Is the Human Resource Department Killing Corporate Innovation?


Reading the latest news and corporate blogs suggests this question fails its hypothesis almost immediately. For example, on its home page, Doherty Staffing devotes the majority of its whitespace to reasons why there is a talent shortage in the United States. Internet searches surrounding the topic of talent shortages lead one to believe that the job mandates or an aging population, not the HR Department, created the innovation gap and talent shortcomings within corporations.

On August 22, 2013, Deloitte's, Jeff Schwartz, summarized the findings of a Deloitte survey, where 37% of surveyed executives stated their HR Department required significant, dare they say, radical improvements to Human Resources. A breath of fresh air for those seeking employment, or a statement that will result in nothing new? Only time will tell. Either way, could not agree more with the statement; HR Departments hold a large key to corporate innovation, and many kill that innovation using a few choice policies and standard operating procedures. Four of these innovation-killing measures include:

  • Applicant Tracking Systems (ATS) – These are also known as Human Resources Software, like Taleo, Kenexa, and other systems
  • "Because of the Volume of Applications, if you do not hear from us in XX days, assume you do not fit the position" statements
  • Maintaining the recruiting process inside of the staff management division
  • Perpetuating the myth of "The Perfect Candidate"

The Applicant Tracking System – Arguably, the worst offender, the ATS touts itself as the way to save so much time and effort in the recruiting process. Human Resource and recruiter salaries, for the top 10%, exceeded $ 100,000 a year, yet automated screening systems are required to ensure candidates meet the qualifications. In spite of industry-recognized reports that, approximately 75% of well-qualified candidates are screened out by the systems, HR managers and recruiters still hype the systems' usefulness and essentiality to the job.

According to the job search services provider Preptel, seventy-five percent (75%), let that sink in, of all qualified candidates get served out the system as soon as they submit their resumes. No wonder 'Innovationicide' occurs daily in companies like Microsoft, RIM, and others, and it occurs from within the HR Department. Only twenty-five percent of (25%) candidates make it beyond this screening, and this 25% is not always the most or best qualified. This is the result of how the systems work. Without digitizing into the technicalities, one major way this paltry performance occurs results from how the job description is loaded into the ATS. In many scenarios, the hiring manager drafts the job description because they know what they need in the new candidate. From here, the HR personnel or recruiter loads the job description into the ATS and assigns keywords. The problem resides in these keywords. Many qualified candidates select keywords based on industry knowledge and their extensive experiences, while the HR person may not know the industry or job well enough and select keywords that poorly represent the needs of the position.

The sheer gravity of only 25% of qualified candidates making it through this automated system compounds the corporate dilemma surrounding innovation, and it provides a different lens with which to view the belief that the United States suffers from a talent shortage.

Automated Responses – Perhaps one of the most disingenuous things that a company can do, and yet, it permeates a multitude of corporations. Even IDEO, one of the mostly highly innovated innovators that filmed videos devoted to their unusual personnel mix, uses one of these high volume do not expect a response messages. The argument heard most often in support of this rude tactic is that they are so busy that it takes too much time to respond to every candidate. To postulate here, what happens when a very qualified candidate, who never hears from a company that they wanted to work for, sees another position from the same company? What likelihood does the HR department believe exists for these candidates to apply again? Sure, candidates will always exist that continue to reapply regardless, but what percentage of these are the top candidates? Advice presented from LinkedIn Influencers and others across the web, advise candidates to know when to turn down a company, and a commonly repeated reason persists – companies that can not even provide a courteous response.

In the end, how many qualified candidates have ceased caring about your business' needs because of a lack of courtesy in thanking applicants for applying that were not selected for further consideration? The ATS systems provide tools to help with this, but instead the common practice of ignoring candidates in the interest of saving time dominates the standard practices of the same companies that believe the myth of a talent shortage.

Single Roof HR Departments – For all of the ways presented that HR departments kill innovation, they do not equate to helplessness. HR departments ensure payroll and other essential employee support receives the attention it requires. Government and pro-litigation regulation compliance demands full-time attention. People wonder why corporations returned to tactics, like those mentioned here, that kill innovation. The answer jumps out at us – the inclusion of recruitment into the personnel management hierarchy. Sure, during the design of an offer, include the HR department.

After all, this group works diligently to manage personnel and ensure that certain tasks fall within the corporate and regulatory guidelines; however, why should that equate to these people managing the recruitment pipeline. It hamstrings efforts to find the best-qualified candidates through rules that include one found at one of the United States 'largest corporations: "all candidates' resolutions, regardless of how the candidates came into the pipeline, must pass the ATS automated screening." In effect, recruiters and other employees find exciting candidates, but if they do not pass screening by a computer with a 75% failure rate, the candidate can not be considered. At some point equal opportunity became familiar with mindless screenings without a specific requirement to do so. Again, these raises questions about the reality of talent shortages and why innovation is disappearing.

The Perfect Candidate – Peter Capelli recently wrote in the Harvard Business Review of this very phenomenon. He also challenges the notion of candidate incompatibility with the available jobs, and goes so far as to suggest the push to reduce the cost per candidate in the hiring process is one of the major problems. Of even more importance in the article is his research that concluding hiring managers have implemented large delays in the hiring process through second interviews or simply going months without contact to candidates in consideration. The implication is that hiring managers believe that by delaying a decision the perfect candidate may emerge based solely on the number of people searching for the jobs.

HR departments perpetuate the myth by not challenging some of the ridiculous requirements hiring managers state they need, many of which are innovation killers in and of themselves. Take a perusal of the job boards and look at some of the job descriptions. Outrageous specificity that did not exist before the financial mess abounds. In some fields, the number of candidates that qualify based on some listings is reasonably less than ten people nationwide, and the majority may not even be in the market for a new position. Are they holding out hope that the one in a million candidate simply stumbles upon them?

In this instance, basic business school precedes have been forgotten. For example, numerous innovation classes teach that one of the best methods for innovation is to hire people that have never solved the exact problem the company faces. Specifically, in his article, "The Weird Rules of Creativity," Robert Sutton of Stanford University delves into why it works to have people that are not simple imitations of every other employee, yet when looking at the ridiculous specificity in most requirements these days, imitation is exactly what companies are seeking.

A modern day example of this can be seen in IBM and Microsoft. In 1993, IBM brought in Lou Gerstner when they were on the verge of failure. At the time, Gerstner possessed little to no technology experience, yet he returned IBM to being one of the most respected technology companies in less than ten years. Contrarily, look at Microsoft's selection of Ballmer as CEO. Ballmer was an industry insider, joining Microsoft as the 30th person the company ever hired. During his tenure, he orchestrated the blunders of shutting down the tablet project that would have been first to market, shutting down the automated software project to have a car read text messages and other items from a mobile phone, and other similar projects that would have was first to market.

In the end, the more HR departments encourage and perpetuate the myth of the perfect candidate, the more high-quality candidates corporations lose.

The next Gerstner may very well have been screened out by a highly prone to failure ATS system, being turned off by the rude "we're too busy to acknowledge you," or simply looked elsewhere because of the slow hiring process in the search for the mythological "perfect candidate."

So, the next time it comes up that the lack of qualified, innovative personnel filling critical needs is related to a talent shortage, look inside the very HR department that is perpetuating these innovation killers. The perfect candidate may already be in the pipeline, or have moved on to a company that has not turned over its recruitment to a bureaucratic nightmare that by its very design thwarts interest from qualified candidates.

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