You might think the downturn would make talent acquisition easier. You would be wrong.
By Michael Beygelman
July unemployment numbers came in unchanged—14.6 million Americans unemployed, which represents 9.5 percent of the U.S. population. A snapshot of the U.S. employment situation from the Bureau of Labor Statistics (BLS) reveals that, “Among the major worker groups, the unemployment rate for adult men (9.7 percent), adult women (7.9 percent), teenagers (26.1 percent), whites (8.6 percent), blacks (15.6 percent), and Hispanics (12.1 percent) showed little or no change in July. The jobless rate for Asians was 8.2 percent, not seasonally adjusted.”
BLS data also states that long-term unemployment, those jobless for 27 weeks or more, was little changed at 6.6 million. This group made up 44.9 percent of U.S. unemployment. The civilian labor force participation rate (64.6 percent) and the employment population ratio (58.4 percent) were essentially unchanged; however, these measures have declined by 0.6 percentage points and 0.4 point, respectively, since April.
Unemployment levels are nearly twice last decade’s, so one would think that recruiting would be easy. But this is not the case. In fact, recruitment is more complicated today than when we were at 5 percent unemployment. To better understand the primary drivers behind today’s recruitment challenges, we need to consider three perspectives, including the candidate experience, internal company infrastructure, and risks and costs.
The gainfully employed are not considering new employment as readily as five years ago; they are afraid to leave a secure workplace environment. This anxiety on the part of high-quality candidates makes it more difficult to find them, because they’re not the ones openly advertising their candidacy for new roles.
Conversely, those openly advertising their candidacy tend to apply for jobs they’re not really qualified for. Resume engineering makes it more challenging to quickly screen candidates. As a result, qualified candidates who are genuinely interested in a position sometimes wind up being taken through a more rigorous-than-need-be screening process. In real life, this sometimes translates to a less-than-stellar candidate experience, or acts as an inhibitor to hiring the highest quality candidates.
Applications for some positions went from six applicants to 600, and some organizations—especially ones that need to follow rules from the Office of Federal Contract Compliance Programs or other regulations—are finding it difficult to process increased candidate traffic, remain compliant with laws and regulations, and still hire the best qualified candidates for their firms. The amount of resources needed to handle recruitment in today’s environment has increased above the levels that already-anemic recruitment departments can possibly support.
Recruitment organizations are being asked to reduce cycle times, enhance the hiring manager and the candidate experience, improve employee branding, do a better job screening and qualifying, develop talent pipelines and market maps, enhance ATS functionality—all quickly and cost effectively. Many pressure points are pressing down on recruitment. However, companies lack the infrastructure or investment budget necessary to quickly adapt to the new recruitment paradigms.
Companies are finding themselves in a battle with their competitors for nearly identical resources with nearly identical offerings at nearly the same time, which is a classic seller’s market in recruitment terms, meaning a candidate-driven market if you have the skills. So the third leg of this problem is pay rates. Salaries for candidates who have the skills have gone up, because in order for a qualified candidate to make a move, and for the compensation to be an enabler, companies are having to pay more—at times much more—than they anticipated.
Several risks are at play here. On the one hand, if a company is not willing to pay more than market rates, it might be forced to hire a less qualified candidate or wait longer to find a better fit. On the other hand, if a company chooses to pay top rates, it will find itself in trouble with the remaining population of employees who might be in equitable roles but at 10 to 20 percent less total compensation. In turn, those legacy employees might either begin to search for higher paying opportunities, or the company will have to pay more to retain them.
Today’s recruitment market is one that few, if any, of us have ever seen. We have to learn the new paradigm in flight, as it is evolving, and adapt to stay ahead of the competition. No wonder the last 12 months have seen an explosive trend of organizations moving to buy third-party talent solutions. The need for scalable recruitment infrastructure to handle variability in hiring, the ability to direct source-passive candidates, reducing cycle times, and keeping new employee compensation competitive will remain a challenge for HR and recruitment executives who are faced with ramping up recruitment.