Talk about long odds — and a big bet. Arte Nathan was VP of human resources for Mirage Resorts Inc. in 1998 when it launched Bellagio — a lavish resort even by the standards of a city famous for its excess. Everything about Bellagio was larger than life, from its 3,000 rooms to its stunning art collection of original masterpieces. Equally lavish was the challenge that confronted Nathan: Hire 9,600 workers in 24 weeks.
Nathan and his HR team designed a campaign that would screen 84,000 applicants in 12 weeks, interview 27,000 finalists in 10 weeks, and process 9,600 hires in 11 days. In the end, they nailed the deadline — without using a single sheet of paper. They created electronic job applications, processing documents, and personnel files. Now MGM Grand Inc., which acquired Mirage Resorts last March, is pushing Bellagio’s electronic HR system across all of its properties.
“For us, hiring 9,600 people was like Desert Storm,” says Nathan, 50 (who left Bellagio in October to join PricewaterhouseCoopers’s Global Human Resources Solutions practice). “Norman Schwarzkopf reviewed our system, and he said that it was similar to moving a military operation around the globe.” Here, in his own words, Nathan explains how his team did it.
First Step: Get Rid of HR!
The only way that we could hire so many so fast was to move everything online — the entire application process, plus all of the personnel files that resulted from hiring 9,600 people. That meant we had to build one of the first fully integrated online job-application and HR systems. I told our managers that this technology would give them hire-and-fire responsibility, which they say they want. It would give them complete authority, which they rarely get. And it would make them 100% accountable for their decisions, which they never want. Going online would take out of the loop the people who shouldn’t be there: human resources. I’m an HR guy, but I firmly believe that my job is to give our managers the tools that they need to perform — and then get out of the way.
Trouble was, back when we started, I couldn’t find a template from which to build a computerized hiring system. Like most HR people at the time, I was clueless about client-server technology and open-database architecture. I had to become conversant in that stuff, because I didn’t want to rely on the IS people. They know the technology, but they don’t know my business demands.
So I took computer classes and networked the hell out of my high-tech contacts. I went to Microsoft, IBM, and a company out of Hyannis, Massachusetts called Infinium Software. And while those companies hadn’t yet developed what I needed, I could get in their jet stream and watch what they were doing. I came to understand how client-server and browser technologies were key, and how open-database architecture would allow those technologies to operate.
Then I set up a pitch meeting with Bobby Baldwin, president and CEO of Bellagio; John Strzemp, CFO of Mirage Resorts; and Mirage’s CIO, Glenn Bonner. I told them that I needed $1 million to hire a bunch of people and to build a paperless HR system. I promised that we’d deliver the ROI within two years. Bellagio cost $1.6 billion to build. I blew another million. Asking for an extra million, under any circumstances, is serious. But I just put myself on the line.
Treat Your Applicants Like Customers
We put together a design team that operated outside the bounds of the normal IS-development process. I got one IS guy, three HR people, and an outside developer whose team had created the software for the online-application system and the Active Server Pages. We then partnered with a document-management company called FileNet Corp., which developed a platform that would index and maintain our personnel files. It took us about 14 months to design, build, and implement a database that runs on Windows NT in an SQL server.
We then developed 168 questions for the online application, which covered 633 job classifications — everything from dealers, maids, and front-desk clerks to accountants and vice presidents. We brought in 100 people at a time to demo the application — the phrasing of the questions, the prompts, the look and feel of the screen. In all, we tested and refined the system 2,800 times. The goal was to make the system as easy to use as an ATM, because we needed people to fill out the application in about 48 minutes. We couldn’t afford to slow people down: In order to get the selectivity we wanted, we had to take in 1,200 applications a day.
We also decided that in order for people to come in and fill out an application, they would have to schedule an appointment. On our previous two resort openings — Mirage and Treasure Island — we had lines of 300 people waiting to apply for a job. For them, it was like going to the Department of Motor Vehicles: no fun. So we built a scheduling system into this Windows NT program, and then we were ready to roll.
Here’s how it worked: To apply for a position at Bellagio, you set up an appointment at the 65,000-square-foot administrative complex that we built on land adjacent to the Mirage. When you drove into the parking lot, an HR staff person wearing a microphone — just like the Secret Service — confirmed your identity and notified staff at the door, who greeted you by name and assigned you to a computer terminal that also knew your name. Suddenly, you were thinking, Wow, this is pretty cool.
