It’s no secret that the past two years have upended the labor market. The fallout from a global pandemic pushed millions out of the workforce and caused millions of others to rethink their career plans. At the same time, America’s largest generation in history, the Baby Boomers, began aging into mass retirement.
Today’s labor market is tighter than it has been for years. Companies of every size and industry want to hire, but with a potential recession on the horizon, they know a poor hire can mean disaster.
Traditional headhunters cannot ensure that companies get the talent they need. Instead, businesses need a different approach- one we call Topgrading. Topgrading is a proven, practical approach. Research suggests that the mis-hiring rate without Topgrading can be as high as 70%, while Topgrading can reduce that to as little as 10%. So let’s explore some facts and solutions.
Hiring the Wrong Person Can Spell Disaster
We highlight the fact that vacancy and quit rates currently experienced in the United States correspond to a degree of labor market tightness previously associated with sub-2 percent unemployment rates. – NBER Report by Alex Domash and Lawrence Summers.
A lot of reporting confirms the tight labor market. The supply of suitable candidates has shrunk to the point where even if you find someone for an employment opening, it is equally challenging to find someone to replace them if they fail to meet expectations. Naturally, this weighs on the minds of hiring managers and SMB owners, often resulting in companies rushing hiring decisions and getting stuck with whoever they hire.
And to compound hiring challenges, much information gets left out with a traditional interviewing and recruiting process. For example, an applicant may be great in a one-on-one setting but fail at group interactions. They may lack core skills not covered by an interview. And their preference of behavior (aka personality) may turn out to clash with company culture.
Hiring a new employee is expensive. Administrative costs abound, and new employees don’t become fully productive until after a period of training and orientation. The company funds that learning curve from every aspect.
One bad employee can spoil a bunch, which may be worse than no employee. Organizations often sink to their lowest common denominator as workers look around and see what their coworkers can get away with behaviorally. But a good employee can raise the productivity of a whole team through their example.
Traditional Recruiting Often Hires the Wrong Person
Traditional recruiting finds candidates and assesses them through resumes, CVs, and interviews. Unfortunately, this process lets candidates present themselves the way they want you to see them, enabling distortions and deceptive appearances.
Recruiters tend to present far too few candidates- after all, there is a labor shortage right now. As a result, resumes often contain a lot of hype. And interviews and reference checks carry too few valuable insights.
And ultimately, traditional recruiting leaves the final decision up to whims and intuitions. And no one’s gut has ever failed them, right? Without an objective method of determining the right candidate, managers will have little transparency and few past examples to review. And lack a consistent, replicable process for other hires.