Avon Products or GE Money America Case Study
CHAPTER 1
AVON PRODUCTS, INC.
MARC EFFRON
A leadership development and talent turnaround system designed for executives that leverage 360-degree feedback, a leadership skill/competency model, and individual development planning.
• Introduction
• A Success-Driven Challenge
• The Turnaround
• The Talent Challenge
• Execute on the “What,” Differentiate with “How”
• From Opaque to Transparent
• The Avon 360
• Broad-Based Transparency
• From Complex to Simple
• Performance Management
• Engagement Survey
• From Egalitarian to Differentiated
• Communication to Leadership Teams
• A Few Big Bets
• Tools and Processes
• From Episodic to Disciplined
• From Emotional to Factual
• From Meaningless to Consequential
• The Results of a Talent Turnaround
• Measuring the Talent Turnaround’s Success
INTRODUCTION
In early 2006, Avon Products, Inc., a global consumer products company focused on the economic empowerment of women around the world, began the most radical restructuring process in its 120-year history. Driving this effort was the belief that Avon could sustain its historically strong financial performance while building the foundation for a larger, more globally integrated organization. The proposed changes would affect every aspect of the organization and would demand an approach to finding, building, and engaging talent that differed from anything tried before.
A SUCCESS-DRIVEN CHALLENGE
Avon Products is a 122-year-old company originally founded by David H. McConnell—a door-to-door book seller who distributed free samples of perfume as an incentive to his customers. He soon discovered that customers were more interested in samples of his rose oil perfumes than in his books and so, in 1886, he founded the California Perfume Company. Renamed Avon Products in 1939, the organization steadily grew to become a leader in the direct selling of cosmetics, fragrances, and skin care products.
By 2005, Avon was an $8 billion company that had achieved a 10 percent cumulative annual growth rate (CAGR) in revenue and a 25 percent CAGR in operating profit from 2000 through 2004. A global company, Avon operated in more than forty countries and received more than 70 percent of its earnings from outside the United States. By all typical financial metrics, Avon was a very successful company.
However, as the company entered 2006 it found itself challenged by flattening revenues and declining operating profits. While the situation had many contributing causes, one underlying issue was that Avon had grown faster than portions of its infrastructure and talent could support. As with many growing organizations, the structures, people, and processes that were right for a $5 billion company weren’t necessarily a good fit for a $10 billion company.
THE TURNAROUND
Faced with these challenges, CEO Andrea Jung and her executive team launched a fundamental restructuring of the organization in January 2006. Some of the larger changes announced included:
• Moving from a Regional to a Matrix Structure: Geographic regions that had operated with significant latitude were now matrixed with global business functions, including Marketing and Supply Chain.
• Delayering: A systematic, six-month process was started to take the organization from fifteen layers of management to eight, including a compensation and benefit reduction of up to 25 percent.
• Significant Investment in Executive Talent: Of the CEO’s fourteen direct reports, six key roles were replaced externally from 2004 to 2006, including the CFO, head of North America, head of Latin America, and the leaders of Human Resources, Marketing, and Strategy. Five of her other direct reports were in new roles.
• New Capabilities Were Created: A major effort to source Brand Management, Marketing Analytics, and Supply Chain capabilities was launched, which brought hundreds of new leaders into Avon.
THE TALENT CHALLENGE
As the turnaround was launched, numerous gaps existed in Avon’s existing talent and in its ability to identify and produce talent. While some of those gaps were due to missing or poorly functioning talent processes, an underlying weakness seemed to lie in the overall approach to managing talent and talent practices.
After reviewing Avon’s existing talent practices, the talent management group (TM) identified six overriding weaknesses that hurt their effectiveness. They found that existing talent practices were
• Opaque: Neither managers nor Associates knew how existing talent practices (that is, performance management, succession planning) worked or what they were intended to do. To the average employee, these processes were a black box.
• Egalitarian: While the Avon culture reinforced treating every Associate well, this behavior had morphed into treating every Associate in the same way. High performers weren’t enjoying a fundamentally different work experience and low performers weren’t being managed effectively.
• Complex: The performance management form was ten pages long, and the succession planning process required a full-time employee just to manage the data and assemble thick black binders of information for twice-yearly reviews. Complexity existed without commensurate value, and the effectiveness rate of the talent practices was low.
• Episodic: Employee surveys, talent reviews, development planning, and succession planning, when done at all, were done at a frequency determined by individual managers around the world.
