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May 5, 2016
This article is part of a series called Wake-up Call.

There has long been an assumed link between the quality of leadership a company has and its ability to attract and retain great people. But why is that? Is it because a Steve Jobs or Mark Zuckerberg simply attract talent? Or is there something else going on at a more systemic level? A global survey of HR professionals that we just completed, points to something a little more complex going on.

This is the third year we’ve run The McQuaig Global Talent Recruitment Survey, and this year we included some questions regarding leadership to see if we could get a sense of its impact on the ability to attract and retain talent.

One of the central questions that helped us dig into this leadership question was how effective these HR professionals felt their own leaders were. Based on this response, we were able to look at the impact strong leaders had on a number of activities surrounding recruitment. Before we look at those, let’s look at the results of that first, central question: how effective do HR professionals think their leaders are.

Chart 1 ERE

HR professionals think their leaders are “not bad.” That’s not exactly a ringing endorsement. Just 25 percent rated their leaders as “very effective,” while the majority (61 percent) felt they were only “somewhat effective” and 14 percent felt their leaders were ineffective. That translates to 75 percent of people in leadership roles who are merely adequate or worse. If we know from other research that two-thirds of employees who quit are leaving their boss and not the company or role, that’s making it very difficult to hang onto good people.

Dissecting that issue is fascinating, and we’ve done some of that in our report and on our blog, but what I want to talk about here is what those folks who rate their leaders as “very effective” are doing differently. When we looked into this, we found a number of differences in activities that other companies could grab onto in order to improve their ability to attract talent and to improve their leadership.

What Companies With Strong Leaders Do Differently

Having strong leaders is about two things: hiring the right people and developing them to fill your company’s leadership needs. Much of that hiring and development is being done by hiring managers. So let’s take a look at them.

Our survey respondents tell us that they believe 72 percent of the hiring decision is based on the interview. We’ve seen research from Michigan State that puts that number at 90 percent. Either way, that meeting is the main driver behind whether or not to hire someone.  When we asked if HR thought their hiring managers were “excellent interviewers,” only 40 percent said yes. That’s a big problem.

The cross section who said they had very effective leaders, though, were much more confident with 66 percent saying their managers were excellent interviewers.

This group was also much more likely to be providing their hiring managers with interview training: 53 percent versus just 33 percent of the total sample (and a mere 13 percet for those who felt their leaders were ineffective). As a result, they were more likely to feel their managers were equipped to assess candidates (82 percent) than the global average (42 percent).

So, companies with strong leaders are more likely to be training their managers to assess candidates in an interview, and have more confidence that they can make a smart hiring decision.

What Channels They Are Using

We asked our participants to tell us about what channels they were using to source candidates, and which ones were providing the highest quality of candidates. The top three channels our respondents are using to source candidates are:

  1. Online job boards (82 percent)
  2. Employee referrals (74 percent)
  3. Social networking sites (69 percent)

And when we asked which channels provided the highest quality of candidates, they told us:

  1. Employee referrals (33 percent)
  2. Online job boards (31 percent)
  3. Agencies (16 percent)

Let’s have a look at how these results differed for the 25 percent with very effective leaders.

Chart 2 ERE

Their top three looked like this:

  1. Social networking sites (81 percent)
  2. Employee referrals (78 percent)
  3. Online job boards (73 percent)

The same big three, but they’re much more likely to be using social networking sites. Social networking sites also replaced agencies on their list of providing the highest quality candidates, coming in third with 15 percent. Employee referrals were No. 1 (36 percent) and online job boards No. 2 (27 percent).

This makes sense. If you have a leader, you can put on a pedestal to present to the world, it makes employer branding that much easier, and social media is a powerful channel for that.

Supporting Leaders

If you accept that having strong leadership is important, and most of us would, then it stands to reason that you’d take steps to make sure you were developing people to be better leaders. Or so you’d think.

Nearly 40 percent of our respondents said their companies provide no leadership training to new leaders. And nearly half (49 percent) have no succession management program. The group with effective leaders is much more likely to be supporting the growth and development of leaders, with 73 percent having a succession management program and 79 percent offering new leaders with training.

Those are a lot of numbers I’ve thrown at you, but here’s the point: If you accept that the quality of a company’s leadership has an effect on how successful they are at attracting and retaining talent, these differences in how companies support current and future leaders, and how they approach the candidate market are critical to take note of.

Does having an effective recruiting process lead to better leadership? Or does having better leadership equal more effective recruiting? Our results don’t allow us to conclusively say if there is a cause and effect link either way, but our experience working with organizations around the globe for 60 years points to a cyclical relationship.

One thing we do know for certain is the fact that only a quarter of respondents have confidence in their leaders is worrisome. We also know that succession management, leadership development, and hiring practices are the paths to fixing this crisis (yes, I’d call it a crisis). Underlying all of this, though, is understanding people.

Identify the qualities you need in a leader. Define the personality and behavioral traits that will equip them for success. Use effective interviewing techniques and insights from assessments to identify those natural behaviors in candidates and employees. And then customize your development plans to build on the natural strengths you know you need.

It’s a simple, three-step process that we’ve seen succeed again and again.

This article is part of a series called Wake-up Call.
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