Lean Six Sigma Tools in The Hiring Process
Lean Six Sigma Tools in The Hiring Process
Lean Six Sigma Tools in The Hiring Process
Executive Summary
Talent Acquisition today as an activity fraught with risks Did we hire the right person, the
right skills, the right fit?- and has the maximum impact on a organization bottom-line. It is
more than just posting a requisition and making an offer but a series of sourcing activities,
branding efforts, assessment processes, on-boarding activities and more all designed to help
an organization answer these key questions and find talent relevant to its business context.
Rapid, complex and pervasive changes (see Exhibit I) are occurring in our business landscape
that will continue to impact the traditional concepts of work, employer, and employee
relationships. As a result companies are getting smarter and innovative about how they acquire
talent. They are making their recruitment operations more strategic by connecting external and
internal recruitment activities with succession planning and performance management.
Balancing immediate needs with long term goals they are improving how they apply people,
processes and technology to acquire critical talent. It is this critical talent that go on to create
new products and services and find new and innovative ways of dong business. Being more
innovative in sourcing and recruiting can give an organization a sustainable competitive
advantage by enabling it to find and hire more of the right people who can drive innovation
throughout the entire company! This concept paper examines how Lean Sigma & Just-in-
Time principles from the manufacturing world can be adapted to create a best-in-class
recruiting function and demonstrate the causal connection between the value-added
recruiting activity and positive business results
EXHIBIT I
Demographic
&Economic
trends
Talent
Increased
Mobility Acquisition Diversity
Strategy
Changes in
Business
Environment
Skills &
Culture
Understanding Lean
Lean operation principles are derived from Lean manufacturing practices developed as a
strategy by Toyota Motor Company. The key focus of lean is to identify and eliminate wasteful
actions that do not add value to customers in a manufacturing process. Because lean deals with
production system from a pure process point of view, and not a hardware point of view, it has
been found that the principles of lean can be adopted to improve the efficiency and speed of all
processes in any business context, including the services setting.
Lean is typically driven by a need for quicker customer response times, a need for faster cycle
times and a need to eliminate wastes in all its form. It strives to continuously eliminate wastes
from all processes a fundamental principle in alignment with the goals of Six Sigma
Management System. Just as this management approach is capable of turning out a better
product, when applied to recruitment, practitioners can expect a more efficient and responsive
process to find candidates
7 Wastes in Lean
W O R M P I T
Waiting Over-Production Rework Motion Over-Processing Inventory Transportation
Critical to effectively leveraging Lean is the identification of which steps in a process add value
to customers and which do not. After classifying process activities into these two categories, the
focus is to take steps to improve the former and eliminate the latter.
Applying this lean philosophy to similarly evaluate the Talent Acquisition Process, it is practical
to view the components at a granular level. Exhibit II below illustrates a typical TAQ process
Exhibit II
HM
Employee Post to
Referral Candidate
HR Careers
Websites Inventory
ATS
Interface
Post to
Post Job
Internally Boards Scanning Testing
Print
Media
SUPPLIERS Background
3rd Party
Recruiters & Checking
Agencies
The total economic value of the process efficiency leaks can be optimized to uncover the hidden
ROI of the Talent Acquisition Process with tangible business impact
Variation is the
Waste is the enemy
enemy
Focus on process
Focus on process
quality and
velocity
eliminating defects
A critical lean concept, Just-In-Time (JIT) is founded on the principle of continuous reduction
of all inventory while satisfying changing market demand with shorter lead times and flexible
production. In a volatile and competitive market, inventory is deemed as risk and waste. The
goal of JIT is to deliver just the right amount of supply to meet demand, neither falling short
nor going over. It is a pull based production strategy also referred to as the Toyota Production
System, and is anchored on three fundamental principles:
Anchored on these basic principles, JIT is deployed into the following policies and strategies:
Improve market response times by cutting all lead times in order processing, manufacturing,
procurement.
Reduce machine setup time or changeover time to cut lot size and increase number of models
produced.
Reduce the number of suppliers and partner and train the remaining few.
The process of identifying an organizations talent needs and identifying, acquiring, and
retaining talent for those needs is essentially human capital supply chain management. A supply
chain is a system of organizations, people, technology, activities, information and resources
involved in moving something of value (a product, a service, or a person) from a source to a
customer/consumer. Conventional supply chain activities transform natural resources, raw
materials and components into a finished product that is delivered to the end customer.
