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HR Lessons Learned: Hiring Takeaways from 5 Different Industries

Talent acquisition is one of the most critical yet challenging undertakings for any business. Companies in many sectors face a shortage of workers today; they face stiff competition to hire applicants—any applicant. At the same time, hiring managers in other sectors must sift through a surplus of applications to find the best candidate.

In 2020, 74 percent of CEOs globally were concerned about the availability of key skills, with 32 percent being “extremely concerned.” There’s sufficient reason behind these concerns, too. A successful hire can extend a business’s value, while a poor selection can represent a considerable waste of resources.

As you can imagine, HR teams and recruiters are looking for ways to solve this problem. And many look for help in this area by turning to other industries. For example, what are companies in tech doing to improve efficiencies in hiring practices? How are organizations in the manufacturing sector, many of which are struggling through a long-term labor shortage, meeting this challenge?

To answer those questions, let’s look at standard hiring practices in five sectors at both ends of the labor spectrum. Perhaps by reviewing the HR lessons learned in each, your company can learn how to optimize your talent acquisition strategy.

1. Technology: Pre-employment Testing

The technology industry is one of the most rapidly growing sectors today. It also involves a high level of specialization and expertise, and as such, has had to develop similarly specialized hiring methods. Most notably, tech companies frequently rely on pre-employment tests.

In the tech sector, an applicant’s education and occupational background isn’t always the most reliable evidence of their skills or aptitude. The tech industry has recognized this, and so businesses frequently require applicants to take a skills assessment. These tests offer more conclusive proof of a candidate’s aptitude in a company’s specific needed skills.

The downside to pre-employment testing is that it’s time-consuming. The more in-depth the assessment, the longer it will delay the hiring process. If companies can afford that time, though, borrowing this practice from the tech sector can produce impressive results.

2. Healthcare: Artificial Intelligence

The medical sector has an 18.7 percent turnover rate, so healthcare companies need to recruit new workers quickly. Consequently, many organizations have turned to artificial intelligence (AI) to streamline the hiring process.

The healthcare industry has a history of using AI to increase medication adherence and more, so applying it to hiring was a natural step. Hospitals use it to automate tedious, repetitive tasks like interview scheduling and application screening. One of the HR lessons learned here is that automation gets promising applicants to the interview stage of hiring quicker, helping speed the journey from application to onboarding.

AI hiring tools are relatively new, but their impact is snowballing in many hiring sectors. With AI, larger businesses in various industries have found solutions that streamline their hiring processes by automating several recruiter and candidate tasks. As technology advances, these tools will be able to do even more to help the hiring process–and they’ll also be more available (and affordable) to smaller businesses.

3. Manufacturing: Passive Candidate Search

Manufacturing companies have had to work with an ongoing labor shortage for years. With fewer people entering the industry, manufacturers have had to find new avenues for recruiting workers. One of the most effective of these strategies has been searching for passive candidates.

Businesses have found that many manufacturing professionals are hard to find because they’re not actively looking for a new job. These workers don’t often apply independently. Given the right opportunity, however, they could be willing to switch careers or positions. Scouring databases of nearby workers, industry-related forums, and other data sources to find these employees helps manufacturers find ideal candidates.

Other industries facing labor shortages can employ the same tactic. After all, sometimes the best employees aren’t actively looking for new work. Until a better offer comes along, that is.

4. Real Estate: Mentorship

Success in the real estate sector often requires experience and intimate industry knowledge. While many companies’ reaction to this hiring environment would be to look for outside, experienced hires, many brokerages take a different approach. Instead of finding already-knowledgeable employees, real estate companies create them through inside hiring and mentorship programs.

The theory behind this approach: It’s easier to find an eager but inexperienced new hire than to poach an experienced outside worker. Real estate brokerages understand that by pairing recruits with their veteran employees, they can cultivate expertise.

By the time these once-inexperienced recruits become eligible for higher-level positions, they’ll be more qualified for it than anyone else. In fact, research shows that outside hires take three years to perform as well as internal hires doing the same job. So, rather than having to find employees in a competitive marketplace, one of the HR lessons learned here is that investing in better training through mentors helps companies more organically build the best workforce.

5. Education: Internships

The hiring process in the education industry is unique. Teaching at a K-12 level requires years of experience through hands-on education programs and passing certification tests. Not all industries have such high requirements, but they can still learn from these pipelines.

College students pursuing education degrees finish their programs by student-teaching at a school. More often than not, the school systems where they student-teach will later hire them as full-time teachers when they graduate. Businesses and other industries can mimic this process by instituting intern programs that act as pipelines to employment.

Universities frequently involve faculty in interviewing and hiring their colleagues. Other industries can benefit from this same practice. In this longer-term hiring approach, employees already have intimate, hands-on knowledge about a position’s actual demands. So they can help spot ideal or unideal candidates and advise hiring decision-makers accordingly.

Businesses Can Learn a Lot from Other Industries

In a labor shortage, hiring companies must look further than their competitors for ideas about how to improve their hiring process. There are many HR lessons learned when taking inspiration from other industries like those mentioned above. These industries can provide practical, novel insights that businesses may not have gained otherwise.

These five industries are not perfect examples of ideal hiring processes, of course, but they all feature useful takeaways. Learning from each, then combining methods as necessary, can help create the optimal talent acquisition system for your company.

