In the current, highly competitive job market, finding talent with the right skills for a job and retaining them is challenging. Non–stop advances in technology mean jobs with new capability requirements are available everyday. Globally, all companies now have equal access to a single database of talent. Unemployment is low and the pool of talent tight. It’s clear; businesses need new ways to acquire talent. It’s not possible to simply search for candidates in comparable roles at competitor businesses. Companies need to cast their nets beyond the traditional talent pool and source candidates across roles and industries by evaluating transferable skills, experience, knowledge and learning agility.
To explore these issues, Korn Ferry Futurestep commissioned a global survey on talent acquisition: The Talent Forecast. The survey reveals that 99 percent of executives say retention of new hires is an issue in their organisation. Additionally, the majority of respondents reported that 10 to 25 percent of new hires leave within the first 6 months. This turnover is costly and disruptive. The cost of replacing a manager within 6-12 months of their hire is 2.3 times the person’s annual salary, according to Korn Ferry research. For a senior executive position, the replacement cost could amount to $1 million or more.
And it isn’t only the business’ current performance that is at stake: Without a strategic and methodical approach to talent acquisition, the resulting hires can impede an organisation’s ability to meet its business objectives. The survey revealed many talent acquisition leaders do not have a seat at the table when it comes to the business strategy. They don’t know what the organisation is planning in any detailed manner. Therefore, they become reactive and transactional.
The survey of more than 1,100 hiring professionals globally shows most companies use a transactional, unstructured process to acquire talent. Talent Acquisition and HR professionals are not linking talent acquisition efforts to business strategy, nor using tools to streamline the talent acquisition process. Only 39 percent of respondents report their recruitment team is aligned with their organisation’s business objectives, and nearly one–third admit they don’t have a strategic workforce plan to map future talent needs to business strategy.
In fact, many Talent Acquisition professionals are not taking advantage of available tools and technology, such as behavioural interviews, assessment to name a few.
There are many risks associated with unstructured, transactional talent acquisition:
- A weak link is established between information collected and prediction of performance.
- It is easy for candidates to ‘fake success’ in an interview.
- Agreement on the best candidate is difficult among interviewers.
- Decisions are made using intuition or gut feelings.
- Unstructured behavioural interviewing can lead to bias, judgment or stereotyping.
A structure approach and the right hiring method can ensure hiring effectiveness by increasing quality and productivity of new hires, decreasing staff turnover, reducing legal challenges and providing a strategic view on hiring. Three pillars underpin the successful acquisition and retention of employees:
1. Understanding the competencies required for the job
Korn Ferry’s definition of a workplace competency is:
‘An observable and measurable skill or behaviour that contributes to workplace effectiveness and employee career success.’
By using validated research on competencies, it is possible to gain a meaningful understanding of required skills and to assess if candidates are likely to succeed on the job. Hiring managers must design behavioural interview questions that uncover candidate competencies by:
- Reflecting the hiring criteria
- Closely matching the specifics of the job
- Driving alignment with the strategic direction of the business
For example, a universally used competency is ‘Communicates effectively’. Korn Ferry’s database of competencies reveals that this competency’s true meaning is:
– Developing and delivering multi-mode communications that convey a clear understanding of the unique needs of different audiences.
The unstructured version of assessing this competency could be:
– ‘How would you rate your communication skills?’
However, the research based, structured, behavioural version of this interview question is:
– ‘Tell me about a time you had to communicate the same message to different audiences and had to vary your style for each.’
This last question—when posed consistently in each candidate interview—prompts the candidate to share their specific achievement of the competency in a previous role, while also allowing the interviewer to assess the candidate’s level of ability against their competition.
To effectively understand what competencies the business needs, the relationship between the job requirements and the business strategy must be understood, now and in the future. Once a skills and competencies analysis is complete and the selection criteria determined, hiring managers can assess candidates objectively, fairly and consistently.
2. Developing the right process
The right talent acquisition process uses a strategic set of research–based competencies to drive alignment with the business strategy. Knowing what competencies are required, helps design the right questions and informs the selection of the appropriate assessment tools.
The use of digital tools
The right process requires the use of the right tools and there are a number of new, technology–based tools available to TA professionals to streamline the recruitment process. These include: applicant tracking systems (ATS); video interviewing; online assessment tools; job posting aggregator; analytic tools and dashboards; electronic reference checking; and more.
According to the Talent Forecast research, less than 50% of TA and HR professionals globally are currently taking advantage of such recruitment technologies.
Online assessment tools are of particular value as they can be used to measure a variety of factors that determine whether a candidate is likely to succeed in an organisation, including their technical skills, interpersonal abilities, motivation, behavioural drivers and ethics.
Many talent acquisition professionals are unaware the information gathered in the hiring process with these tools can also be used for on–boarding and development purposes. More than one–third of survey respondents say they use the assessment information after a candidate is hired to help on–board the new employee; while 54% report they use the data to create an employee developmental plan.
Behavioural interviews should be used as part of an integrated recruitment process alongside the appropriate digital tools. This approach avoids bias and labeling of candidates based on first impressions and helps identify candidates with the right competencies for the role. Successful behavioural interviews achieve the following:
- Better predictor of future performance and level of ability
- Evaluation based on same competencies and questions
- Specific responses and past experiences mitigate guessing
- Multiple ways to verify behaviours and competencies
- Reduces bias
3. Training the hiring managers
The final pillar of successful talent acquisition is the training of hiring managers in competency–based talent acquisition. Educating recruiters and hiring managers similarly requires a structured approach to ensure consistent hiring practices.
Last year, Korn Ferry worked with a global technology distribution company, with 20,000+ employees located in 30 countries. The client had acquired 25 companies in 12 months and achieved extreme growth by hiring 8,000 people. However, they faced several challenges:
Just a few months after Locy retired in 2006, a plant came calling. Locy returned as a contractor, which afforded him a flexible three-day schedule and the mental freedom to leave his work at work. “We have new guys who are smart, but they just don’t have the experience,” Locy says. “Having someone around they can ask questions is a big benefit.”
The client engaged Korn Ferry to design a global training approach for 500+ hiring managers. The achievements included:
At the project’s end, the client’s hiring managers expressed their increased confidence in their hiring practices from this training by saying: ‘We can see a connection now between the strategy of the business and how that is affected by the talent effort and how this particular application within talent management selection is related to the future of the business.’
Finding the right people to futureproof your organisation and achieve and sustain competitive advantage requires a structured process, high–quality assessment tools and skilled interviewers. Without a strategic and methodical approach, the resulting hires can prevent an organisation from meeting its goals. Korn Ferry can assist your organisation to achieve its goals by determining competencies, assessment technologies and creating talent strategies to your business requirements.
Watch the webinar Accelerate Talent Acquisition to learn more about improving your hiring process.