DaVita Optimas Award Winner for Competitive Advantage

Dialysis provider DaVita was hurting several years ago because of problems with a key corporate function: recruiting. The Denver-based company’s recruiting department was understaffed, inconsistent and lacking in feedback to recruiters. Nearly 10 percent of budgeted nursing positions were open in 2005, and the time to fill jobs averaged almost 65 days. In early 2006, DaVita managers ranked recruiting as one of the bottom-five departments out of 70 corporate functions.

“Recruiting was labeled as ‘broken,’ ” says Tony Blake, DaVita’s director of recruiting.

What’s more, demands on recruiting jumped when the company effectively doubled in size with the acquisition of Gambro Healthcare in 2005. The 33,600-employee firm now operates more than 1,500 outpatient dialysis facilities and acute units in more than 700 hospitals in 43 states and the District of Columbia.

In response to the hiring challenges, the firm brought in industry veteran Blake in late 2006 and launched an “extreme recruiting makeover.” DaVita implemented new hiring software from Taleo and relaunched its career site. It reorganized the recruiting function with separate teams targeting corporate positions, managers at clinics and clinical staff including nurses. And it began collecting more data on time to hire, cost of hire and quality of hire. It also began force-ranking recruiters. Not everyone fit the new initiative. About 30 percent of the firm’s 50 recruiters have left voluntarily or have been “managed out” in the past few years.

Getting a monthly scorecard with the recruiter rankings was difficult at first, says Sherida Gard, a DaVita clinical recruiter based in Texas. But she eventually came to appreciate the approach and says the firm has managed to increase both individual accountability and a sense of teamwork among recruiters.

DaVita’s reputation faced a challenge last year because of trouble at a company facility in Lufkin, Texas, which experienced an increase in patient deaths. A former employee of the dialysis center has been charged with injecting patients with bleach. The site also shut down for about three months in the wake of a federal probe that found a number of deficiencies.

Negative publicity around the Lufkin center hasn’t damaged DaVita’s recruiting in Texas or nationwide, company spokesman Craig Handzlik says. Indeed, data indicate DaVita’s recruiting function has grown stronger in the past few years. The firm has trimmed its time to fill nursing posts by 26 days, or 41 percent.

Faster hiring allowed DaVita to save $12.1 million in potential overtime and contract nursing costs during the past two years. The registered-nurse vacancy rate fell by nearly 20 percent last year and now stands at about 4 percent. Early this year, DaVita managers ranked recruiting as one of the top 10 corporate departments for the first time.

Dennis Skrajewski, vice president for DaVita’s division serving New Jersey, Delaware and part of Pennsylvania, says recruiting was “very thin” when it came to finding managers in 2006. That has improved over time, he says.

The recruiting staff has played an important role in finding key management talent for his division, Skrajewski says. “They have helped me turn around a division that was struggling 2½ to three years ago,” he says.

For curing an ailing recruiting function and making it a healthy foundation for business success, DaVita earns the 2009 Optimas Award for Competitive Advantage.