The Talent Challenges for HR

Attracting, hiring, developing and retaining the right people has always been a crucial part of any organisation’s success. The methods of doing so successfully, however, are evolving fast.

With growing skills gaps, uncertain trading conditions and rapid changes in technology driving new preferences and expectations in consumer behaviour, businesses need agile, curious and committed workforces. Our current and future employees have expectations of a more seamless and immersive experience when they apply for a role or join a new business. They also now have more choices over where they work and how they work, and look for companies that will offer them the opportunity to grow, develop and reach their potential.

For the HR profession the technological developments, behavioural changes and shifts in expectations and preferences that are impacting how businesses operate and grow, present unique challenges. The workplace analysts who believe that all processes should be redesigned to accommodate and attract Millennials have a powerful voice in both the digital business media and at industry conferences, yet the HR team that looks around their companies will see a more varied mix of people and interests to be catered for.

Workforces are embracing similar influences, but at a different pace and in a variety of ways. Not all employees want company-issued technology that requires them to check e-mails 24/7, or to have a constant digital presence. The modern HR team has to cater for all expectations and preferences, in a way that is both diverse and inclusive, and enables all employees to deliver their best work.

92% of workers say that technology affects their satisfaction at work, yet HR are not always part of the conversations around the digitisation process. That has to change fast. The ubiquity and speed of digitisation does however drive a need for approaches that are more relevant to how employees live, and this means recognising the importance of experience and regular communication; creating work experiences that reflect their aspirations.

The Employee Experience is now a competitive advantage, so HR teams need to balance the needs of the business today with potential changes in the future, helping to create an environment and culture in which people want to work and feel empowered and supported to give their best.

To meet the challenges posed, and make the most of opportunities created, every business needs to find and hire the talent that is right for them. That is, people with a spirit of curiosity and flexibility, who possess the skills, attitude, capabilities and potential to help organisations grow and evolve.

The word ‘talent’ is a much overused and misused word in the modern labour market normally implying a high skilled, high potential candidate who is in some way special. That definition needs to change. It drives poor recruitment practice, with hiring businesses trying to chase a candidate who ticks many boxes and appears ready made for their vacancy. These matches rarely exist, nor are the likely to be successful.

In a world where new jobs often require skills that have not been hired before, that definition also fails to take into account the many ways that employees can develop and use their initiative and capabilities to help companies meet business challenges. Most successful specialist hires step in to a role that will stretch them and help them grow and realise potential. Everyone has talent. It is finding the people right for the business and the role, irrespective of background and work trajectory, that organisations need to focus on.

Recruitment is not a one-way street and the dynamic has shifted. Candidates can tell a lot about a business from the way they go about recruiting, so a gladiatorial process full of challenges and hurdles, is unlikely to engage them, unless it accurately reflects the type of business you are and the culture they can expect when they join.

Historically there was little that job applicants could find out about what life was actually like inside the business they were applying to work for. It wasn’t until the first few days in the job that they really got a feel for culture and structure. This has changed. The company is now selling itself to the candidate they want to hire as much as the candidate is to them.

The way in which we attract, hire, develop and retain people, the HR processes and interventions along the way, will be a defining factor in how businesses succeed. The outcome is as important to individuals as the process that delivers it, while social and digital channels, powered by the constant presence of mobile, provide a real-time commentary on both the process and perception of the outcome. They want to be encouraged and treated fairly. And they want to be themselves at work.

It is the journey by which they are found, selected, oriented and developed, which needs to be reimagined for the workforce of today and tomorrow. There is now also a transparency around current thinking and best practices, and reporting of the various attempts that businesses make to introduce new working arrangements and structures that can help shed light on how others are facing similar challenges. HR professionals can embrace clear and fresh thinking, and learn from industry peers and colleagues.

Ultimately, this transparency means that workers in every company have access to what other businesses are doing. If they like what they see elsewhere, the chances are they’ll expect it where they are; or else may go out and find it for themselves. Effectiveness of the employee experience is both a business’ competitive advantage, and also the yardstick by which HR teams will be judged.

My co-authored book Exceptional Talent has been published by Kogan Page. In the book myself and Matt Alder explore how changes in technology, communication, and employee preferences are impacting the talent journey, offering practical advice on how to build effective recruitment and talent management strategies to meet the needs of today, while also helping businesses plan and prepare for the challenges of the future.

Are You Listening to Your Employees?

If there’s one thing that should be high on the agenda of HR teams, then its the employee experience. Yet only 30% of businesses try and measure it, which is poor when compared to the 72% who measure customer experience, and baffling when so much of customer brand perception (around 70%) actually comes from interactions with your employees. The experience should start early, from as soon as someone thinks about joining you.

