Businesses now spend more money on hiring than ever before, as many rely on outsourcing to third-party recruiting firms. The question managers face is: how can the hiring process improve to deliver the best talent? Here’s a look at ways to refine the process.
Problems with Current Hiring
Many hiring problems today stem from the fact that nearly half of U.S. companies outsource to recruitment firms that subcontract with low-paid workers from countries such as India and the Philippines. These workers use LinkedIn and other online networks to search for candidates. The recruiters may be paid bonuses if they can negotiate lower salaries than what the industry normally pays.
It’s still common for companies to do their own recruiting by posting ads for job openings in strategic places. But many times the people who place the ads don’t use the right language that connects with the talent they’re trying to target. Meanwhile, companies that have invested in AI software are able to sift through candidates and identify the best matches based on keywords.
Each of these processes have major limitations and may not be reliable for scouting the best talent. Only about a third of American companies track whether hiring leads to quality employees. Cost per hire, for example, is not a widely-used metric, when it could help streamline the recruitment process. Yet hiring the right talent is a top concern among CEOs, according to a recent Conference Board Annual Survey.
Adjusting to Today’s Economic Picture
Traditionally corporations promoted from within most of the time. But these days companies hire more from the outside, making it more difficult for people to advance their careers under the same employer. Bureau of Labor Statistics data reveals that 95 percent of hiring reflects filling positions caused by workers quitting.
Turnover rate is a concern for managers since the cost of hiring and training new talent can cut into profits. The top reason workers leave a job is finding another job that advances their career goals.
Employers can take proactive steps to retain and attract talent. Many companies have moved toward more casual business environments such as allowing employees to work on their own devices. Job descriptions in recruiting posts should have realistic requirements and not exaggerate the challenges.
About half of new hires come from employee referrals. Offering staff members referral bonuses for hires who work out can help refine the hiring process.