The Sky is Falling!

Over the last few months, I’ve spoken with recruiting leaders at dozens of Fortune 500 companies, getting their reaction to some of the hiring challenges we all face. It seems that everyone agrees the talent shortage is for real and getting worse, but most recruiting leaders are reluctant to implement the bold actions needed to address the problem.

In this article, I want to make the case that we have a problem, get your viewpoint, and then offer the vision of Steve Jobs, Darwin, the underpinnings of the American Industrial Revolution, and obviously Geoffrey Moore, Jimmy Buffett, and Thomas Friedman. These are our guides on how to implement the appropriate corrective actions.

Here are some of the more obvious factors explaining why the gap between top talent supply and demand is increasing:

  1. Everybody is competing for the same talent pool. As a result, only the most aggressive competitors will get a bigger share of a shrinking pool. (This is the Darwin part.)
  2. The demographics are for real. The first of the baby boomers are turning 60 this year. I know a few, and some wouldn’t mind working at Starbucks or McDonald’s (since it now has better coffee).
  3. There is a difference between the generations. While there is no difference in work ethic, there certainly is in the types of work each generation prefers and their attitudes and ambitions.
  4. The hidden job market is no longer hidden. Pre-1995, top people had to find a recruiter to get good jobs quickly. Now most jobs below $250,000 are available for all to find. This is an example of Thomas Friedman’s “flatlander” argument that information is now accessible to everyone. (Not advertising jobs might be an option worth exploring.)
  5. The passive candidate pool is no longer hidden. Anybody can find the names of just about anyone within an hour or two. People are joining ZoomInfo, LinkedIn, FaceBook, MySpace, and Yahoo! 360? so they can be found.
  6. Jobs are changing faster than people are being trained to fill them. This exacerbates the overall talent shortage since it takes longer to train people to meet current needs.
  7. Workforce mobility is on the rise. In part this is because of economic cycles and in part because of changes in attitude (listen to Jimmy Buffett for more on this) about work. There is no longer a stigma to leaving a company every year or so. Work is now being designed with this concept in mind.
  8. The shift to hire more corporate recruiters has worsened the problem. The more recruiters you have, the more turnover you’ll get since everyone is stealing from everyone else more often.
  9. The line between passive candidates and active candidates is blurring. Passive candidates now start checking out other opportunities once they find out another company has some interest in them.
  10. Technology has not evolved as rapidly for recruiting as it has for other business functions. For example, think about the disruption the OFCCP ruling has had on company reporting. I suspect that if some top distribution person from WalMart led an OFCCP reporting project, it would have been handled with relative ease. It’s certainly an easier IT project then JIT inventory and cross-docking.

Don’t hesitate to challenge my thinking here or add some ideas of your own, but the point is that you can’t use yesterday’s solutions to solve tomorrow’s problems. New ideas and new approaches must be found.

From what I can tell, only those willing to be innovators and those willing to look at the problem/solution from a totally new perspective have a chance of ending up on top. According to Darwin (and every economist), everyone can’t win when there is a finite supply of a scare resource.

In some cases, price is the equalizer, so expect some dramatic wage inflation for top performers in the short term. Of course, if your comp and benefits department is looking at yesterday’s data, you’ll lose valuable playing time fighting this argument. This is one of the bottlenecks that needs to be broken in order to move ahead at a rapid enough pace.

Geoffrey Moore offers some interesting marketing insights in his book Crossing the Chasm. The book describes how to market technology products. In the book, he describes these five types of buyers:

  1. Innovators. The technology enthusiasts.
  2. Early Adopters. The visionaries.
  3. Early Majority. The pragmatists.
  4. Late Majority. The conservatives.
  5. Laggards. The skeptics.

Moore suggests that the key to successful selling in this type of market is targeting customers who are early and late majority buyers, since these are the largest pools. From a recruiting perspective, I’d suggest that you need to be an Innovator and Early Adopter type of buyer. This means being the first to try out everything. Given a finite supply of talent, waiting for some new tool to be proven to work means you’ll be stuck with the leftovers.

Steve Jobs offers another perspective on how to reorganize your recruiting resources. Jobs recently made the contention that record publishers needed to unlock their music to increase portability across different devices. Jobs made the case that total sales would increase as a result, not decline.