Businesses are short of the skills they need. Leaders are concerned about agility – both the business and the workforce – and the ability of their organisations to respond to change and create solutions. Technology is both friend and foe. Evolving at a rapid rate, and giving employees and customers heightened expectations, it can also overwhelm. Do we have the digital capabilities we need? Are we able to harness the efficiency, data and insights to help create better and more profitable businesses?

Overarching all of this is the way we treat our people. Are we somewhere they want to work? They have choices – are we giving them every opportunity to grow and develop? The opportunity for personal development is increasingly important to them. And what about the technology we use? 92% of employees say that technology affects their satisfaction at work.

I’ve spent last week at Ultimate Software’s Connections conference as part of a team of analysts, influencers and bloggers. Ultimate are certainly a company that from the inside knows how to create a great place to work, and they worked hard to make sure this was an event that offered all attendees – and there were around 3,000 of them – insights, case studies, ideas, new tools and a peek at the road ahead in terms of their new offerings. They announced an impressive range of tools and products to be rolled out over the next year or so. This is important – over 60% of HR technology buyers rate customer service as a major factor in the purchasing decision. The way you look after them – both from the perspectives of innovation and support – is vital.

We started with a run thorough of trends and crowd sourced client concerns. Some familiar bases were touched, such as gig economy, generational concerns, and limitations of the traditional job description – once created they become obsolete. However there was also recognition that how organisations treat their employees today is more important to employee satisfaction and retention than ever before, with a US workforce study showing that it matter two to three times more than mission, goals & values.

Whilst most of the workplace trends get talked and written about regularly, the fact that they remain a concern for so many HR leaders indicates to me that there isn’t enough clarity around the debate. These events are a useful way for people to get together and share. Whilst something like the gig economy might not itself have a large impact, the fluidity it enables in the workforce matters. HR needs to plan ahead, and if their workers are balancing careers that mix both permanent and contingent arrangements then this needs to be factored in.

Hearing the voice of the employee, getting a feel for their real thoughts and sentiments, is probably most vital. In the US nearly half the workforce don’t feel they are treated fairly, and around 75% want to be listened to. This was a key focus for the conference and, not surprisingly, an area in which Ultimate try to help. Their Retention Predictor was a big feature at sessions during the conference with customers vouching for its effectiveness. Fellow blogger Tim Sackett wrote:

“Ultimate has done a really good job at going out and buying some great data analytics companies and implementing that tech and talent into their organisation.

The concept is that if you analyse enough of your employee’s data points you’ll see trends that show if someone is highly likely to leave your organisation as a voluntary term. As an organisation, we really want and need to know data this to help retain our best performers.

UltiPro Perception delivers a ‘score’ of each of your employees showing if someone is a flight risk based on their level of performance, so that you can filter, if you want, by high performers to low performers. The notion being, you definitely want to ‘save’ your high performers”

There were two customer case studies I heard. In one attrition had been reduced from 30% to 15% amongst high performers and in the other from 25% to 6%, with the HR client saying “everyone has a retention score but then there’s a person attached to that score”.

A feature that is key to this improved retention is that managers who see team members with a high score indicating a probability of leaving are prompted with a series of customised leadership actions to help them retain their employee – there are 50 actions built into the system, and companies additionally build in their own bespoke actions. Both case studies spoke positively about how this was helping managers become better leaders and much more aware of their key performers and what it takes to keep them.

Relationships with managers and leaders are key to the employee experience. Whilst we might talk about managers being promoted based on their ability to lead and inspire teams, I know from personal (and anecdotal) experience that much of this is learned on the job. What I like about the retention predictor is that it helps managers understand the link between experience and retention, and the help it gives them to develop. Improving retention of the people you want to keep is one clear way for HR to show strategic and commercial contributions to the business. Understanding who is at risk of leaving and why, and being able to do something about it.

The product is currently being evolved as the big product announcement last week – Xander – shows. It uses machine learning, NLP and sentiment analysis to provide better predictions and recommendations. Collecting data is easy, the real trick is to understand and act on it. The best opportunity to really understand our people will come from the ability to understand open text and comments, incorporating more unstructured data to help make the predictions faster and more accurate.

Listen, understand and act – as Ultimate’s CTO Adam Rogers said “Great employee experiences don’t happen by accident”.

5 Ways to Deal With Skill Mismatches

72% of Directors and business leaders are worried about their skills pipeline. Permanent candidate availability is at an all time low. Skills gaps are reaching crisis proportions. 740,000 more people with digital skills will be needed in the workforce this year alone. Half of recent graduates are working in non-graduate jobs. 66% of engineering graduates don’t work in engineering. 1 in 4 vacancies are going unfilled.

