Hiring in a Soft Market
By Randy Southerland
Catalyst

one are the days when new employees queue up for signing bonuses and the cappuccino machine in the lobby. Reports of rising unemployment and corporate belt-tightening paint a picture of a stagnant economy in which employers call the shots when it comes to hiring.

Appearances, however, can be deceiving. While some segments of the economy have an oversupply of labor, and job posting can prompt an avalanche of resumes, in other segments it’s almost like the 90s again. Moreover, experts insist companies are having as hard a time as ever finding highly skilled workers— the mythical top 10 percent that every company says they want.

Author and management consultant Gregory Smith recently surveyed companies to ask if they plan on any new hiring.

“A whopping 72 percent said yes,” he reports. “That amazed me.”

In areas such as healthcare, mortgage banking, construction and even real estate, the hunt for workers has heated up. In fact, in coming years these hot spots may turn into widespread shortages, some experts predict.

Warnings of dramatic changes in the composition of the American workforce have been sounded since the U.S. Bureau of Labor Statistics revealed a year ago that by 2010 the nation will face a potential shortage of more than 10 million skilled workers.

The study projected that economic growth will produce approximately 168 million skilled jobs; however, there may be only 158 million workers to fill these jobs.

“What’s critical is that companies have to be selective in whom they hire and more conscious of how they manage their human capital,” advises Smith.

If companies do a better job of recruiting the right worker, they not only are likely to lower costs, but also may be able to ensure their economic survival. Unfortunately, many firms are still operating in a reactive mode that yields low productivity and early termination instead of a high performer.

“For many companies if somebody quits, they move on and hire somebody fast, hire somebody cheap, and at a low salary,” says Ed Pease, a director with the Atlanta office of Spherion Professional Recruiting. “Then they deal with the consequences later.”

Recruiting experts say that companies could avoid these problems, and perhaps many of these consequences, by recruiting and hiring the right way. A better hiring process yields better workers and cuts the costs of frequent replacements.

The slow economy has also emboldened companies to rely less on outside search firms and more on their own— sometimes flawed— networks. For example, the large number of tech companies that went bust has created a ready pool of executive talent for VCs looking for a known quantity.

“The downside is that they are not able to cast a net as a search firm,” says Kathy Forbes, principal at the Forbes Group, a specialist in executive search for tech companies. “When they know someone, it increases their comfort level. The problem with that is they’re often not able to be as objective as they should be in the interview process— which is very important.”

Business seeking new hires are also making greater use of the Internet and the old standbys— ads in newspapers and trade journals. All these methods are guaranteed to produce large numbers of applicants. Internal HR departments, themselves downsized and disconnected from the real needs of a hiring manager, must in turn sift through these stacks of resumes.

Little wonder then, say recruiting experts, that finding a good candidate is hit or miss. But it doesn’t have to be that way.

The secret to finding the best employees is to develop a formal hiring process— one that is driven by deep understanding of the results the company wants the worker to achieve. Figuring out what the job really consists of is not as easy as you might think— even if you have a job description handy.

The typical job description can rane from the short and poorly written to multi-page single-spaced epics, says Pease.

“But they often don’t deal with some of the cultural nuances and environmental factors within a company, which can be strong attributes or indicators of success,” he adds.

Instead of creating a job description that lists degrees and certifications required and general tasks to be done, a performance profile is far more effective.

“It defines what you need to get done, not the skills and experience a candidate needs to have,” says Forbes. “It provides a simple means to make past comparable performance the basis of the hiring decision— not experience and personality.”

In other words, if the candidate can achieve the performance objectives, he or she has sufficient experience and skills. On the other hand, the candidate who possesses an arbitrary list of skills and experience may not be able to deliver the end results a company is seeking.

Whether a candidate has those traits must be discovered during the interview. This conversation, in which a company and the candidate attempt to sell themselves to each other, is where the entire process is most likely to break down.

“The problem with interviewing is that it’s a learned skill,” says Joe Koscik, co-CEO of IT staffing company, MDI. “Some people may be better at it than others, but it’s definitely a skill that can be acquired. The more you do it, the better you’re going to get at it.”

The process contains many pitfalls that can snare a hiring manager— or a job applicant— and result in the best qualified candidate being rejected.

“Most interviewing methods measure interviewing skills, not job competency,” says Forbes. “When interviewers need to do is control their biases. They need to minimize the impact of their impressions.”

An interviewer can develop rapport with the candidate and spend his time talking about common interests like golf and children, according to Koscik.

“Now you’re going to like the person on a personal basis— which is important— but you don’t get their skills and how they’re going to perform the job,” he warns.

Even if the interviewer sticks to the subject, he may come away with a biases impression of the candidate. Even good prospects get nervous and may be excluded for superficial reasons.

“The number one cause of hiring errors is that most managers hire people based on the candidate’s ability to get the job— not do the job,” says Forbes.

In fact, there is little correlation between interviewing skills and job competency, she adds. The best candidates are rarely the best interviewees.

To minimize these problems, hiring managers must carefully follow a structures approach such as Chronological Structured Interviewing. The object is to take the candidate through their entire career by asking in-depth questions about each position. The goal is to get a feel for how they actually did their job and how well they performed.

This process also allows a good interviewer to match the candidate’s skills and accomplishments with the performance objectives of the job. Through this matching process the interviewer also can avoid the mistake of dismissing someone who might not have all the skills, experience and education required in a typical job description.

“They’ll bring traits to the table that are more difficult to assess, such as self-motivation, tenacity, leadership, vision and other (soft skills),” Forbes explains.

In addition to appraising the candidate, an interviewer also must remember that while the interview is about the job seeker selling himself, it’s also about selling the company as a desirable and challenging place to work.

For the best companies, becoming an employer of preference means providing benefits that appeal to workers. Quick entry into the company’s 401K plan is increasingly common among businesses seeking the best workers, according to James H. Landon, a partner at Jones Day and an expert in employee benefits.

“Employees, particularly in the non-executive ranks, find healthcare to be one of the most essential elements of employment,” says Landon.

Finding the right employees to help drive your company to success isn’t easy— even in a down economy. When it’s done right, however, hiring can be a highly successful and bottom-line boosting move.

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