Thriving in an Increasingly Competitive Hiring Climate

By Roy Notowitz, partner, Generator Group 

An increasingly competitive hiring climate is making it more difficult than ever to locate and keep the best talent, both in Oregon and elsewhere in the country. In many ways, being located in Oregon is a big advantage. A key attractor is the quality of life that Oregon offers. “I’ve found that executives have a really good perception of Portland as a place to live and raise a family,” says Elaine Lees, vice president of human resources at Unicru, Inc.

Yet key challenges are the lack of a recognized software center in Oregon and the perception that Oregon schools are underfunded. “The two most frequent questions we hear when recruiting software executives are, ‘How good are the local K-12 schools?’ and ‘What would my other employment options be in Oregon if the job doesn’t work out?’” says Eric Rosenfeld, managing partner of Capybara Ventures.

“If we hire up-and-coming talent, they want to know that they have options that go beyond us in the future,” says Lois Brooks, director of human resources for WebTrends. “There are not many large software companies in Oregon, so many candidates don’t feel there are good options in this area for future growth.”

Broad changes sweeping the hiring landscape
In addition to the challenges specific to Oregon businesses, changing demographics on a broader scale are radically altering the recruiting landscape for companies across the United States. The workforce is aging, and more than 64 million baby boomers are poised to retire by the end of this decade. The unemployment rate has dropped to 4.7 percent nationally and, as a result, compensation and company turnover at the executive level are rising rapidly. Unfortunately, companies won’t be able to rely on the next-generation workforce to solve the supply problem. Undergraduate enrollments in engineering and computer science have declined at U.S. universities since 2001. And post-9/11 immigration rules are making it harder to recruit highly skilled workers from overseas.

Advances in technology are also complicating the hiring picture. For example, Internet job boards and software are enabling job candidates to crank out job applications faster than ever, leading many candidates to apply for numerous jobs for which they are not qualified. Deluged with résumés, recruiters are now spending the bulk of their time handling job applications from unqualified candidates. In addition, networking tools such as LinkedIN and Jobster are making it possible for top talent to maintain contacts and find work with much greater efficiency on their own. This reduces the likelihood that the talent you are actually seeking will respond to your job opportunity or become a part of your talent pool, unless you proactively seek them out.

These indicators suggest that companies are having an increasingly difficult time locating, attracting and retaining key talent, both in Oregon and elsewhere in the country. Indeed, nearly 60 percent of company executives now cite the inability to attract and retain the best talent as a key threat to their business.

A strategic approach to hiring
With such a strong reliance on highly skilled workers, how can the Oregon software industry succeed in this environment? Is it still possible to hire and retain the best talent in the face of all these challenges? While there are some things you cannot control in a person’s decision to consider Oregon, other things you can. The answer lies in adopting a proactive, strategic approach to hiring. By thoughtfully planning your approach to hiring and staying in front of the process at all times, you can significantly influence the recruiting and hiring experience.

Here are five tips to point you in the right direction:

1. Develop a strategic staffing plan.
   The software industry is composed of knowledge workers, who inherently come with a high level of performance variability. A strategic staffing plan will enable your company to anticipate future staffing needs and start planning now to fill these future positions with top talent. A good staffing plan should include strategies for increasing the number of employee referrals, enhancing the diversity of candidate pools, or reducing time to fill. Each strategy and its corresponding tactics should be measurable to ensure that it is effective. As you develop your staffing plan, consider which positions in your company have the greatest impact. These are the positions in which you should invest the most time and resources since you have the most to lose if you hire the wrong person.
   
   Also keep in mind that hiring is a process, not an event, and all processes consume resources. With many moving parts and variables that are hard to control, hiring can at times be inefficient. Be sure that your strategic staffing plan includes a comprehensive recruiting and selection process that allows your company to consistently generate, evaluate and select highly qualified candidates. A comprehensive process does not have to be slow. Speed is becoming more important with top candidates flying off the market in record time. Some recruiters are reporting that the top candidates hardly last two weeks on the market once they decide to make a job change.
   
   
2. Know what you are looking for and how to assess it.
   People are the most complicated technology on earth, so you have to approach the candidate-selection process with your thinking cap on. An incredible amount of time can be wasted sourcing, screening and selecting candidates based on ill-defined, and often inaccurate, assumptions about what a job actually requires. Making a successful hire involves up-front prioritization of requirements as well as consideration of how to properly evaluate prospective candidates. To accomplish this, some companies go beyond job descriptions to develop “success profiles” for key positions. A success profile spells out the specific core competencies needed for success in the job. Core competencies are more than the particular skills or experience a candidate brings to the job. They are a set of capabilities such as “problem solving,” “strategic thinking” and “leadership ability” that are harder to define, yet critical for success. Defining the core competencies will help you to focus on the most reliable indicators of job fit and prevent you from selecting candidates based on experience and skills alone.
   
   When evaluating candidates, be sure to validate information and dig below the surface. The Society of Human Resource Managers estimates that 53 percent of all job applications contained false information in 2003. Using structured interviewing methods such as “behavioral interviewing,” which delves into a candidate’s past experiences and behaviors to determine future success, can increase the likelihood of a successful hire by as much as 40 percent. In addition, online screening and assessment tests, as well as “work simulations” that test a prospective candidate’s approach to real work situations he or she will encounter on the job, can further the accuracy of hiring decisions. I also highly recommend in-depth reference and background checks for all finalists.
   
