Point of View: A Changing Recruitment Environment

I have been involved in one way or another in the recruiting world for more than 20 years, but I believe that we are now going through one of those cyclical changes that will entirely remake our profession. Gone is the 20th century, when companies sat back and sifted through scores of qualified candidates for a single position. Gone are the days when recruiting agencies ó retained or contingent ó could pick up a few thousand dollars almost at will. Gone are the days when candidates would do whatever it took to get almost any good job. And gone are the days when anyone could become a recruiter. While the economy has temporarily caused some of us to think the good old days are returning, most of the perceptive among us know they are not. The revenue models for staffing agencies are changing; fees and commissions are under assault. Yet the number of positions being recruited internally has gone down. Organizations are looking inward, some out of economic pressure and some out of awareness of the looming talent shortage. More focus is being placed on retention and more careful selection. Hence the recent interest in both performance management and screening and assessment. This trend will continue. I expect that the size of the third-party staffing industry will continue to shrink, as it already has. On the other hand, there will be a rise in the need for innovative and cost-effective advisors and consultants in the overall area of talent management. Still a bit of a buzzword, but slowly being better defined, “talent management” will blossom. It will be the art and practice of attracting, developing, retaining, and replacing talent within both a particular firm and within an industry segment. The new role of human resources will be to ensure that an organization has the talent it needs in place to execute whatever business strategy is planned. This is what the U.S. military has been doing for decades, but it has never really become a common business practice. To create talent strategies one needs several elements in place. First of all, it is necessary to have a deep understanding of the business and where it is going or wants to go. This necessitates a “place at the table” for the talent management people, and it necessitates a thorough understanding of what makes the business successful. This will also require the use of scenario planning and the exploration of potential futures that would need to be staffed. It would mean preparing contingency plans and having a highly evolved set of strategies around talent. Next, it is critical to know what the current workforce capabilities are. This is not the same as knowing their educational backgrounds and years of service, but rather involves a much deeper understanding of their capabilities, experiential background, formal and informal skills, and motivations. The closest equivalent we have to this is the succession planning that takes place in some organizations for the top few. Practices like those will have to be leveraged and expanded to include everyone. A few firms have made progress here, including the usual leading edge firms like IBM and Dow Chemical. The third need is the hardest to fulfill and perhaps the most critical. This is gaining knowledge of the supply side of the talent equation. In order to plan effectively, it is important to know what the composition of available talent looks like and how much of it exists. For example, in order to plan for growth in the medical field it is necessary to know how many doctors, nurses, medical technicians, and so forth are available in a geographical area you can reach. It is also important to know how many of these people could be lured away at any time or are already on the job market. We have virtually no insight into this today. A few fledgling efforts have been made to capture market data, but it is notoriously difficult to get this information and maintain it. Some organizations have dedicated staffs to find people with key skills and maintain databases of contact information. This capability has to be expanded and will to be commercialized in some way over the next two to three years. Of course, the military has always had an advantage here because it can count on a percent of a demographic segment always being attracted. And, as a last resort, it can fall back on the draft. Corporations have no such luck. Intelligent arguments can be made for or against recruiting or developing people by looking at and comparing current capabilities to emerging needs and then to the available labor and talent supplies. In some cases it will be much cheaper to hire someone to fill a need, but in more and more situations it will be cheaper and perhaps faster to develop (or have already developed) the needed talent inside. Talent managers will be expected to do the math and make cogent arguments for one position or the other. Hiring managers will rely on talent managers to provide advice and guidance on which direction to go. Finally, organizations will have to have their policies and practices within clearly aligned to their talent needs. This means that human resources practitioners have to become champions of internal employee movement ó often at the whim of the employee rather than at the request of the organization. Employee development and rotation should become a standard practice, supported and funded to ensure the constant availability of talent wherever needed. Some employees will be less productive than others for periods of time while they learn. All of this will have to part of the overall equation. Internal development, formal education, mentorships, and experiential learning will all become more integrated and meaningful to both the employee and the organization. Compensation will be forced to change and respond to market pressures, not artificial barriers such as internal equity. Don’t we wish that real life were ruled like that! Employment contracts and negotiated bonuses based in part on supply and demand knowledge will be normal. We will slowly see the decline of what I call the knee-jerk recruiting that occurs when someone leaves. Usually this results in an almost automatic generation of a replacement requisition. Each time someone voluntarily leaves, and that should be less and less frequent, thorough analysis will occur on whether to find someone with the same skills, someone with different skills, and whether or not that skill set exists internally. Technology, databases and a strong understanding of evolving business needs will heavily assist that analysis. Is all of this utopian? Perhaps. But in a general way this is the scenario of the 21st-century talent manager ó the role that will replace that of recruiter and perhaps even of the HR generalist and provide organization with what they will most need to thrive in this age of skill.