Talent Acquisition Doesn’t Belong Under HR – It Belongs Under Operations With Keith Hulen of SmartRank

William Tincup: [00:00:00] This is William Tincup and you are listening to the RecruitingDaily podcast. Today we have Keith on from Smart Rank, and our topic today is talent acquisition doesn’t belong under hr, it belongs under operations. So probably a decade ago I did this presentation in Omaha where I talked about HR being the a hundred year old house, and it was fun.

Notice I was asking questions of the audience, like, why is payroll under hr? Why is that a finance or accounting? Like why is it under hr? She’s crazy to me. So I literally broke down everything in HR and I said, what is HR really supposed to be doing as opposed to what has been given to HR to do?

And so Keith and I are really gonna, take this into talent acquisition more specifically outside of hr and really kinda talk about like talent acquisition. Where if we were doing it, We didn’t have any history and we were have a blank slate. How would [00:01:00] we do Tali?

Where would we put it? Who would be over it? How would we do it more effectively? So Keith, would you do us a favor and introduce both yourself and smart rank? Yeah,

Keith Hulen: happy to. So my name’s Keith Hulen. I’m the c e o and Co-founder of Smart Rank and Smart Rank. Is a SaaS solution for talent acquisition teams that completely automates the job applicant screening process without needing or using a resume at all, and gives the hiring managers exactly what they are looking for in candidates.

William Tincup: That sounds easy. So I love that. And let’s talk a little bit about Tali, your experience with Tali and you’ve been on a thousand calls with Tali professionals, so what do you when we talk about okay, cuz it, we’re making a bold statement. The bold statement is, it’s dumb for it to be under hr, or at least it’s, it might have made sense at one point.

It doesn’t make sense now. It should be under operations and operations being defined [00:02:00] as your COO that cares deeply about business stability. And so they care about staffing. They just care about staffing in a different way historically. Had you, how’d you first come up with this

Keith Hulen: idea? Because I guess you could say that I’ve fallen under or been a part of operations for the majority of my career.

My background is a non-traditional talent acquisition background, meaning that I come at it from the hiring manager, executive leadership standpoint, not directly from the recruiter kind of standpoint. So I see it from the other side of the house and and it’s not just me, right? I’ve worked with hundreds of other hiring managers and leaders in my career that all feel.

Very similar to me, that, this is a function that belongs under the same roof as them, as opposed to a completely different area of the company that can’t really relate to [00:03:00] exactly what you know they’re looking for on a day-to-day basis.

William Tincup: Pros and cons. We’ll do pros and cons of Tali being under hr.

Pros and cons of it being under operations okay. Pros and cons of it being under hr? I’d say pro would be whether or not it’s be efficient or not, it’s been under HR for a long time. I could also be a con, I guess now I’m talking myself out of it, but I’ll, I was talking myself into saying, okay, Tali, at least.

At least budget wise, it’s, it makes sense because it’s under hr. HR and recruiting have this kind of a, at least this demarcation of onboarding where everything prior to onboarding is recruiting. And then after everything, after onboarding or onboarding and after, is HR. So there’s, at least historically I’m gonna talk myself into this being a con as well, by the way, but I’m gonna stay on the con, I’m gonna stay on the pro side [00:04:00] as much as I can.

But there’s at least a, at least in a lot of people’s minds that have been doing both HR and Tali for a long time. There’s this, his historical line of demarcation, so I’ll just stop there. What do you think of that as either a pro or con. And what do you see as a pro of Tali staying under HR or a con of it staying under hr?

Keith Hulen: I agree with you that this is where it has resided. I find it interesting that it has, right? This is something where people have just shoved talent acquisition into an area that will take it in a way. I know that maybe it doesn’t sound great to say, but that’s what’s happened because if you look at all of the reasons why it shouldn’t belong underneath hr, there are a ton of them.

A ton that make a lot of sense. I struggle to think of pros. I really do. I. I’m trying to be really objective here. William, and I struggled to think of a single pro. In fact, I just was at a conference a couple months ago and I sat down with [00:05:00] a very smart head of talent acquisition and we went out to lunch and I asked her a question and I said, I wanna open this up.

Where do you think that talent acquisition belongs under HR operations? Her immediate answer was, it belongs under hr. And I said, interesting. Why do you say that? And she started saying like that’s where it has resided. That’s where I came up is through hr, and that’s where, right then I got into talent acquisition, same thing you just said.