Barely a week goes by without statistics like these being used to demonstrate an acute skill shortage. And for recruiters, there’s more. Time to hire is rising. Cost per hire increasing. Interview processes getting longer. Recruiters have more open requisitions than ever. Quality of hire is going unmeasured but, anecdotally, could be better. Productivity is affected.

What can be done? To rely on bringing in developed skills and finding the ready made, perfect fit candidate from outside isn’t the answer. Waiting for a magical piece of sourcing code to help identify candidates with perfect skill sets from across different platforms isn’t the answer either. Even if you could find them, how do you they would join you? What have you got to offer them?

Your vacancy isn’t always the holy grail for a job seeker. Sure, some of the positions you are trying to fill might present interesting challenges for them, but then so might other vacancies in other companies. Even if you had a steady stream of candidates, how many would come and work for you?

In times of heightened hiring challenges, you need to be a place where people want to work. If you’re not, then no amount of sourcing, searching, advertising and referring is going to produce successful results in the long term. Here’s what you need to be doing first…

Consult with hiring managers

You are the recruitment professional, and the labour market – where the skills are – is your specialist area. When you take a briefing from a hiring manager be armed with all the data and manage their expectations. Know what the market is like for candidates with the skills you need. Educate the hiring manager in where the candidates are, what the pool looks like. Use data from REC, FIRM, ONS, job boards and sites like Indeed and Broadbean to make your case and let them understand where there are candidate shortages and what roles create the most competition.

Don’t just accept a job description, particularly one that replicates what the last incumbent did, but rip it up and find out what the role really needs – skills, competencies, capabilities. Begin to build a profile of what you will be looking for and how to assess it. Re-design the role if needs be around the kind of skills and experience available and help the hiring manager to understand the candidates they will be getting.

And test the hiring manager. Can they sell the company or vacancy? Are they a credible interviewer? Candidates always say that the key interview is the one with the manager they’ll be working for, so what impression will they get?

Understand the internal market

Know the talent pool inside your organisation – what skills people have and who is ready for a new challenge and an internal move, or stretch assignment, to help with their development. Make sure your managers are talent producers, not talent hoarders, and encourage them to support employees with internal moves. Identify the people who could develop with some training or input, and convert those you have into the candidates you need. Remember, people want to work for an organisation that helps them grow, develop and realise their potential, so play your part in making the company a place where that happens.

Research the external market

Do you know what candidates look for when they change jobs? How to make your company and open roles attractive? Well find out! There’s plenty of content out there about what job seekers really want, or why not do your own research amongst candidates and people who have applied previously.

What three things are most important to them? Do you market your roles to show that your organisation can provide them with what they want? People with the skills you need might be out there but not responding to your messaging or not perceiving you as a place where they would want to work.

Leverage all the networks you can. Previous candidates, alumni, clients, customers, suppliers and collaborators all have a relationship with your organisation, and all of them have connections. Somewhere in those extended networks might be the person you need. Find a way to reach them and get your message across.

EVP & Employer Brand

What are you like to work for? How does the employee experience shape up? The way you hire, orientate, develop, engage and retain people counts. The way you treat people and support them in reaching their own goals and fulfilling their potential will mark you out as a great place to work. What is your external brand? Does it align with internal values? The early period of employment is when someone reaffirms their decision to join you. If you don’t have an experience that underlines they have made the right choice in joining you – they’ll leave.

Candidate Experience and Recruitment Process

Have you applied for your own jobs? Do you know what the experience is like? Take feedback from candidates going through your hiring process and act upon what you hear. And don’t just take feedback at the end as it will be affected by the outcome.

You can’t expect there to be a pool of skilled and work ready candidates waiting to jump through hoops, endure long absences of communication and non-existent feedback, and work their may through a selection and interview process resembling the labours of Hercules, just to join you. So ditch the gladiatorial approach to hiring.

Make it easy to apply. Give information and let people show you what they can do. The technology is there so why not let people take video interviews at a time to suit them. Find out how they can perform when they are relaxed, rather than trying to find the perfect fit by seeing how they react under pressure.

You can tell a lot about a company by the way they go about recruiting and enabling their people. Stop waiting for the perfect match to come along and start sending out the right messages about the kind of place you are for people who want to learn, grow, develop and reach their potential.

Challenges Facing Executive Search

I was recently invited to attend the World Executive Search Congress in London. It’s a two-day conference with a variety of speakers covering techniques, marketing, relationship building and perspectives on where the sector is and where it is going. It is sponsored by recruitment software firm Dillistone Systems, and was well organised and attended. Previous commitments meant that I could only attend the first day.

I’ve written and researched a lot recently about the challenges and opportunities for contingency recruiters so was keen to hear about the concerns from the retained market.

