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.
1 Morath, Eric (July 2, 2015). Jobs at a Crossroads: Hiring Up, Pay Flat. The Wall Street Journal. http://www.wsj.com/articles/jobs-report-u-s-payrolls-climb-by-223-000-1435840430)
2 Timiraos, Nick (July 2, 2015). The June Jobs Report in 10 Charts. The Wall Street Journal. http://blogs.wsj.com/economics/2015/07/02/the-june-jobs-report-in-10-charts/)
3 Goldstein, Steve. (July 2, 2015). Labor-force participation drops to lowest level since 1977. MarketWatch. https://news.fidelity.com/news/news.jhtml?cat=Economy.US&articleid=201507021020MRKTWTCHNEWS_SVC000271&IMG=N)
4 Dill, Kathryn (June 22, 2015). Study Confirms The American Hiring Process Is Now 10.3 Days Longer. Forbes. http://www.forbes.com/sites/kathryndill/2015/06/22/study-confirms-the-american-hiring-process-is-now-10-3-days-longer/