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Big Challenges for Recruiting Leaders — The Top 10 Upcoming Recruiting Problems

by Apr 7, 2014, 5:23 am ET

Those who follow my articles know that I frequently write on the positive trends and the big ideas that recruiting leaders need to be aware of. However, I have not often written about the biggest strategic challenges or problems that corporate recruiting leaders face. Of course no one wants to dwell on the negative. But since I am predicting that during the next few years we will all encounter a completely transformed world of recruiting, it only makes sense to at least be aware of our largest current and upcoming challenges. If you don’t act proactively to mitigate these major challenges, they unfortunately may grow out of control, causing exponential damage to your firm.

The Top 10 Highest-impact Strategic Recruiting Challenges

In this list, the highest impact problems and challenges appear first.

  1. Not being prepared for the return of intense recruiting competition – with so many jobless individuals applying for every open position, often recruiters and managers could pick and choose over numerous applicants. And as a result, recruiting could have been labeled over the last few years as being relatively easy. But as the economy improves, the power will inevitably shift away from the corporation to the job seeker. With this shift, most corporate recruiting functions simply aren’t ready for a return to intense competition where the candidate holds the power. Solving the intense competition problem will be difficult because the primarily “active” recruiting approaches that have worked and dominated over the last handful of years will simply fail when you have to fight over prospects and candidates. Having to fight to fill every position qualifies this problem as the one with the highest impact unless you have developed a plan to return your function to a war-for-talent model. And even then, a lack of resources may restrict any shift in your approach.
  2. The increased volume of open positions will overload the recruiting system – in addition to having to fight over individual talent, the upcoming increase in the volume of hiring will further stress most existing recruiting systems to the limit. Obviously as corporate growth increases, so will the hiring volume. However most recruiting leaders don’t realize that retention problems at your firm will further increase that hiring volume. Last year alone corporate turnover increased by 45 percent, and I am predicting a similar increase for this year and next. Turnover will increase because as the job market opens up in specific industries, regions, and technical jobs, many employees who have been focusing on job security for years will begin to realize that it’s time to move on. Because most corporate retention teams have been completely decimated and their retention approach hasn’t been updated in a decade, corporate efforts to prevent this increased turnover will have little impact. For recruiting leaders this means that the combination of new corporate growth and high employee turnover will dramatically increase the volume of open positions beyond their capacity. Because during the last few years recruiting has been operating exclusively in a “low-volume mode,” I rank our lack of capacity and scalability as the No. 2 challenge.
  3. Rusty hiring managers and underdeveloped recruiters have diminished capabilities – a low volume of hiring and the lack of competition may have caused the capabilities of your hiring managers and recruiters to degrade significantly. Adding to that condition the fact that there has been little money for development or training for either recruiters or managers will mean that in growth mode both are likely to initially stumble under this new environment.
  4. A lack of speed will restrict your results – the business world moves much faster today than it did during the last recruiting boom. Unfortunately, recruiting hasn’t maintained its speed capability because reduced recruiting resources and a lack of competition have caused many firms to stop focusing on their time to hire. But because in the near future top candidates will have multiple offers, they simply won’t be around when indecisive managers finally make their hiring decision. In a newly competitive and faster moving world, delays in hiring may cause you to lose literally every top candidate. Unfortunately, reducing time to hire is one of the most difficult tasks within recruiting (Note: speed hiring is the topic of my presentation at the ERE.net Spring conference).
