Why the Talent Crisis Is a Question of Quality, Not Quantity of Candidates

Eightfold
Eightfold

Many employers report feeling inundated with applications from enthusiastic candidates, but those employers still can’t seem to fill their vacancies from those candidate pools. In our Talent Intelligence and Management Report for 2019–2020, we spoke with CEOs and CHROs at enterprises across the U.S. and in several European countries. We also surveyed some of their full-time employees. We learned that the talent crisis has not abated.

Both the 2018 and 2019 reports showed that more than 70 percent of CEOs and CHROs couldn’t find enough qualified candidates. Better matching technology would help companies to solve this challenge.

Employers actively hiring and talented employees cannot easily find each other, which leads to frustrations on both sides. But there are solutions — both in terms of technological tools and people-led hiring strategies — to this problem. Below, we explore approaches that hiring teams can pursue to ensure they find quality candidates in the haystack of of applications.

Recruitment and Retention Is About to Get Harder

In the U.S., unemployment rates are at generationally low levels, and there are more vacancies than unemployed job seekers, says Darin Buelow, principal at Deloitte Consulting LLP. 

Baby boomers are set to retire, and companies are searching for the next generation of leaders. There is also a paucity of candidates with the right skills in advanced fields. Consider the situation with science, technology, engineering, and math (STEM) skills. Even though more workers are being reskilled in advanced tech roles, the demand will most likely continue to outstrip demand for a long time yet, Buelow warns. 

All this means that the hiring challenge is not going to get any easier. It’s reasonable to expect even more applicants for each vacancy. Having an effective filtering process will be key to successful hires. 

Multinational hiring managers conducting interview with female candidate; talent crisis concept

Organizations Should Look Inward for Talent

Hiring teams often try to increase their candidate pools by posting jobs on what Nick Corcodilos at Ask the Headhunter calls “cattle-call websites.” It’s better, he says, to focus on connecting with fewer but more relevant candidates. Sometimes, that will mean looking within the organization. 

Yet few companies take this approach. Only around 30 percent of organizations hire internally today, explains Peter Cappelli, a professor of management at the Wharton School and a director of its Center for Human Resources. In the mid-20th century, by contrast, that number was 90 percent. In two generations, a focus on internal mobility seems to have fallen by the wayside. Cappelli adds that only 28 percent of talent acquisition leaders today say internal candidates are an important source for their pipelines.

One of the reasons organizations avoid hiring from within is the perceived cost of retraining employees. But sooner or later, most companies will need to reskill their people anyway. Investing in employee development will help staff and the business to grow together.

It helps to have a system in place that identifies areas in which employees can develop new skills that also align with the organization’s changing needs. Taking such an approach is a powerful means of overcoming the talent shortage while maintaining an engaged and loyal workforce.

The Human Hiring Manager Can Be Inconsistent

People are prone to errors in judgement. Indeed, unconscious biases plague many human decisions. AI, however, is capable of circumventing those biases. 

Journalist Jo Faragher spoke to Megan Marie Butler, an analyst at AI research company CognitionX, on this issue. “Bias in hiring is just one small subset of what AI can do in recruitment,” Butler says. “A bot to answer recruitment questions is great for engagement, for example, and would never introduce bias.”

The hiring algorithms that AI relies on are not inherently biased. They offer useful, streamlined suggestions that people-led hiring teams can employ as part of their overall hiring strategy, Butler explains. 

But, as Faragher adds, a person in charge of hiring could consider a resume in very different lights depending on mundane factors like what time of day it is. AI and humans work in tandem. AI does the heavy lifting, and people finesse the process. Marina Arshavskiy at SHRM also notes the powerful filtering capabilities of HR tech. She says it can be used to filter candidates so the final pool of contenders include only the most qualified and suitable. 

The advantage of such technology is that those responsible for hiring can devote their energies to the few rather than the many, making nuanced decisions on the final candidate. 

Besides being able to accurately and efficiently filter the best candidates from a great number of applications, HR technology can provide employers with additional staffing insights. As Arshavskiy notes, AI-powered tools are able to filter through thousands of applications instantly. And we’ve noted above that AI can match an internal candidate’s key strengths with an organization’s evolving needs. 

happy pretty office workers having teamwork meeting and standing in office looking at laptop computer; talent crisis concept

Start Using New Tools

There is a wealth of new technology available that can improve the accuracy and efficiency of hiring. The editorial team at Entrepreneur says examining resumes and interviewing on the phone will reveal limited insight into a candidate’s suitability.

Better is to use an assessment tool that can test for behaviors and cognitive reasoning. The team says the right assessment tool can reveal whether candidates’ attitudes, such as whether they’re “conscientious or lackadaisical, introverted or extroverted, agreeable or uncompromising, open to new ideas or close-minded, and emotionally stable or anxious and insecure.” 

That’s a boon for any hiring manager trying to sift through the hundreds of applications. Then, the data gleaned from these tools will help to create a clear behavioral and capability profile of each candidate. That way, you will know whether these candidate attributes align with the role’s requirements.

Tracking Performance Is Key

Gathering data provides usable insights. Indeed, tracking employees’ performance is sound business practice for employers. Still, very few employers actually measure the success of their hiring strategies. Again, Peter Cappelli says most employers haven’t even gathered data. In fact, only around 30 percent of employers are trying to calculate the ROI on their hiring methods. 

And the metrics that hiring teams do focus on miss the mark. They care about the time and cost of filling vacancies. Cappelli says if we measured restaurants on these same metrics, “McDonald’s would be the best restaurant in the country, right?” 

At first glance, receiving hundreds of applications seems positive. But it can also be unhelpful, particularly if organizations don’t have suitable tools, systems, and processes in place to filter through the deluge of candidates for the best hire. AI-powered tools and focused human-led approaches can help to solve this problem. 

The right candidates are out there. HR teams just need to understand how to find them in the current talent marketplace.

Images by: fizkes/©123RF Stock Photo, fizkes/©123RF Stock Photo, primagefactory/©123RF Stock Photo

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