The Top 25 Recruiting Trends, Problems, and Opportunities for 2014, Part 1 and 2

Even if you work in a corporate recruiting function with low resources or minimal expectations for change, every recruiter still has a professional obligation to maintain their awareness of the latest trends and predictions. I have grouped 25 predictions of the leading corporate recruiting trends for 2014 into four separate sections. Part 1 includes two sections that cover 14 new opportunities and continuing current trends. Part 2 (to be published next week) includes the final two sections, which cover 11 remaining trends that cover new challenges and areas that will continue to diminish in importance.

Section 1: The Hottest Recruiting Opportunities for 2014

The eight top opportunities that will dominate strategic corporate recruiting during 2014 include:

  1. The competition for top talent intensifies — you could call 2014 “the year that intense recruiting competition returned.” That is because after years of slack hiring, the competition for top performers and technical talent will increase over the next year in many industries to the point where current recruiting resources and tools will be stretched to the limit. Aggressiveness, the need for counteroffers, higher rejection rates, and a renewed focus on recruiting the currently employed will all return to prominence. As a result of this increased competition, executives will begin to put pressure on recruiting to produce new recruiting approaches that provide them with a competitive talent advantage.
  2. A metric-driven employee referral program  becomes the dominant hiring source – as more firms adopt quality of hire metrics, it becomes even clearer that well-designed employer referral programs produce high performers, high retention rates, and if managed correctly, they are faster, just as diverse, and often cheaper than all other sources. Referrals are obviously not new but the results that they produce have been recently strengthened by the astonishing growth and usage of social media. The impact of social media has been so strong that that the referral hire target for top firms is now approaching a dominant 50 percent of all hires. The most effective programs will adopt specialized types of referrals including assigned referrals, proactive referrals, college referrals, and non-employee referrals. Overall the 2014 strategic referral goal should be to build a recruiting culture which makes every employee a 24/7 talent scout, and to channel these employee talent discoveries through a data-driven employee referral program. At the same time, many of the recently introduced vendor supplied external referral programs will begin their inevitable decline.
  3. Predictive metrics and the use of big data move from interesting to essential  after years of struggling with “historical metrics” that have had only minimal impact, recruiting leaders are beginning to follow the lead of the rest of the business in adapting advanced metrics. This new focus will be on real-time metrics that let managers know what’s happening today, and predictive metrics, which alert everyone about upcoming recruiting problems and opportunities, so that they can act appropriately with time to spare. Although still in its infancy, a handful of vendors are beginning to show that you can actually identify hundreds of top performers who are not currently looking for a job (the so-called passives) using external “big data.” These advanced metric developments are on top of the established trend of shifting recruiting toward a data-supported decision model.
  4. Employer branding returns as the only long-term recruiting strategy– after years of minimal funding and attention, strategic employer branding begins its return as the only long-term recruiting strategy. This shift is partially due to increased recruiting competition but it also comes about because social media now makes it so easy for others to virally spread either positive or negative comments covering working at your firm. The willingness of current and former employees to comment online about their work environment increases the impact of firms that reveal what employees and applicants say (i.e. Glassdoor, LinkedIn, and Universum).  Talent leaders are also gradually learning that providing a weak candidate experience can quickly damage that brand. There is now a growing division between the one percent top employer brand firms in each industry (e.g. Google, Facebook, Deloitte, P&G, and McKinsey) and the remaining 99 percent of firms that simply offer “paycheck jobs”. This dramatic and perhaps insurmountable difference in brand strength and employee treatment may permanently limit the capability of the remaining 99 percent to attract any more-than-average talent.
  5. Recruiting finally adopts the practice of monetizing its business impacts – even though it has long been a standard business practice, recruiting is finally beginning to move away from its long-held attempt to “align with business goals” and instead focus on having a direct impact on business goals. Because revenue is one of the prime corporate goals, by quantifying the revenue impacts of great compared to average and weak hires, recruiting can now convincingly demonstrate its “highest of all talent function business impacts” to executives. Demonstrating the direct connection between recruiting results and improved business results will eventually supplant quality of hire as the most important recruiting measurement. By monetizing its revenue impacts, recruiting can make a continuous business case, which will provide it with the necessary funding to meet this latest hiring surge.
  6. A focus on becoming a serial innovation firm increases the need for recruiting innovators – the wild economic success of serial innovation driven firms like Apple, Google, and Facebook have demonstrated to executives the high economic impact of hiring, retaining, and managing innovators. The renewed expectation for rapid corporate growth means that more innovators must be recruited. That simply can’t happen unless current recruiting systems are redesigned so that they can now effectively recruit and hire these hard-to-land innovators.
  7. Boomerangs become a primary target once again — boomerang rehires have proven to be one of the highest quality of hire sources, and this new talent shortage will return them to prominence after years of inattention. As the competition for talent heats up, the best firms will re-energize alumni groups and they will use them as the mechanism for bringing back the very best former employees with a proven track record (among the many who were recently released). This increased emphasis will eventually lead to boomerang rehires reaching nearly 15 percent of all hires.
  8. Accepting social media profiles in lieu of resumes opens the door to many passives – the unabated corporate goal of targeting and recruiting those top prospects who are not in job search mode”cannot be met if an up-to-date resume is required. That is because these individuals often resist applying for a job simply because they don’t have the time to update their resume. Although there are still legal and administrative hurdles, more and more firms are learning that accepting a social media profile alone (usually a LinkedIn profile) is more than adequate at least initially to begin the hiring process.

