November 29, 2018 Hiring in an Employee’s Market

With unemployment at a record low, companies need to look at their recruitment and selection strategies.

November 20, 2018

By: Ted B. Kinney, PhD

Unemployment in the US is at record lows, and employees have more choices than ever when searching for a new job. Employees in the manufacturing industry no longer have to remain in a job where they are unhappy, unfulfilled, or underutilized. Stiff competition in the industry means there are multiple other companies that are seeking the skills they can bring. As candidates leave for better opportunities when they come along, company turnover is driven higher.

How can companies combat near-full employment across the country, high turnover, and shrinking candidate pools? Consider these three tips:

1. Begin at the end.

The war for talent is being waged across the country. As demand grows for US-made products grow, your managers must hire new people while at the same time, other employees are leaving to pursue new opportunities. It may be your inclination to scramble and hire warm bodies to fill these positions, but that will rarely pay off in the long term. In fact, OSHA estimates that safety incidents on the job cost U.S. organizations almost $1 billion per week. Those warm bodies who with other opportunities lined up are going to drag down your bottom line for many years to come. Before you hire the first people that come to mind, ask yourself what the goals are for your selection process:

• Do you want to hire individuals who will perform well?
• Do you want employees who will behave safely on the job?
• Do you want committed employees who will show up on time day after day?
• Do you want to reduce turnover and build a pipeline of internal talent?

Knowing what your end goals are and referring back to them when designing or making decisions about your selection process will help you make advantageous, rather than rash, decisions.

2. Use data to measure your selection process.

The selection process that was in place when the market was in employers’ favor is no longer the selection process that will best your organization today. Think about streamlining this process so it’s not too lengthy and applicants don’t have to jump through a lot of hoops. Applicants may be more likely to pursue job opportunities with companies that have a quicker process. Evaluate your current process by using data to help make decisions about changes:

• What does candidate volume and through-put look like?
• What do the candidate completion rates look like for your application, assessment, interview, etc.?
• What does your candidate reaction data say?
• What percent of candidates are passing each hurdle in your selection process – are these still the right targets?
• Between hurdles (e.g., before an assessment, before an interview), what are your drop-out rates?
• How long is it taking for HR to invite candidates to the next step in the process?
• Are you interviewing all available candidates in a timely manner?

This information will guide you to make appropriate changes. Be mindful to keep in place the steps that add the most objective and robust information while still maintaining a positive and engaging experience.

3. Invest in the right technology.

Just as the overall selection process from a decade ago is no longer the best fit for today’s market, the technology in place 10 years ago is likely not serving your organization as well as it once did. Are you able to effectively measure the above datapoints? Is the system you’re using for talent measurement able to be customized for different department needs? Can you easily streamline the application content by:

• Removing redundant steps in the process?
  • For example, do you need three interviews or would one or two suffice?
• Adjusting the placement of your assessment by moving from a screen-out (great for high volume) to a screen-in (better for lower volume) approach?
• Adjusting your target pass rates?
• Increasing your candidate communications between steps?
  • For example, can you automate repeatable time-intensive processes like job applications, reviewing cut score rules, and sending email correspondence?

The changing nature of the labor market will affect the way companies approach recruitment and selection strategies, and it’s important to stay in front of these changes. By investing in new technology available like PSI Service’s proven and versatile talent measurement platform, PSI True Talent™, you can design the best selection tool as your company continues to grow while the candidate pool shrinks.

Ten years ago, employees held on to the job they had out of necessity. Today, those same employees have a range of employment options when examining the best fit for their needs. While job seekers and employees may hold all the cards, organizations looking to hire the best candidates are not entirely subjective to employees’ terms. Organizations can combat employment and retention challenges by evaluating their current system and investing in the best technology for the job.

Ted Kinney, Ph.D., is the Vice President of Research and Development at PSI. An Industrial/Organizational psychologist, Dr. Kinney leads a team of selection experts and developers in the creation and on-going research into the most efficient and effective selection methodologies and tools. He has particular expertise in behavioral interviewing, turnover reduction, effective selection strategy, and executive assessment.

Subscribe to Industry Today