The Theory of Constraints Applied to Recruiting
Finding & Removing Recruiting Bottlenecks
More than three decades ago, Dr. Eliyahu Goldratt wrote a seminal book, The Theory of Constraints. The concept is simple: every system has a constraint, which limits the system's output.
If we think of recruiting as a chain, starting with creating a desire to work for a firm and ending with a new employee, any step in this chain could limit to the ability to hire quickly.
To improve the speed we could start by optimizing each step. We could use technology to augment job postings and analytics to narrow down the best places to find talent. Then we could automate our searches, use LinkedIn, and employ a chatbot to screen for skills and basic requirements. We could use testing, simulations, or job previews to assess candidates for skills. And we could continue optimizing all the other steps in our process.
But, after all of this, will we hire faster or better?
At one firm I worked with, sprint teams looked at each step and worked hard to speed it up or improve its quality. But speed and quality only marginally improved.
According to the Theory of Constraints, no matter how much we optimize each step, how much technology we use, or how skilled the recruiters are, we will not improve the speed of hire until we find and remove the one major limiting constraint.
So what is a constraint? A constraint is a limiting factor that prevents you from making a quick hire. It is not about finding some random constraint —it is about finding the biggest bottleneck in the process and removing or improving that constraint. It is also not necessarily about simplifying or changing the step.
For example, Goldratt was concerned with manufacturing and used the example of a series of machines. In this very simplified example, most machines could produce, let’s assume, 30 pieces of product each minute. Even if the speed on these machines was increased to 31 or 32 pieces per minute production would remain the same because there was one limiting constraint that held everything back. One machine could only process 10 pieces per minute. This machine caused production to backup and, in fact, improving the output of the other machines made the backup worse. Every step downstream was limited by this single machine. The solution was to either make the machine run faster or add two additional machines so output equaled the others.
In recruiting, for example, a hiring manager can be a constraint even with a well-optimized process. Time is wasted and candidates are lost when a hiring manager does not promptly respond to emails or schedule interviews. No matter how fast you source and screen candidates, if the hiring manager does not respond quickly the entire process slows.
So, you need to ask where the flow of candidates is bottlenecked? Is it one person or process holding back all the others? Is it because of a lack of skills or resources? Is it a policy issue or a financial?
The point is that one constraint is holding back every other process, no matter how smoothly or fast they run. The challenge is to locate and remove the constraint.
Types of Constraints
Constraints come in many different forms. Some overlap, and perhaps two or three of them impact your process. The challenge is to determine which is most limiting and work to remove it. Here are the six most common types of constraints.
Policy constraints: For example, when human resources policies limit internal transfers or compensation holds up hiring over salary issues.
Internal constraint: When recruiters are not well-trained o hiring managers delay hiring by responding slowly or not being clear about what skills they need.
Market constraint: When you cannot find the talent you need or hiring managers have unrealistic requirements.
Resource constraint: When you cannot get the tools or the recruiters you need to meet demand.
Financial constraint: When there is a lack of capital to invest in technology.
Technology constraint: You cannot acquire the tools you need either because they do not exist or you cannot find them or integrate them into your system.
The Five Focusing Steps
Goldratt listed five steps that help identify and remove a constraint.
Finding/Observing The Constraint
It is essential to find the most significant constraint - not just any. So which constraint is it?
There will probably be several constraints that eventually need to be removed, but one is the more significant. When it is removed, all the other steps will move more quickly.
To find out which one, you can use various tools, including creating a cause-and-effect diagram to pinpoint the root cause. The root cause is your biggest limiting factor and, therefore, your main constraint. There are many online resources to help you draw a cause-and-effect diagram.
Another way is to imagine a perfect process - one that would quickly and smoothly lead to a great hire. What would it look like? You can compare that to your current process and locate where things are being slowed.
Exploiting the Constraint
Ask yourself, how can we maximize the constraint with what we already have available? For example, if assessment was slowing things down could you shift more recruiters to assessment to alleviate this bottleneck. The idea is to minimize the need for more resources or tools to solve the constraint until you have tried everything else. When you successfully remove the constraint, it is called “breaking” the constraint.
Subordinating the Constraint
Subordinating means ensuring minor constraints get less focus than the major constraint. The constraint you are removing is the biggest bottleneck so everything else is, by definition, less important. For example, don’t do fewer assessments if that is your main constraint, but provide more resources to the constraint even if it slows other processes.
Elevate the Constraint
Solve or remove the constraint simply by doing this differently or adding staff or technology.
Finding The Next Constraint
Once you have found the major constraint, it is time to find the next one. This process continues until you feel all constraints have been removed and the system runs at maximum capacity.
As I have written in past articles, finding and removing constraints is part of having an efficient talent supply chain. Recruiting needs to apply more rigorous and analytical thinking to finding and hiring people who have the highest likelihood of helping your firm solve its problems and maximize profits. Our historical sloppy and subjective hiring practices will not survive this century or even decade.
Please join the discussion with Noelle Hunt Bennett from Visa, Kyle Lagunas, Former Head of Talent Attraction, Sourcing & Insight at General Motors, and myself next Monday.
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