RPO at Boeing started out as a cessna, but now it’s grown into a 727. Relying on twin engines to propel its recruitment efforts, the chicago-based aerospace giant is elevating hiring to a new level.
Job recruitment at The Boeing Company has been up, up, and away in the past few years, a result of the Chicago-based aerospace giant’s stellar sales and orders. Last year, Boeing won a record 1,044 orders for jet aircraft, overtaking its chief rival Airbus for the first time in the past five years. The company has also benefited from a surge in orders for its military aircraft, a business that has grown exponentially since Boeing’s 1997 acquisition of McDonnell-Douglas, the world’s second largest defense contractor.
The company anticipates that its order load for 2007 will mirror the previous year’s tally. With activity buzzing at Boeing’s primary manufacturing facilities in the Seattle area, long-time home of the aviation pioneer before the contentious relocation of its headquarters to the Windy City seven years ago, its staffing department within HR was inundated with job postings. Boeing employs approximately 160,000 people worldwide, a number that rises and descends based on its current and projected orders. In the wake of 911, when orders for aircraft plunged, so did the company’s job postings. This year, however, Boeing was flying high again and posted 25,000 job requisitions. While some were related to internal moves within the organization, the lion’s share was new hires.
With such a transactional load, Boeing’s HR staff was ill-equipped to service the requisitions in a manner consistent with the company’s best practices.
“To handle it effectively would require a significant staff increase,” conceded Steve Mueller, Boeing’s director of staffing operations. “Our business is growing and has grown quite a bit in recent years, not just because of our newer jets like the 777 and the new 787 Dreamliner but also because of our military projects. The demand is huge. Added to that is our geographic diversity and job demographics, which are changing all the time.”
He said a broad range of skills is needed to produce jet aircraft, filling positions that range from sophisticated engineers and technologists to more rank- and-file assembly workers and office staff.
“Boeing is an exciting company to work for, and there are a lot of skills we are looking for—not just aerospace engineering,” Mueller explained.
“We expect to continue to see a large number of job transactions going forward, particularly as our workforce ages and as people (within the company) make career changes.”
Four years ago, as orders for aircraft began a steady ascent, Boeing decided it needed help managing the job requisition volume. A highly conservative company, it determined to outsource a portion of the recruitment process, getting its “toe wet” before taking a more substantial plunge into RPO (recruitment process outsourcing), said Mueller. The company also took a conservative stance with respect to an outsourcing service provider, engaging two vendors to essentially share the work with Boeing internal staff.
“We didn’t want to put all our eggs in one basket,” Mueller explained. “The sheer volume of requisitions drove the need to have a backup (vendor).”
The decision led to a three-way partnership, an arrangement that has evolved during the past four years into more of an end-to-end RPO model, albeit on a piecemeal basis. Boeing’s partners in the RPO effort are long-time providers of services to the company: Momentum, based in Federal Way, WA, and Columbus, OH-based Intellecor. Each has sophisticated expertise in matching aerospace employment opportunities with the specific skill sets of global candidates. Both also have intimate knowledge of Boeing’s HR processes and have cultivated close relationships with its staff over the years. The vendors share the assignment primarily along geographic lines, although they sometimes overlap.
Mueller said he and his staff recognized the need for help four years ago, just as the number of job postings began its ascent.
“We were looking at a significant ramp-up in our business and a consequent ramp-up in requisitions, which we were responsible for processing,” he said. “We decided, rather than a soup-to-nuts RPO engagement, we’d begin with just the job posting, letting the two vendors into our firewall to utilize our system.
There they could engage with our (hiring) managers, verifying the information on the position, posting that position to our external website and internal website and then, based on the applicants who applied, screening them to provide the best qualified ones to our hiring managers for consideration. That’s as far as we wanted to go in the beginning.”
On day one of the outsourcing engagement, the company listed 1,000 job requisitions for Momentum to process, said Lori Larson, vice president at Momentum. But, even before the switch was flipped on the outsourcing engagement, Momentum had worked with Boeing’s recruitment staff to define strategic objectives, make predictions on future job needs, and chart a course with these in mind.
“We wanted to ensure that our goals were aligned and that not only were we helping Boeing execute their current vision, but also assisting them with scoping a future vision, which included greatly improved metrics,” Larson added. To do that, the vendor proposed to Boeing the use of Six Sigma methodologies to drive change and improvements throughout the organization. (See sidebar: Seven Six Sigma Sessions.)
Momentum is a division of Volt Information Sciences, a 57-year-old, $2.3-billion global staffing company traded on the New York Stock Exchange. Intellecor was founded in 1996.
