To be a great company you need to have great talent. And having great talent is no longer a build it or recruit it proposition. Companies need to do both.
Talent Development and Talent Acquisition are interrelated. One without the other is like owning a car without a maintenance plan.
So why engage in talent development?
Because the easiest place to recruit talent from is within your own organization
With the current Talent Crunch in the U.S. and a lack of external talent to fill critical company roles, identifying high potentials, rising stars and emerging leaders is a powerful talent acquisition strategy. Investing in talent development produces a pipeline of high quality talent for critical roles at a lower cost than competing for already built external talent.
Because Talent Development broadens your external talent pool and enhances your employer brand
Candidates who fit your organization’s culture and have the capacity to build the skills needed to do your jobs well, significantly widen your talent pool. Investing in Talent Development allows you to consider job candidates your competition is overlooking. It also enhances your attractiveness as an employer. Top performers, high-potentials, emerging leaders and rising stars are attracted to employers with robust Talent Development programs.
Because Talent Development builds on high potentials’ strengths and keeps them from derailment
With a rising need to fill advanced roles and younger generations’ expectations for quick raises and promotions, companies are promoting high potentials faster than ever. As a result, nearly half of internal job moves made by people identified by their companies as high potentials end in failure. The sooner you start investing in developing your early-stage high potentials, the more effective you will be in putting the right talent in the right roles at the right time.
Executive coaching and mentoring is a terrific to help emerging leaders & rising stars unleash their talent and prevent derailment. Review our Executive Coaching program for more details.
Because Talent Development yields ROI on Talent Acquisition
Recruiting great talent is time consuming and costly. Onboarding a new hire is just the starting point. The first three months of employment are critical to determining if an employee will remain with an organization. Yet companies, after on-boarding, often revert to a “sink or swim” mentality where the new hire is expected to decipher how to best assimilate and integrate in the new environment. With the first 100 days in a new job strongly determining first-year success and tenure, new hires who have the support and guidance they need to be successful are most likely to stay committed to your organization and keep first year turnover to a minimum. See Executive Coaching to learn more.
Because Talent Development is an effective employee retention strategy
Employee tenure is on the decline. Talented employees are leaving for jobs that offer skill development and career advancement. A talent development process is like a series of stepping stones designed to keep your talent engaged, productive, and moving toward mutually agreed-upon objectives.
Key talent also is most likely to resign during periods of stress and frustration. Thus, it’s important to provide key talent with resources that help them develop skills and strategies for dealing with job-related challenges.
To learn how we are helping those who matter to your organization manage work-related stressors and handle sensitive and critical organizational and workplace issues visit our Executive Coaching services page.
With the shift from an employer job market to a candidate job market, recruiters continue to be pushed to their limits in trying to attract and recruit new talent to their organizations. In this increasingly competitive job market, we will either have to rethink the way we recruit and screen candidates or accept the fact that our time-to-fill metrics will continue creeping up. Below we provide six tips for how recruiters, talent acquisition professionals, and employers can take an inclusive approach to identifying hidden talent among the underemployed and the unemployed.
Since June 2015, our national unemployment has been inching downward. Jobs continue to be added, particularly in professional and business services. In addition to the Top 5 Talent Crunch list, engineering services, health care services (especially in ambulatory health care and hospitals), retail trade, and food and beverage services also have some of the fastest growing number of job openings.
Yet the latest BLS statistics1 show very little downward movement in the number of workers employed part time for economic reasons, i.e., because they are unable to find a full time job or their hours have been cut back. This is also true for the marginally attached, that is, individuals who have given up actively looking for work. These two groups combined account for millions of potential job candidates.
Just think of the following ratios: At the peak of the recession, there were almost 7 job seekers per job opening. Today, that number has dropped to just 1.4 job seekers per job opening.
So what are recruiters and talent acquisition professionals supposed to do?
How to Not Miss Out On Potentially Good Talent
Without outsourcing jobs to other countries or importing talent from other countries, recruiters will need to broaden their talent acquisition strategies to address the impending talent shortage.
