1. What Can Talent Acquistion Learn
from
Eli Goldratt
Goal Constraints
Throughput
Eli Goldratt’s Theory of Constraints and the Recruitment Goal
3.5x 2.0x
The photograph above of a hot air balloon breaking
through a group of clouds is a freedom metaphor of
breaking against a constraint, and rising above to
achieve a goal. The Big Idea behind this unassuming
potray is a methodology made famous by Dr Eliyahu Goldratt, who
conceived the Theory of Constraints and introduced it to a wide
audience through his 1984 novel, The Goal. The similarities
of the manufacturing plant, in this fictonal story by Eli Goldratt,
and many corporate recruitment departments are striking & its
relevance endures even thirty years after it was written
Goldratt’s Theory of Constraints applied to Talent Acquisition
Shortly after the turn of the century, when
Bento Boxes had become Japan’s best known
contribution to the culinary world, came the
widely popular conveyor belt sushi restaurants.
Also known as sushi-go-rounds, the customers
could simply pick little portions of fresh sushi and sashimi oftheir choice from a moving
conveyor belt & pay based on the number & type of sushiportions consumed. The idea
combined japanese minimalism & their loathing for wastage
The Theory of Constraints thinking process similarly draws upon
this minimalist approach and is built around the core that
Every process has a single constraint and that the
total process throughput - the rate at which
the system makes money through sales can only be
improved when the constraint is improved
Only improvement of the constraint will further the
GOAL
Achieving More Profit
This concept when applied to recruitments helps us understand the goal as:
To maximize the number of quality hires/month for the Organization
Eli Goldratt calls this “Throughput”
&
that there is a fixed amount of Time, Money & Resource ~
constraints that need to be optimized
Time Money Resources
A Staffing Supply Chain viewed through the lens of Throughput & Constraints
shifts the perspective of the recruitment function
from
Transaction driven to a Relationship driven process
More is better philosophy to how efficient we are with the candidate
activity in the staffing supply chain funnel
Quantity & Cost Containment to Quality of Hire
The Throughput is a great TA metric for these very reasons.
Most importantly, it illustrates the efficiency & effectiveness of the entire
recruiting process by focusing on cradle to grave hiring ratios & help identify
low and high performance process zones as exhibited
below
Interview to Offer Time to Fill Resume to Offer
Average Cost per Hire
Sourcing Hrs/Qualified Candidate
Sourcing Channel Efficiency
Offers to Hire
Opportunities to analyze
fix & improve
Best Practices to review,
share & apply
Low Performance High Performance
With Througput everyone sees the value of having a defined role and all
stakeholders have a skin in the game enabling a visible bottom-line case
The Recruiting function, as per the findings of a research study
by BCG below, when executed well, has the
highest business impact among all TM functions
RG PM TI
Onboarding & Retention
Managing Talent
Employer Branding
3.5x 2.0x 5.5x
Performance Management
Developing Leadership
Enhancing Employee Engagement
2.5x 1.9x 4.4x
2.2x 2.1x 4.3x
2.4x 1.8x 4.2x
2.1x 2.0x 4.1x
2.1x 1.8x 3.9x
1.8x 1.6x 3.4x
RG: Revenue Growth; PM: Profit Margin; TI: Total Improvement
Recruiting
Source: Boston Consulting Group/WFPMA - From Capability to Profitability, 2012
Focus is the essence of Theory of Constraints and using the right metrics,
recruiters will be encouraged to focus their behaviours on the
causes and not the symptoms of recruitment success
Source/Photo Credits
Singkham: Shutterstock
EirngKwan: Shutterstock
Author
Pradeep Sahay
www.toc-goldratt.in
en.wikipedia.org/wiki/The_Goal