And then I started giving my rationale for why I believe it doesn’t, and then at the end she goes, I’m gonna change my answer. I think I’m with you. I think it, now that you say what you said, I think maybe it does fall underneath operation. So this mindset of this is how it’s always been done, that doesn’t mean it’s the right way, it just means that’s the way it’s been done.

Yeah.

William Tincup: And people that have that argument, you can break ’em pretty easily. Philosophically you can break them pretty easily because you can say slavery was a tradition. So yeah, lynching were, was a tradition. So not all traditions are equal [00:06:00] and not all traditions should obviously continue.

So just because something’s historically been done or we understand it as the norm doesn’t mean we shouldn’t challenge the status quo, which I think gets us to kinda the pros and cons of maybe of Tali being under operations. So what would a pro be of Tali reporting? You we’re ripping it out of hr, it’s now under operations, so what’s a pro there for that to happen?

Keith Hulen: Yeah. Okay. So a lot. So let’s just

William Tincup: alphabetical. Yeah. Got it.

Keith Hulen: Okay. All I’ll just start running through a list. Number one, Let’s just look at very high level. HR has certain stereotypes and a lot of these stereotypes are true, right? No budget, no authority very little innovation.

And as a result, Tali under hr, has followed suit, hasn’t really innovated a ton. In the past 25 years at least, from a basic screening, process, which is my area of expertise, I can tell you that it has changed very [00:07:00] little. And so these stereotypes kind of place Tali in a subservient role, and I know that.

It’s something that the audience is probably oh, that doesn’t sound good. It doesn’t sound good, but it’s true, right? This is cuz that’s how HR is perceived, right or wrong. That is how they are perceived. And by Tali being underneath that team right off the bat, they’re following underneath that same perception and that’s not a good thing.

The hiring managers. They’re responsible, which I’ll call that operations are responsible for interviewing, hiring onboarding. And when I say onboarding, I’m talking about the real stuff, the real onboarding. I’m not talking about I nine, and here’s where the bathroom is, right? I’m talking about like real detailed onboarding of this, how you’re gonna do your job.

They’re doing the training, the developing, the managing, and maybe even managing an employee out of the organization. So why on earth would there be another group that falls underneath hr? Responsible for finding and screening these potential [00:08:00] hires and people that are gonna be on that operations team.

That doesn’t make sense. I also think that you have a big pro if you were to put this under operations of aligned goals, right? Look at the metrics that Tali cares about, that they’re shooting for. Time to fill time and process butts in seats, right? Versus.

Quality of hire, right? Interviewed a higher ratio. The real cost of hiring, right? The real cost of it under operations, those things would most likely be looked at with a much deeper look, with a much a bigger lens on a microscope. Look at a concept like, I’ll just ask this, who is responsible for high turnover in the company?

At the

William Tincup: it lands on hrs desk, but and so they get the blame for sure. But where we’ve historically talked about it is it’s managers, it’s hiring managers, it’s the managers that people don’t leave [00:09:00] companies. They leave managers, which I’m no, still not a hundred percent on, but I think who gets the blame for regrettable turnover for sure is HR.

Keith Hulen: And look. Here’s the, I think the answer is, it depends who you ask. Oh, yeah. Yeah. Hundred percent. If you ask talent acquisition or hr, they’re gonna say it’s the operations and hiring managers, right? If you ask the hiring managers and operations, they’re gonna say it’s HR and talent acquisition.

What if you’re under one roof and you no longer get to point the finger across the aisle, do you then, Still get to use that as an excuse. There’s a stat that’s been going around for over a decade. I saw it pop up not too long ago, that there’s a 46% failure rate for zero to 18 month hires, and that’s at all levels.

Not just con individual contributors, but managers, directors, even VP level. That is a staggering statistic. If that’s still true, and I see other ones that are around there, 37% SHRM says, or somebody else says it’s 54%, but let’s call it 40, 45%. That’s a staggering statistic. [00:10:00] People should be getting fired for that, right?

If anything in an organization worked almost half the time, that group would be done. If you only sold 50% of your quota as a salesperson, you’re fired. If your product only works 50% of the time, your product develop, your product team is getting fired, your software developers are getting fired. If your shipments only make it there to your customers, 50% of the time, that whole team’s getting fired.

