Those who follow my articles know that I frequently write on the positive trends and the big ideas that recruiting leaders need to be aware of. However, I have not often written about the biggest strategic challenges or problems that corporate recruiting leaders face. Of course no one wants to dwell on the negative. But since I am predicting that during the next few years we will all encounter a completely transformed world of recruiting, it only makes sense to at least be aware of our largest current and upcoming challenges. If you don’t act proactively to mitigate these major challenges, they unfortunately may grow out of control, causing exponential damage to your firm.
The Top 10 Highest-impact Strategic Recruiting Challenges
In this list, the highest impact problems and challenges appear first.
- Not being prepared for the return of intense recruiting competition – with so many jobless individuals applying for every open position, often recruiters and managers could pick and choose over numerous applicants. And as a result, recruiting could have been labeled over the last few years as being relatively easy. But as the economy improves, the power will inevitably shift away from the corporation to the job seeker. With this shift, most corporate recruiting functions simply aren’t ready for a return to intense competition where the candidate holds the power. Solving the intense competition problem will be difficult because the primarily “active” recruiting approaches that have worked and dominated over the last handful of years will simply fail when you have to fight over prospects and candidates. Having to fight to fill every position qualifies this problem as the one with the highest impact unless you have developed a plan to return your function to a war-for-talent model. And even then, a lack of resources may restrict any shift in your approach.
- The increased volume of open positions will overload the recruiting system – in addition to having to fight over individual talent, the upcoming increase in the volume of hiring will further stress most existing recruiting systems to the limit. Obviously as corporate growth increases, so will the hiring volume. However most recruiting leaders don’t realize that retention problems at your firm will further increase that hiring volume. Last year alone corporate turnover increased by 45 percent, and I am predicting a similar increase for this year and next. Turnover will increase because as the job market opens up in specific industries, regions, and technical jobs, many employees who have been focusing on job security for years will begin to realize that it’s time to move on. Because most corporate retention teams have been completely decimated and their retention approach hasn’t been updated in a decade, corporate efforts to prevent this increased turnover will have little impact. For recruiting leaders this means that the combination of new corporate growth and high employee turnover will dramatically increase the volume of open positions beyond their capacity. Because during the last few years recruiting has been operating exclusively in a “low-volume mode,” I rank our lack of capacity and scalability as the No. 2 challenge.
- Rusty hiring managers and underdeveloped recruiters have diminished capabilities – a low volume of hiring and the lack of competition may have caused the capabilities of your hiring managers and recruiters to degrade significantly. Adding to that condition the fact that there has been little money for development or training for either recruiters or managers will mean that in growth mode both are likely to initially stumble under this new environment.
- A lack of speed will restrict your results – the business world moves much faster today than it did during the last recruiting boom. Unfortunately, recruiting hasn’t maintained its speed capability because reduced recruiting resources and a lack of competition have caused many firms to stop focusing on their time to hire. But because in the near future top candidates will have multiple offers, they simply won’t be around when indecisive managers finally make their hiring decision. In a newly competitive and faster moving world, delays in hiring may cause you to lose literally every top candidate. Unfortunately, reducing time to hire is one of the most difficult tasks within recruiting (Note: speed hiring is the topic of my presentation at the ERE.net Spring conference).
- Long-ignored employer brands will begin to negatively impact recruiting – in a down economy with its surplus of applicants, few recruiting leaders paid much attention to their external employer brand image. Few have taken the time to measure their employer brands, and as a result, recruiting leaders often don’t realize how their “talent failures” (including layoffs, pay cuts, promotional freezes, etc.) have hurt their employer brand image. Once competition for top talent becomes intense, leaders will realize that a weak Internet or social media employer brand will prevent top talent and innovators from even considering applying at your firm. Unfortunately, most recruiting leaders define employer branding incorrectly and rebuilding an employer brand is both time consuming and expensive.
