Tips on applying Lean principles to your recruiting function.
By Michael Stanojev
Current economic uncertainties, increasing margin pressures, and a rise in global supply chain complexity have challenged leaders to look further into the business for threshold improvements that contribute to their growth and cash flow targets. Applying Lean principles can help HR and recruiting departments solve these problems by reducing waste and establishing a drive for continuous improvement. The business case for Lean stands in both weak and strong economies—the conditions are right for HR to examine Lean’s potential and realize the benefits.
Lean: A History
The Toyota Production System (TPS) is credited with establishing the philosophy and practices that have come to be known as Lean. Lean began more than 50 years ago as Toyota evaluated Henry Ford’s mass-production strategies. Ford’s once innovative processes had capitalized on lowering cost-per-process steps, but were challenged in managing and controlling throughput times as demand continued to increase.
The TPS established a manufacturing philosophy focused on elimination of the original Toyota seven forms of waste with the objective of improving efficiency while creating high value for the customer. Toyota’s successful application of Lean has been credited as a key contributor in its steady growth from a small manufacturer to a global industry leader. Lean enabled Toyota to consistently achieve higher profit margins and break-even points far below its peers.
The TPS Lean principles have since been adopted and applied in almost every industry to more efficiently manage and continuously improve operations, control costs, reduce variability, and optimize capacity.
Value is created only when the following three conditions are met:
• The activity is something the customer is willing to pay for;
• The activity contributes a change to the form, fit, or function of the product, advancing it closer to the end-product that the customer wants; and
• The activity is done right the first time and does not require re-work.
Types of Waste
Simply put, waste is the use of any material or resource that does not create a value that the customer requires or is willing to pay for. Processes either add value or create waste.
The original seven categories of waste as categorized by the TPS are:
1. Overproduction. Producing too much, earlier than absolutely
demanded by the customer.
2. Waiting. Any material or work in progress (WIP) that is
waiting in queue for value to be applied.
3. Transporting. Any handling or excessive movement between
processes does not add value to the end product.
4. Inappropriate processing. Any processing beyond the
standard required by the customer, or the inefficient use of resources to achieve the same customer satisfaction.
5. Unnecessary inventory. Any inventory that is in excess
of customer demand and must be managed until
6. Excess motion. Any human motion in excess of what is
required to complete a process.
7. Defects. Any component that would not meet the customer’s
quality standard on first pass.
Additionally, some experts and authors have shared an eighth waste type: Under-use of human capital. This focuses on an organization’s failure to capitalize on the creativity and ideas of its workforce to improve operations.
When looking at recruiting processes from a Lean perspective, focus on end-to-end value opportunities. While it might be tempting to begin with small-scale waste reductions, focusing on long-duration activities first can yield significant time savings that equate to days or weeks versus incremental hours.
Recruiting processes comprise many activities that do not directly contribute to making better or more efficient hiring decisions. While some activities, such as data entry and scheduling, present obvious potential for reduction or elimination, below we examine some waste-elimination opportunities that can have significant impact on the end-to-end process.
• Waiting: managing interviewer availability and workflow
constraints. Far too often, interviewers’ day-to-day responsibilities are at odds with their commitment to schedule and conduct interviews. Candidates can get stalled mid-stream in the process while waiting to be contacted. This delay can add days, weeks, and (in worst cases) months to the end-to-end process.
Establishing a process to assign screeners to blocks of time for interviews can be an effective way to mitigate these bottlenecks and improve demand response time. Also, tracking metrics and predefined escalation processes can be used to determine when to push the interview request on to an alternate interviewer. This keeps the candidate moving through the process.
• Inappropriate processing, defects: right-sizing the interview.
Interviewing experienced candidates for specific skill sets can be a difficult task. A standard one-hour interview might not provide enough depth to gauge capabilities and direct experience to make a decision to move the candidate forward with confidence.
Structuring interviews for these candidates to allow for the incorporation of validation techniques (i.e., live case studies, mock facilitation) can support earlier, better-informed decision making.
This relatively small investment up front can reduce the total time-to-hire by weeks. It can also contribute improved post-hire retention metrics.
• Waiting, inappropriate processing: candidate scorecard. Overly complex scorecard designs or unclear metrics can create delays in users completing and returning
• Inappropriate processing: fast-tracking high-potential candidates. Many recruiting processes lack a mechanism to shortcut the cycle for high-potential candidates. For example, bypassing an interview round to bring the candidate in sooner for a final interview. Time lost in processing the candidate through the normal interview rounds consumes unnecessary resources and can result in possible loss of the candidate.
• Inappropriate processing, defects: mid-/late-stream rejection rates. More effective prescreening criteria can contribute to earlier detection of candidates who do not meet minimum criteria to reject them earlier in the process.
• Overproduction: maintaining an active “pipeline” of candidates. In up markets and growth industries, recruiting can often find itself in a mode of always recruiting. This often creates a backlog of candidates in anticipation of continued static demand. There is also the risk that any change in demand requirements may create a misalignment with the skillsets already in that backlog.
Establishing forecasting processes and metrics with regular, rolling updates can help eliminate this waste. This also enables recruiting to anticipate and quickly respond to changing business requirements for talent as they arise.
Opportunities to Leverage Technology
Technology creates many potential opportunities for waste elimination and driving customer value.
• Inappropriate processing: candidate application. Applicant tracking systems (ATS) provide candidates with intuitive web self-service capabilities to organize their qualifications and store them in databases and reports for easy tracking and retrieval, thus eliminating labor-intensive data entry.
• Inappropriate processing, defects: applicant testing. Many ATS solutions also include online applicant testing capabilities, eliminating the need to conduct manual tests typically later in the candidate’s cycle and acting as a prescreen prior to entering the system.
Prescreening at the point of application can take weeks out of the end-to-end process for candidates that would ultimately lead to a rejection.
• Waiting, inappropriate processing: workflow tracking. Many ATS solutions provide tools that can be used to trigger alerts and notifications for open tasks nearing target dates or past due. When coupled with workflow and automated routing capabilities, these systems can process reassignments and rescheduling to eliminate waiting and excess handling.
• Inappropriate processing, transport: remote screening.Modern communication tools such as Skype or Apple’s FaceTime incorporate video to provide a more personal experience and allow interviewers to develop impressions and pick up on nonverbal cues not possible by phone. Resulting decisions can be made earlier, also saving on potential travel costs when candidates are remote.
The recruiting function has the potential to realize the many benefits through Lean and to be a champion of Lean within the HR organization. To achieve this, it must first identify and attack the seven wastes. As with other functions throughout the organization, HR’s customers can benefit from Lean through cost savings, time-to-hire, and improved quality of candidates.
Michael Stanojev is a senior manager at ACME Business Consulting in Portland, OR. He has more than 12 years experience in leading HR transformation.