Recruiters and talent acquisition professionals will need to shift their organizations thinking — at least for some portion of their talent acquisition needs — from the jobs candidates have done to the jobs candidates can do. This shift in thinking means selecting candidates who want and can develop new skill sets. In other words, selecting candidates who lack the work experience but have successfully completed training programs or earned certificates and degrees from Workforce Development Offices and educational partners like Boot Camps, Trade Schools, and Colleges. Employers also may consider establishing their own Boot Camps, Apprenticeships, Return to Work programs, and training programs that help individuals re-enter the workforce or transition from other industries or positions.
When selecting candidates based on can do rather than have done, many things need to shift in terms of how recruiters and hiring managers assess candidates. Many tips and clues to look for on resumes and in social media profiles are included in Identifying Underemployed Workers.
Beyond talent acquisition and resume review, we need to change how we screen and evaluate candidates. The job interview process and the employment interview guide, in particular, needs to be re-examined. For example, job interview questions need to move from behavioral or experience-based questions to knowledge-based or situational questions. In order words, instead of asking what did you do when happened, you would ask what would you do or how would you do something?
When adding can do rather than have done candidates to your talent acquisition strategies, recruiters need to prepare and coach hiring managers to shift their thinking as well. Recruiters and talent acquisition professionals are well advised to educate internal corporate stakeholders on market realities and the talent crunch that now exists across multiple disciplines. Its also a good time to train hiring managers on unconscious hiring biases. After all, recruiters and talent acquisition professionals can find all the talent in the world, but we still need internal hiring managers to interview and make hire / no hire decisions.
For more insights on how to address talent acquisition needs please contact us.
Backwards is Forwards: Missing the True ROI of College Recruitment
Fall is upon us! And for those of us working on mid- and large-sized college recruitment programs, it’s the time of the year when all the thoughtful planning we’ve done over the summer goes into execution mode.
By this point, we have carefully selected our target schools and started lining up our onsite visits, career fairs, and interview days. We are armed with engaging collateral, intern and new grad success profiles, and job postings that speak to the soul of today’s college student. Our College Ambassadors are eager to get out and spread their contagious passion for our brand to future college hires. Our Hiring Managers and their teams are prepped for what’s to come. They have strategically planned and mapped out the meaningful and challenging projects that next year’s intern and new grad hires will be working on. Right?
We hope it is, because college recruitment is not a cheap proposition, at least not if it’s done right. According to the National Association of Colleges and Employers (NACE), the cost of an entry-level college hire in 2014 averaged $3,5821 (and that only includes the direct recruitment-related costs2 ; if one takes into account the time spent by hiring teams, that number becomes gaspingly larger).
A lot has been written about how to build and run a top-notch college recruitment program and for good reason – it’s a sizeable investment. According to NACE, the average employer with a structured college recruitment program converts 51.7% of its interns and 37.8% of its co-ops3. They extend job offers to 74% of the students they interview, of which 38.3% accept the offers4. Retention rates of new college grad hires were reported in 2011 as 92% and 69.2% after one- and five-years of employment, with larger companies having a harder time retaining new hires. (It should be noted that 2011 includes the worst job market the U.S. has experienced in many years. Thus, these retention rates are likely much lower today in our current improved job market.)
Based on our experience, as well as data from NACE, most companies with formal college recruitment programs do a good job on the operational piece the program. Where employers tend to miss the mark is with the explicit alignment of college recruitment outcomes to the ultimate business objectives. To accomplish such an alignment, data analytics specific to the longer-term business objectives are far more valuable in helping to shape college recruitment strategies and design internships and recent grad programs.
NACE suggests a number of common metrics5 to evaluate college recruitment programs, which include:
Frequency of Use
Level of Importance
Applicant Interview Rate
Interview Offer Rate
Intern Conversion Rate
NACE, in its Standards document6, provides an evaluation of the various metrics in terms of their relative use and importance as reported by NACE employers. A review of that data is very interesting in two regards.
First, the metrics differ in terms of the data availability following the completion of an annual college recruitment cycle – i.e., some are proximal and some are distal to that end point.
From the above listed metrics, Retention, Performance and Promotion clearly require the passage of one-to-five years post-recruiting a group of interns or new grads in order to have meaningful data to analyze.