First impression was that there is little difference between the challenges facing the two. The triple business threats of better skilled in-house teams doing more senior hiring for themselves, client ambiguity and hesitancy on making an appointment, and how to build better working relationships with clients, are common to the staffing sector whether you are working on a retained basis or contingent. In times of perceived candidate shortages, it wasn’t a great surprise to see a number of breakout sessions around sourcing and researching. However, the focus on LinkedIn and how to get the best out of it, many approaches for searching through Google, and general tips for sourcing, produced very similar learnings to those that are usually delivered to in-house and agency recruiters.

With retained work there is a commitment to completing projects, yet keynote speaker Simon Mullins, from the US Executive Search Information Exchange, shared research indicating that up to 40% do fail. This high failure rate primarily happens because projects aren’t properly managed. Often it isn’t the fault of the search consultancy’s own process but in the way they partner with their client. The three key areas where a client shoulders the blame are a lack of clarity on the hiring need, little understanding of the realities of the market and poor timing of the search request. These seem to be common occurrences however the recruitment supply chain supports a hiring business.

Hiring executives and corporate leaders should be held accountable for the recruitment and on-boarding process, properly identifying competencies and key capabilities, and accept that the search process can be risky, particularly if incomplete information is passed on to the search partner and the candidates identified. The search firm similarly needs to be honest with clients. One problem flagged up during the day was around boutique and smaller search firms who might be telling clients what they want to hear, not fully clarifying the brief and not pushing back enough through fear of losing future business.

Many of the top priorities for search firms in 2016 concern better integration with broader talent management processes, particularly those around internal mobility and retention, talent pipelining and supporting clients with better information, and helping diversity. The latter is a key concern and several suggestions were aired, including helping with unconscious bias awareness, coaching hiring managers, understanding exactly what is being communicated about the role and, for gender diversity, interviewing only women in the first round.

Search firms do have a role to play in supporting their clients’ talent processes. Simon Mullins spoke of them as being ‘stewards of the next generation of leadership for our clients’. They have market intelligence and should be trusted advisors, supporting clients and offering the best approach. The way successful searches are measured also needs to be refined. As one speaker said “Quality of hire isn’t about length of time someone stays but what they produce and achieve whilst there. Measure what’s important”.

Measurement was mentioned a number of times and some firms are starting to use Net Promoter Score. In most cases though it is still client metrics that are collected and not those for candidates, with too many firms seeing client testimonials as the only meaningful way of measuring service excellence. However, there is some change in the air with panelists talking about the need for candidate advocacy – one said “don’t commoditise candidates, their experience is important”, whilst another concurred with “metrics on how you treat candidates as important as how you treat clients”.

The need to position as a partner and not a supplier was also a key message. Much like some of their contingency cousins, it seems search firms can too often sell rather than listen, quote fees instead of discussing budgets, offer discounts before justifying value, and focus on delivery rather than bringing fresh insights and perspectives to clients. Keynote speaker John Niland took delegates through the journey of doing higher value work, getting them to focus client conversations on the choice of approach rather than which supplier to use, shape the project requirements as opposed to meeting preset ones, and to create the approach and deliverables with their clients.

The challenges for recruiters of all backgrounds and disciplines are similar. Differentiation, positioning, the need to give value and fresh insights, and support corporate employee initiatives are common to all. Many of the topics discussed and points raised at this event were not that different to those at many other recruitment conferences, although it might be that for this audience some are not considered as often.

The challenge for the permanent recruitment supply chain is relevance. And, in a world of increasing transparency and information availability, to offer clients a service and outcome that they can’t find themselves. As John Niland illustrated, too often the focus is on which suppler to choose rather than finding the best approach to solve the client’s needs, and add value to their recruitment processes.

The New Talent Journey

The way that talent is attracted, hired, on-boarded, developed and retained is evolving. New technologies, changing attitudes to work and employment (from both employers and workers), heightened expectations and a growing transparency around how businesses operate have led to a re-imagining of the talent journey.

What was once a series of events is now an ongoing process, that begins before there is even an identified hiring need, and continues beyond the lifespan of an individual’s working involvement with an organisation.

First lets redefine what we mean by talent. This is probably one of the most overused, misused and misleading words in the modern labour market. Often used by HR and recruitment professionals to imply a high skilled, high potential candidate who is in some way special. This narrow definition leads to poor recruitment practice, with recruiters trying to chase the mythical candidate who ticks all their boxes and is ready made for their vacancy. These people rarely exist, and they are rarely needed.

We now have new jobs are being created, needing skills that haven’t been hired before. People grow in different ways, using initiative and developing their capabilities in line with what interests them and what they believe they would enjoy and be good at. If their jobs are under threat, they will often find new ways to use their talents. The most successful hires will be people who grow into a role, mould it around their capabilities. Growth mindsets and cultures of innovation require curiosity, courage and a restless spirit. These can be found in many people if they are afforded the right tools, a collaborative culture and time.