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History suggests that common parts and transportability of data increases growth and efficiency. For example, consider the growth of the PC industry and Microsoft, in particular, when everyone began using the same Windows-based operating system. Similarly, the shift from a craftsman model to mass production and the use of standardized parts accelerated economic growth and was the foundation of the American Industrial Revolution.

The Information Age is causing a comparable transformation with everyone having access to the same information. This is the contention Thomas Friedman makes in his book The World is Flat. In many cases, what he describes is the root cause of the globalization of the workforce and the increase in workforce mobility. (Here’s an article you might want to read for more on this.)

Back to Jobs and the iPod for another ground-breaking transformation. The reason the iPod continues to be such a huge success is its seamless ability to link a pretty decent music player (but not the best) with an online store that allows a person to easily buy and download music. It’s this systems integration that makes it work, combining a bunch of hardware and software together so that anyone can easily and intuitively use it.

From the perspective of ease-of-use, systems integration, standardization, and marketing, most recruiting, interviewing, and hiring processes are in the Stone Age. Craftsman (recruiters) still dominate the show, using unsophisticated tools to address an Information Age problem.

With this in mind, here are some specific things you can do to move your recruiting process into the future:

  • Don’t get into a price war. We might be setting ourselves up for some massive wage inflation as counter-offers seem to be the dominant approach used to attract and retain top talent. Top people want better jobs and better careers, so use these factors to differentiate your jobs. Use the same concept to re-recruit your best people.
  • Expand the talent pool. Looking for functional equivalent experience and/or people with the potential to quickly adapt seems like a far better sourcing approach than playing musical chairs.
  • Rapidly upgrade your technology. To get started here, hire people from distribution and marketing to design and manage your systems. These people were trained to do it right, and got promoted because they were good. Few people in HR or recruiting get promoted because of their tech prowess, so why would you choose them to lead these types of projects?
  • Shift from a transactional recruiting model to a consultative one. Corporate recruiting is a different breed than external recruiting. Using a transactional model based on unsophisticated sourcing, screening on skills and closing on speed is one sure way not to hire top people. Shifting to a consultative recruiting model is how you can match top performers with great career opportunities without price being the primary criteria.
  • Implement staffing requirements planning. If you think you’re behind because you’re not using sophisticated workforce planning, you need to find out about Staffing Requirements Planning. Ask some leaders in your supply chain what this means, then get started by putting workforce planning at the top of the priority list.
  • Figure out if your competency models and behavioral interview techniques are helping or hurting. Since everyone has the same competency model, it’s hard to believe they’ve had any impact. Of course, it doesn’t really matter, since most managers don’t know how to assess these factors during the interview anyway. Worse, most managers only use behavioral interviewing to eliminate bad candidates they don’t like, not to assess candidates they do like.

I could end this article by saying that 10 years ago few people believed global warming was a threat, and look what happened when nobody took action. But I won’t. Because in this case, there is a solution.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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13 Comments on “The Sky is Falling!

  1. Lou,
    Some great points and we must change with the times. That includes recruiters being involved in social networking, niche sites and blogs. AND we must have the latest tools in the form of ATS (Applicant Tracking Systems), automatic dials and mass emailers. BUT, I pity the recruiters that stop cold calling, attending user groups and asking for referrals.

    High volume, low margin recruiting is a part of the recruiting industry as much as the single, exclusive, high fee recruiting. We must be able to build recruiting departments that can handle it all! It’s up to management to be as creative as much as the individual recruiter. And I don’t mean beating the recruiters if they don’t have enough calls per day either. I mean leveraging the strengths of the TEAM with the best tools, people and processes.

  2. Recruiting is about cold calling and networking. It’s not about getting names. Anybody can now get the names of passive candidates in less than 60 minutes. It’s what you do next that determines how good a recruiter you are.

  3. You can’t be serious about not advertising? I used a retained aproach myself and focus on higher level searches, but even for my roles I’m surprised at the great talent which occasionally applies (thanks to your ad writing techniques). Recruiters NEED to advertise to have a balanced recruiting strategy. But I like the fact you’re bringing up discussion.

