5 REASONS WHY HIRING NEEDS TO CHANGE

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The Cambridge Dictionary defines hiring as “the act of starting to employ someone”. But for any seasoned HR person, the definition of hiring is much more complex. It means employing someone with the right skills, the right personality, the right experience and the right professional goals that align with organizational goals.

The act of hiring has definitely undergone a change from “we are hiring” placards in shop windows to newspapers and fax and then the ultimate game changer: the internet and job boards. But what has changed really? Yes, the number of applicants per job has increased. Thus, several Application Tracking Systems and technologies have emerged to help manage this increase. But when it comes to “hiring” itself, it still very much depends on a mixture of who turns up, what they present of themselves within a very short period of interaction and what their resumes look like.

Hiring managers are very much encumbered with the task of depending on their own discretion to hire employees that are often expected to spend a major part of their lifetimes in the organization they are interviewing for.  So, once Job boards and ATSs have done their job, the person actually responsible for hiring, is still stuck with a rather long manual process of screening résumés, shortlisting candidates and often conducting multiple rounds of interviews to fill one vacant position.

This needs to change. We already have the technological capability and analytical capability to achieve this change. The reason the status quo hasn’t changed is also why it needs to change. So here are five reasons why hiring needs to change and evolve.

  1. Because Instinct is not enough (And mistakes are very expensive)

Most recruiters who make the final call of whom to hire are quite confident of their instincts. They believe they have a certain sixth sense that tells them, this is the one. The truth is they are not always wrong. The problem is, they are not always right. As per a survey output published in the Harvard Business Review, 85% to 97% of professionals rely on intuition when assessing individuals. The same article makes a case to depend on algorithms instead of instinct, but also suggests, not to discard instinct altogether. Often when offered an algorithm or technology, recruiters misinterpret it to be a replacement for their fine-tuned intuition. It is not a replacement and this fact is something that cannot be emphasized enough. What algorithms and technology actually do, is significantly reduce the margin of error. Bad hires mean you need to replace them and replacements are very expensive. According to research cited by SHRM direct replacement costs of one replacement can reach as high as 50%-60% of an employee’s annual salary, with total costs that can amount to a shocking 90% to 200% of their annual salary. In the 2015 Brandon Hall Group’s Talent Acquisition Study 95% of surveyed organizations admitted to making bad hires every year. The numbers pretty much speak for themselves but the problem is, everybody is not a natural with numbers. This leads to the next reason why hiring needs to change:

  1. Because Data is everywhere and has lots to say #HRAnalytics #DecisionSciences

The advent of BigData and Analytics has transformed the way businesses make decisions. Somehow, this hasn’t seeped down into the HR function in a big way. The major cause is that, the people driving the HR function have not been exposed to or trained to adopt data driven decision making. Since functions like Sales and Operations have always been driven by metrics, the adoption of BigData and Analytics was a natural evolution for them. For the HR function, metrics have only recently been taken seriously. Somehow till now, the impact that hiring the right/wrong people had on all organizational functions, was hidden between the number of vacancies and the number of positions filled. Now the impact of hiring can be measured from the moment a vacancy is created to the nature in which the selected candidate exits the organization. But because the key people currently driving the HR function have been functioning for so long without BigData and Analytics and because of very limited knowledge of both, the adoption of data driven decision is facing barriers that are created by conditioning.  Now HR needs to unlearn and learn again and they can’t do this on their own. It is the responsibility of every organization to start training and making HR staff data savvy. It is also time to start injecting people with statistical know how into the HR function. Scott Mondore in an article in Talent Economy predicts three things for the future of HR, 2017 onwards. Firstly, HR educational programmes will emphasize statistics and data analysis. Secondly, he thinks organizations hiring HR staff are going to start looking for candidates with stats skills. Finally, he predicts a rise in demand for I/O psychologists within the HR function who are experts in behaviour, knowledge transfer, attitudes, aptitude and statistical methods which is the perfect skill set to perform HR Analytics. We at Pexitics can validate these predictions because we are currently in the process of creating an HR Analytics course for a leading university in India.