And of course there are many roles that might seem mundane and repetitive. Yet the people who do them are skilled. Talent is about the people who are right for the role, and right for the business, irrespective of background and trajectory. Talent is also about the hiring business itself, its vision, values, purpose and dynamics. Its offer to its employees, whether they are employed or provide their skills on a freelance or temporary basis.

And it is also about the way in which new people, and new capabilities, are bought into a business.

The new talent journey is an ongoing process incorporating many stages:

Attention – What is known about the business and the potential new hire. Information available. Reputation judged from online interactions and engagements. Before there is even a connection there is a perception over what a business is like, and how it treats its people and customers. And there is also an impression of the candidate.

Attraction – How you hire, what information you make available, how the role is marketed and what is offered. How you develop relationships and conversations with potential employees and collaborators.

Acquisition – Your recruitment process. Application, interviews, assessment, selection. How you communicate, the quality of feedback, when you offer, and the experience you give. This doesn’t sit in isolation but seamlessly evolves from attraction and forms the basis for…

On-boarding – Still waiting for a new hire’s first day before you give them the tools they need for the new role? Think again. The best companies are on-boarding people form the very start of the hiring process, giving them a seamless transition into the business. Paperwork? Already done online before they start. Induction? Its also happening online, probably through a portal, often from the time they accept the offer. First day experience? It’s a gift, a meeting, time with a senior leader. It’s not a few days’ wait for a new laptop and a login, sitting with a team who didn’t know you were starting.

Development – Lateral progression and opportunities for skill and capability enhancement, across teams, functions, divisions and borders. Performance evaluation is ongoing and coaching led. New hires don’t wait for a probation review after 3 months and an appraisal after a year, they want real time, constructive feedback on how they are performing and how they can improve.

Retention – Mutual attraction, the outcome of treating people well and giving them the tools and framework to succeed, develop and enjoy what they do. And if they want to move on – then retain their loyalty and advocacy, because they will be your best referrers of new people and customers, and they may well return in some capacity.

Attracting, acquiring, on-boarding, developing, engaging and retaining your people is an evolving, interlocking process that renews, reviews, reinvents and repurposes. It’s the way that the people you need connect and work with you, grow and develop, create and innovate, make their mark, laugh and collaborate, and its the solid bond you put in their hearts, keeping them very much part of your network of connectors, referrers and influencers.

Its the new talent journey.

(My book Exceptional Talent has recently been published by Kogan Page. In the book myself and co-author Matt Alder explore how changes in technology, communication, and employee preferences are impacting the talent journey. We offer practical advice on how to build effective recruitment and talent management strategies to meet the needs of today, while also helping businesses plan and prepare for the challenges of the future.)

Employer Brand Challenges & Solutions

Employer branding has been a hot topic for some time. The perception of what a business would be like to work for is built from a number of interactions and sources, some within the organisation’s control and some outside of it. The issues around it are debated long and hard in the blogosphere, at conferences and on webinars and podcasts. Certain words always arise – e.g. authenticity, culture, talent, differentiation – almost to the point of becoming cliches and losing their meaning.

So what are the real challenges that businesses face?

I have recently worked in partnership with regular co-collaborator Matt Alder, and in conjunction with employer brand solution provider Papirfly, to research what’s really going on in the market. We conducted in-depth interviews with a number of talent acquisition leaders. We wanted to understand the issues that practitioners face on a daily basis, how they handle them, what content they turn to and which conversations they join.

Our research found that they all face a number of similar challenges regardless of the sector in which they operate. These Employer Brand challenges cover a broad range, from alignment with internal processes and the employment experience, to overcoming negative reputations and the best ways to utilise employee generated content. And in these data driven times the questions of measurement and validation are never far away.

You can read more about these, and potential solutions, in our Pulse Report – which can be downloaded by clicking on the image below – and also from listening to this podcast in which Matt discusses the research findings with Papirfly’s Client Director Sara Naveda

Papirfly’s Employer Branding Insight Report was produced by Two Heads Consulting, a research, insight and content collaboration between Mervyn Dinnen and Matt Alder

4 Things About Skill Shortages

In a recent blog I looked at some of the research and narrative around skill shortages.

