The recent Post-COVID hiring shortage wasn’t temporary, instead, it’s a permanent business condition. So why isn’t it a standard corporate practice to measure (and respond to) the current level of recruiting competition in your industry?
Descriptors| Recruiting / Hiring shortages – Future of recruiting components – 5 min read
In order to minimize the business damage during this prolonged shortage, Recruiting will be required to make a quantum shift in both its recruiting strategy and its hiring tools. So, the recruiting function now offers its organization a competitive advantage over each of its major recruiting competitors. I call this required new TA strategy, Competitive Advantage Recruiting (or CAR).
Competitive Advantage Recruiting… provides the recruits that allow business units to prosper
Competitive Advantage Recruiting is a next-generation recruiting strategy designed to allow a corporation to dominate the hiring competition in its industry. Its primary differentiating factor is that it is externally focused. So, it has as its primary goal the reaching and then the maintaining of a competitive advantage in this permanently competitive marketplace. Of course, for that to happen, every aspect of your recruiting process must have a superior design. So that it produces superior results (when compared side-by-side to the same process in operation at your TA competitors). A second goal is to provide superior recruiting performance as a result of using an objective data-driven recruiting strategy and toolkit. A listing of the core elements of this CAR strategy can be found later in this article.
Note: You can learn more about the steps for implementing Competitive Advantage Recruiting here.
Expect These Negative Business Consequences (When you fail to adapt to this forever shortage)
Korn Ferry estimates that by 2030, this global talent shortfall will result in 85 million open jobs that can’t be filled. And that failure will cost companies trillions of dollars in lost economic opportunities. When that shortfall occurs at your corporation, your executives will realize that this hiring shortage will permanently hurt your sales/profit, stock price, production, AI, supply chain, and innovation. These top 10 negative consequences are listed below, with the highest impact negative consequences appearing early on the list.
- Executives will notice the revenue shortfalls – when recruiting ends up hiring lower-performing individuals into revenue-generating positions. Or when revenue-generating and revenue-impact positions are left vacant for too long. Your business will not generate enough revenue to meet its budget allocations. And that loss in revenue may actually lower your stock price.
- Innovation will come to a grinding halt – employees will be overworked because of numerous hiring failures in key positions. These innovator employees simply won’t have the time to collaborate or to think about future innovations. In addition, in a highly competitive marketplace. A strained and poorly designed recruiting process won’t have the capability to recruit additional innovators successfully. Taken together, these will limit your organization’s most valuable human output.
- Some work simply won’t get done – when a significant percentage of your priority jobs go unfilled. Much important work simply won’t get done. And when one phase of a business process doesn’t get completed, the output of the entire process will be reduced.
- Deadlines will be missed – with a significant percentage of your priority jobs going unfilled. And with other jobs remaining open for months. Many internal and external deadlines will simply be missed.
- Work quality will diminish –ineffective sourcing and candidate screening processes will result in the hiring of many weak performers. Those mis-hires, coupled with so many unfilled jobs, will require team members to work longer hours just to produce the same volume of work. And that employee strain/stress will likely result in more accidents. As well as a measurably lower quality of work that your customers will likely notice.
- Your new hire turnover will be high – because your overworked recruiters won’t likely have enough time to match a top candidate perfectly with their perfect job/manager. Your new hire turnover rate will likely be extremely high, and that will be extremely expensive.
- You will hire less diversity – diverse teams are desirable because studies show they are more productive. However, without a data-driven diversity recruiting process that provides a competitive advantage, you will likely fail to get even your fair share of the available diversity candidates.
- Outdated hiring processes will hurt your brand – when your image as a desirable company fades. As a result of potential candidates learning about ineffective hiring processes and a poor candidate experience. Over time, your recruiting results will continue to degrade unabated.
- Hiring manager time will be wasted – a weak, noncompetitive recruiting process will result in many failed searches. And having to reopen so many of them will exhaust and frustrate your hiring managers.
