A Blog by Jonathan Low


Mar 20, 2019

Why the Hiring Process Is Failing In So Many Organizations

The internet made it easier to submit job applications - and harder to effectively evaluate them. The volume of applications increased exponentially, overwhelming hiring managers who had neither the time nor the resources to do the job properly.

The resulting solution was software designed algorithmically to identify the 'best' candidate. This sped up the process but did not improve the outcome. Too often the emphasis was on managing cost per applicant or speed to hire, rather than having the rights skills or cultural fit. And even when those could be coded into the system, the qualifications were often impossibly stringent.

The so-called 'skills crisis' is really a management failure. Companies have ignored qualified or eminently trainable internal candidates, sloughed off those external candidates appearing too eager in favor chasing those whose paper credentials everyone else wants and have even rejected the findings of their own algorithms. Successful companies recognize that hiring cannot be a silo but must be integral to the strategic direction of the enterprise. JL

Peter Capelli reports in the Wall Street Journal and Sanjay Kumar reports in The Data Incubator:

Companies say people are their most important asset. But you’d never know it by the way they actually hire people.The time it takes to fill job openings has been going up for a decade. Submitting applications electronically overwhelms employers. Software screens applications cheaply and quickly and aggressively. Requirements to avoid electronic rejection and muted interest in people actively seeking jobs turned systems into black holes: more rounds of interviews, drug and background tests, permission to hire from financial controllers. Only a third of vacancies are filled by promotions, transfers or internal moves. Only 28% of  leaders report internal candidates are an important source for filling vacancies.
Wall Street Journal Companies often say people are their most important asset. But, for many, you’d never know it by the way they actually go about hiring those people.
Consider: Highly qualified and motivated job candidates are ignored while companies focus on recruiting less enthusiastic ones. Lengthy, multilayered hiring processes leave vacancies open far longer than necessary and alienate job candidates.
And often no one has a clue whether the hiring process is working—whether the company is finding the best person for the job.
Instead, companies’ hiring policies seem driven by one attribute: expense. This is one of the worst examples of penny-wise and pound-foolish thinking in modern business. The costs actually are substantial, as unfilled positions drag down results and employees in the short term, and long-term corporate performance suffers when a business fails to hire the most qualified candidates.
Fortunately, any company can avoid these pitfalls and hire more wisely. If, that is, they know the common mistakes to watch for.
Does your hiring process even work? Most companies haven’t a clue.
According to research firm Gartner Inc., just under one-quarter of large employers currently track whether or not their hiring process is resulting in good employees.
What many employers do measure and track obsessively are costs per hire and time to hire. Think about that for a minute: It would be like a marketing department telling you how much an advertising campaign cost and how quickly they put it together, without telling you whether it had any effect on sales.
Many companies say it’s hard to measure the quality of hires after the fact. But plenty of companies have found a way to do something—they at least look to see whether those who scored better in assessments made during the hiring process are less likely to quit, or more likely to get promoted or get better performance appraisals. Any effort along these lines is better than nothing.
Of course, that sort of evaluation requires companies to make objective assessments of job candidates in the first place, something that many don’t do. Only 48% of companies surveyed in 2017 by human-resources consulting, training and research firm ERC said they tested to see if candidates had the skills, job knowledge or abilities to do the work they were seeking.
What’s more, such testing doesn’t do a company any good if its hiring managers don’t act on that information. One study found that human-resources managers who most often go against the results of employment tests and instead rely on their own judgment tend to get worse employees than those who rely more on tests, according to a 2018 article in the Quarterly Journal of Economics by Mitchell Hoffman of the University of Toronto’s Rotman School of Management; Lisa B. Kahn, now at the University of Rochester; and Danielle Li of the Massachusetts Institute of Technology.
So many internal candidates. But companies ignore them.
Even more stunning is where employers aren’t even looking for job candidates—from within. By some estimates, only about a third of vacancies on average are filled by promotions, transfers or other internal moves.
It’s easy to see how that happens. Only 28% of talent-acquisition leaders report that internal candidates are an important source for filling their vacancies, according to a 2016 LinkedIn survey. And fewer than one-third of employers require that managers post jobs internally before hiring from the outside, ERC found in its 2017 survey.
This is despite evidence suggesting that internal candidates are better and cheaper performers, according to a study by Wharton School associate professor Matthew Bidwell published in 2011 in the Administrative Science Quarterly.
In addition, filling openings from within, especially by promotion, signals to a company’s employees that there is opportunity for advancement, which is an important factor in retention.

