by Steven Lindner | Nov 24, 2015 | Hiring and Retention, Talent Acquisition |
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.
Labor Market Update
Companies continue to add 250,000 new jobs a month, driving our national unemployment rate down to 5%. In Why Its Hard to Find Talent for Entry Level and Hourly Positions, we show how the unemployment rate is projected to fall to 4.5% by August 2016. This is great news for our economy, but New Labor Market Realities: Recruiting Friend or Foe? shows the impact the talent crunch is having on talent acquisition across industries. Our Talent Crunch Top 5 List summarizes the talent shortage that exists in our current job market.
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.
1 The Employment Situation – October 2015. Bureau of Labor Statistics, November 6, 2015 (http://www.bls.gov/news.release/pdf/empsit.pdf).
by Steven Lindner | Oct 27, 2015 | College Recruiting, Industry Research and Recruiting Metrics, Talent Acquisition |
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.
But are we measuring the right outcomes? When analyzing recruitment success, companies often overlook broader metrics that actually tie into business success. For instance, just like planning can help customers make smarter choices for long-term health, assessing the right hiring metrics ensures better employee retention and business productivity.
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:
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.
- 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:
Example 1: Assume you work for a manufacturing company that recruits new MBA graduates for a leadership training program. There is a big push to recruit from Ivy League schools and regional operations-focused programs. After five years, your analysis shows Ivy League hires leave faster and perform lower than regional ones. The ROI favors local schools. Similar to how attract price-conscious customers, focusing hiring from high-retention campuses gives better value to your recruitment dollars.
Example 2: Your company pays $45K to attend Ivy League School X’s career fair but hires just one candidate. After three years, that hire files three patents—far outperforming peers. These insights reshape your view on the school’s ROI. Measuring such long-term impact transforms hiring decisions.
Conclusion: 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.
by Steven Lindner | Oct 20, 2015 | Recruitment Process Outsourcing |
Why Use Recruitment Process Outsourcing?
Recruitment Process Outsourcing (RPO) providers are service providers specializing in recruitment who represent employers. They serve as an extension of an employer’s recruiting function or in some instances as the employer’s recruiting department. RPO providers offer a range of services from Project Recruiting to end-to-end Recruitment Process Outsourcing. Recruitment Process Outsourcing providers also vary significantly in terms of their capabilities and areas of focus. In our article, What is Recruitment Process Outsourcing (RPO), we provide an overview of Recruitment Outsourcing and Recruitment Process Outsourcing. In this article we will answer the question why use recruitment process outsourcing?
Why Partner with a Recruitment Process Outsourcing Provider?
Employers outsource recruiting to gain the expertise, resources, and/or scalability they need to effectively respond to the continual ebbs and flows of hiring. Many outsourced recruiting programs often begin as recruitment projects due to rapid growth, corporate expansion, or opening a new location.
Companies outsource recruiting because hiring needs are difficult to predict. There are peaks and valleys that leave in-house recruiting departments either understaffed or overstaffed. In addition, the various skill sets and talent that organizations need to hire require staffing and recruiting departments to have expertise, methodologies, and sourcing strategies to attract and acquire the full range of non-exempt, exempt, technical, and managerial talent across a variety of functional areas like Sales, Marketing, Customer Service, and Research and Development.
Most organizations can’t afford the luxury of having idle recruitment resources or employing all the recruiting expertise they need to effectively respond to their own hiring needs. For example, few companies have the capability to instantaneously add 10 recruiters to a hiring initiative and then remove them a few hours later when the candidate pipeline is full. Furthermore, few companies have recruiters and assessments capable of consistently evaluating candidates from a multitude of occupations.
Use a Project Recruiting RPO Strategy for Short Term Needs
Recruitment Process Outsourcing generally means a multi-year commitment. Most RPO agreements are 2 to 5 years in length with renewable terms. Here’s a link to an overview of Recruitment Process Outsourcing services and solutions.
However many Recruitment Process Outsourcing providers, such as The WorkPlace Group, offer project recruiting RPO programs for shorter-term recruitment needs. Project Recruiting RPO services are a great way to get the recruiting support needed as well as test out the RPO model before committing to a long-term strategic partnership.
Project Recruiting RPO partnerships have become a common strategy for Talent Acquisition and Recruitment departments to use to fulfill their companies’ need for talent. In fact, many recruitment process outsourcing programs start as recruiting projects. Project Recruiting RPO engagements often start as short-term projects and continue on for years. Project Recruiting RPO projects might focus on a particular division or job family, or support a corporate recruitment department across the entire company during peak hiring periods.
Project Recruiting RPO services provide employers with the scalability and recruiting and process expertise they need to get through high-volume or specialized recruiting needs. Project Recruiting RPO strategies can maximize the cost benefits of other recruitment options such as contract recruiters, staffing agencies and recruitment search firms. If your needs are short-term or narrow in scope, look for Recruitment Process Outsourcing providers who provide Project Recruiting RPO services.
Why Recruitment Process Outsourcing has strategic benefits beyond cost-savings?
Cost savings is often a big driver of why a company initially becomes interested in Recruitment Process Outsourcing services. However, Recruitment Outsourcing strategies that stop at costs savings are missing what is far more valuable.