A Staffing Supply Chain- Exhibit II above - transforms relationships and data (ad responses,
resumes, social networking profiles, etc.) into candidates that are delivered to hiring managers.
In the language of supply chain management the problems of undersupply and oversupply are
collectively known as mismatch costs, the goal being to match the demand with the right
amount of supply. Applying this concept to talent identification and acquisition, Just-In-Time
recruiting is a pull-based strategy of providing hiring managers/clients with the right
candidates at the right time with the right skills at the right place.
The JIT strategy is designed specifically to reduce the wastes of overproduction, waiting time,
defects and inventory. Instead of proactively building, maintaining a work-in-progress
candidate pipeline and creating a Talent Inventory without an actual hiring need, JIT recruiting
has a primary focus on tapping into raw material candidate inventory (resumes, Social media
channels, other sourcing networks) and qualify and deliver a talent pool in direct response to a
hiring need.
The core of Six Sigma methodology involves measurement and evaluation as a way to quantify
process outcomes, identify defects, and make adjustments to improve the process. Evaluation of
staffing as a business process also requires this mindset. Ensuring quality hires with fewer
errors demands an evaluation function, so that the impact of decisions can be understood and
waste (incorrect hiring decisions) can be minimized.
The Schematic below outlines the application of some simple but powerful tools that can be
leveraged to augment the generic human resource analysis method and customise the selection
process for any given hiring situation
The Hiring Managers, Candidates (Prospective), Employees are the key customers of the hiring
experience. This Voice of the Customer is the primary variable in understanding the current
state of the hiring process and figuring out the key skill & attribute mix in ensuring an optimum
QoH- Quality of Hire. Depending on the size of the customer base and the complexity of the
initiative, the Voice of the Customer can be captured form of a supplier, input, process, output,
customer (SIPOC) diagram or tools such as surveys, interviews, Kano Analysis.
SIPOC Explained
Process The means that convert the inputs into the outputs to satisfy key customer
constituent needs
Output The process outcomes; key deliverables
80
Percent
60 60
40 40
20 20
0 0
Characteristics ic y y e y n e y t y y r
e th nest gr it tism itud bilit lear abl bi lit men bilit bi lit the
te
r k Ho In gm A el a tt ia e
o Lik bt ag ala e A a O
R li ty t al
wo P ra i A da an ptu ysic
g M c e Ph
ro
n Ab ss n
St tr e Co
S
Rating score 14 13 12 11 10 9 8 7 6 5 4 3 3
Percent 13 12 11 10 10 9 8 7 6 5 4 3 3
Cum % 13 26 37 48 57 66 73 80 86 90 94 97 100
There should be a direct link between the SIPOC (or alternative voice of customer tools used),
the prioritization tools, and the decision-making tools. In the above sample illustration, all of the
inputs from the SIPOC were evaluated in the pair-wise comparison and then used in the Pugh
matrix to identify the top candidate/hire.
End Notes1
Appraising some of these evolving best practices in Talent Acquisition within the larger ambit of
Talent Management issues facing Organizations at large underscores the need for a New Way of
thinking about Talent Management. Business strategy today has moved away from the
assumption that we can plan our way around uncertainty, heading instead toward a model
wherein the key competency is the ability to react and respond quickly to new opportunities.
Talent management must move in the same direction if it is to support this new orientation in
strategy. The goal of talent management is the more general and important task of helping the
organization achieve its overall objectives. In the business world, that objective is to make
money. And making money requires that we understand the costs as well as the benefits
associated with the Talent Management choices. By far the greatest risks in talent management
are, first, the cost of mismatch in employees and skills and second, the costs of losing the talent
development investments through the failure to retain employees. Being more innovative in
sourcing and recruiting can give organizations a sustainable competitive advantage with visible
impact on the bottom-line.
60
50
40 Return on Assets
30 Return on Equity
Net Profit Margin
20
EBITDA
10
0
Return on Assets Return on Equity Net Profit Margin EBITDA
Mucha, R.T. ( 2004 Winter), The art and science of talent management, Organization Development Journal, 22, 96-101
1
Talent on Demand Peter Cappelli