"Market power is critical to the future of design firms. There is neither time nor the resources for design firms to know all they need to by themselves. Who do they look to? They look to Kerry Harding for support, thoughtful ideas, useful advice, and coaching...he offers a complete tool kit of ideas for professionals."

James P. Cramer, Hon AIA, Hon IIDA
Chairman & CEO
The Greenway Group
Norcross, GA

10 Trends Reshaping the Talent Quest

April 9, 2008
by Kerry Harding

Don’t assume that a slowed economy will make it any easier to hire the professional staff you need. You can’t effectively face 21st-century talent wars with 20th-century tactics.

Despite the appearance of a slowing economy, in a number of geographic markets and in pretty much every sector except housing, U.S. architectural firms are still struggling to meet talent needs. They seek to bridge the gap between escalating staffing projections and the availability of project team professionals.

Traditional recruiting methods, especially newspaper advertising, are becoming less effective for attracting qualified applicants, and frustrated firm recruiters are looking with bewilderment at where to focus their recruiting time and effort for the best return. Discussions with both in-house human resource representatives and independent recruiters reveal 10 emerging trends that are destined to impact dramatically how firms acquire talent in the months ahead.

1. Incentivizing Proactive Referral Programs

Despite advances in recruiting technology, most firms face a shortage of qualified applicants. Firms large and small are implementing internal systems to reward employees who refer their friends for consideration. Incentives range from $250 for administrative support positions to $10,000 for a principal-level hire, with $1,000 per hire being the average commission. Focusing more on entrenched, top performers in the firm, hiring managers are discovering that due to pre-established relationships of trust, they can sometimes be more effective salespersons for the firm than outside recruiters.

The 2006 Sources of Hire Study conducted by CareerXroads discovered that employee referral was the top ranked source for finding qualified candidates (25.6 percent), followed by a company’s Web site (20.7 percent), job boards (12.3 percent), print media advertising (6.9 percent) and direct sourcing (6.4 percent). Financially rewarding employee efforts will go a long way toward creating a positive recruiting culture.

2. Exploiting Social Media

Part of the Web 2.0 genre, social media is an all-encompassing term that includes blogs, podcasts, videos, and social networking sites such as Facebook, MySpace, and newcomer LinkedIn, which already boasts more than 20 million users. From a recruiting perspective, social media’s goal is to identify clusters of candidates and industry-minded professionals and to communicate with them in an effort to give and receive value online. According to recruiter Joel Idelson, understanding how to harness social networks can provide all types of firms with access to a deeper, more targeted candidate base and provide a smart way to cultivate their “employment brand” in the marketplace.

Taking this concept to the next level, executive search firm Heidrick & Struggles is currently testing a private social networking site focusing on business’s top C-titles — CEOs, COOs, CFOs, CMOs and CIOs. Skeptics argue that top executives want personal attention and aren’t actively looking for new positions. However, H&S executives feel the site is likely to shorten the recruiting window for senior staff positions and reduce e-mail backlogs and travel costs.

3. Milking the Job Board Giants

Right now, there are two big players: CareerBuilder and Monster. The first has the advantage that most major newspaper advertising shows up in its database; the second is the household name for where to locate jobs. However, from the recruiting side, most AE firms have little knowledge or training in how to get the most for their money from these behemoths. With regard to Monster, for example, few users know that detailed search criteria can be entered and saved, with the results automatically pushed to them daily, weekly, or otherwise. Known as “agents,” these saved searches can deliver the credentials of qualified candidates who are actively seeking positions to the hiring manager’s computer, matching candidates’ skills to the exact criteria being sought. Working closely with an account representative to understand how to make these Web sites work to your advantage might take a couple of phone calls but can result in a steady stream of qualified applicants you might not be able to uncover on your own.

4. Tracking Key Recruiting Metrics

By using tactical and strategic hiring metrics, people tasked with firm recruiting are trying to discern the most effective sources of new hires. The goal is to eliminate low-yield/high-cost sourcing. Most firms currently use metrics such as time-to-fill, cost-per-hire, interview-per-hire, vacancy costs, and the like to assess sourcing effectiveness. Look for more strategic metrics in the future such as quality of hire, contribution to productivity, and return on investment to assess sourcing targets.

5. Implementing Applicant Tracking Systems

Except for the largest companies such as AECOM and Jacobs Carter Burgess, most design firms do not have a person devoted full time to the recruiting function. For firms with multiple principals or multiple offices involved in day-to-day recruiting, the constant influx of resumés from and to disparate channels creates a procedural and logistical nightmare in which hireable candidate credentials get lost in the shuffle. Other times, candidates respond to multiple opportunities with the same firm through employer job boards, local newspaper ads, or outside recruiters. With no procedures in place to track either the applicant’s best fit or the most urgent need within the firm, company representatives find themselves in an internal struggle over the right to hire or in an external struggle with two or more recruiters who feel entitled to the associated commission.

