How Digital Is Your Company?

Then comes the test: Does the candidate perform? If the person is truly talented, and if the fit is good all around, everyone wins. But as we all know, this ideal scenario doesn't always occur. It can take up to six months to determine that a new hire is not going to work out, and another six months for the company to dismiss that person. In the interim, the company suffers the double whammy of subpar performance and the internal disruption of a disaffected hire -- since poor performers never blame themselves. The true cost to the company is $200,000 to $300,000 per failed hire -- plus organizational costs, customer-related costs, and the opportunity costs. And then there's the need to start all over again -- using the same broken system.

Digital companies are harnessing the power of digital recruiting:

Microsoft has won a reputation as a hard-nosed interviewer, running job applicants through a gauntlet of whiteboard computations and equations. Despite its atoms-based approach, there is a method to this mental-boot-camp madness: Microsoft is looking for people with high IQs and strong problem-solving abilities. But Microsoft has also developed a strong e-recruiting and e-training process, reaching out to a network of leading universities. The company's Web site features a substantial amount of information to attract talent, a series of interactions to screen candidates, and a portfolio of e-training programs to develop candidates once they've joined the company. It's a comprehensive approach to recruiting -- and one that exchanges atoms for bits.

Most business observers rarely confuse Humana Inc. with a front-of-the-pack fast company. But when it comes to e-recruiting, the $7.8 billion health-care giant has become a digital champ. Recently the company has shifted its approach to talent, using software that searches the Web for resumes and then matches qualified candidates to appropriate openings. The company then uses a tracking system to email top candidates, updating their resumes while updating Humana's talent database. By moving to e-recruiting, Humana has cut its spending per qualified resume from $128 to $.06 -- that's right, 6 cents! That per-resume saving totals $8.3 million annually -- and does a more efficient job of forecasting the fit of candidates tracked through the system.

Who says you can't teach an old dog new tricks? Korn/Ferry International, one of the giants of the executive recruiting industry, has discovered that digitization can improve the firm's hit rate. But instead of moving to the Web, Korn/Ferry has embraced digital video. The firm's research into recruiting variables found that a poor fit with corporate culture is the greatest cause of failure of new managerial recruits. Korn/Ferry's bits-based solution: Use videophones early in the screening process so that clients can look for visual clues to determine how well a candidate will fit in.

These companies, and others like them, are replacing the old informational nightmare with a digital system that prequalifies candidates. The company at the forefront of the e-recruiting revolution is Cisco Systems. The San Jose-based, $8.5 billion technology leader has had unparalleled growth, fueling its phenomenal economic performance with an e-recruiting system designed to bring in more than its fair share of the best talent available. From 1990 to 1997, Cisco rocketed from 250 people to more than 14,500 people in 55 countries. Last quarter alone, Cisco added roughly 1,400 people; this quarter, the number of new employees it will add will range from 900 to 1,200. And the company is bringing these new people on largely in response to growth -- not to replace disaffected employees: Cisco's turnover rate is around 8%, which is far below the industry standard of 12% to 16%.

Cisco's goal is to hire the top few percent of engineering and business talent. Central to the effort is Cisco's well-designed, carefully monitored -- and regularly improved -- recruiting Web site. All of the company's other recruiting activities -- from placing ads in Silicon Valley newspapers, to setting up recruiting tables at upscale social gatherings, to using strategically placed cards in the stands at college football games -- are designed to send self-selected job seekers to the Cisco Web site. There the applicants encounter recruiting pages that are informative, user-friendly, and entertaining. And Cisco is making its recruiting information available in Cantonese, Mandarin, and Russian.

At the front end of the recruiting process, Cisco carefully targets its message to the best candidates. Its recruiters hold focus groups to learn the work practices, social interests, hobbies, and lifestyles of the most successful engineers and managers at their company. Cisco then identifies the most popular and influential Web sites on which to post recruitment ads. In addition to posting positions on standard job-search Web sites, Cisco also goes on the Net to places where its kind of people are likely to hang out: The Dilbert Zone, for example. And, since most applicants are likely to visit the Cisco site during their own work hours, Cisco has added the capability of monitoring not only the number of visits to its site but also the company where the visitor works.