Recent Trends in Human Resource Management

Thursday, March 12, 2009

Talent Acquisition: Quality of Hire and Passive Candidates Reign Supreme

Talent Acquisition: Quality of Hire and Passive Candidates Reign Supreme

The growing shortage of desired skills is compounded by an increasingly competitive global marketplace and an uncertain economy - all of which combine to force organizations to get more from the same, or less. It's critical that organizations find and lure best-fit talent and increase workforce productivity and retention. While each of these has pre- and post-hire implications, they also can be impacted by an organization's talent acquisition strategy. However, according to recent data from Aberdeen Group, the ability to identify and attract top talent continues to challenge most organizations.

The Shortage and Misalignment of Skills

Aberdeen Group's July benchmark report, "Talent Acquisition Strategies: Employer Branding and Quality of Hire Take Center Stage," revealed the two predominant factors driving talent acquisition at more than 80 percent of organizations surveyed revolves around the competition for skills, the limited supply of skills or both.

In addition to these external pressures, organizations face internal struggles when it comes to effective talent acquisition. Some 46 percent of all organizations - including 56 percent of those that achieved Aberdeen's best-in-class designation (top 20 percent) - cited workforce planning as their top challenge.

The second-highest ranked internal talent acquisition challenge facing best-in-class organizations focuses on the organization's ability to identify, recruit and validate better hires. In fact, 41 percent of best-in-class organizations cite quality of hire as an internal talent acquisition challenge, compared to only 23 percent that rank ability to reach ideal job candidates and time to fill job vacancies as key internal challenges. Laggard organizations (bottom 30 percent) place relatively equal weight on quality of hire, reaching ideal candidates and filling vacancies in a timely fashion.

Best-in-Class Talent Acquisition Strategies

To overcome the aforementioned macro pressures and internal organizational challenges, best-in-class organizations look longer term and focus on enhancing their employer brands, engaging and attracting passive candidates and targeting those who are best fit for their organizations and available job roles.

Best-in-class organizations distinguish themselves in talent acquisition through a mix of processes and technologies that force organizational collaboration, engage existing workers and target their collective efforts on what matters most to the organization. These work collectively to enable best-in-class organizations to achieve extraordinarily average year-over-year performance gains against the key performance indicators.

Key Differentiator: Recruiting Passive Candidates

Aberdeen's research shows talent acquisition in 2009 will be as much internal as it is external to the organization. But both must focus on heightening the organization's employer brand.

Internal strategies will focus on identifying and developing high-potential workers to fill anticipated higher-level vacancies. Best-in-class organizations place greater emphasis on career development, leadership training and flexible work environments to be more attractive to potential hires and more caring of existing staff. Some 68 percent of best-in-class organizations cite promoting career development and professional growth opportunities in recruiting campaigns as a top priority.

Progress against development plans for individuals designated high potential will be measured against the organization's needs to determine if, or when, the position must be filled externally.

External strategies will focus on finding and engaging talented professionals who are not actively seeking new employment. Passive job seekers are not easy to locate, but they represent an important part of a successful talent acquisition strategy. Aberdeen's research found 62 percent of best-in-class organizations are focused on creating or improving a data repository of desirable active and passive job candidates - versus only 46 percent and 35 percent of industry average (middle 50 percent) and laggard companies, respectively.

Whether internally or externally focused, an organization's talent acquisition strategy must create or validate candidates' and employees' perceptions of the organization as a great place to work. Fifty-three percent of best-in-class organizations focus on having corporate marketing and recruiting work together to improve employment branding. An additional 30 percent of best-in-class plan to have this collaboration in place during the next year. The importance of an internal talent acquisition strategy focused on making existing employees feel positive about the organization is highlighted by the following statistics:

a) Employee referrals are cited by all organizations - and 82 percent of best in class - as the top source to find desirable talent.

b) Some 74 percent of best-in-class organizations rank employee contacts and networks in their top three ways to recruit passive candidates, followed by attending conferences, industry events or tradeshows (60 percent) and visiting social networking sites (30 percent).