When you have more than 80,000 job applicants, probably 20% to 30% of them are just kicking tires; they’re only casually interested in the opportunity. But I’m serious about them, because I need to hire 9,600 people. My job is to treat these folks as if they are guests at Bellagio: I want to impress the hell out of them and convert them from casually interested to very interested. So we took the same personalized-service principles we use for our guests and applied them to our applicants.
Interview in 30 Minutes
There were candidates filling out applications on 100 computer terminals at all times — 12 hours a day, 6 days a week. Once you completed the application, the computer would thank you and ask you to proceed to a checkout desk. And our staffers literally checked you out. Ostensibly, they would review your application for completeness. But what they were really doing was assessing your communication skills and your overall demeanor. At that point, we weeded out about 20% of the applicants.
Next came the interviews — all 27,000 of them. Since we built a Web-based database that operates with a browser, a hiring manager could sit at her office PC and call up, say, the highest-rated food servers in our pool of candidates. The system would retrieve the applications that met her standards and display them in ranking order. She would then pick three candidates to interview for every opening.
Every day, 180 hiring managers conducted 740 interviews. We instructed the managers for a week on how to use the online system and how to complete the interview in 30 minutes. Letting an interview drift even to 40 minutes would have sent us into a tailspin. We had to do all of the interviews in 10 weeks. We didn’t have any more time. So we trained our managers, we made sure that they were ready, and then we hit the bell and took off.
For the interviews, hiring managers asked a set of questions that we had developed for this process. They were behavioral questions, like “Tell me about a time when you were working at the front desk, and a guest was late. What did you do when you couldn’t find the reservation?” Managers had a PC embedded in their desk tops, so the computers were unobtrusive, and the monitors displayed a rating sheet. Candidates were scored based on their answers, which were again ranked in numerical order and fed into the database. We had to use a formal system: If we had left it up to 180 managers to follow their own formats, we’d still be interviewing candidates today.
Eliminate 28,000 Personnel Files
If a manager wanted to hire you, he would call up your file and click on “conduct a background check.” I had 18 law-enforcement officials looking into candidates’ backgrounds. They’d get your application online and then check your employment, military, and education history to make sure that everything was okay. We rejected about 8% of our candidates at this stage for various reasons, such as lying on their applications.
If you passed the background check and a drug test, the manager would then make the final hiring decision. If he clicked “yes” on your form, one of our HR staffers would invite you to a job-offer meeting. So again, we had to process 100 people an hour on their tax status, number of dependents — all of that personnel stuff. Actually, we processed about 800 people a day for 12 days.
When you hire somebody, you create three files: a personnel file, an Equal Employment Opportunity Commission data file, and a medical file. Since we had developed all of this electronic-filing technology for our job applications, we thought, Why not have an electronic personnel file? We could eliminate three paper files for each of the 9,600 people — that’s 28,800 separate files. In the process, we would also get rid of the files that managers usually keep at their desks. So we developed this electronic personnel file and transmitted everything from the application database to the new-hire database.
We created the same technology for all of our personnel and payroll forms, so managers can now fill out those forms online. Once again, we took ourselves completely out of the transaction. We didn’t have to collect, input, and file thousands upon thousands of paper forms. That’s why I get to take a three-week summer vacation in the Adirondacks every year.
Make Yourself Redundant
This started out as an experiment. But in the end, the guinea pig survived. We saved Bellagio $1.9 million. When MGM bought us, they flipped out over this stuff. Now MGM is deploying our technology across 15 more properties in mission-critical departments, and we’ll save millions of dollars a year. The technology will end up being used at reservation desks for all of the customer folios. It will end up being used for all of the purchasing profiles. People expect a Cisco to be developing this stuff, not a Bellagio. Well, Cisco called me and then came out to benchmark our system.
Most of us HR people are afraid that we won’t matter if we let go of our hire-and-fire authority. We hold on for dear life to this personnel stuff. But if you really want to sit at the big table, you’ve got to start thinking strategically and globally. And the only way to do that is to eliminate HR transactions from your life. You have to be willing to say, “I am in the wrong place in this process.” You have to make yourself redundant.
Bill Breen (email@example.com) is a Fast Company senior editor. Contact Arte Nathan by email (firstname.lastname@example.org).