The Hiring Revolution - Why Change Is Now Vital

According to a recent CEO Institute survey, the number one issue keeping chief executives awake at night is ‘sourcing and retaining skilled staff’. Yet when PricewaterhouseCoopers asked 1300 global CEOs about their operational priorities, talent strategies didn’t make the top five. So while CEOs might be suffering from insomnia, they’re still doing very little to alleviate the problem. What most don’t recognise is that 21st century HR is stuck at roughly the same stage of development as professional medicine in the 18th century, a time when toxic mercury was used to treat common ailments, and that there’s a lot they can do to change this.

One Hundred Years of Inertia

Why do I say this? Well, for almost a hundred years, jobseekers have outnumbered vacancies. Consider the Great Depression when up to 20% of the population was out of work; the two world wars when women plugged the gap in the job market; and the population surge caused by the post-war ‘baby-boomers’. For nearly a century then, hiring was as easy as plucking an apple from a tree; people were ‘lucky’ to have jobs, and that was how they were treated.

HR Atrophy

With no requirement for innovation, HR was never recognised as a key business pillar. The belief that ‘anyone can recruit’ became endemic and because many organisations didn’t measure their hiring outcomes in any objective way, they had little contradictory evidence. This atrophy is evident by looking at conventional corporate leadership structure where there are CEOs, COOs, CFOs, CIOs, but still very few ‘CROs’ or ‘CHROs’. This wasn’t a problem until the mid-nineteen-nineties when a surge in productivity around the world meant that positions vacant outnumbered good applicants for the first time in nearly a century. This created a ‘war for talent’ and, because most companies had never developed effective hiring practices, they had no mechanisms to deal with the situation.

The Morphing Of The Labor Market

The global financial crisis relieved some of this pressure but companies are still experiencing a paradox in that although unemployment is high in certain countries and industries, they still struggle to fill vacancies with the right people. For instance, it’s estimated that with 14 million Americans unemployed there still remain about 3.2 million jobs unfilled. The old supply and demand curve is distorted because the continuing escalation in technology means that even the most basic roles require more skills. Whereas in the good old days, many jobs could be held by most candidates, employers now compete for a smaller pool of better-skilled recruits.

The War For Talent

This provides a fantastic opportunity for employers. The twenty first century is a time when continuous improvement of recruitment processes is the new paradigm. Poor hiring practices that converted only 10% of the suitable applicants were OK when there were one hundred applying. But it’s no good now that there might only be three. Survival of the fittest means that every step of the process now has to be honed, so that an organisation appoints every one of those three…..or they go to the wall.

The first step in this path is to start applying scientific, evidence-based measurement to HR to replace the subjective and often destructive hiring techniques that currently masquerade as standard practice. Career’s websites, recruitment ads, screening techniques, psychometric tests, interviews, recruiters’ incentives, L&D systems, rewards and recognition programmes and so on – all of these need to be placed under the microscope, analysed and improved to create true best practice systems, and put people and their needs at the core of the process.

As French novelist, Marcel Proust said: "The only real voyage of discovery consists not of seeking new landscapes but in having new eyes."

Let’s now look at the whole business of HR in a different light.

Mandy Johnson is an accidental HR Revolutionary, best-selling business author (Winning The War for Talent ; Family, Village, Tribe) and a business advisor to public and private organisations.