So yet this one falls somewhere in pointing fingers, not if it resided under one roof.

William Tincup: So I’m thinking about resistance and cuz it makes sense, right? This, these are the things that always it makes sense and then it’s just okay, then why don’t we do it? And the first thing that comes up in my mind is resistance.

Okay, what kind of, either political capital or kind of resistance to the status quo. Are we gonna face candidates? Okay, candidates aren’t gonna know any different. So there’s no resistance from candidates, in my opinion. Recruiters, I think after the initial [00:11:00] shock, I don’t think there’d be much re resistance from recruiters hiring managers again, after the initial shock.

I don’t think that there’d be much resistance from a hiring managers. In fact, they’d probably love it because it’d be more on the quality side of things. I think the resistance would come from either HR ops, either ops, not wanting to add more stuff to their plate fair, fair assessment or HR not wanting to give something up.

What’s your kind of, what’s your assessment of kind of the resistance that we might face?

Keith Hulen: I agree with everything you said there, and although I would add just one caveat to the talent acquisition recruiter folks that are making that switch, which would be some of them may not be able to make that switch.

There’s some of those folks have been Entrenched into this is how we do it. You update job descriptions, you look at resumes and then, like these just very old school type of thinking that [00:12:00] some people just can’t break the habit. That’s how they’ve always done it.

That’s how they’re gonna to it. So I think there’d be some resistance there for sure. I think there’d definitely be a changing of the guard in a lot of companies that says, what used to be a recruiter 20 years ago is not what we consider a recruiter to have, those same skills and qualifications today.

These, this is what we’re gonna actually, this time to fill stuff that’s gone. We’re not gonna do that. So if that’s what you’re used to managing too, you can go ahead and get that off your plate. I agree with you that the leadership would be, the challenge, but. I would challenge both of those leaders.

And I would say, if your objective about this, where does it put your things aside. Where does it actually belong? Like operations. Why on earth would you delegate? If you have a 46% turnover rate, why on earth would you delegate that to another group? And hr I would say, do you not have enough on your plate?

You just listed at the beginning of this call, a number of things they already [00:13:00] have on their plate. It seems like in my, just in the span of my career, more and more things keep getting shoved under HR and just to call it out. These are things people don’t want. Nobody wants to do payroll, so they shove it underneath there. Nobody wants to do, training, but like training is critical. Like those types of things are so important. I can tell you, I’ve got firsthand experience of dealing with these things where if you stick the wrong. Thing under the wrong function, you’re gonna get a really bad result.

That’s just how it works. Like you need subject matter experts involved in the process. I say this all the time, that, hiring managers are generally, if this was a play, they’re treated like a supporting cast member instead of the lead. There’s no reason that a hiring manager shouldn’t be the lead.

In this process. And yet they’re this is your job, Tali. You go do this. No. You’re gonna have to manage that person. Maybe fire that person. Like you’re the one that really needs to be at the front of [00:14:00] this. And getting those two teams aligned is not something I think is a good idea.

It’s something that, companies might want to think about. I think that if they don’t start making these moves, Soon. And by the way, when I consult smaller companies that haven’t already created all these, ways of doing it the same way as always, and I bring this up to them, they’re like, yeah, that makes sense.

I think we’re gonna go ahead and make those changes before we get down the wrong road here. And I’m like, great. So I’m seeing I, you can make those changes in smaller companies where they can move like a speedboat. It’s the bigger companies that I think are just gonna continue to struggle. They’re gonna continue to have these problems.

They’re gonna continue to have people complaining at e at each, at the other department. And then five years, 10 years down the road, they’re still gonna be doing the same thing. But if it

William Tincup: doesn’t, I was gonna, I was gonna ask you about that the transition, if you will, because, as you said, with small companies, there’s really nothing that’s been ingrained.

There’s nothing written in concrete. Yep. [00:15:00] So if we start there and we’re, have less than, less, less than a hundred employees, there’s usually where an HR kind of kicks in at least historically. Okay, so if we’re not already we don’t have to think about how we did it yesterday side type stuff and it just becomes normalized.