Best-in-class organizations are more aggressive at communicating job openings and job-role needs to current staff, and 79 percent are more likely to use the corporate Web to showcase the company's culture and opportunities.

Key Differentiator: Collaboration Between Recruiters and Hiring Managers

Collaboration between recruiters and hiring managers is critical to ensure they get the right candidates within an agreed-to time frame. This collaboration is in place at 89 percent of best-in-class organizations, resulting in a mutual understanding of expectations around the process, skills, attributes and attitudes in a desired candidate.

Aberdeen's research revealed a significant disconnect between human resources professionals and the hiring managers they serve. Non-HR managers are more likely than their HR counterparts to rank quality of hire as a critical success metric for talent acquisition. The same data also shows HR professionals are more likely than non-HR managers to rank time to hire as a critical success metric.

While HR and non-HR managers place relatively equal weight on the importance of overall hiring manager satisfaction, the difference in priority they place on quality of hire, quality of candidate and time to fill suggests a lack of understanding on what it takes to satisfy a hiring manager.

The importance of this collaboration is more pronounced when considering that organizations plan to increase hiring managers' involvement in the recruitment process. For example, 48 percent of best-in-class organizations get line managers involved in candidate follow-up calls, but some 75 percent plan to do so within the next year. Only 32 percent of best-in-class organizations train hiring managers on passive recruiting, but an additional 41 percent plan to do so during the next 12 months.

Key Differentiator: Measuring and Validating Quality of Hire

Seventy-four percent of best-in-class organizations said they have an "understanding of which applicant sources provide the best quality job candidates," compared to only 52 percent of lagged organizations.

When asked for the top four indicators their organizations uses to determine quality of hire, best-in-class organizations' responses focused on two areas: how quickly new employees got up to a desired level of competence and how long they lasted in their role during the first 12 months of employment.

To measure the quality of recent hires, organizations need to have processes in place to determine what level of performance the new employee should be at in three-month, six-month and nine-month time frames; to measure the candidate against those milestones; and to evaluate any performance gaps that need to be addressed. How well an organization can measure new hires job performance and use that information to improve the recruiting process plays a major role in a successful talent acquisition program.

Yet, according to Aberdeen's research, organizations ability to clearly articulate what quality of hire actually is still has a long way to go. Research revealed that quality of hire at most organizations is based largely on loose definitions. In fact, establishing "clearly defined metrics pertaining to quality of hire" is the most common plan related to talent acquisition that organizations will put in place in the next 12 months.


1. Gain clarity on skills gaps. Clearly define the common behaviors and skills of the organization's top performers or key contributors. Use this or the organization's core values as a general competency framework to identify skills gaps. This enables an organization to ascertain where gaps can be filled internally and which require more targeted recruiting efforts.

2. Seek feedback. New hires should be interviewed after the job offer to obtain feedback on the recruiting and hiring process. Make improvements as needed.

3. Define success metrics. Clearly defined metrics should be in place to measure the success of talent acquisition efforts. These metrics should be agreed on by HR and hiring managers and should address the organization's specific business issues.

4. Involve hiring managers. Hiring managers and recruiters need to be trained to use new technologies to find passive job candidates. Such workers can be a vital source of talent and expertise but have traditionally been invisible in recruiting efforts.

5. Focus on internal and external employer brand. The entire organization should work together to collectively brand the company a best place to work. Recruiting should be seen as an enterprise-wide function, not the role of human resources.

Ref: Kevin Martin
[About the Author: Kevin Martin is vice president and principal analyst of human capital management for Aberdeen Group.]


Anonymous said...

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Professional Consultant said...

Thanks a ton dear Mahesh.

I want to make this blog a success ans would require help to do so.

The idea of running this online forum is to make it a ready reference for its followers for the long time.

Please suggest some topics for discussion.