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One of the great paradoxes of the current economy is a relatively high level of general unemployment among Western economies and simultaneously, a very tight labor market for certain skilled roles. Anecdotes of hiring cycles in the six-month range for specialized developers or designers are not uncommon in software circles, and high-tech manufacturers voice frequent complaints about the lack of skilled talent. The key to solving these hiring challenges is to think differently about the problem. All too often, hiring managers and recruiters default to a “hiring” focused answer, when frequently the real answer lies in development, internal mobility, apprenticeship and long-term career and succession planning. In this session, we’ll talk about how all these pieces fit together and why “hiring for critical roles” is fundamentally the wrong strategy in most cases.
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Hiring for Critical Roles: You’re Doing It Wrong
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Speaker: David Wilkins
Global HCM Solution Architect
Oracle
Moderator: Kellye Whitney
Managing Editor
Talent Management magazine
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Hiring for Critical Roles: You’re Doing It Wrong
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Kellye Whitney
Managing Editor
Talent Management magazine
Hiring for Critical Roles: You’re Doing It Wrong
#TMwebinar
David Wilkins
Global HCM Solution Architect
Oracle
Hiring for Critical Roles: You’re Doing It Wrong
<Insert Picture Here>
David Wilkins
Blog: talent-management-blog
Hiring For Critical Roles: You’re Doing It Wrong
8
Executive Summary
• High unemployment is a myth (at least for critical
roles)
• Skill shortages are bad and getting worse
• “Hiring” as a default approach is flawed
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
• We need to reprioritize development and mobility
• To do this, we need better talent intelligence, job
definitions, and matching tools
• But mostly we need a strategy
9
Poll
• Are you having difficulty filling critical roles?
• Yes
• No
10
The “High Unemployment” Myth
Education level (March, 2012) Unemployment Rate
Less than high school diploma 12.9
High school diploma 8.3
Associate’s degree or some college 7.3
Bachelor’s or higher 4.2
Master’s (as of May 2011) 3.6
Doctorate’s or Professional (as of May
2011)
2.4
http://www.bls.gov/news.release/empsit.t04.htm
http://www.bls.gov/emp/ep_chart_001.htm
For critical roles, which group are you hiring from?
11
The Challenge of Critical Roles
The R&D shortage is particularly
acute in industries where
product innovation is critical.
Among the Technology/ Media/
Telecom companies surveyed,
40% predict a severe shortage
of R&D talent, while 39% of
Consumer/ Industrial Products
companies surveyed and 37% of
Life Sciences/Health Care
companies surveyed foresee
shortages in this area.
Talent Edge 2020: Blueprints for
the new normal, December
2010, Deloitte.
12
The Challenge of Critical Roles
The R&D shortage is particularly
acute in industries where
product innovation is critical.
Among the
Technology/Media/Telecom
companies surveyed, 40%
predict a severe shortage of
R&D talent, while 39% of
Consumer/ Industrial Products
companies surveyed and 37% of
Life Sciences/Health Care
companies surveyed foresee
shortages in this area.
Talent Edge 2020: Blueprints for
the new normal, December
2010, Deloitte.
13
And the Future Looks Worse
Georgetown University Center on Education and the
Workforce on shortfall of college grads in 2018
Accenture study from 2006 showed that STEM
enrollments would need to increase by
between 2006-2016 to meet demand
3,000,000
20-30%
Instead, enrollments have GONE DOWN.
14
Poll Question
• How do you typically fill critical roles?
• Mostly external hires
• Mostly internal hires
• A pretty even mix of each
15
Challenges in Hiring Externally for Critical Roles
• Cost
• Time
• Retention
• Engagement
16
External Hire Challenges: Cost and Time
• External hires cost more
– Critical roles are usually industry-wide, not company specific
– Thus, there is usually high demand for limited resources
– Critical roles are critical for a reason – unique skills, high
need
– Scarcity + high demand = high cost
– “Unknowns” in external hiring = more focus on “observable
characteristics” such as education / experience = pay
• Scarcity also often means head hunters which adds
more cost
• Scarcity also means longer time to hire, adding
opportunity cost
17
External Hire Challenges: Cost and Time
• External hires cost more
– Critical roles are usually industry-wide, not company specific
– Thus, there is usually high demand for limited resources
– Critical roles are critical for a reason – unique skills, high
need
– Scarcity + high demand = high cost
– “Unknowns” in external hiring = more focus on “observable
characteristics” such as education / experience = pay
• Scarcity also often means head hunters which adds
more cost
• Scarcity also means longer time to hire, adding
opportunity cost
18
External Hire Challenges:
Retention, Productivity, and Engagement
• External hires aren’t as productive as internal hires; it
takes 2 years for new hires to get “up to speed”
• Externals average shorter tenures than internal hires
• Externals average lower performance reviews
• Hiring outside = risk to existing top performers and
high potentials
– “Lack of career development” is #1 reason for dysfunctional
turnover
– “Training and development opportunity” is #1 driver of
employee engagement
– “More opportunities to do what I do best” is #1 driver of
employee engagement
19
External Hire Challenges:
Retention, Productivity, and Engagement
• External hires aren’t as productive as internal hires; it
takes 2 years for new hires to get “up to speed”
• Externals average shorter tenures than internal hires
• Externals average lower performance reviews
• Hiring outside = risk to existing top performers and
high potentials
– “Lack of career development” is #1 reason for dysfunctional
turnover
– “Training and development opportunity” is #1 driver of
employee engagement
– “More opportunities to do what I do best” is #1 driver of
employee engagement
20
Why Does Talent Leave?
