creates a winning culture that improves the quality of candidates attracted to the organization. Top performers attract other top performers in several ways—through their contact network, by fostering a successful company brand known for high standards of talent, and by showing that the company can identify and manage top-performing candidates.
Hiring the best talent requires a company-wide commitment, and that means getting buy-ins from the executive team, all managerial levels, individual contributors, human resources, and search firms. This approach must be more than just an agreement in principle; it should result in taking the steps necessary to implement a robust process that produces results.
The Recruiting Funnel
The recruiting process is a funnel. A device company executive wants to ensure that the largest possible pool of candidates is going into the top of a funnel, starting a process that will cull the weaker selections and leave the best among the remaining candidates.
Before beginning recruitment it is essential to understand the requirements of the role and to document in detail exactly the nature of the position. This assessment should include the company’s expectations and the goals that the new hire is expected to reach after 6 months, 1 year, and 2 years. The behavioral and technical competencies the new hire will need in order to be successful should also be considered.
A successful recruiting process includes casting a broad yet targeted net, having a rigorous screening and interviewing process, and selling candidates on the company and opportunities throughout the entire process—especially after they start. Hiring decisions are all too often taken too lightly, with the resulting negative consequences.
Constant Company Assessment
Understanding the device company’s overall mission, the critical skills needed to accomplish the mission, and the makeup of the company’s current group is fundamental to building and developing the team that can best deliver on that mission. This may seem like common sense—and it is—but formally identifying and tracking the company’s current state is critical for succession planning and adapting your organization to an evolving mission.
A device company executive should continually evaluate the direction of the organization and the hiring needs over the next six months to a year out. The recruitment plan should identify competency gaps or employees who lack depth in the organization and then correct those shortfalls when making new hires.
Succession planning is another key area that is integral to this process.
This is not just the problem for global multinationals, either. Just as Warren Buffett or Steve Jobs worry about who will replace them, a device company executive should be honestly asking the same hard questions, especially for star performers—the ones that cause executives to cringe when they think about having to replace them.
Build the Talent ‘Bench’
Budgets and organizational factors can impede the ability to hire from time to time. That should never stop companies from developing and cultivating relationships with candidates that they’d like to hire at some point. As the economy improves, it is more likely that current employees at the organization are going to be looking to make a move and leave. If that does happen, it is imperative that company executives jump-start the recruiting process and shorten the time it takes to backfill or even grow as the market expands.
If there is a Murphy’s Law for hiring, it’s that promising candidates will most likely become available at an inopportune time. For example, assume that a device company is planning to build an advanced manufacturing organization but doesn’t expect to begin operations for a few months. Meanwhile, the perfect candidate for heading up the organization expresses immediate interest in the endeavor. An exhaustive search for the ideal candidate could wait until the business unit is ready, but by then the candidate could have been recruited by another company or have lost interest. Candidates cannot always be compared with a larger pool of applicants. However, with the right interviewing process, there shouldn’t be a need to do so.
As the economy improves, recruiting the A players will become increasingly difficult, especially in the medical device and diagnostics industry. In situations like the one above, device industry executives must be willing to make a move and hire a promising candidate when possible. There will always be cases where, for one reason or another, it isn’t possible to hire immediately. When this happens executives responsible for hiring should develop a relationship with prospective A players, keep them updated on the availability of job openings, and ensure them they will be hired when the moment the opportunity arises. Knowing the best practices for sourcing, interviewing, and hiring increases the chances of winning the talent contest.
Andy Rouse is a principal and recruiter with RG Search (Austin, TX.). He may be reached at 512/965-2296 or at firstname.lastname@example.org.