Prior to activating the outsourcing process, both vendors benchmarked Boeing’s recruitment processes against several different vertical companies and others of the same size. “We found, for example, that their time to fill was a lot longer than they thought,” said Larson. “The customer-service aspects of moving candidates through the process needed to be improved; they also had hand-offs since their recruitment activities were very siloed, handed off from one group to another, which created bottlenecks, delays, and errors. This led to higher costs per hire versus the other companies benchmarked.”
John Hamilton, president and CEO of Intellecor, said a chief problem for Boeing was candidate overload. The company’s blue-chip status invited too many applicants to the door, causing requisitions to literally fly in over the transom. “They’d get 2,000 people sending in resumes or asking for information about a single position,” Hamilton noted. “There was no way to basically ‘down-select’ those individuals. It was unbelievably time-consuming.”
Like any company seeking to fill a position, Boeing wanted to effectively sift the candidates to the best 20 or so for the hiring manager to interview. Boeing’s sieve, in this regard, was wanting. “Boeing had recruiters and requisition managers on staff with high volume loads that were difficult to process” Larson said.
Hence, the first phase of the outsourcing assignment—requisition processing. Reducing time-to-fill for internal positions was a key priority. Boeing needed standard job profiles for most common, technical employee requisitions and a more efficient screening process for these candidates. Momentum and Intellecor took to the task with vigor. And with good reason—Boeing anticipated 10,000 job openings in the next 24 months.
“We dedicated a project team to qualify and post the open positions both internally and externally, reviewed the applications, conducted the initial screening of the applicants, implemented ‘knock-out’ processes for the least-qualified candidates, and presented what we considered qualified resumes to the internal hiring managers,” Larson recalled.
Since the onset of the engagement in 2004, Momentum has managed more than 36,000 job requisitions for Boeing, reducing the time-to-fill cycle from an average of more than 100 days to 55 days. And that’s just Momentum’s load. Intellecor picked up an equal share of the burden, while Boeing’s internal staff handled the rest. As the work was completed, it was also measured. Mueller said a study of the metrics clearly indicated that the vendors are able to handle a greater workload than internal staffers.
“We’ve measured that they can absorb 15 to 20 percent more of the workload on a person-to-person comparative basis,” he explained. “From a return-on-investment perspective, that’s good news for our shareholders. We’re a cost center, and if we can deliver productivity back to the business units, it’s icing on the cake.”
Both Momentum and Intellecor are able to achieve higher productivity because of their core competencies. Each has a dedicated team on the Boeing account, working eight hours a day purely on the company’s job transactions, whereas Boeing’s internal staff must divide their attention among special projects, staff meetings, job requisition transactions “and the other stuff going on in the corporation,” Mueller said.
In 2006, pleased with the outcome of its recruitment outsourcing decision, Boeing engaged both service providers to expand their offerings. “We began to look at new areas of opportunity to consider, and a logical one was actual recruitment, going out and helping us recruit the best candidates fitting the needs of The Boeing Company,” Mueller said.
Again, Boeing took a conservative approach to the RPO decision. Mueller’s staff continues to do the bulk of recruitment, with only five percent coming from the vendors. Over time, given superior results, Mueller said he expects this volume to increase: “It’s something we will likely expand,” he added.
The company also gradually handed over other processes to its service providers. Today, Momentum and Intellecor manage the job requisition, posting, and approval process, screening the candidates using a Boeing proprietary applicant tracking tool called “BESS.” The vendors also wield another Boeing tool to meet the company’s specific recruitment needs and manage the applicant tracking process. “We received full training in the Boeing tools,” said Christine King, a Momentum vice president. “We access them from our service center, tunneling into them via a virtual private network.”
From job screening and the “down-selection” process, essentially separating the candidate wheat from the chaff, the vendors then present a final slate of candidates to the particular Boeing hiring manager. They close the circle by managing the offer extension process. Once the offer is accepted and the person hired, the loop is closed, and the vendors’ service offering ends. Momentum and Intellecor staff “sit in” on weekly meetings with their counterparts at Boeing, either virtually or in person.
“We’re considered part of their infrastructure, even though the plan for now is for Boeing to use RPO as a recruitment augmentation capability,” King said. “We operate our program invisibly and are transparent to the hiring managers. As far as they are concerned, we are part of Boeing’s global staffing group.”
Both vendors are providing what is essentially end-to-end RPO, albeit for only a portion of the client’s recruitment needs. Said King, “Boeing uses RPO strategically and at this point does not plan to ever 100 percent outsource recruiting.”
Indeed, Boeing turns to the vendors primarily to access higher-level employees. “We’re recruiting for the high-level engineering skill sets,” said Larson. “We have a depth of expertise in this area drawn from our parent company’s 57 years of global recruitment experience.”