We have the necessary numbers of graduates from most of the disciplines* where shortages are reported, but a lack of those with relevant work experience. I won’t repeat the previous blog except to round up that some of the main reasons for shortages seem to be:

Graduates perceived to have the best qualifications are working in sectors other than those they’ve studied for
The rest are passed over, so end up working in other sectors and in lower skilled work
Companies are too specific about what they want
Definitions of employability are inconsistent
Roles aren’t marketed effectively
Less investment in training

Most of these are fixable by either better recruitment or workforce planning, or more realistic assessment of what we have and what we need. I don’t think the general discussion around skill shortages is helpful. As I’ve written before, no recruiter ever got fired because there was a sill shortage, so the individual circumstances around unfilled vacancies never get scrutinised.

In fact there are four things that get lost in this conversation that I believe could benefit from greater scrutiny:

Maybe we’re past peak hiring. Could well be that most vacancies now are for ‘nice to haves’ rather than ‘need to haves’, and that’s why they are unfilled. The budget for recruiting is signed off, give vacancies to a third party recruiter, or run adverts, and see if someone exceptional turns up.
Is this linked to the wider productivity puzzle? Many firms say they lack the capacity to take on more work without extra resource, but this might well arise from organisational and process inefficiencies that management struggles to identify or solve.
When companies say that they can’t find the skills, are they really talking about employability. These aren’t a list of skills to be ticked off a CV, but instead we are talking about a range of values, attitudes, abilities, desires, social awareness and intellectuality that we are looking for people to exhibit. Many of these are picked up once working, or are adapted by the surroundings and culture of the organisation. It isn’t easy to find them.
Maybe we need to redefine what we mean by skill. The recent BBC series Britain’s Hardest Workers bought a game show element to minimum wage work that is deemed to be lower skill. A mixture of manual labourers and knowledge workers undertook low pay tasks and failed to perform to expected standards. After each activity – whether it was sifting through waste, producing food or making small car parts – we were told that these tasks were actually quite highly skilled. That they were stressful, demanding and pressurised. They needed people who were fast, accurate, consistent, technology savvy, focused and determined. None of this sounds particularly low skill, nor that it should be rewarded with below subsistence pay. In fact, if I listed these descriptions on a job ad you might reasonably conclude that I was looking for someone on a fairly high salary to undertake a fairly senior and responsible role.

*Some sectors – one obvious example is healthcare – do have a gap between the people available and those we need. How we bridge that gap is a different debate and one that I think is not well served by being lumped it in with general skill shortage narrative

Recruitment Agency Opportunities and Threats

I recently partnered with Broadbean Technology for some detailed research on the SME recruitment agency market in the UK. The aim was to look at how they were doing and also at ways in which they were adapting to market changes. Overall we found the sector in fairly buoyant mood and posting record figures. It has become a crucial supplier of strategic skills to the UK’s business sector, yet we also identified potential headwinds that some were beginning to feel.

Changing preferences of a new generation of candidates and consultants, both in the way they look for work and what they want to get out of it, are beginning to impact the way agencies attract and engage with candidates and trainees. The speed of interaction that technology enables, and users expect, is one that recruitment businesses have to embrace, particularly in an evolving era of transparency and ratings.

Clients are building their own internal capability and in many cases are looking for a different type of relationship. Some recruiters find negotiating with procurement, and working through an RPO provider, to be particular pain points. For forward thinking agencies this does create opportunities to add value and be seen more as a partner than a supplier. Making this change happen will require a different mindset and approach, and one that the research showed is starting to appear in the SME sector.

Amongst the trends we found underlining this, was a prioritisation on the development of marketing initiatives and building awareness to replace a more traditional sales-led transactional approach. This is important as the research showed only 10% of agency vacancies coming from outbound sales calls and 11% from speculative inbound calls. Building reputation and investing in CRM technology is helping many move away from a transactional model.

To support the increase in vacancies from developed relationships rather than speculative approaches, consultants are supported in becoming true sector specialists, offering knowledge and insights to clients, and to build their networks to source candidates. Growing concerns over the hiring and retention of consultants is being addressed by increasing investment in their learning and rewards, and realising the potential of employer branding.

During the research I spoke with a number of SME agencies who were trying different approaches. Some were embracing more agile models, others were taking a much more creative marketing approach, whilst building advocacy and client loyalty.

We featured some of their stories in the report along with more insights into how the SME recruitment agency sector is developing to meet current opportunities and challenges.

To find out more of what they are doing, and see how you compare, download a copy of the report here. And let me know how you are currently finding the market…

(It should be noted that we completed this research, and the report, prior to the referendum on the UK’s membership of the European Union. Whilst that result will undoubtedly play a significant role in shaping the recruitment agency sector over the next few years, it is almost certainly too early to tell what direction that may take)

Do We Really Have Skill Shortages?

Do we really have major skill shortages? Are they a myth? Or do we have a problem with recruitment? No recruiter would ever get fired because there’s a skill shortage, so do the individual circumstances around each shortage go unscrutinised?