- TA may be outsourced – as the hiring shortage at your organization becomes more severe over time. You can expect added pressure from your executives to give up and to outsource your entire function to a lower-cost vendor instead.
Here Are The Core Elements… Of The CAR Strategy
For your corporation to remain successful during this permanent hiring shortfall, I have found that it must shift away from the traditional recruiting model. And shift into this competitive advantage recruiting strategy. A dozen core elements of this Competitive Advantage Recruiting strategy are highlighted below.
- Raise the bar to recruiting domination – even the recruiting functions that have been successful in the past. Will struggle throughout this “forever” hiring shortage because of the intense competition that everyone will now face. This will force your executives to raise the bar on recruiting, away from the historical goal of simply being competitive, to a higher goal of recruiting dominance in your industry. And it will be quickly obvious to everyone that you won’t be able to dominate without a much more aggressive strategy and toolkit. That includes a component of continually tracking every aspect of the recruiting marketplace and what each of your TA competitors is doing.
- It is data / metric driven – with the high level of competition, you simply can’t tolerate high error rates. So, this CAR strategy emphasizes data-driven decisions and the use of performance metrics throughout the recruiting process.
- It emphasizes having direct business impacts – because clear ownership leads to excellence. TA must accept the accountability for not just completing hires. But going further to ensure that those hires produce measurably higher business impacts. So, as part of the strategy, TA must have a process for measuring the direct business impact that recruiting creates in each strategic business function.
- It prioritizes key jobs – because there are never enough resources to hire the best for every open job. This CAR strategy prioritizes jobs so that it is easier to focus the most and the best recruiting resources on filling these priority jobs with exceptional talent. Similarly, the strategy also prioritizes key business units and teams.
- It uses a mass personalized recruiting approach – research shows that targeted, personalized recruiting is much more effective than the “treat them all the same” shotgun approach. So, the CAR strategy focuses on providing “mass personalized” recruiting in priority jobs. The first step in mass personalization is accepting the fact that top candidates now hold (and will continue to hold) a lopsided amount of power in the recruiting relationship. Mass personalization also requires you to treat top candidates as unique individuals who will add tremendous value to your organization. This customized approach also requires you to tailor your recruitment marketing and your assessment and selling approaches. So that they closely fit the candidate’s expectations, needs, and job acceptance criteria.
- It is an aggressive strategy – you certainly won’t be able to win a long-term “war for talent” unless you are aggressive and are willing to take some risks. And that level of aggressiveness begins with directly targeting (some call it poaching) the most desirable “passive candidates” currently fully employed because the very best and most desirable candidates are likely already working across the street at one of your competitors. As an added bonus, when you recruit employees away from individual competitors. You will likely also acquire their organization’s new ideas and best practices.
- The strategy assumes continuous obsolescence – in order to keep up with the rapid speed of change that results from the continuous implementation of new recruiting technology. Recruiting leaders must assume that every element in your current recruiting effort is constantly becoming obsolete. To avoid obsolescence, TA must use data to continually test and then update every individual recruiting process and tool that is beginning to become obsolete.
- It demands that you only use the best sources – because all successful hiring of top performers starts with great sourcing. TA leaders must use data to identify and exclusively use the best sources to find candidates for each priority job. Usually, the most effective sourcing channel that should be emphasized is a data-driven referral program that makes every employee a 24/7 talent scout.
- It hires fast – because the competition for top candidates will remain high. The best candidates may now make their job choices even faster. And that will mean that you won’t be successful unless you assess candidates and make offers faster than your competitors. That means that you must analyze every hour of your hiring process. To shorten it without negatively impacting new hire quality.
- It creates a candidate pipeline – one of the keys to successfully hiring the top “passive candidates.” It is to start identifying and building a relationship of trust with them long before you actually have an open position for them. And the tremendous value added by this “upfront time.” This makes the creation and maintenance of this pipeline essential.
- It builds a powerful brand – in a highly competitive marketplace. It’s important to realize that top candidates are first drawn to employers with a well-known employer brand. So, if you even expect to get the attention of the most in-demand candidates. You must build, maintain, and measure the strength of your organization’s employer brand.