- Your current recruiting process may not have the capability of recruiting innovators – one of the things that executives have learned from the success of firms like Google and Apple is the value of innovation and having innovative employees. Unfortunately, most recruiting processes are not designed to effectively recruit innovators, who incidentally expect to see innovation and technology as an integral part of the hiring process. Without a strong employer brand and a separate sub-process designed specifically for recruiting innovators, the chance of recruiting a top industry innovator to your firm may approach zero.
- Your recruiting strategy may be years out of date – obviously without the direction provided by a strategic plan, a lack of focus may doom your firm two years of weak results. But surprisingly, most recruiting functions actually operate without any written and distributed recruiting strategy (one that has its own name). But even if you have a strategy, update it so that it meets the need of this new intense global recruiting market. The strategy must also include a competitive analysis of your recruiting competitors to ensure that your firm’s strategy and approach produces superior results and a measurable competitive advantage.
- Antiquated recruiting metrics lower your credibility with executives – whether you have a seat at the table or not, recruiting leaders simply will not be listened to and funded unless they have the right metrics that demonstrate and quantify the dollar impact that high-performing new hires have on corporate revenue. And of course the biggest corporate metric omission is the failure of the majority of firms to accurately measure the quality of hire. And as a result, few corporate recruiting functions can convincingly prove that they hire top performers and innovators with advanced skills and high retention rates. Only a handful of functions have predictive metrics that are necessary in order to alert recruiters and hiring managers about upcoming recruiting issues and opportunities.
- A shortage of effective recruiters is on the horizon – everyone knows that this long period with a down economy has decimated the ranks of corporate recruiters. Many of those who were laid off have left the profession. And the bad taste that it left in their mouths may cause most never to return to the profession. Since there are no college programs that turnout recruiters, recruiting leaders need to prepare for the time when competition for top recruiters will become intense. Existing employed recruiters will be in such a demand that they will be “bid on” by other firms, and finding effective replacement recruiters on the open market will be extremely difficult and expensive. Training new recruiters themselves may be the only effective option available to many firms.
- The lack of recruiting resources — unless you work at Google, the odds are that your function has already suffered numerous dramatic budget cuts over the years. So obviously you’re going to need a significantly higher budget if you expect to have a reasonable chance to increase your employer brand, recruiting volume, recruiting speed, and quality of hire. Unfortunately, most recruiting leaders simply don’t have the capability of building a strong business case that quantifies the tremendous dollar impact that recruiting has on corporate revenue and results.
Some Additional Challenges to Keep in Mind
There are obviously many additional upcoming strategic problems that didn’t make the list, because I determined that even though they are important, they had a lower impact. But since every industry and company faces unique problems, add your unique problems to your “keep an eye on list.”
The first to consider is the assessment of new Internet and social media approaches that may at least initially appear to have the potential to dramatically improve your recruiting results.
Next I would consider the globalization of the talent marketplace to be an important challenge (and even more so if you have the capability of offering remote jobs). Assessing the incredibly high volume of emerging recruiting technologies in order to find the very few that really impact quality-of-hire results will also certainly be a reoccurring challenge. Keep an eye on employment-related legislation in each of the various countries that you recruit in, as the rights of applicants will invariably increase.
Finally, as executives become more aware of the economic importance of recruiting and retaining talent, don’t be surprised to find increasing pressure to separate recruiting, retention, and onboarding from the rest of HR.
Although it’s certainly more fun to explore new opportunities in recruiting, failing to identify and resolve existing recruiting problems may actually have a larger negative impact on your results (I estimate up to a 50 percent impact). Almost everyone is aware of the tactical day-to-day problems in recruiting, but very few recruiting leaders take the time to forecast strategic “big picture” problems that are on the horizon.
If you are a corporate recruiting leader, I hope my “biggest-challenges list” at least started you to think about the major shifts that are ahead in recruiting and the problems that will occur as a result of them. If you know of additional “big challenges” that we are likely to face in the near future, please take the time share them in the comments section immediately following this article.