The second interesting observation, supporting our experiences in the field, is that distal metrics carry different degrees of importance and are used less frequently, overall, by employers.
However, aren’t those distal data points the ones that are the most meaningful to the business in terms of the bottom line? Aren’t those the most critical metrics that should be shaping and driving our college recruitment strategy?
Let’s look at two examples of how that becomes quite important to the business with regards to, let’s say, developing target schools from which to recruit. (Incidentally, the most typical selection criteria used by companies to assemble a target school list include geographic location, types of majors offered, accreditation of the school, perceived quality of the school’s programs, and recruiting experiences at the school.)
Example 1: Assume you work for a manufacturing company that recruits new MBA graduates for a leadership training program that prepares your future operations leaders. There is a big push from the business to attend career events and recruit talent from the Ivy League schools in addition to other schools that are either within the same geography as your facilities or have MBA programs with an emphasis on productions/operations. After five years of recruiting and hiring new MBAs from both groups of schools, you run your Retention analysis. Your results show that MBAs from production/operations programs and regional schools have a retention rate of 78%, whereas your Ivy League schools have a retention rate of 42%, with most new hires separating between years 1 and 3 of employment. Your Performance analysis shows the production/operations or local MBA hires consistently outperform your hires from the Ivy League schools. If you factor in your investment in college recruitment efforts as well as in your leadership development program, there is a clear difference in terms of the ROI you get based on the type of school from which your hire came. Shouldn’t those findings shape what schools you target in your next college recruitment cycle?
Example 2: Now, assume you work for a technology company that strives to be a leader in continuous innovation and product development. Your college recruitment efforts are balanced between Ivy League schools and schools with strong technology programs, but when you look at your related expenses you see they are disproportionately spent relative to the number of hires you made from the two types of schools. At the end of last year’s college recruitment cycle, your P&L shows an expenditure of over $45K for attending Ivy League School X’s career fair and getting access to resume books. When you look at the Total Hires by School, you see that you made only one hire from Ivy League School X. Was it worth it? Should you keep that school on your list for this year or is your money better spent elsewhere? Without having any distal data points to assess the ROI of the Ivy League School X’s hire, you might as well flip a coin at this point. Fast forward 3 years out from paying that invoice to Ivy League School X for the single new college grad hire – your data shows that this hire, in her three years of employment with your company has developed and patented 3 products, which is 200% to 300% higher than any of her peers. Do you still think it’s a good idea to drop Ivy League School X from your target list?
Staying focused on desired business results is what ultimately should drive your company’s college recruitment strategy. And in order to stay focused, we need to be measuring the right things (or putting the right measuring processes in place to capture what really matters to the business), even if our patience for data availability may be taxed. That is not to say that proximal process-related metrics such as Applicant-to-Hire, Interview-to-Hire, or Intern Conversion Rate do not matter – but without the ultimate goal in mind we may have a very efficient and effective process that yields all the wrong results to the business.
With a national unemployment rate expected to reach 4.25% by August 2016, we need to get ready for another war for talent4. As a result, over the next two to three years, we will see the fight for talent strongly intensify.
Because the number of individuals with current, relevant experience (supply side of the candidate pool) is quickly falling below employers’ needs (demand side of the candidate pool) — thus leading to a talent shortage.
As the available supply of labor with current, relevant experience diminishes, employers will need to use pay, benefits, fringes and other working incentives to woo candidates from competitors as well as implement programs to increase the supply side of the labor market.
Recruiting and Talent Acquisition professionals are already feeling the heat to hire experienced hourly employees and staff-level professionals. We are seeing a big push to attract experienced candidates for positions such as technical support, customer service, inbound and outbound sales, banking and financial services, and software engineers.
In Low Unemployment Rate Sparks New Tactics for Recruiters, we described how entry level and experienced, hourly hires have been the largest driver of new job creation. As a result, this demand has thankfully and dramatically driven down the unemployment rate both nationally and locally across states. As early as 2014, we began seeing employers offering many kinds of incentives to experienced, hourly hires including sign-on bonuses and relocation assistance — benefits often reserved for management only positions.