OECD research finds that the UK has comparatively light skill shortages:

Screen Shot 2016-08-23 at 08.13.04

I’ve recently written up some research on the STEM skill shortage for recruitment group Serocor, who specialise in technical recruitment. The STEM sectors are often used as the poster boy for the UK’s skill shortage problem, so seem a good place to start.

2011 data from the ONS showed that of new STEM graduates that year only 16% were working in core STEM jobs in core STEM sectors. A surprisingly large 66% were working in a non-core STEM job in a non-core STEM sector. Whilst not anything new, it was a worsening situation – in 2001 the proportion working outside STEM was 52% so the pool of grads working in STEM jobs and sectors was decreasing. As UKCES concluded in their November 2013 report:

“Mismatches between supply and demand for Core STEM appear to be more about lack of suitably qualified candidates rather than a numerical shortage of STEM degree holders”

This situation starts from graduation, with only 1 in 6 gaining suitable experience, and seems to be increasing. Do we really need more STEM graduates then? Possibly not. The subject of ‘leakage’ was looked at in 2015 SKOPE research on engineering graduates. The training given in technical and scientific areas, allied to a broad understanding of mathematics, makes STEM graduates attractive to a wide range of employers – many in sectors that are thought to be more attractive to work in than core STEM sectors. Increasing the number of graduates is likely to increase this leakage:

“The evidence produced on these initial flows confirms that public policy would be ill-advised to proceed assuming that the response to reported shortages of supply of engineering graduates in a particular subsector, where substantiated, must be to try to increase the numbers on the relevant engineering higher education courses. It should rather be to find ways of helping any sectors genuinely concerned about shortages to take much more seriously the need to significantly increase the attractiveness of their work to engineering students, and in particular to those in the last and penultimate years of their courses.”

In other words increasing the number of graduates won’t necessarily increase the future talent pool. Some more 2015 research, conducted for the European Commission, on STEM graduate shortages in the EU, also found UK employers being a bit choosy:

“In particular in the UK, there is evidence that the expansion of higher education has resulted in a growing employer differentiation between different ‘types’ of graduates, and with employers’ putting a higher premium on graduates from the traditional prestigious universities. This could explain why so many UK STEM graduates end up in relatively low paid service sector jobs with limited opportunities to deploy their STEM knowledge and skills. There is some evidence that the notion of ‘employability’ has a much wider meaning, and therefore cannot be reduced to a list of skills that can be ticked off in curricula if covered. A UK study concludes (Hinchcliffe 2011) that employers place value on a wider range of dispositions and abilities, including graduates’ values, social awareness and generic intellectuality — dispositions that can be nurtured within HE and further developed in the workplace”

Amongst their conclusions they noted a drop in investment in training “acute reported shortages are likely caused by under-investments in training of the existing STEM professionals, as there has been a general drop in investments in continuing education and training since the (financial) crisis” but also that shortages were partly caused through:

Growing employer expectations regarding the quality of the match
Entry barriers for STEM graduates who do not have labour market experience
Risk of under-employment of non-native STEM graduates
Insufficient absorptive capacity in SMEs to make productive use of the skills of STEM graduates, making the SMEs a less attractive employment and career destination
Career guidance oriented towards the public sector and large corporations.

The Serocor research I referenced earlier found an interesting mismatch in the way jobs were marketed. Hiring companies seemed to think that technical candidates looked for a good reward package and promotion potential, whereas the candidates themselves prioritised interesting projects to enhance skills, a good working culture and opportunities for flexible working. When I wrote about recruitment challenges for charities last year it became apparent that the problem was less about skills not existing and more about identifying and attracting the specific skills needed, moving away from a reactive approach.

So far I’ve written about STEM candidates, but believe that most of these findings apply to other sectors. The indication from the research quoted earlier was that graduates in any discipline who aren’t seen as immediately ’employable’ end up in other sectors and in lower skilled work. This leads to a much smaller pool of talent when employers want someone with 3 or 4 years relevant work experience.

Any business struggling with unfilled vacancies has to redefine the problem. Some of the things to think about are:

What exact skills are we short of?
Can we afford to hold out for someone who ticks every box?
How about investing in training or apprenticeships?
Have we got people already here who could move across and perform this role with some training or encouragement?
Are we marketing the positions correctly?
Do we know what target candidates actually look for when they change job and are we offering it?
What collaborative ways are there to bring skills in?
Is the job design right – can we re-design it to turn un-fillable roles in to smaller constituent parts that we can staff?
How can we do workforce planning better to anticipate future shortages?

We’re All Recruiters Now…

The recruitment landscape has evolved rapidly in recent years. The process of attracting and hiring the talent that business needs has become ever more complex and multi-layered. Digital tools have enabled quicker and simpler applications – no longer dependant on time or location – and greatly increased the number of connections every job seeker has, putting them closer to recruiters and target companies. This raises applicant expectations for the recruitment process with new tools and technology speeding up the matching and selection.