• Emotional: Decisions on talent movement, promotions, and other key talent activities were often influenced as much by individual knowledge and emotion as by objective facts.
• Meaningless: No talent practice had “teeth.” HR couldn’t answer the most basic question a manager might ask about talent practices—“What will happen to me if I don’t do this?”
EXECUTE ON THE “WHAT,” DIFFERENTIATE WITH “HOW”
Our TM group found ourselves in a difficult situation. Fundamental changes were needed in every talent practice, and the practices had to be changed and implemented in time to support the turnaround. This meant that the practices had to be quick to build, easy to use, and, most of all, effective.
Taking our guidance from the Top Companies for Leaders study (Effron, Greenslade, & Salob, 2005) and the philosophies of executive coach Marshall Goldsmith (2006), we decided to build our talent practices with two key guiding principles.
1. Execute on the “what.” The Top Companies for Leaders study found that simple, well-executed talent practices dominated at companies that consistently produced great earnings and great leaders. We similarly believed that fundamental talent practices (that is, performance management or succession planning) would deliver the expected results if they were consistently and flawlessly executed. We decided to build talent practices that were easy to implement and a talent management structure that would ensure they were consistently and flawlessly implemented. More importantly, we decided to . . .
2. Differentiate on “how.” While disciplined execution could create a strong foundation for success, the six adjectives that described Avon’s current processes were largely responsible for their failure. We drew inspiration from Marshall Goldsmith’s revolutionary recreation of the executive coaching process. He had taken a staid, academic/therapy model for improving leaders and turned it into a simple but powerful process that was proven effective in changing leaders’ behaviors.
With those two guiding principles in place, we began a 180-degree transformation of Avon’s talent practices.
FROM OPAQUE TO TRANSPARENT
One of the most simple and powerful changes was to bring as much transparency as possible to every talent practice. TM designed new practices and redesigned existing ones using total transparency as the starting point. Transparency was only removed when confidentiality concerns outweighed the benefits of sharing information. The change in Avon’s 360 assessment process was a telling example.
The Avon 360
Avon’s 360-degree assessment process was hardly a model of transparency when the turnaround began. When the new TM leader arrived at Avon, he asked for copies of each VP’s 360-degree assessment, with the goal of better understanding any common behavioral strengths and weaknesses. He was told by the 360 administrator in his group that he was not allowed to see them. The TM leader explained that his intent wasn’t to take any action on an individual VP, simply to learn more about his clients. He was again told “no”—that confidentiality prevented their disclosure.
While the administrator was correct in withholding the information (the participants had been promised 100 percent confidentiality), the fact that the most critical behavioral information about top leaders was not visible to the TM leader (or anyone else) had to change. A new, much simpler 360 was designed and implemented that explicitly stated that proper managerial and leadership behaviors were critical for a leader’s success at Avon. Citing that level of importance, the disclosure to all participants and respondents stated that the 360 information could be shown to the participant’s manager, HR leader, regional talent leader, and anyone else the Avon’s HR team decided was critical to the participant’s development. It also stated that the behavioral information could be considered when making decisions about talent moves, including promotions or project assignments.
Helping to make this transition to transparency easier, the new 360 assessment and report differed from typical tools that rate the participant on proficiency in various areas. The Avon 360 borrowed heavily from the “feed-forward” principles of Marshall Goldsmith1 and showed the participant which behaviors participants wanted to see more of, or less of, going forward. Without the potential stigma of having others seeing you rated as a “bad” manager, openly sharing 360 findings quickly evaporated as an issue.
Broad-Based Transparency
Transparency was woven into every talent process or program in a variety of ways. Examples would include:
• Career Development Plans: To provide Associates with more transparency about how to succeed at Avon, the HR team developed “The Deal.” The Deal was a simple description of what was required to have a successful career at Avon, and what parts the Associate and Avon needed to play (see Figure 1.1). The Deal made clear that every Associate had to deliver results, display proper leadership behaviors, know our unique business, and take advantage of development experiences if they hoped to move forward in the organization.
FIGURE 1.1. Talent Investment Matrix
• Development Courses: Avon acknowledged the unspoken but obvious fact about participating in leadership or functional training courses—of course you’re being observed! We believed it was important for participants to understand that we were investing in their future and that monitoring that investment was critical. The larger investment that we made, the more explicitly we made the disclosure. For our Accelerated Development Process (a two-year high-potential development process offered to the top 10 percent of VPs), we let them know that they were now “on Broadway.” The lights would be hotter and the critics would be less forgiving. They knew that we would help each of them to be a great actor, but that their successes and failures would be more public and have greater consequences.