Okay. Recruiters report to COO and and, recruiting operations and ah, and and the operations people are all in sync. Great. No one knows any different, like even if you come from the outside, it’s oh, okay. It just becomes the new normal. Like, all right you used to report to hr, report to Ops, eventually we all report to finance, so you know, it just a different route to get to the same place the larger company.

So I see the like the immediate, like you said, like they can flip a switch, boom. We could do that tomorrow at a small company. The larger companies and larger companies isn’t just the, the global 100, the larger companies being like a couple hundred, maybe a couple thousand people.

Yeah. Where there has been historical kind of norms, I think it’s gonna be a slow burn.[00:16:00] Someone’s gonna take it on as an innovation. We saw this with people operations a couple years ago in Silicon Valley that they didn’t say HR. They didn’t say human resources, they didn’t say hr, they called it people operations.

And what I found fascinating about that movement is it was still hr. They still put compliance and payroll and a bunch of other stuff under it, but it was more of an operational feel. They were looking at it from an operational lens and more data and more metrics and just kind more data driven decisions in hr.

Great. This is an extension of that and saying, okay. Tali, we need, Tali needs to be rethought of, and it needs to be rethought thought of, not just in its own, what we do inside the four walls of Tali, but whom it reports to and why.

Keith Hulen: Yep. Yeah. I think that, I think people will make a mountain out of a molehill in those size companies like I think, If you’re a call it a thousand person company I [00:17:00] would be asking the questions of don’t, don’t gimme the reasons why you know why you can’t, why you shouldn’t.

I want you to tell me what the catastrophic things would be if come Monday, today’s Wednesday. If come Monday we decide that we’re going to move talent acquisition under operations. Don’t worry, hr, you don’t need to do a thing. We’re just gonna move them under. They’re gonna, now that the leader of Tali is now going to report under the leader of operations, tell me the catastrophic things, right?

We’re not changing systems yet. We’re not changing. There’s no retraining of anything. We’re just moving who they report to. This happens all the time in companies, right? You have this, it’s like, Sales teams and everything and oh, we’re gonna move this. We’re gonna extend this team and grow this. So now you report underneath this person.

That happens all the time under operations. So why would that, be a case where you couldn’t just move that team under? And that would be my first suggestion. Just move the team right now. If you’re the person that’s in [00:18:00] charge of operations, naturally you’re gonna be curious at a bare minimum, and you’re gonna start looking in, and I’m gonna say this, there’s a lot of things you’re not gonna like.

You’re not gonna what and you’re gonna want to make some changes to. I met with a person that. Was a director of D&I at a fairly large aerospace company. I’ll just say that. And this person that I spoke to said that he’s he didn’t know what I did. He didn’t know that I was in the talent acquisition space at all.

So I just started asking him questions, Tell me about how this is going, how is, how things been going? So he is telling me about everything and then I said, do you have any experience working with the talent acquisition teams? And he got a huge smile on his face, William. And he said I do, yes.

And I went, interesting. Tell me he doesn’t, again, he doesn’t know what I do. I said, tell me about your experience. And he said that team was probably the [00:19:00] most resistant to any type of changes Yep. That, that we talked about. And I said, wow, I find that really. Really interesting considering like all the Tali leaders I talked to talked about how important D&I is, and he said, oh, I can’t tell you. Like we just had round after round with them. Everybody else, every other department was yeah, this same, this makes sense. Yeah. Because

William Tincup: it’s remember that book years ago who Moved My Cheese? Yes. Yes I do. This is an extension of that,

Keith Hulen: that, that’s exactly right.

And so look That leader, he said it, it really stemmed from the leader. The leader was like, this is how our process works. What I found fascinating, and this is where I’m tying this together, is the director of D&I said the first thing we did is just unpack the process. We just needed to know how it works and Keith wa it was astounding how.

Inefficient how? How broken? Yeah, how broken it really was. Now again, this is coming through the lens of essentially somebody that’s D&I, I [00:20:00] guess in this respect, reported under operations, which was very interesting and said, look, we just broke down the process and we don’t know that much about Tali, but we know that seemed ridiculous.

And when we started making suggestions, they were not having it. And so look, if that report’s under operations and you start peeking underneath the hood, And you start seeing things you don’t like, but now it reports to you. So now you’re getting bonused on those things. You’ve got motivation to change them.

