What’s Hot and What’s Not in 2005?

The economy, the Internet, and the younger generation of employees entering the job market have all profoundly changed what recruiters do and where they focus their time and budgets. Over the past few months I have seen four trends grow and become the focus for much of what recruiters do. While I can trace a number of other trends, such as the continued focus on candidate relationship management and employment branding, these four trends seem to me to be the most important and enduring.

Referrals, not Job Boards Clearly the bloom is off job boards. Postings are going down and recruiters are disenchanted with the quality of candidates. Simply amassing lots of candidates and jobs does not really deliver value. A recruiter remains the primary screener, and workloads go up, not down. More sophisticated use of the Internet and a variety of tool have made referrals the future of sourcing. New companies such as Jobster, H3, and JobThread have changed the landscape. John Sumser had a good article comparing H3 to Jobster in his Electronic Recruiting News recently. We are finding that younger candidates ó the Generation Yers ó do everything through leveraging their networks. They are always connected, either through their mobile phones, text messaging, instant messaging, blogging, or simply by using email. They find information, look for employment, discuss national issues, compare professors, and arrange dates by using their web of friends. Job board popularity peaked a couple of years ago and only niche boards will endure. General boards like Monster will offer employers private-labeled job boards and add services such as advanced screening in order to survive. Just as the Internet and the economy of 2002 for the most part killed the job fair ó leaving only a few trade-specific, diversity, or college job fairs ó the same pressures will act on job boards. The new breed of recruiter relies on technology to build and tap into networks. Recruitment Process Outsourcing, not Contingency or Retained Recruiting Smaller companies have learned that outsourcing recruiting to a recruitment process outsourcing company can make good business sense. For a pre-established fee, these organizations can ensure a supply of talent that meets their needs at less cost than they can do so internally. They help create and promote a recruiting brand, create and manage a recruiting website, and handle all aspects of getting quality people on board. For larger firms, the focus is on having a few good internal recruiters who can cover strategic recruiting while less strategic recruiting gets outsourced. I see widespread outsourcing of non-essential positions and a more organized and thoughtful approach to outsourcing than ever before. Administrative, routine manufacturing and call-center representative positions are being completely outsourced to selected third-party vendors who sign service-level agreements related to cost and quality. While contingency and retained recruiting will never completely disappear, RPO may become more attractive because it offers guarantees, more comprehensive services, and a fixed (or predictable and lower) pricing model. Talent Strategies, not Traditional Workforce Planning As a natural part of this more thoughtful approach, organizations I am working with are focusing on developing strategies around their talent needs. They are looking at what kinds of talent they will need over the next year, or even five years, and then comparing that assessment with the abilities of their current staff. Once they understand the gap, they then decide what talent to hire, to layoff, or to develop or transfer internally. These organizations are involved in decisions about changing the skills of the workforce and about downsizing. They may even conduct the outsourcing process and steer employees to new internal positions. They link tightly with the training and development side of the organization and also conduct active competitive intelligence gathering so that they know who is who at competitor firms. Traditional workforce planning focused on the number of replacements and the amount of linear growth that was projected to occur. The workforce planning approach was short-term and tactical, rarely looking at the current skill levels across the entire organization. Much workforce planning was contained within a function or division and was heavily influenced by the finance department. The talent strategy approach tries to encompass the entire organization, develop alternate scenarios and contingency plans around those possible scenarios, and tie them to corporate strategy and long-term needs. Retention, not Turnover It is very hard to keep good people when there are alternative employment opportunities everywhere and when the difference between employers is seen as small. Benefits are increasingly the same, pensions are all portable (even the big companies have moved to cash balance plans, which are essentially portable pensions), and there is almost no negative stigma to having frequently changed jobs. In fact, changes that make sense are considered a plus, as they mean that the employee gets added experience and competitive knowledge. Historically, recruiters have reported and focused on turnover. They have only seen a marginal connection between themselves and keeping people. Recruiters have focused on screening for fit and then have left other aspects of retention up to others. In the best organizations today, they are looking at internal employees for open positions before going to look outside. Recruiters are focusing even more on hiring the right people ó those who are good cultural fits for the organization ó and they are working more closely with functions such as training and development and human resources to make sure people are carefully on-boarded and developed continuously. But they are also focused on finding ways to inform employees of internal opportunities and helping them move internally whenever they want to and there is a need. While managers are not keen to allow good employees to move on, the market sends a clear message. If you don’t let them, they will leave your organization altogether. In many organizations these trends are converging, in others perhaps only one or two are evident. But the increasing number of Gen Y candidates, the growing shortage of skilled candidates, the increasing number of Baby Boomers retiring, and the need for cost effectiveness and efficiency will push almost all recruiting functions to look at each of these as a possibility.