• Performance Reviews: Switching from a 3-point scale to a 5-point scale provided additional clarity to participants about their actual progress, as did clarifying the scale definitions. Associates were informed about what performance conversations their managers should be having with them and when. The recommended distribution of ratings across the scale was widely communicated.
FROM COMPLEX TO SIMPLE
One of the most important changes made in Avon’s talent practices was the radical simplification of every process. We believed that traditional talent processes would work (that is, grow better talent, faster) if they were effectively executed. However, we understood from our experience and a plethora of research (Hunter, Schmidt, & Judiesch, 1990) that most talent practices were very complex without that complexity adding any significant value. This level of complexity caused managers to avoid using those tools, and so talent wasn’t grown at the pace or quality that companies required.
We committed ourselves to radically simplifying every talent process and ensuring that any complexity in those processes was balanced by an equal amount of value (as perceived by managers). Making this work was easier than we had anticipated. As the TM team designed each process, we would start literally with a blank sheet of paper and an open mind. We would set aside our hard-earned knowledge about the “right” way to design these processes and instead ask ourselves these questions:
1. What is the fundamental business benefit that this talent process is trying to achieve?
2. What is the simplest possible way to achieve that benefit?
3. Can we add value to the process that would make it easier for managers to make smarter people decisions?
Using just those three questions, it was amazing how many steps and “bells and whistles” fell away from the existing processes. The two examples below provide helpful illustration.
Performance Management
Aligning Associates with the turnaround goals of the business and ensuring they were fairly evaluated was at the foundation of the business turnaround. As we entered the turnaround, the company had a complex ten-page performance management form with understandably low participation rates. Many Associates had not had a performance review in three, four, or even five years. It would have been impossible to align Associates with the vital few turnaround goals using that tool and process.
• The business benefit: We stated that the fundamental benefit of performance goals and reviews is that they aligned Associates with business goals and caused Associates to work toward those goals with the expectation of fair rewards.
• The simplest path: It seemed obvious that the simplest way of achieving the business goal was simply to have managers tell their Associates what their goals were. It was simple and the value to managers outweighed any complexity. After taking that very small step forward, we literally advanced at the same pace, taking incrementally small steps forward in the design process. At each step, we would ask ourselves, does this step add more value to managers than it does complexity? As long as it did, we added the additional design element. When that complexity/value curve started to level (see Figure 1.2), we very carefully weighed adding any additional elements. And, when we couldn’t justify that adding another unit of complexity would add another unit of value, we stopped.
What went away as the design process progressed? Just a few examples would include:
• Goal labels (highly valued, star performer, etc.), which added no value (in fact blurred transparency!) but did add complexity.
• Individual rating of goals, which implied a false precision in the benefit of each goal and encouraged Associates to game the system.
• Behavioral ratings, which were replaced with a focus on behaviors that would help achieve the current goals.
The output was a one-page form with spaces for listing the goal, the metric, and the outcome. A maximum of four goals was allowed. Two behaviors that supported achievement of the current goal could be listed but were not formally rated. As a result, participation reached nearly 100 percent, and line managers actually thanked the talent team for creating a simple performance management process!
• Adding Additional Value: In this process, we didn’t find opportunities to add more value than was achieved through simplification alone.
FIGURE 1.2. The Avon Deal (Example)
Engagement Survey
When the turnaround began, no global process for understanding or acting on Associate engagement issues existed. Select regions or departments made efforts of varying effectiveness, but there was no integrated focus on consistent measurement and improvement of engagement. In designing the engagement survey process, we applied the same three questions:
• The business benefit: We accepted the substantial research that showed a correlation (and some that showed causation) between increasing engagement and increasing various business metrics. In addition, we felt that the ability to measure managers’ effectiveness through engagement levels and changes would provide an opportunity for driving accountability around this issue. As with performance management, we knew that managers would use this tool if we could make it simple and, ideally, if we could show that it would allow them to more effectively manage their teams.
• The simple path: There were two goals established around simplicity. One goal was to understand as much of what drove engagement as possible, while asking the least number of questions. The second goal was to write the questions as simply as possible, so that if managers needed to improve the score on a question, their options for action would be relatively obvious. The final version of the survey had forty-five questions, which explained 68 percent of the variance in engagement. The questions were quite simple, which had some value in itself, but their true value was multiplied tenfold by the actions described below.