  5. Long-ignored employer brands will begin to negatively impact recruiting – in a down economy with its surplus of applicants, few recruiting leaders paid much attention to their external employer brand image. Few have taken the time to measure their employer brands, and as a result, recruiting leaders often don’t realize how their “talent failures” (including layoffs, pay cuts, promotional freezes, etc.) have hurt their employer brand image. Once competition for top talent becomes intense, leaders will realize that a weak Internet or social media employer brand will prevent top talent and innovators from even considering applying at your firm. Unfortunately, most recruiting leaders define employer branding incorrectly and rebuilding an employer brand is both time consuming and expensive.
  6. Your current recruiting process may not have the capability of recruiting innovators  one of the things that executives have learned from the success of firms like Google and Apple is the value of innovation and having innovative employees. Unfortunately, most recruiting processes are not designed to effectively recruit innovators, who incidentally expect to see innovation and technology as an integral part of the hiring process. Without a strong employer brand and a separate sub-process designed specifically for recruiting innovators, the chance of recruiting a top industry innovator to your firm may approach zero.
  7. Your recruiting strategy may be years out of date – obviously without the direction provided by a strategic plan, a lack of focus may doom your firm two years of weak results. But surprisingly, most recruiting functions actually operate without any written and distributed recruiting strategy (one that has its own name). But even if you have a strategy, update it so that it meets the need of this new intense global recruiting market. The strategy must also include a competitive analysis of your recruiting competitors to ensure that your firm’s strategy and approach produces superior results and a measurable competitive advantage.
  8. Antiquated recruiting metrics lower your credibility with executives – whether you have a seat at the table or not, recruiting leaders simply will not be listened to and funded unless they have the right metrics that demonstrate and quantify the dollar impact that high-performing new hires have on corporate revenue. And of course the biggest corporate metric omission is the failure of the majority of firms to accurately measure the quality of hire. And as a result, few corporate recruiting functions can convincingly prove that they hire top performers and innovators with advanced skills and high retention rates. Only a handful of functions have predictive metrics that are necessary in order to alert recruiters and hiring managers about upcoming recruiting issues and opportunities.
  9. A shortage of effective recruiters is on the horizon – everyone knows that this long period with a down economy has decimated the ranks of corporate recruiters. Many of those who were laid off have left the profession. And the bad taste that it left in their mouths may cause most never to return to the profession. Since there are no college programs that turnout recruiters, recruiting leaders need to prepare for the time when competition for top recruiters will become intense. Existing employed recruiters will be in such a demand that they will be “bid on” by other firms, and finding effective replacement recruiters on the open market will be extremely difficult and expensive. Training new recruiters themselves may be the only effective option available to many firms.
  10. The lack of recruiting resources — unless you work at Google, the odds are that your function has already suffered numerous dramatic budget cuts over the years. So obviously you’re going to need a significantly higher budget if you expect to have a reasonable chance to increase your employer brand, recruiting volume, recruiting speed, and quality of hire. Unfortunately, most recruiting leaders simply don’t have the capability of building a strong business case that quantifies the tremendous dollar impact that recruiting has on corporate revenue and results.

Some Additional Challenges to Keep in Mind

There are obviously many additional upcoming strategic problems that didn’t make the list, because I determined that even though they are important, they had a lower impact. But since every industry and company faces unique problems, add your unique problems to your “keep an eye on list.”

The first to consider is the assessment of new Internet and social media approaches that may at least initially appear to have the potential to dramatically improve your recruiting results.

Next I would consider the globalization of the talent marketplace to be an important challenge (and even more so if you have the capability of offering remote jobs). Assessing the incredibly high volume of emerging recruiting technologies in order to find the very few that really impact quality-of-hire results will also certainly be a reoccurring challenge. Keep an eye on employment-related legislation in each of the various countries that you recruit in, as the rights of applicants will invariably increase.

Finally, as executives become more aware of the economic importance of recruiting and retaining talent, don’t be surprised to find increasing pressure to separate recruiting, retention, and onboarding from the rest of HR.

Final Thoughts

Although it’s certainly more fun to explore new opportunities in recruiting, failing to identify and resolve existing recruiting problems may actually have a larger negative impact on your results (I estimate up to a 50 percent impact). Almost everyone is aware of the tactical day-to-day problems in recruiting, but very few recruiting leaders take the time to forecast strategic “big picture” problems that are on the horizon.

If you are a corporate recruiting leader, I hope my “biggest-challenges list” at least started you to think about the major shifts that are ahead in recruiting and the problems that will occur as a result of them.  If you know of additional “big challenges” that we are likely to face in the near future, please take the time share them in the comments section immediately following this article.

 

Some of the Related Conference Sessions at the ERE Recruiting Conference in San Diego:

  • Strengthening Your Recruiting Department’s Internal Reputation and Influence,
    Wednesday, April 23, 10:15 a.m.
  • The State of Recruiting, Wednesday, April 23, 8:30 a.m.
  • Recruiting Recruiters: Strategies to Find and Develop Great Recruiters, Wednesday, April 23, 2 p.m.
  • Stop Slowness from Killing Your Recruiting Department,
    Thursday, April 24, 2 p.m.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Martin Snyder

    Some good points here, but some factors also not considered…one is that recruitment has a natural “speed limit”, just as auto and real-estate sales do: people make big decisions at different paces, and sometimes that cycle stretches far longer than generally imagined. Another is that the means to solving most any solvable problem is throwing dollars at them, and corporate America has never been so awash in cash and starved for yield at the same time. That suggests that as the problem is realized, it will be addressed financially, which tends to inspire optimism ;-)

  • http://www.recruitinginferno.com Steve Levy

    @Marty Actually a speed limit has more of an impact on Yugos than Corvettes…lots of Yugos driving on Recruiter Blvd

    @Sully, one more touchy point – Google ain’t great recruiting. Let me pose this to you Google fanboys and fangirls – does your company have the financial performance, marketing power, employment brand awareness and recruiting budget of Google?

    800 pound Gorillas can recruit just because they’re 800 pound Gorillas…

  • http://www.thehireauthorityexecutivesearch.com Edward Woycenko

    The low hanging fruit “recruiting” era is coming to an end. In my opinion, very few companies have a proactive recruiting capability designed to acquire top talent from their competitors. If I were in a C-level position in a company, I would be partnering with industry knowledgeable 3rd party recruiters as soon as possible while the company can still forge those relationships. Smart companies are partnering with specialist recruiters who deal in performance based hiring practices, thus reducing the probability of a mis-hire while maximizing revenues and profitability. Investment into a hiring process that works and focusses on quality of hire and proper onboarding practices while at the same time investing in training and mentoring programs will only strengthen a companies ability to attract the best talent in a given industry. A cost contained approach will only result in a companies continued descent into mediocrity or lower. Remember, Talent Wins.

  • Richard Araujo

    I believe the low hanging fruit era is at an end too, but I do not think companies will invest in their recruiting functions for several reasons, but primarily the basic attitude of entitlement. Employment is still viewed as a ‘gift’ of sorts in the US, and not a mutual agreement. A friend of mine recently had an experience where she was interviewing for an executive admin job. Her salary was in the 60s, the salary surveys I’ve seen for NY put that right smack in the middle of what a good Executive Assistant with a few years experience should get. The company knew her requirements going in, and offered 45K. She was put off to say the least, the HR rep there actually said, “You should feel lucky to have a job offer!” And these people considered her lucky, to get a job working in Manhattan at 45K. The commute costs alone work out to about 10% of the gross salary.

    Plus the US will always have policies that create chaos in the labor market, and will subsequently always favor employers by having a permanent surplus of labor. We’re dominated by two political parties, neither of which is generally populated by people who have ever had to work for a living themselves, much less have employed others. Lefties would raise the minimum wage to the point that almost no one would be employed except union reps, righties think empowering ‘entrepreneurs’ to the point of making them borderline slave masters leads to ‘prosperity.’ Unless someone in the government has a case of rectal-cranial prolapse and manages to pull their head from their ass, things will continue on here much as they have.

  • Scott Weaver

    If you ask me, we’re in the age of “the corporate recruiter”. Demand is high and recruiting related salaries are sky-rocketing. The problem is that the corporate recruiter isn’t very good in many cases. Whether you’re 3rd party or in-house, if you don’t have the innate ability to understand a specific positions hiring needs, you don’t play well with Hiring Managers, or you don’t know how to headhunt (or passively recruit for those that are afraid of the word ‘headhunt’), then you’ll just be another “HR Person”.

  • Richard Araujo

    “If you ask me, we’re in the age of “the corporate recruiter”. Demand is high and recruiting related salaries are sky-rocketing. The problem is that the corporate recruiter isn’t very good in many cases.”

    The corporate recruiter is as good as the third party recruiter, all else equal. It’s the italicized phrase though that qualifies it. You don’t have time for headhunting when you’re spending half your days getting sucked into employee relations and other more generalist oriented issues. However, being corporate means you are a general resource and you will be called upon to backstop the rest of HR, so it’s unavoidable.

    But, you also have more influence over the hiring process, which is one of the advantages. Being inside a company makes it easier to tame an out of hand hiring manager, and to know the real company culture vs the hype delivered to most third party agencies to sell. But it makes it harder to engage in a purely recruiting oriented function.

    I’d like to see how effective so many self proclaimed gurus in the third party world would be dealing with half the crap I had to when I was on the corporate side. The jobs are different, one is not superior to the other, nor are the people who excel in either necessarily better than each other. They are two different positions with different benefits and challenges to each.

    And for most companies a corporate recruiter gives better ROI, because paying 20-30% per hire would break most company’s budgets and have no justification unless they were making a serious effort to measure quality of hire and cost of hire, and concentrate on the former as superior. And even then there’s far from a guarantee that a third party agency would deliver better. And then there’s the challenge of retaining the quality hires, however they’re delivered.

    For most companies a high powered cost-no-object approach to recruiting would be like adding a NOS system to a Yugo. It’s a great system that’ll get you going fast if it’s installed right and has the associated mechanics to take advantage of its capabilities. But the latter is missing it’ll just explode in your face.

  • http://www.thehireauthorityexecutivesearch.com Edward Woycenko

    @Richard. If, as you state, the corporate recruiter is as good as a good 3rd party recruiter, why would you stay in an environment where you were making 1/4 the money and taking a lot of crap? If companies really valued what a corporate recruiter, who knows how to headhunt brings to the party, shouldn’t they be paying more money for the position and shouldn’t the corporate recruiter have a say in how the majority of his/her time will be spent? Your example is another demonstration of a misappropriation of time and money in companies that diminishes the ROI of the position. The influence over the interviewing process that I have been exposed to has been a protectionist influence, designed to keep headhunters out of the process. In the time that I have been in the recruiting business, I have had no trouble determining what the corporate culture is like, which can easily be accomplished by talking to the various stakeholders in the hiring process and by effective questioning techniques. I agree the most companies need to get their house in order prior to going out and acquiring top talent, but if cost containment takes precedence over an investment approach, we are currently seeing the results of that decision.

  • Scott Weaver

    @Richard: I don’t disagree with much of what you’re saying. I’m not saying that one is necessarily better than the other. I’m simply saying that as the demand for good recruiters increases, the supply of the same is quickly diminishing. At the same time, we’re seeing some organizations do very good training – Amazon being one of them. The major difference being… If you’re 3rd party and you’re not good at your job – you won’t last long doing it. If you’re corporate and you’re no good, or you’re what I would consider a “process recruiter”, you can probably get by and the company may not know what they’re missing out on. As the article mentioned, with the shift in the economy, fewer and fewer ‘process recruiters’ are going to do as well as they have. Its no longer a matter of posting a job and picking your favorites. You actually have to recruit now.

    @Edward: I agree with you also. Like I said previously, corporate recruiting salaries are sky-rocketing so the ‘make a ton of money’ argument is diminishing in some respects. Some people stay on the corporate side because you can have greater impact on the recruiting platform/strategy/operations used. That’s the part I enjoy and why I made the switch 7 yrs ago. And while I don’t doubt you can have a good feel for corporate culture, it won’t be close to the understanding you have of it by actually working in that same office every day for 5 years.

  • http://www.thehireauthorityexecutivesearch.com Edward Woycenko

    @Scott. Being in a corporate environment for 5 years could be a negative when recruiting, especially if the corporate culture is not that good. How much input and influence do you have as a corporate recruiter on cultural issues? How do you overcome what could be construed as a neutral or negative corporate culture? Exactly what impact do you have on the platform/strategy/operations used? Does this include utilizing 3rd party recruiters?

  • Scott Weaver

    @Edward: Is it then a positive if the culture is good? I don’t think anyone can say one is better or worse than the other… its just personal preference. We have a great culture here and an excellent reputation in the market so instead of overcoming it, I’m advertising it. In terms of impact – ATS, data, metrics, branding, social strategy, referral programs, managing a team/req load, temp services, succession planning, college recruiting, talent pools/pipelines, etc. Yes, it includes using 3rd party.

    So why does one have to be better or worse than the other? I guess I’m unsure why there would be an argument to that?

  • Keith Halperin

    Folks:
    We need ALL types of recruiters:
    3PRs (contingency and retained) when you have work that requires the training, professionalism, and expertise doing things the corporate or contract recruiters can’t do as well that’s worth a 30% fee.

    On-site, on-demand corporate recruiters to handle the high-touch, high value add activities (mentoring, counseling, streamlining/improving processes. CLOSING that can’t be tran-sourced (no-sourced, through-sourced, or out-sourced) for less than U.S. minimum wage. These people should make $50+/hr.

    On-site, on-demand contract recruiters to handle the same type of work during hiring peaks when additional FT recruiting headcount isn’t justified. These people should also make $50+/hr.

    Finally, I don’t know where these
    “skyrocketing corporate recruiter salaries”- are. You don’t see them here in the Bay Area… Hourly rates for in constant dollars for CRs are simialr to the early/mid ’90s…

    -kh

  • http://www.thehireauthorityexecutivesearch.com Edward Woycenko

    @Keith. I agree that we need all types of recruiters, but we need to be working in concert with each other, rather than a them vs us manner which seems to exist today. In terms of compensation, I think on demand corporate and contract recruiters should be paid anywhere from $80/hr. on the low end to $100/hr. Recruiting is vital to the existence of every company and the function should be compensated at a level that reflects this importance.

  • Scott Weaver

    @Edward: I think that “them vs us” only exists when there is a lack of respect between the 2. Anyone who is good at what they do is fine by me. Frankly, I wouldn’t be on ERE if I wasn’t interested in learning from the many ‘headhunter’ types that make up the core of the discussions on this site. While many of the articles are corporate leaning, many of the active participants are the good ‘ol fashioned headhunters. And I like it like that. There isn’t enough of that mentality on the in-house side.

    @Kieth: Corporate side (FT) gigs are on the upswing because many companies are building their own in-house executive search function. In order to do this, they have to be willing to fork out the cash it takes to get someone who is on the 3rd party side. Obviously, for those of you who are very successful and have been doing it for years, then its still more lucrative to remain 3rd party.

  • Richard Araujo

    @ Edward,

    “If, as you state, the corporate recruiter is as good as a good 3rd party recruiter, why would you stay in an environment where you were making 1/4 the money and taking a lot of crap? ”

    I was making more than average, because I asked for it. And, I enjoy the other aspects of HR work. In short, I was getting paid well and I like challenges and a broader scope of work. There were certainly a lot of negatives to my last position, boredom was never one of them. That meant a lot to me.

    “If companies really valued what a corporate recruiter, who knows how to headhunt brings to the party, shouldn’t they be paying more money for the position and shouldn’t the corporate recruiter have a say in how the majority of his/her time will be spent”

    In pie-in-the-sky Idealand, sure. Not in the real world, no. If they’re going to pay at an agency level, they’ll just use the agency and not have to pay when hiring volume is down. With a corporate recruiter you pay a less, save when hiring volume is up, carry them but retask them when it’s down.

    “The influence over the interviewing process that I have been exposed to has been a protectionist influence, designed to keep headhunters out of the process.”

    That’s kind of the point, to not use agencies when it’s not necessary. And it’s the call most companies make because most agencies amount to glorified job boards. When I was on the corporate side, in almost all cases the resumes I got from agencies were the same ones I got from a job posting. Once more it’s hype vs reality; if third party agencies were so good, and I tried a lot of them because my previous employer was under the impression they were superior too, then why with only one exception did I always see the same resumes from them that I saw from a posting? I always hear protestations to the contrary, but my experience says something else.

    Third party recruiters do have one thing corporate recruiters don’t have: marketing and PR in their favor. Results are harder to come by.

    “I have had no trouble determining what the corporate culture is like, which can easily be accomplished by talking to the various stakeholders in the hiring process and by effective questioning techniques”

    Then you’d be the first in my experience. The stakeholders usually hand you hype and BS. They most often will not tell you any of the company’s perceived negatives. In any event, nothing gives you insight into a company’s culture better than actually working within it and for it directly.

  • Richard Araujo

    “Its no longer a matter of posting a job and picking your favorites. You actually have to recruit now.”

    Don’t see any evidence for this. It may come to pass, but right now I still see high unemployment, and employers acting as if they have the pick of the litter despite how being employed by them stacks up to the market vis a vi salary, culture, opportunity, etc.

    I think you’re right about corporate recruiters being more secure in their jobs. However, I think that’s because companies know they’re priced significantly lower than using an agency for each and every hire, while performing at an acceptable if not exceptional level. But then not everyone needs, nor can they afford, top shelf.

  • Scott Weaver

    @Richard – I suppose each experience is different. We had a very successful recruiter on our team during the terrible economic times. Now that we’re back in ‘passive’ mode (that John references in his article above), we had to transition her to a different role in our firm. Our growth is 15-20% year to year and will probably be over 30% this year – all within a niche industry. As with anything, just because you don’t see it in your work/industry, doesn’t mean its not a reality for others. Heck, we hired more people in Q1 this year than we have in any other quarter of the companies 18 year history.

  • Richard Araujo

    @ Scott,

    “So why does one have to be better or worse than the other? I guess I’m unsure why there would be an argument to that?”

    It’s fairly common here, and in every other gathering of recruiters I’ve seen, to denigrate ‘corporate’ recruiters as somehow less skilled, lower-end, lazy, etc. Which is funny because before I was at my last job, they were using agencies and paying close to half a mil a year in recruiting fees. Then they tried hiring agency recruiters, all of them washed out in less than a year, some less than a month. They just tried replacing me with such a person, he was gone in three weeks.

    In my six years there I eventually got the recruiting budget down to near zero. Just m salary, a coordinator’s, the ATS fees and about 20K a year for posting. And I got the time to hire down and quality of hire up. No doubt, there were things about me they didn’t like, and things about the place I didn’t like. Such is life.

    What’s more, as stated before, when I did use agencies I invariably got the same candidate pool I got from a posting and some resume hunting on my own. I used to believe the hype about agency and third party recruiters. Experience has taught me otherwise. All recruiters should be judged on one thing: results.

  • Richard Araujo

    @Scott,

    Your company would be one of the few that are managing to a change in the market then. My experience tells me most will continue with business as usual and scrape by or go under. I’ve seen too much entitlement in too many companies to believe many will actually try to earn the better employees. They will expect them to line up as before.

  • Brian Sinclair

    Give the debate about in-house (corporate) vs. external/3rd party vendor recruitment, I thought this might be of interest:
    http://www.workcomms.com/#/campaigns/am-forum
    It’s a bit UK/EU centric, but hopefully an interesting read none the less.