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The CRISIS for Talent Has Arrived

Michael Clegg | 06/11/2019

I have said it a lot lately.  The “War for Talent” has progressed to the “Crisis for Talent”.  What does that really mean?  For the first time in history, there are more jobs than unemployed candidates to fill those jobs.  That is creating a very tight labor market.  Yet, few employers are changing how they hire.

There are only 3 types of job seekers:

  1. Those seeking better pay or career progression
  2. Those that are ambitious for new skills regardless of title or pay
  3. Unemployed people

Many clients still believe there is a line out the door of people looking to join their Organization.  It is great that client’s boast their brand.  The difference today than in any other time in history is that all three of the above-mentioned job seekers have choices.

Employers have adjusted but not in the direction that you would expect.  A Glassdoor Study states that the total amount of interview time has doubled since 2009.  Of course, a primary cause could be the lack of talent that they are seeking.  However, are they seeking out the right things in a potential employee?  Between World War 2 and the 1970’s the number of internal hires/promotions have gone from 90% down to less than 30%.

Employers often hire for job skills yet terminate for behavior skills.  Think about that for a second.  Why are employers doing that?  It is very clear to me; when employers interview, they are more interested in the past performance than future performance.  When was the last time someone was taught how to interview and what to identify in an interview?  Few Organizations spend any significant time teaching how to conduct interviews or the types of questions that you should ask to identify future behaviors.  Most Companies put together a job description based upon hard skills and do not identify enough of the soft skills.  However, most say they are seeking those soft skills.  The same companies also say that they have great cultures.  Yet, time and time again, studies show that employee engagement is less than 30%; indicating poor culture.  Companies just keep accepting the same old results by doing things the same old way.

To prove that last point, I pulled a Harvard Business Review Article from June 2008 – “Top 10 Talent Management Challenges”.  This was published right before the “Great Recession”.  The Top 4 Challenges from over a decade ago are the same challenges as today.

  1. Attracting and Retaining
  2. Employing multiple generations
  3. Developing a Leadership pipeline
  4. Concern of identifying proper “people skills”

So where do we go from here?  There are some simple solutions that Employers can implement.

Simple Solutions that you can do today to fight the “Crisis for Talent”:

  • Promote from within (HBR, May-June 2019 “Your Approach to Hiring is All Wrong”)
    • Outside hires take 3 years to perform as well as internal hires in the same job
    • Internal hires take 7 years to earn as much as outside hires are paid
  • Learn to build Job Descriptions that attract the RIGHT talent that includes the behavior skills that will help you identify the right fit
  • Create an internal referral program
  • Learn how to interview for future behaviors
  • Hire a reputable 3rd Party Talent Management Firm

The looming issue for Companies to attract the “right fit” in external candidates comes back to culture.  The challenge in fixing this issue is many companies think they know what their culture is.  That has shown to be a false narrative.  If you question that, how would you explain that 70% of your current employees today are open to hearing other Job Opportunities?  Clearly, this is not an overnight fix.

According to SHRM (Society of Human Resource Management), culture adds up to 50-60% of an employee’s annual salary. created a “State of the Candidate” report and it shows that 75% of employees have been employed in a role that they didn’t feel they were a good fit

Immediate culture fit fixes that a hiring manager can implement during the external hiring process:

  • Identify key behaviors traits that each role will need to possess
  • Determine the winning characteristics to partner with the key behavior traits
  • Identify key themes that each role requires
    • e. Due to lacking a support system, this person will need to demonstrate success in an environment that proves being a self-starter
    • Create situations or “what if” scenarios to have them answer questions to prove they are a self-starter.
  • Partner with a 3rd Party Organization that can provide Assessments in these areas that will help build the job description and the marketing ad to attract talent to this role
  • Require the person conducting the interview to prepare for the interview
    • The average interview prep time is 5 minutes (Kathleen Quinn Votaw; “Solve the People Puzzle”)
      • Based on today’s average starting salaries, do you think 5 minutes of prep time is appropriate?

Employees have more choice than ever before.  As a 17-year-old Talent Organization, we are seeing more counteroffers than ever before.  Companies are trying to retain their internal talent like never before.    Some smaller Organizations do not have the talent to promote from within.  Therefore, they must seek external resources.  Large organizations have so many open roles that they cannot properly vet the candidates that are applying.  They are relying on software to identify the “right fits”.  (There are even challenges with these software tools creating unintended bias based on several factors.)  As a reminder, only 2-3% of applicants get the jobs through standard application processes.  That leaves a lot of qualified candidates that are having a tough time getting in front of employers.

As an owner of a Talent Firm, we help clients with options to battle this crisis.  It is more important than ever before to partner with a reputable Firm.  We help clients get the right Talent and our candidates identify the employers that fit their needs.  Most large recruiting companies are working with so many clients and candidates, they are working in a reactive mode with what roles are on their desk that day.  In other words, they are not evaluating best talent for those roles.  They are only evaluating the Talent that is in front of them on that day.  They are being inundated with opportunities to help their clients and that is preventing them from helping cure the crisis.  Find a Firm that has a close relationship and has taken on priority searches for the roles they seek.  Do not be afraid to ask how your external recruiter is prioritizing the job search.  This will give you a lot of information that you need to see the importance of the role with their Firm.

Partnering with a professional outside source, with a proven track record of successful placements, is more important than ever. Your chosen external recruiting firm should understand that the ultimate goal is to find the best suited candidate for your organization during this time of crisis.

Written By: Michael Clegg, The Q Works Group