The Future of Hiring: It’s Not Pretty

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Here are a few random observations on a summer’s day, as I contemplate what I’m going to say at ERE’s upcoming ER Expo 2004 Fall in Boston on the state of hiring. Interesting. We’re having a mild pickup in hiring and everyone is panicking (according to the Bush team we’ve turned the corner, and according to the Kerry team it’s a U-turn, but that’s a different article). An unscientific survey this week revealed:

• Good third-party recruiters have more business then they can handle.
• Corporate recruiter departments are scrambling to hire more contract recruiters.
• Corporate recruiters and third-party recruiters are not able to fill positions fast enough with top people.
• It’s taking longer to fill positions.
• Recruiters are handling more requisitions than they were six months ago.
• Recruiters are spending too much time worrying about the wrong things ó for example, the definition of a candidate ó and not enough time on how to find more top candidates.

Most corporate recruiters (about two-thirds) say they don’t have strong partnership relations with their hiring manager clients. Third-party recruiters fare only slightly better on this score: About 60% of them indicate they don’t have strong relations with their hiring manager clients. Yet in a complete reversal, 80% of retained recruiters say they have strong relations. (This is a significant issue. It could indicate that what retained recruiters do differently is the key to consistently hiring better people.) In comparison to the above, consider these widespread predictions made over the past few years.

• Starting last summer, a few astute ERE authors said that the circumstances described above would materialize sometime in 2005. These same pundits urged immediate action.
• Starting in the 1990s, all of the job boards said that they could help you win the war for talent.
• Starting in the 1990s, all of the applicant tracking system vendors said they could help you win the war for talent (now they’re saying you need their new X.0 versions to help you win the war for talent).
• All of the specialty tools vendors (resume parsing, filtering, database searching, recruitment advertising) said they could help you win the war for talent.
• Corporations were told that if they bought all of these tools, they wouldn’t need third-party recruiters and could win the war for talent on their own.
• It was claimed behavioral interviewing would prevent hiring mistakes and allow companies to hire better people.
• Competency models were supposed to prevent hiring mistakes and allow companies to hire better people.
• Testing companies said they could separate the best from the worst and help you hire better people.

Now consider this: During the hiring slowdown of 2002-2003, companies still couldn’t find enough top people to fill all of their open positions, despite all of the these great new talent-war-winning tools. Now we’re in a modest hiring upturn, and these great war-winning tools are proving even less useful. In fact, we spend a lot of time and resources just keeping the tools functioning. My major conclusion drawn from this pre-selected group of facts: don’t trust what anyone says ó except those ERE authors who accurately predicted what would happen. What I find even more surprising from this data is that nothing has changed in the 25 years I’ve been in the search business. More surprising is the fact people are still willing to buy the latest batch of snake oil and are surprised when it doesn’t cure their ills. Here’s my own two sense (sic ó this is a play on words) of what needs to change if you want to consistently hire more top people. For one, since retained recruiters are the most successful, do more of what they do and less of what the vendors who sell snake oil tell you to do. For another, stop doing stupid things that don’t work. To be more specific, here are a few quick dos and don’ts:

1. Balance your recruiting resources with your hiring needs. Retained recruiters become less effective when they have too many assignments to handle. The same is true for corporate recruiters. Candidate quality will decline as you assign more requisitions to your recruiters. The quickest way to increase candidate quality is to hire more good recruiters and then train them.
2. Recruiters must not use traditional job descriptions as a screen to find candidates. Retained recruiters work closely with their hiring manager clients to obtain a complete understanding of the job before they begin searching. The lack of job understanding is the number one reason hiring errors are made: why too much time is spent looking in all of the wrong places, and why there is such widespread disagreement on candidate quality after the interviewing is completed.
3. Spend less money on behavioral interviewing and competency models and more on knowing the real job. The key to assessing top people is simple: find people who are competent and motivated to do the work required. This means that you first need to know what work is required. This will prevent the biggest hiring mistake of all time ó finding people who are competent, but not motivated to do what you want done.
4. Stop letting incompetent interviewers assess candidate competency. This includes recruiters, hiring managers, and everyone else on the interviewing team. You must validate everyone’s ability to assess competency before you allow them to interview. How many other important business activities are people allowed to perform without any training?
5. Design every single step in your hiring process to find and hire top employees, not top candidates. Top employees work hard, work well with others, and are competent and motivated to do the work required. Top candidates have nice resumes, interview well, and say they’ll work hard, but not necessarily on what’s needed to be done (here’s an article you might want to read for more on this). The kicker here: Since they’re more discriminating, top employees don’t look for new career opportunities, nor do they use the same decision criteria when accepting an offer as top candidates. If you’re not seeing or hiring enough top people, you probably aren’t considering these differences.
6. Recognize that employer branding is only useful for hiring entry-level people and the rank and file. Seasoned, top people (with more than three or four years in the workforce) are more concerned about the actual job and who they’re going to be working for and than the employer brand. This gets back to the importance of knowing the real job and its impact on the company. Job branding is putting this into words and then marketing the whole concept.
7. If hiring is #1, workforce planning must be #2. If right now you’re not working on who you need to hire 90-120 days from now, you’re behind. There is no way you can consistently hire top people without enough time. A forward-looking hiring plan is a prerequisite to hiring top people. A good workforce plan allows you to build a strong network and a pipeline of the talent you’ll need. Requisition-driven hiring (as opposed to forward-planning hiring) is one sure indicator that your hiring systems need revamping.

Of course, the real key to implementing change like this is leadership. In my experience, those companies that have been able to implement real change have had a strong leader at the helm of the recruiting department. It is not easy to be a leader in these circumstances. The person needs to push, cajole and pressure their peers and superiors into action. They can’t be shy, quiet or too diplomatic. Recruiting department heads must stop asking for permission. They need to make hiring act more like a business process, and less like a series of reactive and random actions. They must execute. This means making commitments, delivering results, and not making excuses. The head of the recruiting department should even report to the CEO. Maybe each functional department head should have his or her own recruiting department. This is how you convert recruiting from an overhead department into a line operation. In my mind, this is the real future of hiring. But more about this in Boston. I look forward to seeing you there.