What if you were a real estate broker in charge of selling a house, but you didn’t have much say on how the property was priced?
Talent acquisition leaders can relate.
Recruiters are under pressure to “sell” candidates on why they should join a company. But they often have limited input over setting compensation policies. That needs to change, and it’s up to talent acquisition leaders to lead the way, John Vlastelica, the CEO of Recruiting Toolbox, told the audience gathered at LinkedIn’s recent Talent Connect conference.
“We’re going to talk about something that I’m very passionate about, which is how do we, as TA leaders, have a bigger impact on the business,” John told the Talent Connect audience in his session, How TA Leaders Can Lead Holistically in a World of HR Silos.
For too long, John said, talent acquisition has been siloed from other HR functions, including the compensation leaders who establish compensation guidelines. As a result, recruiters find themselves hamstrung by policies they didn’t influence, creating frustration and resentment and lost talent. Employers, in turn, are missing out on valuable market insights from their recruiting teams.
But there are steps talent acquisition leaders can take to assert more influence, John said. The potential payoff: “Alignment on compensation principles leads to speed,” he said. “Alignment leads to quality. Alignment leads to better diversity outcomes.”
The walls between recruiters and compensation teams are starting to come down at some companies. Last year, when hiring at Google reached a frenzied pace, the tech company sent members from its talent acquisition team into a rotation on the comp team.
“It changed everything,” Alice White, the director of Google recruiting, said at a LinkedIn Recruiter Reunion conference. “We came back with some really good tips for our team on how to work better with our comp partners.”
Work together — it’s in everyone’s best interest
John, who previously served as a recruiting director at both Amazon and Expedia, knows firsthand what it’s like to spar with comp leaders over compensation strategies. “I think once in my career in corporate I had a good relationship with a compensation leader,” he said. “The rest of the leaders would literally close the elevator door if they saw me coming.”
The salary surveys used by comp teams to set pay are often out of touch with market realities, John noted, whereas recruiters can offer real-time information. “We’re on the phone,” he said, “we’re chatting with candidates all the time.”
That’s not to say that recruiting leaders should overstep their bounds, John said. “I don’t mean TA writes its wish list of how compensation works,” he explained. “I mean collaborate, cobuild the compensation philosophy for our company.”
Agree on compensation principles to boost speed, quality, and diversity
Ideally, talent acquisition and comp leaders should seek consensus on several key compensation principles, John said.
For instance, is the company willing to sacrifice “internal equity,” meaning is it ready to offer outside candidates competitive salaries even if those salaries exceed what current employees are earning? On the flip side, is the company ready to make market-competitive salary offers to internal candidates, or will the company underpay its internals and risk losing them to better outside offers? How much additional money can recruiters offer on the spot without needing the permission of the comp team or others who set pay guidelines?
To make their voices heard on these matters, recruiting leaders should start engaging in conversations with their compensation team peers, John advised.
One idea: Set up “mock offer trainings,” where different parties play the roles of candidate and recruiter. The goal is to make comp teams aware of the challenges recruiters face in closing the deal.
“I’m not asking for more money to make my job easier,” John said. “I’m asking for more money to improve speed, quality, and diversity. Mock offer training — with compensation teams in the room — can show them how effectively we’re already selling the non-compensation aspects of our job, so they don’t think we’re just being lazy by asking for higher pay ranges.”
Share information to understand why people leave and why they turn down offers
Talent acquisition leaders should also show their compensation counterparts examples of job offers that were rejected. “You want to say, ‘These are examples where we lost someone good — are we OK with that?’” John said. “‘What if we lost them over just $5,000? Was that a good decision, or do we need to update our principles?’”
Recruiters and comp teams should have similar conversations about internal employees who left a company because they were unhappy about their current compensation and earning potential. This is especially important to look at in this market, John said, where an employee may know they can get a 10% to 20% increase or more if they leave versus staying and accepting a standard 3% annual increase.
“Have the same kind of conversation,” John said, “when we lose a good existing employee: ‘Is this someone we could have saved over $5,000; is it someone we should have saved?’”
Final thoughts
As John’s Talent Connect talk showed, talent acquisition leaders need to bust the silos across HR and engage in more leader-level, principle-focused conversations with peer compensation leaders. Employers can benefit from adopting a holistic approach to hiring where recruiting and other HR-related teams work together.
Talent acquisition leaders will have to work hard if they want more say over issues like compensation. It starts with recruiting leaders recognizing how their insights can help companies achieve their most important goals.
“I deserve to have a point of view on compensation, internal mobility, onboarding, career pathing, and on our competency model,” John told the Talent Connect audience. “I deserve to be in the room as part of that conversation. I’m not just a ‘req-filling machine.’ I want to shape this organization in a positive way, and today’s talent challenges require more holistic thinking.”
You can access a recording of John’s Talent Connect presentation and his extended slide deck here.
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