Your Approach to Hiring Is All Wrong

Article by : Peter Cappelli, Harvard Business Review
Posted on : May ~ Jun 2019
Full Article :

Outsourcing trend that is dangerous
“about 40%, according to research by Korn Ferry—have outsourced much if not all of the hiring process to “recruitment process outsourcers,”… they can be persuaded to apply for a position and negotiate the salary they’re willing to accept. (The recruiters get incentive pay if they negotiate the amount down.)”

Hiring right is an important and huge investment
“Hiring talent remains the number one concern of CEOs in the most recent Conference Board Annual Survey…view the unavailability of talent and skills as the biggest threat to their business… Employers also spend an enormous amount on hiring—an average of $4,129 per job … Most of the $20 billion that companies spend on human resources vendors goes to hiring.”

Reluctant for internal promotion
“become very picky about candidates especially in the slack labor market… openings are now filled more often by hiring from the outside than by promoting from within…organizations don’t have to pay to train and develop their employees…it has been relatively easy to find experienced talent outside. Only 28% of talent acquisition leaders today report that internal candidates are an important source of people to fill vacancies…These people don’t need training, so they may be ready to contribute right away”

Low retention rate
“hiring is so difficult is that retention has become tough… 95% of hiring is done to fill existing positions… LinkedIn data indicates that the most common reason employees consider a position elsewhere is career advancement”

Lack of monitoring of hiring results
“Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire… but companies don’t seem to be applying that maxim to tracking hires”

Recognize the costs of outside hiring
“outside hires take three years to perform as well as internal hires in the same job… It disrupts the culture and burdens peers who must help new hires figure out how things work.”

Don’t post “phantom jobs”
“Employers may simply be fishing for candidates. (“Let’s see if someone really great is out there, and if so, we’ll create a position for him or her.”) …they are a problem for economic policymakers as well as for frustrated job seekers. Companies should take ads down when jobs are filled.”

Design jobs with realistic requirements.
“push back on hiring managers’ wish lists… found that virtually no applicants met all the criteria.”

Reconsider your focus on passive candidates
“Surveys of employees find that only about 15% are not open to moving.“passive” job seekers are different from “active” job seekers…The number one factor that would encourage the former to move is more money. For active candidates the top factor is better work and career opportunities. More active than passive job seekers report that they are passionate about their work, engaged in improving their skills, and reasonably satisfied with their current jobs.”

Understand the limits of referrals
“according to LinkedIn research…referrals work out better than other hires, it’s because their referrers look after them and essentially onboard them…downside to referrals, of course, is that they can lead to a homogeneous workforce, because the people we know tend to be like us.”

Measure the results
“Few employers know which channel produces the best candidates at the lowest cost because they don’t track the outcomes”

Persuade fewer people to apply
“Recruiting and hiring consultants and vendors estimate that about 2% of applicants receive offers…the main effort to improve hiring—virtually always aimed at making it faster and cheaper—has been to shovel more applicants into the funnel… this is a misguided way of trying to attract better hires or just meant to make the organization feel more desirable isn’t clear… company saved the cost of having to process their applications… it’s more important to scare away candidates who don’t fit than to jam more candidates into the recruiting funnel.”

Test candidates’ standard skills
“glean sufficient information about an outside applicant’s past performance… even when companies conduct such tests, hiring managers often ignore them—and when they do, they get worse hires. applying their own weights and judgment to those criteria leads them to pick worse candidates than if they had used a standard formula.”

Be wary of vendors bearing high-tech gifts
“These vendors have all sorts of cool-sounding assessments… few of them are validated against actual job performance.”

Revamp your interviewing process
“Think hard about whether your interviewing protocols make any sense and resist the urge to bring even more managers into the interview process… Interviews are where biases most easily show up.”

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