If you think talent acquisition isn’t mission critical, think again.

At Clinch I have always been open about the fact that once upon a time, I was a newcomer to the recruitment sector — as new as newcomers get.

We’d built businesses from scratch and organically moved from opportunity to opportunity without applying or interviewing for jobs. Our original team came from sales, finance, and engineering disciplines.

At the outset, we didn’t hire anyone with a HR background so we could form our own opinions with an open mind by talking with the practitioners to understand their problems first hand.

Along the road to building a recruitment marketing platform, we’ve been lucky enough to get to know and better understand the world of talent acquisition in organisations of all sizes — from startups to multi-nationals.

It’s been an eye opener.

Team Determines Success

In a smaller organisation, you are necessarily exposed to all parts of the business as you build your team. You hire great people and you make mistakes, but pretty quickly you realise that your success is most likely going to depend on the team you build — not the strength of the original idea.

To be honest, you feel a bit slow that you didn’t realise this on day one of starting the business: now, it seems blindingly obvious. But then you look back at past experiences and realise that in many organisations, the business side still doesn’t really get this, or if it does, it’s not acting on this knowledge.

We’ve attended lots of conferences over the last 6 months, sat in roundtable discussions, and listened to the issues that talent acquisition teams experience. Their frustration at being seen as a “cost centre” or “production line,” and a general lack of connectedness with the “Business” side, are common issues they are dealing with on a daily basis.

In some cases, the perceived strength of the business idea or product has temporarily overshadowed the importance of the people needed to execute it profitably. The result is that it can take longer for these organisations to experience the benefits that come when human resources and talent acquisition work alongside operations, finance, marketing and sales, as strategic partners.

It can be difficult to get there.

Talent Acquisition and Company Profitability: the Direct Link

However, there are many who are actively striving to get there, to understand more about the business they are working in so they can do a better job of resourcing the organisation with the right people to deliver real value to the bottom line and, ultimately, the shareholders.

Yes, shareholders.

Let there be no doubt in anyone’s mind that there is a direct link between talent acquisition ability, the speed and quality of hires, and company profitability.

There are lots of great companies out there who get this and treat hiring as a strategic initiative. And they reap the rewards of this strategy, too.

In her recent book on recruitment, Mandy Johnson writes about funds like Parnassus that have been set up to invest in companies that regularly win awards for great workplaces and attract great talent. Looking at their latest results, they are outperforming the S&P by a significant margin.

It’s not always the case though.

Having sat on the “Business” side of the fence in the past, I realise in hindsight it should have been more proactive in involving and giving HR teams the help they needed.

Here’s a relatively recent story to reinforce how mission critical this can be.

On the 10th of February 2015 during the Marketo earnings call, hiring was a regular topic in the analysts’ Q&A. Here’s a paraphrased report from one of the analysts covering the stock later that day . . .

“We are downgrading our rating on Marketo from Outperform to Market Perform as the company is behind on hiring. In addition, we are not raising our billings outlook due to our concern over a sales headcount that is at least six months behind plan. Sales capacity drives bookings/billings and ultimately revenue. With the need for additional enterprise sales capacity in the face of a challenging hiring environment, we don’t see much upside potential until Q4. We incorrectly assumed Marketo could sustain 50% growth over the next few years. Our new valuation range is $29–32, from $49–52 previously.”

Marketo share price dropped by over 15% the next day.

Enough said.

Originally published at blog.clinchtalent.com.