Section 2: Currently Impactful Trends That Will Continue to Remain Important

Six major corporate recruiting trends that have been prominent during the last year will continue to be significant corporate recruiting trends during the next year.

  1. The mobile platform continues to be a critical tool – even though last year was “the year of the mobile platform,” the impact of this platform in recruiting will continue to expand and grow. The emergence of the technical capability that allows the direct “instant” application for jobs from mobile phones will soon become mainstream.  A multitude of startups will continue their development of a variety of recruiting-focused mobile phone apps.
  2. A data-driven approach to operations continues to be the benchmark standard – even though most business functions have long ago shifted to data-driven decision making, the practice is strikingly unusual within recruiting. Google continues to separate itself from every other firm in its comprehensive data-driven approach to recruiting and its use of predictive metrics. Its recent data-driven research on the ineffectiveness of many traditional recruiting tools can only be classified as groundbreaking.
  3. Live video interviewing steadily grows in acceptance – live video interviews has now proven its effectiveness, so its use will continue to expand until it becomes the standard practice, at least for initial interviews.
  4. On-line candidate assessment continues toward the mainstream – as online technical knowledge and skill assessment options become cheaper and more effective, they will continue their growth until they become mainstream. Their impact is high because they reduce unnecessary interviews and they can dramatically improve the quality of hire.
  5. Remote work continues to expand the talent pool – the growth of technology and the willingness of managers to accept remote work positions will continue to dramatically expand the number of available recruits for those remote work jobs. This shift to remote work will also force recruiting to increase its capability to find and land candidates around the globe.
  6. Accelerated internal movement is still needed – continued uneven growth in business units will mean that there will be a much greater need for the rapid movement of current employees into new areas where they can have a higher impact. The most effective solutions have involved either using corporate recruiters to proactively move underused employees or encouraging employee referrals to quickly identify a wider range of talent for internal openings.

Next week: Part 2, which covers 2014 recruiting challenges and recruiting areas that will continue to diminish in importance. Part 2 also includes an additional section covering some developing trends that have yet to peak and some final thoughts on developing action plans for preparing for these upcoming trends.


Part 2

If you are looking for a comprehensive list of the corporate recruiting trends and predictions for 2014, this two-part article covers the top 25 most likely trends. Part 1 included the first 14 trends that covered new recruiting opportunities and continuing recruiting trends. In this Part 2 of the series, I cover the 11 remaining trends, including recruiting challenges/problems that corporate recruiting will likely encounter during 2014 and some recruiting areas that will likely continue to diminish in importance. I have also included a separate section covering eight developing areas that have yet to peak. 

Section 3: The Biggest Strategic Recruiting Challenges

The eight most significant corporate recruiting challenges or problems that will be prominent during 2014 include:

  1. Retention problems will increasingly impact recruiting – as more employees become comfortable shifting away from security needs and toward more exciting job opportunities, turnover rates will increase by over 25 percent. This dramatic increase in turnover will create many new “sudden openings” which will put an added strain on already stressed recruiting systems. In order to help reduce future turnover, the “potential for early turnover” will have to be included in the assessment criteria for all finalists.
  2. Speed once again becomes essential to remain competitive – over the last few years — with high unemployment and little competition for talent — in many cases recruiters could take their time and still land top candidates. As the pace of change in business and the competition for talent increases, firms will have no choice but to revisit “speed of hire” approaches and tools in order to land candidates that are in high demand.
  3. Limited resources will require position prioritization – the increased hiring volume coupled with the inevitable lag in being provided with additional budget resources will require most firms to prioritize their jobs. Recruiting will then allocate their resources toward filling revenue generating and other high-business-impact positions.
  4. Business volatility makes workforce planning more necessary but more difficult – as continuous business volatility in a VUCA world becomes the “new normal,” executives will increase their demand for data-driven workforce planning. Unfortunately, most talent functions simply do not currently have staff with the capability to conduct sophisticated workforce forecasting and planning.
  5. College recruiting must be reengineered if it is to succeed – the demand for college talent in key majors will continue to increase dramatically. Unfortunately, corporate college recruiting budgets and processes have been mostly stagnant over the last few years, even though colleges themselves and the expectations of their students have changed dramatically. A reengineered college recruiting model must move beyond a focus on career centers and increase its capabilities in the areas of global college recruiting, remote college recruiting, recruiting students from online universities, recruiting “passive” students, and the use of market research to completely understand the job search process and the expectations of this new generation of grads.
  6. The shortage of top recruiters will become evident – as recruiting ramps up, firms will begin to realize that there is a significant shortage of talented and currently up-to-date recruiters. After poaching from the rapidly shrinking executive search world, leaders will begin bidding over top corporate recruiters. A lack of quality internal and external recruiter training capability will make the recruiter shortage even worse.
  7. Large firms must learn to compete with startups for talent – the recent lavish funding and the economic success of numerous startups will continue to make them attractive to innovators and top talent. Unfortunately, few major corporations have a market-research-driven strategy or a set of tools that allows them to successfully recruit against startups for these valuable prospects with a “startup mindset.”
  8. Finding high-impact technology will still be problematic – although there is a wealth of new technology in recruiting, almost all of it is designed to reduce costs and administrative burdens. After 20 years of waiting, I have yet to encounter the breakthrough recruiting technology that produces a competitive advantage by demonstrating in a split sample that its usage directly improves the on-the-job performance of all new hires by at least 20 percent over existing processes.