    Also, I totally disagree about your point with more corporate recruiters. Our company has hired 6 GREAT recruiters and our turnover is less than 5%. Perhaps there’s some angst from the agency world that corporate recruiters are becoming more educated making it difficult to argue for 30% retainer fees? 😉

    Finally, Lou, don’t be fooled by the man made global warming hype machine. I’m pasting an op/ed below which offers some insight:

    The Weather Channel Mess
    January 18, 2007 | James Spann | Op/Ed

    Well, well. Some ?climate expert? on ?The Weather Channel? wants to take away AMS certification from those of us who believe the recent ?global warming? is a natural process. So much for ?tolerance?, huh? I have been in operational meteorology since 1978, and I know dozens and dozens of broadcast meteorologists all over the country. Our big job: look at a large volume of raw data and come up with a public weather forecast for the next seven days. I do not know of a single TV meteorologist who buys into the man-made global warming hype. I know there must be a few out there,
    but I can?t find them. Here are the basic facts you need to know:

    *Billions of dollars of grant money is flowing into the pockets of those on the man-made global warming bandwagon. No man-made global warming, the money
    dries up. This is big money, make no mistake about it. Always follow the money trail and it tells a story. Even the lady at ?The Weather Channel? probably gets paid good money for a prime time show on climate change. No man-made global warming, no show, and no salary. Nothing wrong with making money at all, but when money becomes the motivation for a scientific
    conclusion, then we have a problem. For many, global warming is a big cash grab.

    *The climate of this planet has been changing since God put the planet here. It will always change, and the warming in the last 10 years is not much difference than the warming we saw in the 1930s and other decades. And, lets not forget we are at the end of the ice age in which ice covered most of North America and Northern Europe.

    If you don?t like to listen to me, find another meteorologist with no tie to grant money for research on the subject. I would not listen to anyone that is a politician, a journalist, or someone in science who is generating revenue from this issue.

    In fact, I encourage you to listen to WeatherBrains episode number 12,featuring Alabama State Climatologist John Christy, and WeatherBrains episode number 17, featuring Dr. William Gray of Colorado State University, one of the most brilliant minds in our science. WeatherBrains, by the way, is our weekly 30 minute netcast. I have nothing against ?The Weather Channel?, but they have crossed the line into a political and cultural region where I simply won?t go.

  4. I thought the article was good…I share many of the same ideas…..the problem isn’t a lack of good ideas it is figuring out a way…a quick way…. to get the buy-in necessary from further up the food chain. I am a firm believer that you should take advantage of every tool available (there is no magic bullet). Getting the organizational change management to become championed and accelerated is the issue most of us face. I guess it boils down to whether your company is a:

    # Innovators. The technology enthusiasts.
    # Early Adopters. The visionaries.
    # Early Majority

    if not….you will beat your head against the wall and get nowhere. I like to think that Lockheed Martin (for as large a corporation as it is 135,000) is an ‘early adopter’.

    But regardless…..more specifics about getting corporate buy-in and affecting change management in a timely fashion would be appreciated.

    BTW, the promise to not end your article by jumping the shark over global warming went unfulfilled.

  5. As someone outside the HR field, I’d like to ask one question. Have you any idea of the number of professional women who have left their careers to raise a family? After a few years, many of them would be able to return to work and would welcome that opportunity if only a company would appreciate how important it is for them to balance their schedules between work and family. A little flexibility in scheduling could go a very long way toward getting quality professionals who in turn would be very loyal and work very hard. It amazes me just how shortsighted the business industry can be at times. Thank you for your time.

  6. This is an excellent examination of the tools to find people. But I didn’t see anything in this that addresses the people issue.

    As Geraghty and Coppinger pointed out, there are pools of qualified talent that are needlessly overlooked. And as I pointed out in another thread, there are things we can be doing now in order to develop the talent we desire in our apocalyptic year.

    And as I’ve pointed out in one of my blogs (can’t remember which of the three), there are reasons why we’re overlooking the female population, making odd choices, and totally ignoring others.

    Additionally, in a 2000 (or was it ’99) article (Facing the Facts), I talk about yet another population that gets overlooked and then dismissed when they are identified — the disabled.

    It’s still my contention that the talent crisis is illusory.

    Viva

  7. Baby boomers have reinvented just about everything in our society, and they will continue to reinvent retirement. We have found that Baby boomers and active retirees want to stay involved in today’s workforce.