Achieving meaningful recruitment results requires much more than a dedicated team with diverse expertise willing to work long hours. Achieving results important enough to be cited in a client company’s annual report, for example, requires a team that is coordinated, responsive, and overseen by managers with a strong appreciation and keen insight into the clients business environment and challenges.
To give you a specific example, The WorkPlace Group helped one the worlds largest and most comprehensive drug development services company double its volume of new hires, bringing in approximately 1,600 employees on board in a single year. While doubling hiring volume, they also helped the company decrease their overall cost-per-hire by approximately 15% and improved time-to-fill by 10%.
In this example, the most important benefit to the company’s business was not the 15% cost savings. It was the additional revenue they were able to generate by reducing the time-to-hire and having 1,600 individuals productive 10% sooner. That’s the kind of impact that gets the attention of C-level Executives.
To explore how recruitment process outsourcing can help you, please contact us here at The WorkPlace Group.
by Steven Lindner | Oct 13, 2015 | Recruitment Process Outsourcing |
What is Recruitment Process Outsourcing? It’s the act of transferring talent acquisition, selection and hiring activities to an entity that specializes in recruiting services. Recruiting involves a range of activities that begin with identifying, attracting and sourcing candidates and concludes with the actual act of hiring. Once a new hire is employed and on the job, the recruitment process ends.
Why has Recruitment Process Outsourcing (RPO) become an industry standard?
Hiring needs are difficult to predict. There are peaks and valleys that leave in-house recruiting departments either understaffed or overstaffed. In addition, the various skill sets and talent that organizations need to hire require staffing and recruiting departments to have candidate sourcing, screening, assessing and on-boarding expertise across the full range of entry-level, technical, managerial and executive level job openings. Talent acquisition and recruiting leaders depend on RPOs to help ensure hiring needs are met. Why Partner with an Recruitment Process Outsourcing Provider shares several examples of why talent acquisition and recruiting leaders are using Recruitment Process Outsourcing and Project Recruiting RPO services.
How do I know if a recruitment provider is an RPO?
The RPO marketplace can be very confusing. Many companies refer to themselves as RPOs but don’t actually recruit. Some providers only offer recruitment technology, such as applicant tracking systems. Technology solution providers are not RPOs. Still other providers who engage in recruitment and refer to themselves as RPOs are not true outsourcers at all, but staffing agencies providing temporary or leased workers, or headhunters and search firms offering stripped down versions of their full-scale services.
Recruitment Process Outsourcing (RPO) providers represent employers and specialize in recruitment services. They serve as an extension of an employers recruiting function or in some cases as the employers whole recruiting department. True RPOs, whether they refer to themselves as Recruitment Outsourcing or Recruitment Process Outsourcing companies, provide recruiting services that can support or carry out the entire end-to-end recruitment process. The setup of the relationship is no different than calling Microsoft for tech support, thinking you are speaking with Microsoft, when in fact you are speaking with a third party supplier who is representing Microsoft and authorized to do so by Microsoft. To job seekers, the perception is they are speaking with the employer itself.
In contrast, headhunters, search firms, and staffing agencies represent the candidates. They serve as an agent for candidates and represent candidates to many potential buyers; in this case the buyers are employers. Whereas headhunters, search firms, and staffing agencies negotiate with employers for the best possible employment opportunity for their client – the candidate – recruitment outsourcers protect the interests of employers, ensuring their client – the employer – hires the best person for the job in the most efficient and effective manner.
What is Recruitment Process Outsourcing versus Recruitment Outsourcing?
Recruitment Outsourcing and Recruitment Process Outsourcing are used interchangeably. The acronym RPO refers to both Recruitment Outsourcing and Recruitment Process Outsourcing.
Recruitment Outsourcing and Recruitment Process Outsourcing providers can be differentiated by the R , P and O capabilities.
CHARACTERISTICS OF RECRUITMENT PROCESS OUTSOURCING PROVIDERS
RPOs must have outsourcing capabilities and provide
recruiting and/or processing services |
|
R = Recruitment |
Do they find, attract and source candidates? |
|
P = Process |
Do they manage transactions that carry out the act of hiring? |
|
O = Outsourcing |
Do they have the ability to carry out the recruiting process from start to finish? |
(more…)
by Steven Lindner | Sep 29, 2015 | Hiring and Retention, Industry Research and Recruiting Metrics, Talent Acquisition |
Are you ready for the talent shortage?
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.
Why?
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.
References
1Schwartz, N. & Applebaum, B. (Sep. 4, 2015). Jobs Report Gives Ammunition to Both Sides of Fed Rate Debate, NY Times.
2Jackie Odum & Michael Madowitz (Aug. 6, 2015). The State of the U.S. Labor Market: Pre-August 2015 Jobs Release, Center for American Progress.
3 Hilsenrath, J. (May 22, 2014). More Gloom for the Long-Term Unemployed from Alan Krueger, Wall Street Journal.
4 Jakab, S. (Sep. 5 – 6, 2015). Jobs Report: What’s Not to Hate? Wall Street Journal, B12.
5 Achutan, L. (Sep. 10, 2015). Glimmers of Hope or Growth Slowdown for U.S. Economy. Bloomberg Business.
6 Republic 3.0 (March 2015). Jobless Rates Fall, But the Long-term Unemployed Still Struggle.
7 Innovate+Educate (2014). Skills Based Hiring.
8 BLS charts are from http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf
