August 23, 2022 – If you’re responsible for hiring at your organization, you are no doubt under tremendous pressure. The skilled talent shortage is driving a hiring frenzy. Top talent is more willing than ever to jump to a new job and employers are seizing upon that trend by offering huge bonuses and inflated salaries, according to a new report from LHH Knightsbridge Search’s Jonathan Krone. “But if you’re the one doing the hiring, you’re also aware of the risk associated with moving too quickly and making a bad decision,” the report said. “Turnover rates are skyrocketing as the Great Resignation percolates through workplaces all over the world. It’s essential to make sure you’re bringing in new talent that is going to make a contribution for the long haul.”
How can you give yourself more time for thoughtful hiring decisions and release some of the pressure created by the Great Resignation? Two words: interim talent. “In the past, the interim or temporary staffing market focused on lower-level administrative positions,” the LHH Knightsbridge report said. “Today, however, you can source interim talent for every role at every level of an organization and for every kind of contingency. Interim solutions have always been an important part of overall talent management. But when you look at the current volatility of the global labor market, interim may be more important than ever before.”
The Time to Hire is Shrinking, But Risk of Bad Hires is Increasing
Prior to the pandemic, if there was a concern around the time it took for companies to hire new talent, it was that they were moving too slowly, according to the LHH Knightsbridge report. “Unnecessarily long and complicated hiring processes often meant organizations were losing out on top talent.”
A LinkedIn analysis of more than 400,000 hires showed the median time to hire was nearly 42 days, with the longest delays in engineering (49 days), and the shortest in customer service and administrative roles (34 days). However, with so many skilled workers riding the wave of the Great Resignation, and much of the business world trying to shake off the pandemic doldrums and get back up to full capacity, hiring is running hot and heavy – and the time to hire is shrinking.
A LHH-LinkedIn pulse poll taken in early to mid-May 2022 showed that 70 percent of recent job seekers got a job offer within 30 days. Roughly 18 percent of respondents waited 30 to 60 days and just 12 percent were kept waiting longer than 60 days. “Even though times to hire vary greatly depending on role and industry, there is strong evidence that employers are moving more quickly to fill open roles and ensure they don’t lose out on the current willingness of top talent to make a jump,” the LHH Knightsbridge report said. “But there is a risk to moving too quickly. Some of the organizations that expedited hiring processes are only now finding out that they may have made some bad hiring decisions.”
The Great Resignation is Evolving into the Great Regret
Spring of 2022 saw a rash of surveys suggesting many of the workers who voluntarily resigned to take a new job – motivated by the current hiring frenzy and its gaudy wage and bonus offers – may be having second thoughts. Another LHH-LinkedIn pulse poll conducted in May revealed that 57 percent of those who voluntarily resigned from a job in the last year to take another job were generally “happy and satisfied” with their decision. However, nearly one-third of respondents were already looking for another job or looking to return to their former job. Another 13 percent were “on the fence,” unsure about whether to stay in their current role or make another jump.
Typically, the turnover rate from voluntary departures in U.S. companies is about 25 percent. The mere suggestion that more than 40 percent of new hires could be on the move again in the near future is enough to cause HR professionals sleepless nights. LHH Knightsbridge notes that there seems little doubt that a significant number of workers who resigned to take new jobs are suddenly discovering their new employers are not meeting expectations for culture, fit, and advancement opportunities.
How Can Interim Solutions Protect your Organization Against Bad Hiring Decisions?
At this stage of a global talent shortage that has been deeply affected by the pandemic, managing risk is a top priority for any hiring manager, according to the LHH Knightsbridge report. “As the hiring process is shortening, turnover looks like it may be on the rise,” the study said. “That is a scenario rife with risk. Once again, this is where interim talent solutions come in. If there is a project deadline looming, or a major business transformation needs to maintain momentum, you might not always have the time or the available talent to staff projects with permanent employees right away. Certainly, we can see many organizations leaping first to hire talent in this fluid market, and only looking later to see if they made a good hire. The stakes are simply too high for that kind of strategy.”
What specific benefits do interim talent solutions offer, the LHH Knightsbridge report points to these factors.
- Reliability. Interim talent, particularly those vetted by a trusted partner, are experienced, capable and – this cannot be understated – equipped to thrive in an interim role. You’re not just blindly plucking someone from a pool of available talent; properly managed, interim solutions match established, skilled talent with specific job openings.
- Financial flexibility. Hiring managers know that one of the biggest risks they face in the mad dash for talent is getting locked into a fixed cost for a full-time hire that turns out to be a bad fit. Interim talent solutions give hiring managers the flexibility of filling an opening quickly without making long-term commitments.
- A source of missing skills or expertise. Companies often take on new projects – restructuring, digital transformations, new product design and launch – without having all the necessary talent already on board. Interim solutions can be applied on a project-by-project basis, with hard start and end dates, to give companies the talent they need, exactly when they need it.
The Two Major Streams of Departures
To determine whether an interim solution works for your organization, and which solution works best, LHH Knightsbridge says it is necessary to look at different types of talent shortages.
Unplanned Talent Shortages
A sudden departure can include unplanned retirements, the sudden onset of illness, a pressing need for personal leave, or finding that a key member of your team has been poached by another employer, according to the LHH Knightsbridge report. “In some larger organizations, there may be adequate bench strength to simply plug-and-play a new person in a suddenly vacated role,” the report said. “In many other companies, however, there will be nobody with the specific expertise to fill a specific role and an external search must be undertaken.”
Why Interim HR Leaders Are in Growing Demand
Interim professionals bring niche skillsets, expertise and leadership capabilities required to drive change, says a new report by Lucy Bielby of Frazier Jones. Interim human resource leaders, in particular, have subject matter expertise, general business knowledge and an external perspective that can help organizations achieve a fast turnaround, realize rapid results, and drive a business forward. Because as we all know, it always comes down to people.
There is also a whole category of unplanned talent shortages: to support business growth. “For start-ups and other smaller to medium-sized companies, it’s not unusual to struggle to find the specialized talent to support rapid growth,” the report said. “For smaller companies, there may be a need to create an HR or IT department. Medium-sized companies may suddenly realize they are growing so quickly, they suddenly need to build an executive team – HR, finance, IT – to serve the growing needs of a growing workforce.”
Planned But Temporary Talent Needs
There are other moments in the evolution of every organization where talent needs come and go. One example would be when a company needs to bring in an internal team for a specific project like the introduction of a new technology platform. Another might be implementing new processes to meet compliance requirements for government or securities regulation. “Organizations need very specialized talent to keep up with all these challenges; it is possible to find subject matter experts in the interim talent market that can fill these important gaps,” the LHH Knightsbridge report said. “The key element here is that the talent is needed now, for a specific period, but not forever. The current environment provides many examples where very specialized talent is needed for a very specific time frame.”
Perhaps you need experts in M&A integration to get you through an important merger or acquisition. Or you need to perform a detailed compensation review to ensure you are paying competitive market rates to your people to keep them from accepting higher salary and bonus offerings from competitors. Or perhaps an ESG audit is needed to see if your organization is meeting all regulatory requirements. In all of those instances, LHH Knightsbridge says that specialized interim talent can be a huge help.
The pressure to find the right people is so intense right now that employers are speeding up their hiring practices and – in the process – increasing the likelihood of bad hiring decisions. “Interim solutions are key to containing these bad hiring decisions,” the report said. “They provide employers with the opportunity to vet candidates thoroughly before making a job offer. It also provides your teams with much needed support by filling unexpected vacancies quickly, which helps to mitigate burnout and improve overall morale and engagement. Filling a key talent hole can be a genuinely stressful experience. Interim solutions help alleviate some of that stress and allow hiring managers to make the best decisions.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media