Organisations can now be bolder and more targeted with their recruitment marketing, whilst the greater reach and visibility of information has created more transparency around the recruitment process. A company’s culture is exposed and this is becoming a selling point for potential employees. We now have access to a wider and more relevant range of data that helps to drive many hiring decisions. Many more recruiters work in-house, either as part of a broader HR team or closely aligned with it. Their major targets are to reduce both the time to hire and cost per hire which, given the increase in application numbers and selection tools, could help to create an instantaneous ‘swipe right, swipe left’ culture for CV matching.

So how has this impacted talent acquisition and what are the implications for the future?

We are all connected. Whether its through social networks, business relationships or previous interactions, there’s a likelihood that every business is already connected in some way to everyone they may ever need to hire. They have the networks and connections of current employees, alumni (a significant source of hire in the US) and their networks, suppliers and collaborators and their networks. There are also customers and clients, fans of the company Facebook page and followers of the company Twitter account. Previous job applicants who weren’t  the right fit at the time may now have gained the necessary skills and experience.

The key is to understand these connections – where they are, their strength and relevance – how best to manage and leverage them, and assess cultural fit. This will require content to be produced – market intelligence and insights, product developments, ways to showcase the employee experience – and used by a recruitment team that understands marketing and the importance of culture.

The power of referrals is now better understood by organisations. There are platforms to help employees manage and keep in touch with their wider connections. Professional services firms offer large cash bonuses to their employees who can attract top talent to the firm from their own networks, whilst also finding ways to reward their internal influencers. For connections and networks to deliver real value then reputation and trust need to become part of the currency of recruiting, a form of ‘peer capital’. This will include recommendations from trusted sources and, for those who worked flexibly or across companies, a validated portfolio of projects and achievements.

Certification and validation have long been part of the service offering from third-party recruiters who, by using judgment and intuition, have selected the talent most suitable for the needs of their clients. However the make-up of the talent supply chain is fast changing as technology finds a new area to disrupt. For example, there are now apps connecting those looking for flexible work with companies who have on-demand staffing needs shaped by seasonal peaks and troughs. By matching on skills, availability and location this kind of hiring removes the need for interviewing – especially as the workers are pre-screened and checked. Meanwhile in Australia KPMG have a portal matching staff that have downtime between assignments with clients who need short term or interim accountancy help.

If talent is coming from a variety of sources, it is also being engaged in different ways. Whether as freelancers, flexible workers, or assignment and project collaborators, the talent pool is no longer just about current and future permanent employees, but reflects the wide range of skills, knowledge and expertise that can be called on at any time to supplement the capabilities of the current workforce. Many potential recruits coming across the radar of hiring companies may well have had a rich and varied mix of projects and assignments, not always gained from a permanent role.

Again it will be reputation and credible recommendations that recruiters will look for. Roles are evolving faster than many companies can develop their people – many of the positions to be filled in 2020 almost certainly don’t exist at present – so the ability to call on specialist skills at any time will be a crucial part of the recruiter’s toolkit for coping with urgent requirements. And in the evolving talent ecosystem that I’ve described the connections and knowledge networks of collaborators and freelancers are as important as everyone else’s. They are likely to be moving in and out of different organisations, building their capabilities, and will have worked with a wide range of talent.

Most of these shifts require a different approach to talent management so it’s no surprise to find that HR process is already evolving. Responsibility for personal, skill and career development now rests firmly with the individual employee and not the company or HR department. Performance and career management are no longer dealt with in annual appraisals nor based on school report style ratings; instead the current approach is for continuous dialogue between employee and manager, with flexible and transparent goals. At the same time development increasingly comes laterally through a range of projects and secondments, rather than through linear promotion. For staffing in 2020 this is likely to have created a blend of honed and skilled sector specialists alongside a broader range of multi-industry generalists.

In the future we will all be recruiters, and all be part of the solution.  Our networks and spheres of influence will help attract new people  and go some way to defining our importance to the organisation. The employment experience will be visible to outsiders through our personal experiences and how we share them. The organisation may ‘loan us’ to clients or collaborators who need short term help. And ultimately, we will be the ones responsible for developing our skills, increasing our knowledge base and acquiring and building on new experiences.

(This post was originally featured in a 2015 White Paper jointly produced by HR Zone and Cornerstone On Demand titled ‘Talent 2020 – What is the Future Talent Landscape’. You can download it here and read the other contributions from Rob Briner, Doug Shaw and Dr Tom Calvard)

Screen Shot 2016-01-18 at 22.44.04