• Adding additional value: We were confident that, if managers took the “right” actions to improve their engagement results, not only would the next year’s scores increase, but the business would benefit from the incremental improvement. The challenge was to determine and simply communicate to the manager what the “right” actions were. Working with our external survey provider, we developed a statistical equation model (SEM) that became the “engine” to produce those answers. The SEM allowed us to understand the power of each engagement dimension (for example, Immediate Manager, Empowerment, Senior Management) to increase engagement, and to express that power in an easy-to-understand statement.
For example, we could determine that the relationship between the Immediate Manager dimension and overall engagement was 2:1. This meant that for every two percentage points a manager could increase his or her Immediate Manager dimension score, the overall engagement result would increase by one percentage point. Even better, this model allowed us to tell every manager receiving a report the specific three or four questions that were the key drivers of engagement for his or her group.
No longer would managers mistakenly look at the top-ten or bottom-ten questions to guess at which issues needed attention. We could tell them exactly where to focus their efforts. The list of these questions on page five of the survey report essentially reduced a manager’s effort to understand his or her survey results to just reading one page.
FROM EGALITARIAN TO DIFFERENTIATED
A critical step in supporting Avon’s turnaround was determining the quality of talent we had across the business—an outcome made much easier with transparent processes and conversations. Once we understood our talent inventory, we made a broad and explicit shift to differentiate our investment in talent. While we would still invest in the development of every Associate
CHAPTER 6
GE MONEY AMERICAS
TAMMY GRISHAM AND D. ZACHARY MISKO
Developing and sustaining an integrated talent acquisition model utilizing recruitment process outsourcing (RPO), advanced sourcing technology, and process efficiency in conjunction with LEAN methodologies.
• Introduction
• Company Background and Environment
• The Challenge and Approach
• Solving the Staffing Dilemma: Two Leaders Team to Get It Right
• A True Partner Steps Up
• Results Chart a Success Story
• The Technology
• The Challenge
• The Solution
• The Results
• Strategy Sourcing
• The Challenge
• The Solution
• The Results
• LEAN Methodologies
• Flexibility Defines the Future
• Introducing Transactional Lean
• FS
• The Lean Journey
• The Impact
• Expansion
• Conclusion
INTRODUCTION
This chapter introduces the framework, processes, and tools currently used at General Electric, GE Money, for executive talent acquisition. The long-term goals of the strategy and programs GE is currently implementing for talent acquisition include:
• To ensure that an efficient and cost-effective talent acquisition process to provide quality talent and a talent pipeline is identified.
• To provide robust metrics reporting to ensure analysis and measurement of process (efficiencies, waste, quality, time, and satisfaction) are reviewed regularly.
• To maximize performance of recruitment process and HR professionals through utilization of LEAN methodologies.
COMPANY BACKGROUND AND ENVIRONMENT
General Electric is a diversified technology, media, and financial services company dedicated to creating products that make life better. From jet engines to power generation, financial services to plastics, and medical imaging to news and information, GE people worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world’s toughest problems.
GE Money is the consumer finance brand for GE Consumer Finance worldwide. GE Money combines the trustworthiness of banks and the speed of finance companies to deliver a unique service to our customers and clients. Around the world, our businesses have embodied the values of GE Money and prospered. Customers are drawn by what GE Money represents: speed, value, flexibility, accessibility, and trustworthiness. When you work at GE, you work with people who have a passion for learning and a desire to innovate. Their obsession with finding better ways to do things creates an exhilarating work environment.
With more than $163 billion in assets, GE Money is a leading provider of credit services to consumers, retailers, and auto dealers in fifty countries around the world. GE Money Americas offers a range of financial products, including private-label credit cards, personal loans, bank cards, auto loans and leases, mortgages, corporate travel and purchasing cards, debt consolidation and home equity loans, and credit insurance.
THE CHALLENGE AND APPROACH
Solving the Staffing Dilemma: Two Leaders Team to Get It Right
We often hear the buzz word “sustainability” in reference to environmental resources. At GE Money Americas, we link the term with human resources, too. Our recruiting process delivers sustainable results today, thanks mostly to our partnership with Kelly’s Outsourcing & Consulting Group (Kelly OCG), Recruitment Process Outsourcing (RPO) practice. This recruitment process outsourcing provider helped us get the “people” part right, which can make all the difference in the global scramble for talent.
