Talent Acquisition: The Challenge Ahead

Talent Acquisition: The Challenge Ahead by Mike Prokopeak | Talent Management   In a time of high labor supply, with U.S. unemployment hovering at more than 9 percent, it stands to reason that it would be relatively easy and cheap for organizations to find needed labor. As many hiring managers will tell you, that's not the case.   Supply is plentiful, but organizations still struggle to find skilled workers. According to senior talent executives surveyed by Talent Management magazine and HCM Advisory Group, a majority (79 percent) report difficulty finding qualified employees for high-skill and technical positions.   It's not just recruiters and talent managers who have noticed the problem. Only 17 percent of COOs at high-tech companies said they were well-positioned to attract and retain talent, according to a December 2010 study conducted by Accenture. Despite the flood of supply in mature markers such as the United States and in emerging ones like China, critical talent remains a valuable commodity. In fact, the high number of candidates makes talent acquisition more difficult as recruitment departments sift through mountains of resumes and data to find the right candidates for job openings.   "Having the right talent is going to be pivotal and fundamental to design and develop customer solutions [and] to have distinctive offerings that will set them apart competitively in the markets," said Hans Von Lewinski, managing director with Accenture's Asia Pacific electronics and high-tech industry group and leader of the study.   The problem is particularly acute in China, where labor is plentiful but experienced workers with English language skills remain in short supply. "As soon as you start getting into slightly more experienced managerial ranks - by that I mean five years plus - you suddenly run into a real crunch because everybody is after the same people," Von Lewinski said.   This apparent conundrum - high supply paired with high demand - lies at the heart of the challenge facing recruiters this year. It's only the first of them. With hiring widely expected to pick up in 2011, recruiters will face heightened demand for their services. At the same time, skittish bosses remain hesitant to turn on the tap and give talent managers the go-ahead to find those workers.   On top of that, talent acquisition itself has become a more complex process. Social networking technology has changed the landscape for sourcing talent, opening up new avenues but also creating new challenges. Given continued business volatility and uncertainty, bosses are also asking for more sophisticated measurement and meaningful analytics, challenging many recruiters to rethink their approaches.   The only real certainty: Recruiters, be prepared. It's going to be an interesting year.   Job Market: Growth and Churn   With workforce productivity peaking, many organizations will be forced to hire to sustain growth in the coming quarters. The good news is that stock markets are broadly up, corporate profits are surging and many organizations have built a substantial war chest to fund that growth.   According to a December 2010 survey of 848 finance executives by Duke University and CFO magazine, nonfinancial firms are currently holding $1.9 trillion on their balance sheets, with plans to start spending in 2011. That same survey showed that CFOs plan to expand their U.S. workforce by 2 percent in the next year, a tally that could add 3 million jobs to the U.S. economy.   The turnaround may not be as quick as many job seekers would like, but it's a positive sign of growth, said Bob Kelleher, former chief human resources officer at AECOM and author of Louder Than Words: 10 Practical Employee Engagement Steps That Drive Results.   "The first wave of gains was really based on cost cutting," he said. "Companies were having layoffs, they were focusing in many cases on survival." Subsequent gains over the past six months have been based on growth, with corporate profits up and temporary staffing, a traditional early indicator of labor demand, steadily moving upward.   In addition to growth-driven hiring, job activity will be amplified by job changers. Many workers who sat on the sidelines as hiring demand remained low throughout 2009 and 2010 are poised to enter the game, triggering a spike in replacement hiring and releasing two years of pent-up demand from disengaged employees.   "Even though the companies may be reluctant to hire right now, they're going to see a significant [growth] in people leaving because the individuals now have more confidence in the job market," he said.   The rising disengagement of workers from their jobs provides agile organizations, and their recruiters, with significant opportunities this year, provided they have the tools and processes to capitalize on it.   "Those that are fleet of foot over the next 24 months are going to be in a wonderful position to realize some great talent gains," Kelleher said.   Sourcing Goes Social   The recession gave many organizations the opportunity to step back from hiring to focus on technology and strategy. For example, organizations such as Qualcomm went from filling several thousand positions a year to about 700, said Madeline Laurano, principal analyst for talent acquisition with research firm Bersin & Associates.   As hiring picks up, more and more organizations are turning to social media sites such as LinkedIn, Facebook and Twitter to reach new audiences and source qualified candidates. Traditional sourcing tools like job boards are losing their luster, forcing recruitment departments to rethink time-tested tools and strategies.   "Organizations are thinking about more innovative technology options [and] also relying on sourcers and some different outsourcing firms to fill those critical positions rather than internally," Laurano said.   