 

Fix Tech Hiring: Make It Data-Driven and People-Led

Tech hiring is broken, and the data from research is overwhelming. Below are a few highlights:

  1. Bad hires are extremely expensive. A study by the Society of Human Resource Management (SHRM) estimates the cost of a bad hire can be as high as 5x the salary. Zappos CEO Tony Hsieh has estimated bad hires cost his organization over $100M.
  2. Bad hires happen far too frequently. According to a study by the Brandon Hall Group, 95% of companies admit to recruiting the wrong people each year.
  3. Great hires are game changers. According to research by Linda Pittenger from the Embry-Riddle Aeronautical University, high performing technology personnel are 10x more effective than average performers.

With studies like these, it is no wonder that many solutions are being developed to ease the pain. So why does the problem still exist?

The answer is that innovative organizations need to be both data-driven and people-led.

Companies that are just data-driven will leave common sense and simple solutions behind. They will over-engineer every answer and forget the people-side. While those that are just people-led will follow their charismatic leader without the support of, you know, facts. Zappos is an interesting example of being both data-driven and people-led as they recognized the problem through measuring data and understood the people side with their solution of offering $2000 to employees to leave after the first week.

The problem of bad hires, however, can be greatly reduced far earlier than after the first week of training. According to Bersin by Deloitte, organizations with highly mature talent acquisition functions spend 2x more than those organizations with low maturity functions but have a “40 percent lower new-hire turnover and are able to fill vacancies 20 percent faster.”

And, we know where in the hiring process to look. Again from the Brandon Hall study, “69 percent of companies in our research identified a broken interview process as having the greatest impact on the quality of a hire.”

The problem specifically in tech hiring is that assessment and interviewing are particularly difficult. The pace of change in technology is breath-taking with the number of platforms, and technical skills make it impossible to keep up. Also, tech hires are in such demand that hiring managers feel the pressure to hire quickly.

Currently, most companies rely on unstructured interviews by their internal team possibly combined with a behavioral interview from HR and an online assessment of technical skills if they exist. This process is lengthy and disjointed.

One solution would have a resource that is both a subject matter expert and an interviewing expert. This expert can put the candidate at ease, go through a consistent, structured process to evaluate candidates evenly, and be able to ask the probing follow-up questions to truly understand the candidate’s capabilities.

You could invest in building this process internally by taking your best technology assets offline to focus on this work, but the best solution would be to leverage that expertise that already exists. The problem is that these skills have been previously inaccessible as they are dedicated to their particular technology craft at other great companies.

Technology has been used with great success to change many business models by connecting and utilizing previously under-utilized assets. AirBnB and Uber are two excellent examples. Expert Interview leverages these same principles to connect those rare technology experts that also know how to assess candidates and build teams. Stop over-engineering. Be data-driven and people-led.

Photo Credit: codiepie via Compfight cc

Finding Tech Talent to Fuel the Future #TChat Preview

(Editor’s Note: Looking for full highlights and resource links from this week’s #TChat Events? Read the #TChat Recap: “Tech Recruiting: Skilling Up to Fill the Middle.“)

Recently, we’ve seen the rise of the “digital detox” — when individuals temporarily go “off the grid” to reconnect with life apart from technology.

But of course, it’s impossible to escape fully anymore. Technology is now deeply embedded in daily life — its pervasiveness reaches far and wide. And not surprisingly, as innovation continues at full speed, competition for skilled technical talent is more fierce than ever.

How can employers stay ahead of that curve? And what should recruiters do to help lead the way in attracting technology rockstars?

That’s the topic we’re tackling at #TChat Events this week, with Shravan Goli, President of Dice, The Career Hub For Tech, and Sara Fleischman, Senior Technical Recruiter at Concur.

Sneak Peeks: Facing Tech Recruiting Challenges

To frame this week’s events, I spoke briefly with both Shravan and Sara about how businesses can recruit effectively in today’s environment. Shravan suggested three success factors in an audio hangout:

And Sara added her perspective as a technology recruiter:

Is your organization feeling the impact of the tech talent shortage? How are you addressing this? What does this trend mean for business innovation, overall? Join us this week to discuss your ideas and opinions with the #TChat crowd.

Publication1Share Your Insights, Win a Smartwatch!

As extra incentive to submit your best ideas, everyone who participates in #TChat Events this week will be eligible to win a cool Pebble Smartwatch from Dice! After the the #TChat Radio Show and #TChat Twitter Dice shared details about how to enter before the Feb 7th deadline. See details now!

#TChat Events: Tech Recruiting In a World of Pervasive Technology

#TChat Radio — Wed, Jan 29 — 6:30pmET / 3:30pmPT

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Tune-in to the #TChat Radio show

Our hosts, Meghan M. Biro and Kevin W. Grossman talk with Shravan Goli and Sara Fleischman about critical tech recruiting issues and trends. Tune-in LIVE online this Wednesday!

#TChat Twitter — Wed, Jan 29 7pmET / 4pmPT

Immediately following the radio show, Meghan, Kevin and our guests will move to the #TChat Twitter stream, for a live discussion with the entire TalentCulture community.

Everyone with a Twitter account is invited to participate, as we address these 5 related questions:

Q1: How do tech recruiters stay skilled up and “in the know”?
Q2: Why is finding tech talent so difficult?
Q3: How do recruiters tap into high-tech hot spots to find tech talent?
Q4: How do employers create a culture that attracts skilled tech talent?
Q5: What recruiting technologies appeal to high-tech professionals?

We look forward to hearing your ideas and opinions, as talent-minded professionals who care about recruiting issues and trends.

Throughout the week, we’ll keep the discussion going on the #TChat Twitter feed, and on our LinkedIn Discussion Group. So feel free to drop by anytime and share your questions, ideas and opinions.

We’ll see you on the stream!