Companies want too many candidates who don’t necessarily want them.
One of the strangest developments in companies’ efforts to recruit outsiders is the current fixation on so-called passive candidates—those who aren’t looking to move.
The idea behind this is the smart-sounding notion that there might be something wrong with anyone who wants to leave his or her current job. But consider the results of a 2014 LinkedIn survey. It found that the No. 1 factor that would encourage passive candidates to move was paying them more money, while for those actively seeking new jobs the greatest motivation was better work and career opportunities. Active job seekers also reported being more career-focused and more engaged in seeking information that would help them improve their job performance, and a majority said they were satisfied with their current job. They seemed interested in moving because they were more ambitious, not because they were struggling.
Yet “recruiting passive talent” beat out “recruiting highly skilled talent” as a priority for recruiters who responded to a 2015 LinkedIn survey.
The process itself guarantees inefficiency.
A final problem with hiring lies with its administrative processes.
The ability to submit applications electronically very soon overwhelmed employers with submissions, and companies responded with software that screens applications cheaply and quickly—and in many cases, too aggressively. A combination of stringent requirements for any application to avoid electronic rejection and many companies’ muted interest in people actively seeking jobs has turned these systems into black holes for applicants.
Meanwhile, the time it takes companies to fill job openings has been going up for more than a decade. While some economists have been inclined to see that as a sign of labor-market tightness, a simpler explanation confirmed by surveys of employers is that more steps have been added to the selection process: more rounds of interviews, drug and background tests, and a general inefficiency in securing permission to hire from financial controllers interested in keeping staffing lean. A study by Indeed.com in 2015 found that job candidates are put off by having to clear too many hurdles: The number of people applying for jobs fell 50% when online applications had more than 30 questions. Even once offers are extended, candidates report that delays in the process are an important factor in determining whether they will accept them, according to a 2012 survey by recruiting firm Robert Walters .
One way around these administrative delays is the common practice of outsourcing all or part of the hiring process to experts. Unfortunately, producing better-quality hires isn’t the top demand that clients make of their outsourcing vendors, according to a 2014 survey by the Futurestep unit of consulting firm Korn Ferry and the magazine HRO Today. Their concern is more focused on time delays and cutting costs.
The Data Incubator Data science has marked its presence as the beautiful soul of the digital world and has crept across the multiple phases of the organizations driving their business growth. These days, small to large organizations are leveraging this technology to understand their consumers and business needs. This growing technology is making its way into the HR department so that organizations can use their data to improve engagement, performance and decision making.
A survey report by Global Recruiting Trends 2017 reveals that the 83 percent of Human Resource professionals think that talent is the biggest priority of an an organisation. The future of recruitment is 34% dependent upon the innovative interviewing tools.


Benefits Analysis:

One of the very effective uses of data science can be observed in the insights collected from the employee’s data. It uncovers the answer to typical queries like employees benefits, their opinion, costs optimization and analysis. Here, data science can predict whether the deal is good or not for the candidates and organization will face loss or profit. They can also put data science to manage the plans like gym memberships, health insurance, travel, food, funds, assessment, training, events, seminars, counselling etc. By analyzing the benefits and outcome of such events, organizations can make better decisions and achieve their objectives.
Predictive analysis deals with statistics and mathematical data. It ensures the effective future plan on the basis of the collected data. PA visualizes the employee’s data in the form of the graphs, states, and many more interesting methods providing a clear pictorial view. Thus, HR can easily deal with the critical scenarios like pay gap, bonus, resign, new batch recruitment etc. To deeply understand the concept and internal working of such methodologies, go for Data Scientist Course and be the part of this technological trend.

Talent Analytics:

Recruitment of the right candidate is the first priority on the HR lists. No matter whether your company is small or large, you need skilled workers to drive companies growth. Since companies are recognizing more, data science is helping them to find good candidates in an effective way.
The data science helps them make a congenial strategy for recruiting candidate by reducing unfair or other bias. The data collected from the analytics help recruiters to gather candidate’s performance data and make predictions about which candidate fits best for the particular job profile.
It allows organizations to channelize best fit talents, manage training campaigns, monitor turnover and create strategic plans for retention and recruitment. As seeking the best employee for the job is the toughest part of the HR recruitment journey. Around 38 per cent of the organizations are leveraging smart tools for the interview.

Work Analytics:

To understand the main requirements of the organization, data science is the best option. It deals with shape, experience, variety, knowledge and other attributes to boost up the companies efficiency. It assists them to increase their throughput and achieve future success. Some companies may employ a Quality Management System Software to help with work analytics.
Since recruitment plays a crucial role in companies growth until the organisation doesn’t have the right candidate for the right position. Here, data science can be very useful.
Data science not only allows to get accurate employees’ experience data, but it also observes behavioural patterns. It recognizes observing employee pregnancy, work affection etc.
The Ugandan governement has already implemented data science to monitor various public undertaking projects across the region in 2016. They use analytics to examine the quality of the services provided to the public. So they can monitor who is doing their job correctly and best.
Understanding employees performance will make management to decide promotions. Because choosing the best manager is not an easy task as it is not only decided on the basis of top performance. Here predictive analysis decides which selection is best for which job. The data collected from the manager and whole team defines which employee is more likely to achieve manager post and which one is not.

Final Words to Take Home:

A report by IBM and MIT concluded that the companies that are using HR analytics in their culture have more positive outcomes in their business. These organizations achieve 8 per cent increase in the sale and a 24 per cent increase in their overall revenue. Thus, you must have understood the need and impact of HR analytics in an organization.


Unknown said...

"there might be something wrong with anyone who wants to leave his or her current job."

The way this writer said it sounded smart makes me worry about everything. It is the dumbest shit that I have ever F***ing heard. There is something wrong with people that hear that and thing "Gosh that is brilliant"

Prioritizing the hire of a passive applicant over an active one is insulting. What kind of person do you want working for you, a passive person that doesn't want to move or a hungry thankful applicant that will work hard to make an impression? I am I only one not taking stupid pills?

Jon Low said...

That great philosopher Groucho Marx once said, "I wouldn't want to join any club that would have me as a member.

Suspicion of the overly eager is a deeply ingrained human trait, probably traceable to mankind's earliest days when survival was the prevailing challenge and culling of the weak was a genetic necessity. Like many other such characteristics it may have outlived its usefulness but it is simply one behavior of many that cause people and organizations to function suboptimally.

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