    The companies that we work with realize that by the year 2010, almost one in three workers will be at least 50 years old.

    Undeniably, changes in workforce composition and capabilities are right around the corner. What effect they will have on specific organizations remains to be seen. We recommend that all companies take a pro-active approach in planning for the future.

    Lou – Thank you for another great article!

  8. Kathleen:

    Here I am opening my big mouth again. We introduced ‘flex time’, and ‘nanny on site’, and ‘work from home when the kids are sick’ for our working Mothers back in the 80’s and early 90’s.

    The LAST people in the world who would understand this type of thinking are the traditional, 9 to 5 (only interview 11 to 3 with 2 hours out for lunch) HR types.

    One thing the women who worked in and built our little company learned right off the bat, much to their chagrin, was not to expect anything from HR women (the few men weren’t so bad)except disdain and accusations of ‘unprofessionalism’ when it was learned that the Mothers worked from home. HR would react with ‘professional horror’ if there was the occasional noise of babies or toddlers in the background.

    Just FYI, I don’t thinks have changed all that much from what I can see.

    We have a photo of my spouse, who worked for the company, sitting at her home office desk with our son on her knee while she scanned resumes (she was an actual TECHNICAL Recruiter) and maintained a 1.3 to 1 submittal to hit ratio for contract Engineers with clients like (as?) G.E., Lockheed, Martin Marietta, MacDoug, et al.

    It CAN, and should, be a common and accepted practice…but it ‘ain’t’.

    END

  9. Unfortunately, many recruiters want to hire people who are like them, or the hiring managers want to hire people who are like them, look like them, talk like them, etc. The experience that more mature ‘Baby Boomers’ would bring to an organization is invaluable, but are viewed as ‘old’ or ‘slow’, or worse yet, like ‘parents’. They seldom make the cut.

  10. Another avenue you might try is http://www.worldwit.org/Jobs, an on-line, national and international network of professional woman, and some men, but predominantly women. You will see their job-posting page on the link above. They regularly send notices out to the members in their network regarding new postings.

    If you’d like to reach an underutilized segment of the talent pool, I suggest including your postings there. You will surely receive more responses than you expect, and from very qualified applicants.

  11. John, Congrats go to your wife’s company for offering the flextime. I’ve worked as a consultant in the diversity field for a long time. I understand what you are saying about those who complain and disrespect the ones using the flextime. It doesn’t excuse them though, and leadership in the company should take notice.

    It’s the leadership who is responsible for educating its employees and creating understanding between them. For starters, it might help if flex time is offered to ‘parents’ not just ‘mothers’ or better yet, offered across the board wherever possible. There are many times when my husband can easily step in to help with our children while I am attending a conference, etc.

    Your wife’s example shows that this can and does work. A company with vision and commitment to company success through individual success should be able to help each person understand what it takes to be a team and win. It sounds like much work needs to be done to create a more supportive atmosphere, but it can be done.

    Thank you again for sharing your story. I appreciate the chance to learn about it.

    Best wishes,

  12. If you are interested in getting more information, a good place for research is the BLS Employment Projections program. Learn more about the expected effects of baby-boomer retirements in ‘Gauging the labor force effects of retiring baby boomers’ by Arlene Dohm, Monthly Labor Review.

  13. In the course of doing some research, I returned to this discussion and the thoughts expressed. Josh’s words left me a bit baffled as to misquoting the thought leaders. As I looked at the list of those who spoke, I saw a number of names who have been acknowledged or should be acknowledged as thought leaders. The capacity of each person is not important. The quality of the feedback is.

    I don’t know that anyone actually misquoted the author of this piece as much as expressed opinions about populations that can add to the mix. The population isn’t as small as we’re led to believe. And the other thing I saw (and knowing Lou as I do, he has as well) was food for a future article on those areas.

    As to bullet points, that one’s baffling as well. Again, I didn’t see bullet points but concerns about populations and search strategies that were missing. Lou talked about tools. But I’ve read one of his books and gone through the updates of another. He is thorough and will get to the missing topics as time passes.

    Based on the title, I know I was expecting to learn about why the talent crisis is not and, like Chicken Little’s alert, we need not heed the scream.

    Isn’t it wonderful that we have free expression in the article reviews and in the Forum?

    Viva

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