Based on the data being released by the Bureau of Labor Statistics (BLS), we have not seen this kind of labor market since 2006. But this impending talent shortage is nothing new for those of us who have been in the space for longer than we would like to admit. Remember the Y2K IT Talent Shortage? How about the dot com or the pharmaceutical talent shortage in the early 2000s?
Employers have been in the driver seat since 2008, when the number of unemployed individuals per job opening rose from a prior low of 2 to 1 to almost 7 to 1 by mid-2009; meaning there were almost 7 unemployed individuals for each job opening. As Chart 1 shows8, as of July 2015 there is clearly a talent shortage. There are now only 1.4 unemployed individuals for each job opening. No wonder the average time to hire has increased by 10.3 days and will continue to do so (New Labor Market Realities: Recruiting Friend or Foe?).
Very few employers will be able to pay employees at the top of the pay scale as a strategy for attracting all the talent they need to address the talent shortage. Even the few who can and do, will not be able to do so for every new hire. Let’s also keep in mind that what has mostly driven our low employment rate has been cheap labor, with job gains going disproportionately to the least educated, and lowest-paid workers5.
Addressing the Supply Side of the Talent Shortage
There are other ways to increase the supply side of the candidate pool for employers without outsourcing or importing talent from other countries. But to do this, employers will need to broaden their talent acquisition strategy to address the impending talent shortage.
There is a big opportunity to do so.
If you combine the (a) recent unemployed and (b) long term unemployed (i.e, those looking for work for 27 weeks or longer) with (c) the marginally attached workers (i.e., those who are on the verge of giving up or stopped looking for work), the unemployment rate increases twofold from 5.2% to 10.4%6. This 10.4% does not include the almost 6.5 million workers who are working part-time (some working as little as an hour a week) but who would prefer full-time work7. With all these individuals sitting on the sidelines this is an enormous supply side – candidate pool – to tap into.
So why are we seeing the emergence of a “Talent War” for tech support, customer service, inbound & outbound sales, billing, collections, order processing, loan processing, software engineers and similar?
Answer: The demand for “Current, Relevant Work Experience” exceeds supply.
A talent shortage is partly the result of employers’ unwillingness to step outside of their comfort zone. There is comfort in hiring those who currently do the same job as the one you want to hire them to do for you. Candidates with current, relevant work experience are able to articulate and describe how they perform the job you need them to do and have recent examples to describe how they carry out their work. In contrast, an individual who has not worked in many months or lacks experience in your particular line of work requires a much stronger leap of faith that they will be successful within your company.
With over 5 million job openings, unless we hire everyone who has been unemployed for less than 6 months, we have to address the talent shortage with a strategy beyond passive, direct candidate sourcing and recruiting of individuals doing the same or similar job for a competitor. For entry level and hourly positions, employers should start building talent acquisition strategies to source, recruit, and screen candidates from the long-term unemployed and part-time workers with transferable skills, as well as retirees and parents who want to return to the workforce.
To address the supply side of the talent shortage many employers will need to add Return to Work and Apprenticeship programs for some portion of their talent needs. Many entry level & hourly positions already begin with structured training programs. Thus, adding content to training to bring individuals’ knowledge and skills up-to-date can pay big dividends. Partnering with local workforce development offices and other workskills development providers is a great way to give candidates the opportunity to ready themselves for your work requirements.
To source, recruit and screen candidates who do not have current work experience, employers need to use recruitment and screening methodologies that focus on aptitudes and competencies. Rather than focusing on recent work experiences, address the talent shortage by recruiting and selecting candidates who have the core work ethics, competencies and aptitude to successfully perform the job given a reasonable amount of upfront training. For insights on competencies for contact centers please review Call Center Agent Recruiting & Selection: Is a single competency profile enough? For specific recommendations on How To Find Great Talent Among the Underemployed Workers see Identifying Underemployed Workers: How to Find Great Talent.
The June 2015 job report – showing 223,000 new jobs created in June and a 5.3% national unemployment rate at a 7-year low – was great news for those who have been job hunting 1. But for companies that need to hire new employees, these numbers are creating new challenges to find the perfect candidate.