You start innovating and you start saying, now you have budget, now you have authority, now you can start innovating and now you’re gonna be more productive because this isn’t gonna work anymore. So I think that’s the first thing they could do is just move the department. That doesn’t do much at all.

You just gotta go into your system there and change the who they’re reporting structure under. And and that’s a first step. You

William Tincup: know what’s interesting is operations, when I learned it in school is it was very, methodical in the sense of, there’s inputs, there’s throughputs, [00:21:00] there’s bottlenecks and there’s outputs.

A couple other things. But basically you could look at anything process wise and just look at it and say, okay, there’s things that come in. There’s things that go through. There’s things that where it gets tight or doesn’t work as efficiently, and then there’s outputs and. We know that, that’s hiring, we just described hiring in a, in an abstract way.

So it would help, I think, what I love about the idea is it would help recruiters understand. How to operationally, how to operationalize and make things more efficient for everybody involved. Hiring managers themselves, candidates, executives, the whole bit because they’d be thinking about it from an operational perspective.

And so I like that. Now, two, two final questions. One is would you in this, recommend not with a small company, cuz I think we’d fix that pretty easily, but with a larger company, would you move HR over? Under operations?

Keith Hulen: No. No. Do you keep HR separate? Not yet. Okay. I think that, that [00:22:00] would probably be too much for a company to handle at one time, but but over time, yeah.

Yes, I would. Yeah. Yeah. And the reason why is because, just when it comes to fun, fundamentally changing the efficiency of something, I’ll just use a really specific example. That’s something that we deal with every day. If you just look at one single aspect of Tali, recruiters for the most part are just going through and opening up one applicant after another.

And looking at a resume and comparing it to the job description, an operations person that really dug into that. See the, a lot of people don’t know how Tali works, right? They have no idea how it’s actually being done. And if they were to look at just that one aspect, they would be like, What in the hell is going on here?

What do you mean? You look at every person one, like why wouldn’t you just look at the top people? Cuz we don’t know who the top people are. Surely there’s a system out there that can tell us that, right?

William Tincup: Yeah. Again, the inputs are coming in, how are you? How you’re getting a bottleneck because you can’t [00:23:00] look at a thousand candidates.

Yes, there’s an immediate bottleneck, time wasted on candidates you never should have even spent time with. Yes. And even people candidates not to blame recruiters, candidates that should have never even applied to those jobs. Yeah. That’s right. Anyhow last thing I wanted to ask you is that like executive sponsorship, like I’ve.

Just had the experience in my life that if you want real change to happen in something this, what we’re talking about, moving Tali from HR to operations, you’re gonna have to have the board and the C-suite onboard with this idea. Like they’re gonna have to get behind it and love it and want it to happen, or it’s, you’re gonna be fighting uphill the entire time.

Is that. First of all is what’s been your experience with executive sponsorship, and if so, is are we on the same page?

Keith Hulen: A hundred percent. I spoke to A C E O earlier this morning and he was be beside himself. How the CEOs can be so disengaged in the hiring process. And it’s very common, obviously, and the bigger the company, the [00:24:00] more disengaged they are.

But listen, people are the most important. In a lot of cases, the most expensive asset that a company has, a hundred percent period. So why on earth, if you’re a CEO and you want your company to operate better and you want it to be more successful and you want higher, shareholder value and things like that You should probably care about the tip of the spear of the people that are actually being looked at and coming in the door in the beginning.

That’s where you should start. And so yes, I think that there’s a case there where you would want to get executive a hundred percent. You want to get executive sponsorship to really make sure that happens and that the people in charge of operations and HR both know this is what’s happening and you need to play.

Nicely because this is where we’re going. And it’s a

William Tincup: good thing. It’s a positive thing. It’s not a, it’s not like somebody’s being penalized. It’s just there’s a more effective way of doing this. And this is a more effective way. These are people that think about operations all the time. [00:25:00] It’s going to actually help everyone.

Hiring managers. It’s gonna help everybody. Not a bad thing, it’s just, again, getting past some of the historical stuff. It’s different. Yeah, it’s different. That’s exactly right. This has been absolutely fantastic. Thanks again for your time and coming on the podcast.

Keith Hulen: Yeah, thanks for having me, William.

Always a pleasure.

William Tincup: And thanks for everyone listening to the RecruitingDaily podcast. Until next time.