But social media isn't a panacea for all that ails the recruitment department. Recruiting departments need to develop a comprehensive sourcing strategy and build competency with a variety of sourcing tools in order to be truly effective, Laurano said.   "Signing up for an account on these sites is not having a social media strategy for your talent acquisition," she said. "You have to define your social media strategy for your talent acquisition function and then take the time to learn how to use these sites."   Social media sites are rich sources of data on potential job candidates and offer a way for recruiters to brand and build a talent community that brings together internal and external candidates, full-time and past-time job seekers, new hires and corporate alumni. But they don't offer the same broad reach as a job board for active job seekers. In many cases, social networking sites are most effective for identifying passive candidates for high-skill positions. That's a limitation, but also an opportunity.   Sites such as LinkedIn, which has more than 80 million members who voluntarily provide career information and identify their professional connections, allow recruiters to capture the personal nature of a referral and manage it in a way that a job board or a traditional talent acquisition system can't, Laurano said.   The excess supply of labor in the market has changed the way recruiters do their jobs, said Kevin Martin, vice president and group director of human capital management at research firm Aberdeen Group. They have to build their competency with social networking technology but also specialize in candidate relationship management and develop the ability to find hidden talent, whether it's through sites like LinkedIn or by cultivating relationships with a range of stakeholders in the hiring process.   "Many recruiters are really good at working with hiring managers to understand the competencies that the hiring managers really need and then they go out and find that talent," he said."But they've got to be able to build marketing communication skills. They've got to be able to manage a candidate pipeline much like a salesperson manages a sales pipeline."   Measurement: The Crux of the Problem   Over the years, recruiting departments have become quite adept at collecting data on a variety of measures. Fundamental metrics include time to fill open positions and cost per hire. But the old mainstays are being overshadowed by an increasingly critical and complicated metric: quality of hire.   "The challenge there is that organizations don't know how to measure quality of hire," said Laurano. "There's a lot of different moving parts that go into finding out what quality of hire is, and there's not a lot of standardization out there or a lot of examples to pull from."   Efficiency measures such as time to fill and cost per hire are relatively easy to track. Effectiveness measures, such as quality of hire, are tougher to crack. Ongoing assessments can help, but the way many organizations use them is limiting.   "Top-performing organizations tend to utilize assessments as much for behavioral, aptitude and even cognitive purposes as they do skills and competencies," said Martin.   Performance management tools such as 360-degree reviews, for example, can provide a wealth of valuable information to recruiters looking to develop measures of quality and organizational fit. That level of integration with other talent management functions remains a continuing weak spot for many organizations, however.   In Aberdeen's studies of talent acquisition success, executives ranked quality of hire No. 1 four years in a row. Yet only 17 percent of surveyed executives said their company has the data necessary to validate quality of hire, Martin said.   "These companies are hamstrung to be able to utilize the data once they collect it from an applicant perspective, transition that into someone who is an employee, and then be able to track that person against performance milestones and other initiatives as they move on in their career with the company," he said.   Laurano said many companies use employee retention figures to determine quality of hire, although that measurement lacks accuracy. To improve reliability, companies such as appliance manufacturer Whirlpool incorporate other metrics, including employee "promotability" or "referability."   However it is done, gauging quality of hire should be a calibrated series of measurements including pre-hire screening, skill and competency assessments during the hiring process, and post-hire performance feedback.   "Once talent acquisition is really able to understand quality of hire, measure it and then report that back to the business, they're going to see a lot of value there," Laurano said.   From Recruiter to Business Adviser   Recruiters in 2011 will grapple with complexity in their talent pools as well as continually evolving tools and techniques. They'll also need to be in tune with the needs of hiring managers, the organization at large, and increasingly, external stakeholders.   "What we find is most HR executives do not get out into the field and talk to their customers or prospective buyers," Martin said. "They're relegated to listening to what the hiring managers have to say, if they're even doing that."   Wouldn't it be powerful if a recruiter were able to go to a hiring manager after talking with customers and share insights into how to source and hire talent to tackle market challenges and exploit business opportunity? Martin asked. That's where challenge and opportunity come together, showing a way forward through recruitment complexity.   "All of the sudden that recruiter goes from being someone who is just really fulfilling a need of a hiring manager to someone who is actually driving the business," he said.     [About the Author: Mike Prokopeak is editorial director for Talent Management magazine.]