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***********Human Resources Q & A
March 12, 2007
By Tim Rutledge
The question:
I’m hearing more and more about the difficulties organizations are having in attracting good candidates. My organization is feeling this, too. Is this a temporary phenomenon, or are we experiencing structural changes in the job market?Tim's Response:
I’ve written in earlier columns that the North American job market is changing from a buyer’s market (more job seekers than jobs) to a seller’s market (fewer job seekers than job openings). This month I’ll explore what this change means for recruiters.
The buyer’s market in jobs was created by the return of soldiers to civilian life after World War II. It was then deepened by the arrival of their children, the baby boom generation, into the workplace starting around 1965. There was a huge pool of workers that employers could choose from. When they needed to hire, they simply dipped into this pool and pulled out employees.
The ability to create employees out of strangers at will gave rise to today’s recruiting function, a function that’s structured to operate in a buyer’s job market. Recruiting functions today are propped up by this overriding assumption:
Employees who resign can always be replaced.
This assumption has been true by and large for so long that recruiters tend to treat it as a fact. But it’s an assumption, and it’s no longer true.
What portion of your organization’s recruiting resources is devoted to replacing people who leave? If you’re typical, the answer is at least half. Half the work that recruiters do is bringing people in the door marked ‘Enter’ to replace people who’ve gone out the door marked ‘Exit’. Some recruiters owe their jobs to this fact. While we’ve become quite good at managing the ‘Enter’ door, we tend to all but ignore the ‘Exit” door. Why? Because we assume that employees who resign can always be replaced. We’ve come to accept that ‘turnover’ is a fact of organizational life.
If organizations continue to leave the ‘Exit’ door wide open and unattended, here’s what to expect now that there are fewer job seekers than jobs:
- Job postings will attract a dwindling number of resumes.
- Managers will take recruiters to task for not bringing them enough dream candidates.
- The talent available at the 'Enter' door will be inferior to the talent going out the ‘Exit’ door.
What to do? For starters, it’s time to manage the 'Exit' door. But we also need to make changes in how recruiting gets done.
- Stop expecting to build your workforce with strangers. It’s time to make every employee a recruiter through a robust, carefully managed employee referral program. A well managed program keeps the employee who has referred someone involved through the whole process. Most employee referral programs invite employees to submit resumes, and then leave them out of the process until it’s time to give them a cash award. What a waste! This approach treats the referred person as a stranger.
- Extend proactive recruiting processes. Many organizations have a campus recruiting capability. Rather than sitting back and waiting for students to approach them, they go to where the students are. Why? Because there’s only so much student talent to go around, and you don’t want to miss out. This thinking needs to be applied to the whole function. When there are layoffs in your area, when a plant closes, recruiters need to go to where those workers are to get the good ones.
- Don’t wait for a vacancy to open up before you bring talent in the ‘Enter’ door. Organizations need to nurture a pool of future leaders to fill positions that don’t even exist yet. If you think back five years, how many positions in your organization can you name that didn’t exist five years ago but do now? You may be surprised by the answer. When your next brand new position comes into existence, you don’t want to be scrounging for strangers. You want to have the talent in-house already. Why? Because we’re in a seller’s job market; there’s less talent than there used to be.
I know this sounds sort of radical, and I know, too, that recruiting departments aren’t structured to operate in this way. But that’s my point. The old ways won’t do any more, because there’s been a fundamental change in the job market.
- Re-examine the activities that take up much recruiting time. Do you have to spend time tracking resumes of people that you’re never going to hire? Must you document six ways from Sunday every interaction that you have with other human beings? Even if the answer is ‘Yes’, recognize that these activities keep people busy (and employed), while adding almost no value to the organization. Continuing to do them makes your function vulnerable to cost-cutting.
- Oh, yes, it’s time to start managing the ‘Exit’ door. It may seem counter-intuitive for a recruiter to help stop people from leaving (fewer vacancies, right?), but really it’s a golden opportunity. If recruiters want to add value, they’ll stop tracking resumes and redefine themselves as retention consultants as well as recruiters. They’ll stake claims to both doors, not just the ‘Enter’ door. Demonstrate that you can bring talent in, and keep it from going out.
I know of a company that’s experiencing a 40% turnover rate. They know that they have a problem, but you know what they call it? They call it their recruiting problem. Thus framed, their solution is to recruit harder.
This company doesn’t have a recruiting problem, they have a retention problem. They’re pretty successful at getting people in the door; what they need to do now is keep them in.
Even if your organization is too small to have a separate recruiting function, the preceding applies to you, too. You’re in the seller’s job market every bit as much as larger organizations. So take a hard look at how you recruit and how you retain. As talent becomes more scarce, you want to be positioned to keep the talent you have. Because if talent is allowed to amble out the 'Exit' door, replacing it will be harder than ever. More on this in future columns.
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