A True Partner Steps Up
In 2000, GE Money Americas (formerly GE Consumer Finance) wasn’t getting it right, and we knew it. Our company, a leading provider of banking and credit services, had staffing challenges common to many large organizations: a decentralized staffing process, inconsistent interview practices, and variable candidate quality from a small number of colleges. Moreover, the cost per hire averaged more than $8,000 and the time to fill a position typically exceeded three months. In short, our process was unsustainable.
A parade of vendors told us they had just what we needed to reform our troubled staffing function. In the end, however, the clear choice was Kelly OCG, which had the competitive advantage in employing experienced, caring people. No surprise that, in selecting a partner to be an extension of GE Money Americas’ HR team, the difference came down to people! (See Figure 6.1.)
FIGURE 6.1. The Evolution of Our Partnership
Kelly OCG launched a revamped outsourcing model in early 2001. Key to the solution were a centralized staffing process and a dedicated team. This shift to centralization included a customized candidate application website and standardized, more thorough screening methods to enhance candidate quality and service level.
The solution also incorporated:
• A hiring logistics strategy to ensure consistency, standardization, and efficiency from interview to offer;
• Management of an Internet-based applicant tracking system;
• Automation of processes once done manually;
• Measurement of staffing and activity costs; and
• Establishment of new benchmarks and goals.
The ability to sustaining a process with year-over-year process improvement given an ever-changing landscape of our business, the economy, and sourcing strategy development are critical.
Results Chart a Success Story
Kelly OCG helped GE Money Americas realize significant savings at virtually every level of the staffing process. In addition, they streamlined a time-intensive prescreening process, enabling more interviews of well-qualified candidates during fewer recruiting visits to a diverse range of campuses in a shorter time frame.
Numbers tell the bottom-line story:
• Our total staffing costs decreased 54 percent. The savings were attributable largely to a halving of sourcing expenditures and an 80 percent reduction in travel and relocation costs. The average cost per hire fell to $4,900 from $8,300.
• Indirect savings included a cycle time reduction to 47 days from 115 days.
In the course of an eight-year relationship, Kelly OCG has helped GE Money Americas obtain year-over-year cost reductions ($2 million in 2007), while continuing to manage a best-in-class staffing process. With a focus on operating more efficiently and sharing best practices, they have improved both candidate quality and our interview-to-hire ratio. They measure their progress in both quantitative and qualitative terms (see Figure 6.2).
The process shown in Figure 6.2 combines both GE managers and the RPO provider team throughout the candidate life cycle.
THE TECHNOLOGY
The Challenge
With the right process defined and in place to attract candidates, we were now experiencing difficulty in managing the high volume of applicants, which negatively impacted the effectiveness of our staffing function. Additionally, existing technologies did not enable them to execute a highly successful, high-volume recruiting program with the ability to produce metrics on demand.
FIGURE 6.2. The Process Model
The company faced these difficulties:
• Lack of an effective applicant tracking tool designed for high volume, nonexempt hiring;
• Limited outlets for candidates to apply;
• A narrow scope of reporting capabilities;
• Complexities of dynamic recruiting needs in more than twenty locations;
• Management of the day-to-day functions of a technology provider; and
• Successful management of phone interview and onsite interview scheduling.
The Solution
Together GE Money and Kelly OCG sought a technology vendor to address the challenges. Kelly OCG selected My Staffing Pro (HR Services Inc.), which offered an applicant tracking and recruiting software system with advanced applicant screening capabilities. Next, Kelly OCG stepped in to manage the implementation and the ongoing day-to-day activities of the applicant tracking system (ATS). This included system, end-user, and reporting functionality. As a result, a variety of improvements were made to the process.
The solution incorporated:
• An interactive voice response system (IVR), which serves as an automated applicant screening and scheduling tool;
• An integrated online and telephone application accessible twenty-four hours a day;
• Automation of candidate prescreening and scheduling previously done manually;
• A custom candidate portal specific to the client;
• Standardized EEO data collection and reporting;
• Advanced statistical reporting capabilities;
• Strategic initiatives that maximized the use of available resources; and
• Automated communication (including confirmation and regrets letters).