  1. Because “Everybody” says so (Read as: Most current Employees)

Dynamics in the workplace are changing. The employer employee relationship is not what it used to be. Hierarchies, are no longer looked at with awe and admiration, and are melting into flatter structures that grant more autonomy. There is this whole new buzz about building human organizations. Yes, lots of organizations still prefer doing things the old way. But the new generation entering the workforce does not. Look at this diagram from an HBR article about “why employees stay”

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Source: Why Employees Stay by Vincent S. Flowers and Charles L. Hughes, Harvard Business Review, July 1973. Found at: https://hbr.org/1973/07/why-employees-stay

The new generation entering the workforce has somehow evolved to converge on the top half of the matrix. According to the article, “the turn-overs (top-left) are dissatisfied with their job, have few environmental pressures to keep them in the company, and will leave at the first opportunity.” Basically, your employees are not going to stay with you if they don’t want to. Gone are the days when employees were loyal to one organization till retirement through thick and thin. So, you have two choices: either find ways that are not essentially natural to your organizational culture to make them want you enough OR, more importantly, hire only those you can absolutely satisfy. The better of the two choices is the second one. While this does not change the fact that some organizational cultures suck universally, it does shine the light on a better path for most future centric organizations focussed on sustainable growth. If your organization is still hiring on instinct, it could take a while to adjust said instincts to assess the Gen Y.

  1. Because we might move to Mars (Read as: Most prospective employees need change to accept your job offer)

Technology and society have combined to form a complexly connected ecosystem that looks like what some sci-fi writers must have imagined during the good old days. People whisper ominously about how AI is going to result in the extinction of mankind or how “they” are always watching you. It’s not even ridiculous or funny anymore. The point is communication has not only transformed, but has also created concerns about privacy. While some of your prospective employees may be ok with you snooping on their social media profile to vet them, they are doing the same thing when looking for places to work. Glassdoor reviews are important. So, where does the process of hiring really begin? Does it begin when you interview a candidate or when you publish jobs on a job board? Or does it begin when prospective employees start looking at your organization’s online image while looking for a job? What are your current employees saying about how you treat them and how they feel about you? Filtering happens way before a resume reaches your ATS. The decision to hire is therefore shared by both the hirer and the person being hired. While part of the process may be beyond organizational control, certainly more control can be exercised on the conventional hiring process. And more control means changing the process and improving the process. While we may not move to Mars in our lifetime, hiring can get wise and start treating prospective employees, somewhat like customers. Give them a deal they can’t refuse. An article by the Deloitte University Press talks about reimagining traditional hiring elements like the résumé, using the example of L’Oréal. Apparently, L’Oréal China, tired of piles of paperwork, decided to ask 33,000 applicants to answer three simple open ended questions. These questions were then analysed using an algorithm. They found that most of the candidates they finally chose, would have been rejected, had they been screened, based solely on their résumés. Change is good.

  1. Because you can.

The solutions are already in the market. We have moved way beyond generic ATSs and HRMSs and Job boards. There are solutions that let you hire better, faster and smarter by integrating standardised and customised assessments like skill tests and psychometric tests. According to a report cited by Amy Gulati in an SHRM article, “57 percent of companies use pre-hire assessments to help select top talent”. Why use assessments/tests? An HBR article answers this question giving three reasons. Firstly, nearly 50% more candidates embellish their CVs compared to the past, making résumés a less useful screening tool. Secondly, Web-based psychometric tests have made testing less expensive and more convenient. Finally, research across industries shows that assessments are good predictors of performance. Let’s focus a little more on the second reason. Automation and analytics based tests and screening are no longer the privileges of million dollar organizations. All, absolutely all organizations can use assessments to hire better people. To prove this, we at Pexitics, have developed a composite score called the PexiScore (People Excellence Indicator Score). To use this score anybody looking to hire at any scale can publish their vacancy at PexiScore.com and set up an assessment for free. You can then publish the opening on any job board or social network to source candidates. The candidates take the assessment and are scored to signify their level of Job Fit. What is unique about our assessments is that, our scoring algorithm, is responsive to the job description. The best part is, recruiters can now make data based decisions using tools like PexiScore without reaching far out of their comfort zone, while significantly reducing hiring costs and hiring the right people every time. Hiring can change and it can change now.

Conclusion:

There is no reason for hiring not to change. There are many reasons it needs to change. What do you think? Is HR going to take the leap forwards? While you are thinking about that you can head over here to see a demo of PexiScore or get in touch with us here. We would love to hear more about how HR can be enabled to hire better. Do comment with your thoughts, ideas and opinions.

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