November 29, 2016 – While strong job growth is a good sign for the U.S. economy as a whole, it presents certain challenges for employers and HR professionals. According to the just-released iCIMS ‘U.S. Hiring Trends’ report, employers are having difficulty attracting suitable candidates. Jobs are becoming harder to fill, requiring more time and money to hire best-fit talent.
“In today’s tight labor market, employers need to think about how best to leverage their employees as rigorously as they do their other resources,” said iCIMS chief economist, Josh Wright. “They should weigh the costs of traditional hiring practices versus building out their talent pipelines. Our data suggests employers should consider the latter more closely.”
iCIMS’ data suggests that employers having difficulty filling positions with qualified candidates should invest in their talent pipelines by fostering relationships with passive candidates and interns, as well as by developing an effective employee referral program. Medium and large businesses, apparently recognizing the value of an internship program, have been able to convert interns into full time hires. Not surprisingly, small businesses struggle here.
“Technology is advancing rapidly, transforming the workplace and how employees engage with employers,” said Mr. Wright. “These rapid changes are evident in debates about skills gap in the labor force and the impact these have on the labor market. Employers across all industries and company sizes need to examine their operations and search for opportunities to nurture their own pools of talent.”
Companies struggling to fill positions quickly with qualified candidates need to invest in their talent pipelines and build relationships with potential candidates. iCIMS offers four ways employers can build talent pipelines for future hiring needs.
- Grow Your Company from the Intern Up
Many companies recognize internships as one of the most effective recruiting tools because they provide a relatively secure source of entry-level hires. Interns have already demonstrated their skill, dedication, and ability to fit into the company culture; furthermore they have received some level of grooming or at least exposure to the work of the company. According to a study by the National Association of Colleges and Employers, approximately 71 percent of employers plan to transition interns into full-time employees, and 63 percent of companies would like to hire interns for entry-level positions.
Unsurprisingly, small businesses’ use of internships lags behind medium and large companies, in terms of both the average time it takes to fill a position and the size of the internship program relative to overall hiring. Medium and large businesses appear to be doing a better job at building talent pipelines for internship programs: their internship programs are larger relative to their overall hiring programs.
More surprisingly, the relative size of the largest enterprise companies’ internship programs more closely resembles that of small businesses. The relative composition of their total hiring may play a role here, as well, but some enterprise companies may be at risk for coasting on their brand names.
- Don’t Forget Passive Candidates
Strong talent pools of passive candidates ensure that a company always has a pipeline of talented and qualified candidates to select from when a job becomes available. Passive candidates are the people that are willing to entertain a job offer but are not actively looking for a new position. According to another recent iCIMS survey, 78 percent of respondents would be open to a new career opportunity if contacted by a recruiter with a relevant opportunity, even if they weren’t actively seeking a new job.
Sending automated personalized, branded communications based on what talent pool they belong to makes passive candidates more likely to think of that organization when ready to apply to a job. Automating this process with a recruitment marketing automation tool enables employers to maintain a constant pool of warm candidates, reducing cost per hire and time to fill.
- Diversify Your Recruitment Marketing Tools
One of the most important parts of building a talent pipeline is expanding candidate reach. In order to make an organization more visible, employers should regularly leverage multiple channels to discover which sources are most effective. Employers can make open positions easy to discover by advertising where candidates are looking. This includes job boards, social media, and ensuring that open jobs ranked favorably on search engines like Google.
Dedicated talent acquisition technology helps companies more effectively build candidate pipelines with automation and ease. Companies of all sizes can explore and test candidate outreach channels to attract more candidates and reduce their time to fill. Employers should partner with a technology provider that allows for a seamless flow of information from multiple vendors into a single talent acquisition system of record.
- Increase Your Odds — Encourage Employee Referrals
According to iCIMS, on average, 24 percent of new hires originate from a referral, but some companies see rates of nearly 40 percent. Larger companies with 1,000 employees or more tend to hire more referred employees (27 percent) compared to smaller companies (14 percent). This divergence is likely due to the fact that 69 percent of large companies have a documented referral process compared to 46 percent of smaller companies.
Part of the reason employee referrals are considered so successful by employers is due to the fact that they are effective at bringing talent that easily fits into a company’s existing culture. By capitalizing on employee networks, companies can enhance their ability to compete for talent.
The lack of available or qualified candidates could be pointing to a skills gap. According to the Aberdeen Group, 80 percent of employers believe that the skills gap is a hindrance for any organization looking to recruit employees. Aberdeen found that the hardest skills to find in candidates include a mix of both soft and hard skills.
Calculating the impact of this problem on either the economy as a whole or individual employers is difficult, but few doubt that unfilled positions come at a steep cost. When the right talent can’t be found, lost profit and revenue can be as high as $23,000 per unfilled position, according to the U.S. Chamber of Commerce Foundation.
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Inadequate Talent Supply
Numerous reports continue to come out citing that lack of quality talent is an issue among companies despite a large amount of people seeking new employment opportunities.
Forty percent of employers are experiencing difficulties filling roles, marking the highest level since 2007, according to the latest ‘Talent Shortage Survey’ released by ManpowerGroup.
The report noted that as skills needs change rapidly, employers are looking inside their organizations for solutions, with more than half choosing to develop and train their own people. This represents a significant jump from ManpowerGroup’s 2015 survey, when just 20 percent prioritized training and development to fill roles or find new skills. In the U.S. IT sector, businesses are reporting the most marked talent shortage in a number of years. IT roles jumped from ninth to second place this year, the most marked demand for IT in a decade.
The inadequate supply of qualified and skilled talent is the second biggest threat to U.S. companies’ ability to meet revenue or business performance targets, second only to “increased competitive pressures,” concluded a recent Randstad ‘U.S. Workplace Trends’ report. Nearly eight-in-10 hiring decision makers (79 percent) agree that when positions become available at their organization, they struggle to find people whose skills match the job requirements.
Ninety five percent of recruiters expect finding new talent to be as or more challenging in 2017 as this year, according to the latest ‘Recruiter Nation Survey’ conducted by Jobvite. Corporate recruiters cited a lack of skilled candidates (65 percent) and dealing with hiring managers moving candidates through the hiring process (48 percent) as their biggest challenges. Recruiters expect competition for talent to be in the most demand within hospitality (87 percent), manufacturing (79 percent) and healthcare (78 percent).
Job creation has been “steadily increasing” ever since the recession, “forcing corporate recruiters to double up their efforts to fill positions with quality candidates,” said Dan Finnigan, chief executive officer of Jobvite. “But there simply aren’t enough educated, talented and qualified candidates to keep up with the demand.” As a result, he says, “these recruiters must now go above and beyond by helping to create compelling employer brands and an exceptional candidate experience to keep their clients happy.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media