The Results
By strategically integrating the right technology partner, Kelly OCG was able to optimize the recruiting process and achieve significant results for GE Money. In the first year 15,332 new applicants were tracked and managed through the hiring process. In the following years the number of new applicants continued to grow and exceeds 80,000 annually. As the client hiring demands and processes have continually changed, the flexibility provided by My Staffing Pro (HR Services) and its technology have helped to seamlessly accommodate their requirements and enable better hiring decisions. Recent successful implementations include the addition of four new call centers, increasing the total number of Kelly OCG recruited call centers to eighteen.
STRATEGY FOR SOURCING
We also refined our sourcing strategy. The Internet, for example, remains an important weapon in our recruiting arsenal, but qualified candidates who are working successfully for our competitors may not be checking web postings. This truth calls for fresh thinking about a model that blends both contemporary approaches and traditional recruiting tactics such as cold calling, all but abandoned during the rise of the web.
Our candidate funnel (Figure 6.3) is streamlined due to an efficient process. Through this process only qualified candidates are invited to an on-site interview, which means Hiring Managers are spending quality interview time and have higher interview to offer ratios.
The Challenge
Dissatisfied with their current methods of generating and implementing an effective method for research and advertising, a world-renowned consumer financial services company requested assistance in finding a more successful channel of advertising media to increase the flow of candidates. Additionally, the company wanted to improve the way in which they tracked their advertising spending in order to accurately calculate cost-per-hire and manage their annual budget.
FIGURE 6.3. The Candidate Funnel
The relationship is managed by the Kelly OCG-RPO talent acquisition team, and it is uniform across all locations. Prior to the endeavor to merge the process of ad placement into a single, proficient entity, nearly two dozen client locations were actively placing their own advertisements separately—using limited time and resources.
The company faced the following challenges:
• Lack of advertising budget management and tracking of spending;
• Inconsistent process across all client locations;
• Lack of resources to research best ways to advertise and reach target candidates, including cutting-edge technology and emerging trends; and
• No cost-per-hire nor ROI tracking.
The Solution
The client needed to hire talent for call centers across the country but did not have a comprehensive or long-term solution in place. Together, TMP Worldwide and Kelly OCG-RPO developed a nationwide annual media plan. With the plan in hand, the client could reference the overall strategy and implement the best tactics for the specific market within a two-week lead time. Included in the plan were specific strategies for search engine marketing, job boards, direct email advertising, mobile marketing, and outdoor advertising.
Since the media plan included strategies throughout the year, in addition to covering all of the client-specific geographic areas, it was easy to implement. As a result, the client took advantage of both traditional and non-traditional media to achieve success in staffing the call center locations. The client is now competitive for hiring for positions across the country—no matter the regional location. The well-received advertising campaign promoted the collaborative and unique company culture and captured the essence of joining a successful team. In fact, the client requested two additional executions promoting the benefits of employment.
The solutions for the client included (but were not limited to) the following:
• Budget management for advertising spending;
• A consultative relationship between TMP and the client managed by the Kelly OCG-RPO talent acquisition team;
• Demographic research provided by TMP Worldwide;
• TMP Worldwide working specifically within company branding guidelines;
• Introduction of new and cutting-edge products/technologies;
• All requests handled by one to two direct points of contact; and
• Cost-per-hire tracking from the Kelly OCG-RPO talent acquisition team to better manage resources.
The Results
Through a partnership with Kelly OCG-RPO, the company’s respective locations no longer need to place or research their advertising. All research, recommendations, placement, spend tracking, and budget management are taken care of through this business relationship, thus helping to reduce overlapping advertisements, unnecessary or ineffective advertisements, and unnecessary spending. TMP Worldwide and Kelly OCG-RPO worked together to maintain the distinguished image and reputation of the client company.
“Partnering with TMP as an ad vendor, and having that relationship and budget managed by Kelly OCG, has allowed us to have one centralized point of contact for advertising needs, research, and staying up-to-date on developments in the market(s). Additionally, this centralized approach has helped us reduce overall advertising/ recruiting costs while reducing cycle time and increasing position fill rates.”
Effective sourcing strategies have reduced agency spending by over 70 percent (see Figure 6.4).
FIGURE 6.4. Sourcing Model
LEAN METHODOLOGIES
Flexibility Defines the Future
Like all successful programs, this one is evolving to meet the needs of our ever-changing organization. Over the past year, we embarked on a Lean quality review. Through value stream mapping, we reviewed opportunities to improve our processes and defined our ideal process state. Working closely with Kelly OCG, we formed kaizen teams to effect positive change. Our challenge was to enhance the applicant experience through reduction in process delays and redundancies. In the end, we were able to meet more stringent federal compliance standards while maintaining cycle times and quality of service.