Section 4: Areas That Will Continue to Diminish in Importance

The downward trend in these three final corporate recruiting areas will continue through 2014.

  1. Recruitment advertising and the corporate website – as more applicants demand authenticity and crowd sourced “real” information, both the corporate career site and all forms of traditional recruitment advertising will continue to produce a lower ROI.
  2. Sourcing becomes easier – as almost everyone becomes “findable” on the Internet and social media, the formally critical role of sourcing will be reduced. The new focus will shift toward improving the various “selling components” of recruiting.
  3. Underperforming sources need to be deemphasized – the growing emphasis on using metrics to determine the quality of hire from each source will continue. And as a result, all heavily used channels like large job boards, Facebook, and job fairs that can produce low-quality hires will have to be deemphasized.


Trends That Won’t Peak Until 2015 and Beyond

This last section covers seven developing corporate recruiting practices that can’t accurately be classified as trends for at least another 18 months.

  • Competitive analysis is not yet a standard practice – although recruiting is clearly a competition and a “zero sum game,” most recruiting functions are almost 100 percent internally focused. Unfortunately, you can’t prove to executives that you provide a competitive advantage unless you do a side-by-side comparison of your recruiting approaches and results with your talent competitors. The recruiting function will also eventually have to develop plans to track and then counter each your competitor’s major recruiting and employer branding moves.
  • Market research practices will eventually allow you to fully “know” your prospects and candidates – eventually recruiting leaders will learn that you can’t effectively find or sell top prospects until you fully understand how they search for a job, where they would see recruiting information, and what factors excite them about a company or a job. The sales and customer service functions have successfully used market research for years, and eventually these practices will be adopted within the recruiting function at all top firms for both experienced and college hires.
  • Firms must eventually begin to “map” their future talent pipeline – great recruiting functions are forward looking, so they attempt to identify and assess future talent targets long before they are needed. These approaches require that you identify your future talent pipeline. Leading firms will eventually learn to supplement their standard filling-vacant-job approach with a more proactive talent pool for talent pipeline approach. This practice involves identifying and then “mapping” the top talent throughout your industry with the goal of eventually bringing the best onboard when they are ready to move on. More firms will also eventually learn to use professional learning communities as talent pools, while others will use pre-need employee referrals to develop this talent pipeline based on employee recommendations.
  • Finding “their work” online will eventually become a key sourcing tool – as more and more individuals post examples, pictures, videos, or portfolios of their work on the Internet, finding talented individuals who might not be looking for a job will move into the mainstream. In addition, evaluating their actual work will prove to be an accurate assessment approach.
  • Virtual reality simulations for assessment will gradually be introduced – although airlines and the military have successfully used them for years, the costs have slowed simulation usage for assessing candidates. As costs decrease, virtual reality simulations will eventually become a standard assessment practice.
  • Hiring those without degrees or standard credentials will soon become more common – firms like Google, Facebook, and most startups have had notable success with hiring individuals regardless of their degree status. As a result, “credentialess” approach will eventually become a more common corporate practice as metrics demonstrate a similar high success rate in business that has been found in hiring non-college grads in the sports and entertainment fields.
  • Personalized recruiting is on the horizon – although it is still currently rare, more organizations will attempt to personalize their recruiting and to target their recruiting pitch specifically to individual high value prospects.

Final Thoughts

There will be a marked increase in recruiting competition in high-growth industries like technology, the mobile platform, social media, construction, and healthcare. In addition, the next year will see an increased demand for high performers, technologists, and innovators in key jobs in every industry. In fact, a recent survey of CEOs revealed that 77 percent of firms are currently changing their talent strategy, which means that most CEOs agree with me that the need for change in the talent area is already present.

As a recruiting leader, realize that, just like in the product area, if  you want to dominate your recruiting marketplace, you will have to move fast in order to stay ahead of the trends and the adopted practices of your competitors. If you delay taking action, it is almost impossible to “catch up” if you fall too far behind, because your talent competitors will be continually moving ahead of where they were when you originally benchmarked against them. In order to stay ahead and also to build a competitive talent advantage, don’t wait for your new year’s budget to kick in before you start developing your plan for addressing the upcoming problems and for taking advantage of imminent talent opportunities.

Professionals can honestly disagree about which trends will be the most prominent over the next year, but there can be little disagreement over the fact that dramatic changes are unavoidably right on the horizon.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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