According to the Wall Street Journal, the declining unemployment rate is not just a result of job creation, but also owed in part to a decline in the number of people looking for work. Indeed, the labor-force participation rate 2, or the share of the population working or looking for a job, marked a 38-year low at 62.6%. According to Steve Goldstein of MarketWatch, this is a combination of baby boomers hitting retirement (the bigger factor) and other people who have given up trying to get a job. The percentage of those who aren’t in the labor force and who want a job, at 7.1% in June 2015, is only slightly higher than the 6.8% rate in June 2007, before the onset of the Great Recession. 3
Juggling Time to Hire with Quality of Hire
Finding that perfect candidate is becoming increasingly more difficult and employers are feeling heightened pressure to fill job openings. As the job market tightens, time-to-hire increases. In a study conducted by Glassdoor.com, in comparison to 2010, the average time-to-hire has increased by 10.3 days.4 With time-to-hire being an important recruiting metric, the pressure to hire less-than-ideal candidates is compounded when fewer job candidates exist. In an effort to avoid having positions vacant for too long, employers are frequently tempted to hire less-than-ideal candidates despite the long term implications.
Making poor hiring decisions by hiring less-than-ideal candidates can wind up costing companies much more in the end than holding out for the right hires. In Recruiting Budgets: Is it Money Well Spent? Googles Vice President of People Operations, Lazlo Bock shares that [Google] spends twice as much of its people budget hiring [recruiting budget] than the average company guided by the philosophy that the better job Google does to begin with, the fewer resources will have to be spent rehabilitating underachievers or replacing people who dont work out.
So what does all this mean for employers trying to recruit candidates?
As the market becomes more challenging, more creative candidate sourcing strategies are needed. Recruiters need to reach deeper into the labor pool, cast wider nets, and ensure they reach across recruitment channels to connect with candidates for both current and future talent needs. Employers also need to re-think the essential elements of their ideal candidate profiles.
Casting your line deeper and farther: Recruiting Outside the Box
As recruiters reach deeper and farther into the talent pool, building candidate communities that connect with your employment brand is one way to get ahead of the curve and avoid being myopically focused on just todays openings. Recruiters also need to connect the dots to new career paths for candidates as well as consider qualifications based on aptitudes and indicators of job success other than prior experience. For example, target candidates who have transferable skills. Candidates are frequently attracted to opportunities that help them transition into new career paths or industries. For positions offering training programs (like tech support and customer service) companies may also consider hiring individuals based on trainability rather than prior experience.
An initial step in this kind of candidate sourcing and selection is identifying what skills-can be pragmatically trained versus those skills and core knowledge that candidates need to have in order to benefit from your training. For example, its relatively easy to train employees on how to use a specific computer program or the ins and outs of your industry or companys offerings. In contrast, advanced programming skills or core engineering knowledge are much more challenging to tackle. Putting longer training programs in place can help compensate for a lack of industry or job knowledge, provided of course, all other qualities and competencies already exist.
Perhaps the most frequently passed over pool of untapped candidates exists among the underemployed. There are millions of working professionals employed in jobs that are below their skill levels. Included in this underemployed job segment are part-time workers who are actually in need of full-time jobs. Although the number of new jobs in the last few years has increased, the majority of those jobs are at the entry and low-experience level. Therefore, many of those laid off at the start or during the recession have, by necessity, been re-employed in positions that underutilize their skills and experience. For example, someone who held a Director-level position pre-recession may now be working as a manager. Identifying Underemployed Workers provides specific tips on how to find great talent among the underemployed.
Rabbit and the Turtle: Both have value in recruiting
In a tightening labor market, balancing hiring well with hiring fast is ever more difficult to achieve. The tendency is to tilt us towards selecting those we may not have hired a year or two ago. However that may not be a bad thing if it leads you to dig deeper, expanding your sourcing efforts, developing candidate communities and offering candidates opportunities they would not otherwise be able to have with you. In fact, when done well, it leads you to perfect candidates you would have ordinarily missed.
For more information about how to develop and utilize creative sourcing and selection strategies in your recruiting efforts, please contact us here at The WorkPlace Group.