In best-of-class firms, all resumés, wherever they are coming from, go through a centralized process that assigns each candidate a date and tracking number, then collects all relevant contact information and ensures the credentials are available in an easily accessible electronic format for distribution and review throughout the organization.

6. Offshoring Service Positions

While this is not a new trend for the call center markets, the expanding role of U.S. design firms in the global marketplace is resulting in an increasing number of firms in such countries as China, India, Singapore, Russia, and Mexico that are providing CAD production, 3-D rendering, and other easily exported, technology oriented production activities to reduce costs and shorten deliverable schedules. With hourly rates as little as 25 percent of those for similar wages in the United States, foreign providers are partnering with large, multi-office firms for multi-year, long-term relationships for specific projects. Smaller firms, unable to find qualified, affordable talent in their local market, are sometimes outsourcing only one position yet deriving the same benefits previously available to larger firms. Future trends will be driven by the access to and quality of talent through offshore companies as well as the cost-effectiveness of the bottom line as the dollar’s exchange rate continues to fluctuate in a volatile global economy.

7. Outsourcing the Recruiting Process

An accepted process in technology, health care, and other fields, outsourcing the recruiting process to a third party has expanded rapidly over the past decade and is considered healthy, solid, and growing. Many firms are finding recruiting process outsourcing effective for support and lower-paid staff positions while continuing in-house recruiting for managerial positions. According to companies such as Marriott International, which outsources recruiting for its design and construction staffing needs, outsourcing offers speed, quality, and economies of scale that might not otherwise be achieved with an internal process.

8. Increasing Retention Efforts

In the explosive growth of the past five years, top performers, particularly those with design or project management skills, have been difficult to retain when facing the combination of enormous signing bonuses, salary increases, and project or firm performance bonuses. In some cases, firms have lost key project executives to a client who has been willing to split the difference between the candidate’s own salary and the cost to the client with their multiplier of 2.8 or 3.0 times their compensation.

In other cases, a declining market sector has resulted in financial belt-tightening, limiting a firm’s options to compete with financial incentives. Firms are now trying innovative benefit and compensation programs that can be more individually tailored to an individual’s needs and preferences to secure loyalty through flexibility, telecommuting, and other lifestyle issues. According to job board CareerBuilder, 60 percent of firms surveyed offer flexible work arrangements, with 39 percent expecting to offer some form of flex time in 2008. In addition, out of competitive necessity, firms are taking a hard look at how to help employees cope with the soaring costs of family health care.

According to a 2007 study by the Society for Human Resource Management, it now costs about $48,000 in direct and indirect costs to replace a key staff person. Armed with that kind of information, more companies are finding creative ways to figure out how to keep their A-team happy — and then give it to them.

9. Bridging the Great Labor Divide

According to the Bureau of Labor Statistics, in the past 10 years, 44 million Generation X workers have entered the workforce to replace 77 million retirees. About 11,000 people reach the age of 55 every day. This reveals the great challenge every firm is currently facing, which will only worsen in the years ahead: finding competent mid-level professionals to transition into key management and leadership roles. This youngest generation of workers is technologically proficient far beyond their predecessors, bringing enthusiasm, drive, and fresh perspectives. However, their in-depth knowledge of building technology and construction issues as well as oral, written, and interpersonal communication skills have proven to be substantially less than their more senior counterparts.

Savvy design firms are finding effective ways to pair senior architects, engineers, and other design professionals in the 55- to 70-year-old range with talented young neophytes to create project teams that result in better projects, satisfying mentor-mentee relationships, and reduced liability from errors and omissions issues.

10. Designating a CRO

In their quest to establish a recruiting culture, many firms are following the leads of such information technology giants as Google, Pixar, and Apple by identifying an individual in the firm to assume the role of chief recruiting officer. This may be a principal who adds the responsibility to a slate of additional duties or, in a larger firm that can sustain it, who is dedicated full time to enhancing and capitalizing on the firm’s recruitment brand in the marketplace.

The CRO typically speaks at university career fairs, ensures visible recruiting-oriented booths at appropriate trade shows and professional society meetings, and oversees the development of targeted collateral materials that effectively sell the firm’s vision and culture. In the best scenarios, the CRO always knows the firm’s current and projected staffing needs, hiring and turnover statistics and expenditures, and serves as a trainer, cheerleader, and coach in helping everyone involved in recruiting (from the receptionist to the CEO) know their responsibilities and objectives to recruit and retain employees.

One large land planning firm retained the head of an established AE recruiting firm as a CRO under contract who reported to the president and collaborated directly with each office’s managing principal to enhance the firm’s competitive advantage on the national recruiting field.

The ability to secure and produce profitable work domestically and abroad requires a steady stream of talent at all levels. Leading firms will approach their recruiting function with the same scrutiny and expectations as they do IT and other capital expenditures, customizing a variety of tactics to ensure that current and future needs are met. One strategy that is sure to fail is to delegate this vital function to someone in the firm who doesn’t understand the need for urgency and commitment or, worse, who continues to try to meet this challenge with the same tactics used in the past.