Intellecor also specializes in higher-end job placements, which seems to fit snugly with Boeing’s needs.
“Boeing used to hire 300 engineers and 3,000 people to assemble a 737 jet; now they’re hiring 1,200 engineers and maybe 500 people to put it together,” Hamilton commented. “They’ve shifted the types of people they want to hire.”
Part of this stems from Boeing’s much-publicized compliance problems in the past three-and-a-half years, Hamilton noted. Complying with the Sarbanes-Oxley Act has been a challenge for the company, and it has reportedly failed, in both its internal and external audits, to prove it can properly protect its computer systems against manipulation, theft, and fraud—not the best situation for a company building complex aircraft.
In 2006 alone, Sarbanes-Oxley compliance cost Boeing $55 million, or about the list price of one new 737, the Seattle Post-Intelligencer newspaper reported.
The concerns have compelled Boeing, in part, to put a premium on talent. “They’re being totally driven by intellectual capital,” Hamilton said. “And that’s where we come in to help.”
Both vendors agree they are bona fide partners in the Boeing engagement, even though outside the assignment they are competitors. “We have pretty much the same capabilities, although, of course, we differ in some areas,” said Hamilton.
Mueller pointed out that Boeing tends to rely more on Momentum in the Puget Sound region and Intellecor in the Southern California area, home to its defense business, “though they both stray into each other’s geographies,”he added.
Indeed, the partnership with the two vendors is based more on the sheer volume of job transactions, rather than the provider’s differentiation, slim or otherwise.
“When your business is riding on people, you can’t afford to have the machine break down,” Hamilton said. “If a relationship (with a vendor) goes sour, you suddenly have lost a key partner. You need to have someone else on the team who knows all the relevant processes and the different compliance issues you have as a government contractor.”
There is another good reason to outsource to two vendors, even if it is only part of the recruitment load: improved customer satisfaction. Hamilton cited internal research indicating that only 20 percent of companies that outsource their total recruitment process to a single vendor are satisfied.
“Just look at the number of companies that recompete the RPO engagement two years down the road,” he added. “A company hiring 500 people a year—that you can handle through a full RPO assignment, but a company Boeing’s size? I’m not so sure.”
Nevertheless, both vendors are sanguine that their RPO contract with the aerospace company will continue to evolve toward more and more work down the line. “I’m old school; you prove yourself, you become trusted, and then business grows,” said Hamilton.
King concurred: “The Boeing RPO model has evolved and will continue to evolve. At no point over the ast four years has this been a static model. We’re continually called upon to help the customer address challenges and to improve the metrics and SLAs. In fact, as we surpassed the initial metrics we established, we have worked with Boeing to set the bar higher.”
Most recently, Momentum was engaged to assist a revision of the metric addressing the return on investment in Boeing’s recruiting process. As the three partners continue their atypical collaboration, one can only assume that ROI will continue to rise, up, up and away.
Seven Six Sigma Sessions
Before flipping the switch on its atypical recruitment process outsourcing engagement, The Boeing Company worked with service provider Momentum to employ the vendor’s Six Sigma methodologies and tools. Six Sigma is a quality management and process improvement methodology particularly well suited to process-intensive industries such as aircraft manufacturing.
Momentum initially conducted four sessions for Boeing’s requisition management and recruitment and offer/hire staff, led by a Six Sigma master black belt.
“During the working sessions, we used multiple business consulting tools, which are built on the foundation of Lean Six Sigma tools and methodologies. Momentum has helped Boeing global staffing to develop a vision, mission, and goals statement for the RPO engagement,” said Lori Larson, Momentum vice president. “We think it is important to recognize that while Lean Six Sigma provides Momentum an effective tool kit, it is critical to manage the deployment of the methodology to ensure a fast and effective outcome for our clients. Our tools and methodologies helped both Boeing and Momentum identify which pieces of the process constituted the biggest roadblock to both reduced cycle times and increased quality. Our approach is then to use laser-focus to process re-engineer, ultimately ensuring a far higher satisfaction level from both candidates and hiring managers.”
The tools and methodologies also bred the service level agreements that would measure the ongoing effectiveness of the outsourcing engagement. Following the Six Sigma sessions, the Boeing employees involved in requisition management, recruiting, and offer/hire, in addition to the
Once the outsourcing engagement was in high gear, Momentum continued to work with Boeing’s staffing department on other Six Sigma-related projects. To date, seven Six Sigma sessions have been conducted.
Editor’s Note: A previous version of this article mistakenly identified Intellecor as a division of TMP and that it also owned monster.com. Intellecor was never a business of TMP.