- Your recruiters must be tech and business-savvy – to successfully recruit top tech and in-demand talent. You must have sophisticated recruiters who fully understand each candidate and the technologies that they use. Also, to gain the trust and the time of your hiring managers. Your recruiters must fully understand the business environment and the challenges that the hiring manager faces.
- You must emphasize recruiting remote workers – because hiring shortages are often limited to a few geographic areas. Hiring managers can avoid some of those shortages by opening up more remote work opportunities. In addition, hiring managers must realize that they can only land some top global candidates if they offer them a work-at-home option.
Note: You can learn more about the additional critical success factors in this CAR strategy here.
If You Want To Know More About… The Underlying Causes Of This Shortage
If you’re interested, this next section provides a “snapshot list” of what I have found to be the top 10 factors. That is driving this increase in the recruiting competition. Either by increasing the number of job openings or talent competitors. Or by reducing the available supply of applicants.
Factors that are increasing the number of job openings
- The expanding use of technology results in numerous new job openings – the ever-accelerating spread of technology into every business function. This means that there will continue to be multiple job openings available to each qualified candidate. But especially in the functional areas of AI, Quantum Computing, IT, marketing, and data security.
- High employee turnover rates are increasing the number of job openings – since the beginning of the great resignation, employee turnover rates have been high. With so many employee departures, companies will continue to have more jobs to refill.
- Weak corporate recruiting will keep jobs open for longer – budget cuts and recruiter layoffs will continue to limit the recruiting capabilities of many corporations. And with so many ineffective corporate recruiting efforts. Most hard-to-fill jobs will stay open much longer. And that will increase the number of days when a recruiter must compete against other active recruiters.
Factors that are decreasing the number of potential applicants
- Rapid skill obsolescence reduces the number of highly skilled candidates – in our fast-changing world, employee skills quickly become outdated. And that, coupled with massive cutbacks in corporate training, means that the percentage of the workforce currently upskilled in the needed technology areas isn’t rising to meet the demand for skilled new hires. While at the same time, there may be a continuing surplus of lower-skilled workers.
- Gig jobs reduce the available corporate workforce – the increased availability of gig jobs and Internet income opportunities. It will continue to reduce the percentage of the overall workforce interested in corporate jobs.
- Retirements continue – large-scale baby boom retirements are ongoing. And those retirements continue to reduce the size of the available workforce.
- There is a shortage of college grads – fewer students are now entering college. And the number of graduates in hot technical majors hasn’t kept up with the demand. So, college recruiting in hot majors will continue to be highly competitive.
- Lower levels of immigration – lower projected levels of legal immigration. A decrease in the number of foreign students attending US colleges will result in a lower supply of international workers who can work in US facilities.
- Smaller families reduce the growth of the workforce – a global population shrinkage trend is now a problem in Italy, Japan, China, and, to some extent, the US. This continuing trend will mean fewer young candidates will enter the workforce over the next decade.
- Worker priorities are changing – because of the Covid scare and the continuing high unemployment rate. This has caused many potential candidates to take their time in deciding whether they will return to corporate work. In addition, increased levels of employee burnout and harsh return-to-the-office policies are also causing many potential applicants to delay their return to the workforce.
|If you only do one thing – begin to track these ratios. The number of qualified applicants per priority open jobs. And the number of companies actively recruiting for your most critical job to determine how stiff your recruiting competition currently is.
Historically, the critical factors essential for business growth included access to enough capital, land/raw materials, machinery, and labor/management capabilities. However, in today’s fast-moving and quick-to-copy everything global business environment. A new business growth paradigm has been developing. So, over time, technology capability, innovation, and speed may soon become the three top critical success factors that now drive continuous business growth.
As a result of the emergence of these new growth factors, great hiring has become strategically essential. A corporation simply can’t develop or implement technology, move fast, or innovate without the capability of successfully hiring exceptional candidates in the most competitive recruiting marketplace ever.
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