We read with interest the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey Highlights July 2019 published last quarter. Of course, we were well aware of historically-low unemployment in the U.S.; the number of unemployed persons per job opening (seasonally adjusted) has been steadily declining since mid-2007. According to the BLS, when the recession began in December 2007, “the ratio of unemployed persons per job opening was 1.7. At the end of the recession (June 2009), there were 5.8 unemployed persons per job opening. The ratio peaked at 6.4 unemployed persons per job opening in July 2009 and declined to a series low of 0.8 in late 2018.”
That’s great news, right? But actually, this condition increases the challenges HR pros face. Competing for the most qualified candidates has increased exponentially.
Complicating matters is the fact that employees are on the move. The BLS report that “quits” (voluntary separations initiated by employees) continues to escalate, with the rate increasing steadily since mid-2009. The number of quits, in fact, have exceeded layoffs and discharges since July 2011. As of July 2019, there were 3.6 million quits. So, organizations face not only a terrifically daunting challenge in finding qualified candidates but keeping them once they’re hired.
Finally, the BLS report noted that the number of hires has historically been higher than the number of job openings, as shown below. But since the beginning of 2015, that relationship has been inverted; there are now more job openings than there are hires.
Clearly, given these conditions, the candidate is now in the driver’s seat, and organizations must more aggressively attenuate their approach to hiring. But caution is advised, since we noticed that, in an effort to accelerate hiring once a candidate has applied, some HR departments have relaxed their qualifications in job postings. Less-experienced applicants may be considered. Some have even abridged the background check process. But as HireRight noted in the white paper, No Detours: Why Background Check Shortcuts Can Backfire,
“…just as taking shortcuts on road trips may lead to dead ends or even accidents, cutting corners on background checks can often mean delays and higher costs.
“Organizations that have been down that road learned the hard way that hiring the wrong person has serious consequences. Among them were reputational harm, a loss of customer faith, and stock prices that spiraled into freefall.
It’s a risky gambit. As we also noted:
“Many HR professionals acknowledge they brought on the wrong person because of the pressure to hire someone quickly. In a CareerBuilder survey, 43 percent of respondents admitted this was the reason behind a bad hire. Another study conducted by HR.com and IBM found HR professionals regretted an average of 31 percent of their hires in the previous 12 months. Only 11 percent said they would stick to their decision to hire a recent candidate 100 percent of the time.”
A more prudent approach to high-caliber hiring in these tricky times may be to follow these steps:
Look at your recruiting and hiring practices with fresh eyes
As noted above, it’s a different ball game today. What may have worked well for you in previous years may now be sorely out of date, ineffectual, or impractical. Take a look at your ads for job openings. Do they speak to today’s candidates in terms they’ll find appealing? Would the ad appeal to you? How does your website look? Is it 100% mobile-friendly? If not, time for retooling. That goes for job postings on your site as well. Ensure they’re accurate and the application process is easy to follow, and mobile-friendly. Review your benefits packages and make sure they align with the expectations candidates demand in 2019.
Keep the pipeline full
Candidates must jump through more hoops than in previous times before an offer is extended, including multiple rounds of interviews, testing, and background screening. While all this is happening, a candidate may get frustrated and jump to another job offer. Consider nurturing potential candidates before a position opens and keep the pipeline full. Keep in mind that the median number of years that employees stay on a job is 4.6 years (however, the median tenure for workers age 25 to 34 is 3.2 years). Keep track of your most essential positions and be proactive in reaching out to potential candidates, although there may not be a current opening. Build relationships. When a job does open, you can have pre-qualified candidates already on tap.
Prioritize Applicant Experience
Today’s job candidates grew up with technologies that responded immediately. While older readers may remember having to wait until a certain time to watch a television program, Millennials have been able to stream virtually anything when it meets their schedule. So they’re used to getting what they want when they want it. That goes for applying for a job.
Remember that the ball is in their court today. When they apply for a job with your organization and don’t receive confirmation quickly, they’ll move on. Implement systems that respond as quickly as possible. If you don’t, there are too many social media sites where job seekers will tell vast audiences of your lack of responsiveness, and make it even harder for you to find great candidates.
Rather than in-person interviews, consider video calls — which most candidates probably are quite comfortable using. That will eliminate the candidate having to spend time on the road, add wear and tear to their vehicle, and consume gas, all of which will be appreciated. Besides, you’ll be doing the environment a favor. And most recruiters and hiring managers know within the first few minutes if a candidate is going to be a good fit or not. So a video interview may help save time, money, and the environment.
The smoother and faster the process is for your candidates, the more likely the best candidates will join and stay with you.
Develop a retention program
First, find out why talent is leaving. Make sure you get feedback from new hires and get their opinions on your onboarding system. Continuously strive to improve it. What may have worked a few years ago may not suit today’s new hire. Review exit interviews to learn why an employee you invested a significant amount of time and money in is quitting. If there are common themes — lack of recognition, poor work/life balance, and unrealistic expectations — you’ve got a problem that needs fixing. What can you improve?
Yes, there’s a lot of pressure to hire quickly. Some organizations may be tempted to conduct their own background checks or use one of those online screens.
Do-It-Yourself online background checks may sound appealing due to their quick, cost-effective nature, but they pose risks that you, as an employer, will have to contend with. The FCRA has dictated stringent regulations that demand compliance for Consumer Reporting Agencies. For example, companies should notice whether a service will outright call itself a consumer reporting agency. If the company is not willing to market itself as a Consumer Reporting Agency, they probably are not in compliance with FCRA. Some DIY background check sites even state quite clearly that they are not FCRA compliant and that the information they provide should not be used to make hiring decisions. Third-party firms, specifically Consumer Reporting Agencies, on the other hand, are FCRA-compliant, and offer expertise and resources that can help ensure legitimacy and accuracy in their findings.
For more information, please see HireRight’s free article, “Do-It-Yourself” Online Background Checks.
In summary, it’s getting harder to find the most qualified candidates. But by reviewing and modifying your hiring practices to recognize the dramatic shifts noted in the most recent BLS Highlights, you’ll better be able to reach, qualify, hire, and retain the finest team members for your organization.