We are most familiar with “Lean Manufacturing” as introduced by Toyota® to improve production manufacturing. In such an environment, it is used to reduce waste, increase quality, and improve production. Could this “Lean” approach be used to improve a transaction-based service operation—like staffing? GE Healthcare thought so. With help from Kelly Outsourcing and Consulting Group (Kelly OCG), “Transactional Lean” has been successfully integrated into their solid business partnership with great results.
Introducing Transactional Lean
In 2006, the relationship was being challenged with increasing hiring volume and heightened requirements from U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP). GE Money needed more and more staff to combat these issues, which added more and more cost to the staffing budget. Something had to change. We decided to apply the Lean approach to the staffing process to create efficiencies, improve performance, and generate cost savings.
A team of Kelly OCG managers and recruiters and GE Money human resources managers created a value stream map (VSM) of the current staffing process. The VSM revealed areas of low-quality output to target as kaizen improvement opportunities. But before anything could be set in place, a fundamental culture change had to occur.
5S
To initiate the required culture shift, a Lean principle, 5S, was introduced as the foundation for all improvements. The 5S consists of:
• Sort—separation of necessary items from unnecessary items;
• Set in Order—arrange items according to how they will be used;
• Shine—maintain work area for sorted and set in order items;
• Standardize—ensure sort, set in order, and shine are consistently followed; and
• Sustain—maintain and improve sort, set in order, shine, and standardize.
5S was first applied to the physical environment, eliminating unneeded storage and files. It soon became evident the discipline to sustain 5S was necessary to sustain a change in the staffing culture to one of continuous improvement.
The Lean Journey
Following the VSM and 5S, the staffing team focused on the kaizen opportunities. Initially, the team led and participated in more than thirty-two efforts to standardize processes and improve quality. Early efforts included:
• Creating application instructions;
• Standardizing the initial candidate phone screening;
• Creating a compliant process for documenting search strings;
• Standardizing the hiring manager call for newly posted positions; and
• Documenting the employee referral process.
The Impact
Staffing continued to improve, with plans to institute visual management practices to capture performance and adopt better process controls with internal audits. With the Lean improvements in place, staffing processes became more consistent. Defects decreased, and the quality of service continues to improve. For the first time, vacations, absences, and peaks in hiring volume do not disrupt customer service. The standards of excellence and defined processes also allow new team members to more easily learn their roles and integrate into the team.
EXPANSION
In 2008 our process and abilities were challenged again to provide our process in Latin America (Guatemala, Central America). This would mark the first site in Guatemala, as well as the first opportunity for Kelly OCG to staff there.
Process Efficiency and Successes
1. Implemented technology and process used for North American staffing and began processing candidates on March 10, 2008.
2. The first hiring date for the new Guatemala site was April 28, 2008 (six weeks to process candidates).
3. In managing vendor relationships, Kelly OCG worked with an advertising vendor to conduct market research on trends and avenues for advertising in a new market and in a different culture. By managing ad vendor relationships and monitoring effectiveness of ad avenues, cost per hire is at $603.12 as of September 30, 2008. The client averages forty-two hires per month since project inception.
4. We streamlined the hiring process to better customize for the client site: removal of redundancies in the process (preliminary English test), reducing total number of interviews down from three to two by combining competencies covered in two on-site interviews to reduce redundancy. HRF also created and adjusted the phone interview used. Through this process improvement, time to process a candidate was shorter and the number of trips a candidate had to make to the recruitment site was reduced. We adjusted the final English assessment (CEDS) schedule to accommodate most candidates.
5. Kelly OCG hired and trained a local team to represent the RPO onsite RPO team.
The Kelly OCG team was entirely responsible for establishing the process, providing /maintaining resources, and processing of candidates. Once the Guatemala team was hired and trained, the U.S. team maintained daily communication, weekly calls, and occasional trips to Guatemala to ensure questions were answered and issues were resolved. The U.S. team co-managed the advertising and participated in weekly update calls with the entire client project management team to discuss updates and resolve issues.
CONCLUSION
We will continue to demand more from our outsourcing provider as new challenges surface. With the RPO practice of Kelly OCG
