Businesses have never done as much hiring as they do today, spending enormous money on an inefficient process. Today’s approach seems counterintuitive, with most people taking new jobs when they aren’t even looking for one. Sometimes recruiters even post jobs that don’t exist, trying to target those they could utilize in the future or in a different role. Many businesses outsource much, if not all, of the hiring process. When LinkedIn and social media are used to find potential candidates, the individuals are often contacted directly to see whether they can be persuaded to apply for a position and negotiate the salary they’re willing to accept. The issue with these practices is that we don’t know whether they produce decent hires. Hiring talent remains a top concern for companies. Employers end up exhausting their expenses on their hiring approach without having metrics on whether or not it works.
Where the Problem Starts
Openings are all too often filled by hiring from outside than by promoting from within. When hiring from outside, organizations don’t have to pay to train and develop their employees. With fewer internal promotions, the hiring approach is no longer concentrated on entry-level jobs and recent graduates, so companies must hire across most levels. This means the candidates they want are already doing the job somewhere else and don’t need training, but they are much harder to find.
Also, since companies hire from their competitors, they must keep replacing people who leave. Most hiring is done to fill existing positions, and most vacancies are caused by voluntary turnover. Many employees consider a position elsewhere for career advancement. Poor retention can be fixed by tracking the percentage of openings filled from within and requiring all openings to be posted internally.
Protecting Against Discrimination
Determining whether your hiring approach is genuinely effective is not only basic to good management, but it’s the only real defense against claims of discrimination. Workers have legal protections against hiring practices that may have an adverse impact on them. If members of a particular group are less likely to be recruited or hired, the employer must show that the hiring process is not discriminatory. The only defense against evidence of adverse impact is for the employer to prove they use valid hiring practices, predicting who will be a good employee in meaningful and statistically significant ways.
Determining job requirements and the corresponding attributes candidates must possess is challenging since so many companies have reduced the number of internal recruiters who help push back on hiring managers’ wish lists. Companies piled on job requirements, put them on the applicant-tracking software that sorted resumes using binary decisions (if it has a certain keyword or not), and then found that virtually no applicants met all the criteria. It is well worth it in the long run for companies to utilize recruiters who have expertise in hiring rather than just handing the process over to managers.
Be Cautious of Passive Candidates
Although “passive” candidates differ from “active” job seekers, the reason they’d be interested in moving jobs. Active candidates seek better work and career opportunities. They are passionate about their work, engaged in improving their skills, and reasonably satisfied with their current jobs. They have an interest in moving because they are ambitious, not because they want higher pay. Recruiters must avoid chasing passive candidates.
Persuade Fewer People to Apply
There is too much attention to “the funnel,” where job posting readers become applicants, are interviewed, and ultimately are offered jobs. Unfortunately, primary hiring improvement efforts are usually aimed at making it faster and cheaper, only shoveling more applicants into the funnel.
Test Standard Skills
Testing to see whether individuals have standard skills is one of the most helpful things you can do. For instance, can the candidate do simple programming tasks? However, even when conducting such tests, hiring managers often ignore them, and when they do, they get worse hires. When recruiters use objective criteria and tests, applying their judgment to those criteria typically leads to choosing worse candidates than if they stuck to a standard formula.
Revamp the Interviewing Process
Interviewers should stick to questions that predict good hires (regarding past behavior or performance relevant to the tasks of the job) and ask them consistently across candidates. Interviews typically assess if the candidate “fits with the culture,” which is one of the most challenging attributes to measure. Few organizations have an accurate and consistent outline of their culture and even if they do, understanding what attributes make a good fit is not straightforward.
Culture fit is another area in which new vendors are pushing, collecting data from current employees, creating a machine learning model to predict the best ones’ attributes, and then using that model to hire candidates with the same attributes. This can only work as well as the algorithms allow. Above all else, utilizing traditional recruiting experts is the best bet for their hiring approach. These potential conflicts and pain points emphasize why the best staffing industry insurance is needed.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.