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Reality HR August 8, 2006

Date: August 8 2006

Reality HR
Dear HR Professional,

Welcome to the Reality HR - Best Practices from HR Executives Newsletter! You are receiving this email because as a member of the community you have expressed an interest in receiving our Reality HR update. It is our mission at to always provide you with the most relevant and up-to-date HR information. To alter your subscription preferences or noted areas of interest please update your online profile here.

Reality HR: Dan Hilbert, Valero Energy Corporation, on World Class Managing From the Future

This Best of Reality HR features Dan Hilbert, who will also be participating in's Employers of Excellence Conference in Las Vegas in October. Since it was originally posted on, this series of four interviews with Dan conducted by Debbie McGrath, CEO, has become one of our most popular in the Reality HR series.

DM: The first webcast of this four-part series was on Delivering Global Labor on Demand, looking at the supply chain model, which is really relevant for a company that is in the oil business and truly understands supply chain. The second was the Staffing Star Wars - Perish with Staffing Technology. The last one that we did was on Metrics on Steroids - The System-wide Performance Monitoring aspect of staffing. Today, the final one is Predictive HR Managing from the Future.

Dan's career spans over 20 years, and his numerous areas of responsibility include senior level positions and business development, international marketing, software product development, and his primary passion of staffing. He views staffing as a strategic business supply chain that locates, evaluates, process, and delivers Valero's business on demand labor requirements. His business philosophy is built upon the ultimate importance of constant alignment with the business objectives and projects, and optimally modeling all processes, automating and creating workflows to optimize productivity and quality using technology wherever possible.

DH: This is the technology piece of the series and to me it is one of the fun ones because at heart I am somewhat of a techno geek: not good enough to make a living doing programming or building databases, but I know enough to get in trouble and truly appreciate good technology when we see it.

When the war for talent is waged over the Internet, corporations will succeed or fail as a result of their staffing and workforce technology - I don't know about everybody's companies that are out there, but 100% of our candidates come through the Internet right now. So without the Internet, we would not be hiring anybody today. We find more and more that we use the Internet for sourcing candidates, processing candidates, building our corporate brand for candidates, and being a global corporation.

As we move and grow through acquisitions in more global locations, we become more and more dependent on the Internet for our talent acquisition, our talent assessments, talent screening, on-boarding, and now our learning management systems. As this labor shortage becomes more apparent the demands will start to cripple certain industries. We are seeing this right now in some of the healthcare industries where they have to shut down wings of hospitals because they do not have enough talent. Companies are going to have to start to take advantage of these global labor pools more and more and the Internet is going to be the key to assessing the pools. At the end of the day, companies will succeed or fail as a result of their talent acquisition and talent management software.

I think that corporations will succeed or fail as a result of their technology. We have some interns and some masters level interns who are specializing in IS, and have done some extremely advanced stuff. When Dr. Sullivan did his five-part case study, he was really impressed with not just the types of technology but also the use of it. He said, "If you want to see the future technology, it is really at Valero Energy." I think that is a test even to Valero's management as much as anything else. Valero gave us freedom in leadership to build out these advanced technologies.

Getting their support to do this in the beginning was really simple: it was like going back to college level accounting 101 and finance 101. For any new technology that we wanted we would do a two-page report and submit it to our management. Just the basics: the first page would be the summary data of expected rate of return on investment, the pay out period, the life cycle, and that present day value of entire income investment. We would look at opportunity cost and total cost to failure and then we would put in the competitive strategic and tax advantages. That would all fit on the top half of the first page.

On the next page and a half we would expand and drill down into detail so that when we go to our management, we are going with a financial document. Since the chief administrative officer is a CPA, it would be in terms that he understood. We found as a result that we were able to get a lot of our technologies investments approved. We also started to correlate the investments in technology to cost per hire. We're able to show them that if we invest $100,000 a month into staffing technology then it is going to turn around and save us $400,000 a month in our staffing cost, because we reduce our cost per hire by 30% or 40%. It is really easy at that point to get future funding.

In fact, over the first two and a half years I was here, we grew from a company of 5,000 people and about $7 billion in revenue, to over $50 billion and about 21,000 people. The staffing budget that I inherited when I came here was only about 10% or 11% higher two and a half years later. Once we started to use technology and implement it, our efficiency increased so dramatically, our cost per hire decreased so dramatically that we were able to do all these advanced technologies that you will see today with very little investment in additional technology and people. When we showed executive management and the finance people these numbers they were willing to back what we were doing. We also had to show them a vision, where we were going with this. We created a strategic technology plan: to deliver global labor on demand, done through what we call supply chain. It is an objective that sticks with their business objectives.

DM: Dan, we talked about global labor on demand; are you talking about people who work for Valero outside of the United States, or just the available labor that you can bring into the United States?

For All Members:
- View the entire article here. All articles are now available to all logged in members of for FREE.
- View the webcast archive of the interview here.

For Premier Members:
- Download PowerPoint file of the interview here.

-Download MP3 sound file of the interview here.

Debbie McGrath, founded in August, 1999. She is committed to establishing the most helpful Knowledge hub, community and marketplace for human resources on the Web.

Debbie brings to this latest business an extensive background in recruiting, publishing and the Internet. She was President of The CEO Group, an international organizer of high tech career fairs, and developer of Internet recruiting software. Simultaneously, she served as publisher for a large recruitment journal, a monthly publication called htc. In August of 1998, The CEO Group was sold to Kaplan (now, a fully owned subsidiary of the Washington Post Company. During her tenure she served as President of the Canadian and European operations, as well as Vice President of Worldwide Sales.

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Here's another Reality HR archive you may be interested in:

Part 2 - Delivering "Labor-on-Demand" in the Era of Globalization

In this webcast archive you will learn:
  • How to design and implement a world class Labor Supply Chain built atop Six Sigma type process mapping and modeling.
  • The mandatory software components of the talent management suite required to meet these new challenges.
  • The next generation of talent management systems in production at Valero today.
  • How to quickly create a repository of employee knowledge skills.
  • How to analyze job characteristics and ultimately deploy global labor-on-demand.

This webcast archive is free for ALL Members of (MP3 and PowerPoint downloads only available to our Premier and Corporate members)


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