   
3. Build deep talent networks.
   Recent data from the 2006 Executive Job Market Intelligence Report shows that networking outpaces job postings as a successful recruiting strategy by more than four-to-one. Hiring skilled in-house or contract recruiters can cut through the clutter by tapping directly into the most effective sources for finding top talent. In this way, they are worth their weight in gold. Recruiters who wait for candidates to come to them are not doing their jobs and won’t be successful. It is important to structure internal recruiting positions to allow recruiters to spend the majority of their time proactively developing relationships and selling their company to active and passive candidates rather than responding to a sea of résumés. There are many recruiting tools available to help streamline the résumé-screening process and free up recruiters’ time to take a more strategic approach to building talent pools.
   
   Outsourced recruiting is also a way to build deep talent networks. A recent survey by CareerXRoads found that 44 percent of companies outsource all or part of their recruiting. In addition to using in-house and contract recruiters, your company should proactively develop one or two strategic relationships with outside recruiting firms to use for specialized hires, when resources are maxed out or to increase the speed and focus of a specific search. Selecting top vendors up front will allow for better partnerships, improved performance and the ability to shut out unsolicited résumés that can infiltrate your company. It will also help your company avoid paying unnecessary contingency fees to recruiters that add little value beyond blasting résumés at your hiring managers. If managed well, the strategic use of third-party recruiting partners can save you money and have a strong return on investment. When evaluating an outside recruiting firm, look for industry reputation, a proven track record and a well-defined recruiting process. In addition, always check client references.
   
   
4. Create a positive candidate experience.
   High-level candidates do not like the feeling of being processed. Unfortunately, most companies’ hiring processes were not designed for hiring top talent. To create a positive candidate experience, talent guru Lou Adler recommends a “talent-centric” strategy: “This means that every interface, every advertisement and ad placement, every form, every question, every meeting, every e-mail, every encounter, every schedule, every call, every follow-up call, every offer, and everything else is designed to ensure that a top person will be wowed!” A good example of a company that employs a talent-centric recruiting strategy is Starbucks, which personalizes the candidate experience by inviting candidates to a special coffee-tasting event at corporate headquarters as part of the interview experience. Additionally, each candidate gets a personal note from the hiring manager after the interview.
   
   Although a talent-centric recruiting strategy is critical, by itself it is not enough. To attract the truly best talent, your company must also have a strong employment brand. Nearly half of all American workers say their company’s image played a key role in their decision to apply for a job there. With the increasing popularity of Internet blogs and chat rooms, a few negative employee interactions can weaken the reputation of your company overnight. Developing a strong employment brand is not just about PR and advertising. It involves making employee morale a top priority and ensuring that the desired culture truly matches the actual work experiences of employees. Once you capture the unique and desired aspects of your company culture, you will be able to communicate it through the office environment, employee communications, external job postings and the career section of your Web site.
   
   
5. Effectively integrate your hires and keep them engaged over time.
   Recruiting does not stop the first day your new hire is on the job. It’s a continual process that also involves successfully “onboarding” your hires so that they quickly reach an equilibrium point where they are contributing more than they are learning. A recent study by the Center for Creative Leadership found that nearly four out of ten new management hires fail within the first 18 months of the job. Why? They typically must overcome steep learning curves before they can begin to perform their jobs effectively. To integrate your new hires more quickly into the company and begin capturing your ROI, it’s important to develop an effective integration plan that includes frequent communication, coaching and feedback right from the start.
   
   Once your new hires are up-to-speed, it’s important to keep them challenged by providing them with meaningful work as well as an opportunity for learning and development. High turnover is extremely expensive. Studies have found that the cost of replacing lost talent is 70 to 200 percent of the hire’s annual salary. The high-tech industry is particularly hard hit, with annual turnover rates as high as 30 percent, according to the organizational-development consulting firm Leadership Advantage. While money and perks matter, employees say what they want most is a good boss, intellectual challenge and the opportunity for growth. Create a growth path for your new hires that includes training programs to develop their specific capabilities. On a broader level, develop a succession plan that identifies your company’s long-term hiring needs and prepares existing employees for advancement.
   
   No matter how severe the looming labor shortage proves to be for Oregon, attracting and retaining highly skilled knowledge workers will always be a top challenge. By embracing the five steps described above, your company can truly separate itself from the pack and fully reap the biggest competitive advantage you have: your human capital. Watch for upcoming articles that will examine each of these five steps in more depth.

About the author
As one of the partners at Generator Group, Roy Notowitz leads a team of highly skilled and passionate recruiters pioneering a new model for delivering recruiting services to client companies in the software and consumer products industries. Prior to founding Generator in 2000, Notowitz gained experience as a recruiter and staffing manager at Nike and Intel. Notowitz is also the co-founder of the Northwest Corporate Recruiters Association (NWCRA), an organization that provides resources and programming to over 350 local recruiters, staffing managers and HR professionals looking to promote best practices in recruiting. Notowitz holds a B.A. in speech communication from State University of New York at Potsdam and an M.A.Ed. in higher education administration from Virginia Tech. He also serves as a board member for Big Brothers and Big Sisters of Metropolitan Portland.