21
Yet We Know Very Little About Our Talent:
Performance Management and Compensation
22
Yet We Know Very Little About Our Talent:
Performance Management and Compensation
23
Yet We Know Very Little About Our Talent:
Succession and Talent Mobility
24
Yet We Know Very Little About Our Talent:
Succession and Talent Mobility
25
Yet We Know Very Little About Our Talent:
Top Performer and Hi-PO Data is Ugly
• 80% of companies don’t know who is a flight risk.
• 78% of companies don’t know who is on a
succession plan.
• 80% of companies don’t know who has a career path.
• 65% of companies don’t know much about who
they’re retaining.
• 84% of companies don’t if their development plans
are working.
• 65% of companies don’t know much about Hi-Po’s.
26
Addressing the Problem
External Hires
• Fresh eyes and perspectives
• High growth, new territories, new strategic directions
Internal Hires
• Anytime the other criteria don’t apply…
• In other words, this should be the “default” model
27
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
28
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Job Roles Catalog Job
Requirements
29
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Job Roles Catalog Job
Requirements
Match Potential Candidates
30
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Job Roles Catalog Job
Requirements
Match Potential Candidates
Assess Gaps Green light Candidates
31
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Critical Talent
Pipelines
Job Roles Catalog Job
Requirements
Match Potential Candidates
Assess Gaps Green light Candidates
Add
32
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Critical Talent
Pipelines
Job Roles Catalog Job
Requirements
Match Potential Candidates
Assess Gaps
Development Plans
Green light Candidates
Add
33
Your Default Hiring Flowchart
Catalog External Talent
Talent Profiles Catalog
Internal Talent
Critical Talent
Pipelines
Job Roles Catalog Job
Requirements
Match Potential Candidates
Assess Gaps
Development Plans
Update Requirements
Green light Candidates
Add
34
Address Your Talent Intelligence Gaps
• Where are your skill and competency gaps?
• Do you have robust talent data for your team?
– Pre-hire experience, job roles
– Skills, capabilities, competencies
– Self-identified skills developed in personal life
– Career aspirations and related gaps
– Learning and development plans
– Crowd-sourced assessment of potential, capabilities, fit, etc…
– Current and automatically updated talent data
Catalog Internal Talent
35
Address Your Job Role Gaps
• Have you defined requirements for each job?
• Do you have job families?
• Can you identify potential career paths based on
competencies, capabilities, experience?
• For critical roles, have you identified longer-term
competency development strategies?
– Required experience and levels of mastery
– Education and formal knowledge requirements
– Bridge roles or “stepping stone” roles that provide experience
– Assessment models
Catalog Job Requirements
36
Developing Your Talent
• Career Aspirations
• Skill Gap Assessment
• Action Learning
• Stretch Goals and Assignments
• Talent Mobility
• Multi-stage Development and Competency Model
• Mentor / Mentee Models
Development Plans
Assess Gaps
37
Update Requirements
• Is the job definition static or dynamic?
• How much “wiggle room” is there to rethink work
assignments and responsibilities to overcome gaps?
• Do requirements change over time in response to
changing competitive landscape, strategy, new
opportunities or threats?
• Job roles and requirements are a means to an end
– Reflection of “best” way to organize work, not the “only” way
– Often better to rethink work assignments than lose a top
performer or hi-po for lack of internal opportunities
Update Requirements
Assess Gaps
38
Matching – Not Deep Enough
• Goal is not to “hire,” but to match talent to
requirements
• Yet we don’t know the basics
Match
48% 75%
say that their skills go
unnoticed
feel that their work history &
experiences are not leveraged
by their employer
39
My family / partner
21%
My friends outside of work
4%
My colleagues and peers
43%
HR software / systems
1%
My line manager 22%
Don’t know 5%
Other 1%
None of the above
3% My family / partner
43%
My friends outside of work
9%
My colleagues and peers
22%
HR software / systems
1%
My line manager
13%
Don’t know 5%
Other 1%
None of the above
6%
Matching – Not Social Enough
Those who know talent best aren’t involved in matching
Match
Professional & work
capabilities
Professional & work
aspirations / ambitions
40
Matching – Not Smart Enough Match
41
Recruiters – Not Smart Enough
• What’s the #1 predictor of job performance?
– Interview
– References
– Job Tryout
– Cognitive Ability or Psychomotor Skills
– Educational Background
– Experience
– Training and Experience Rankings
– Academic Achievement
– Interest
– Age
– Biographical Inventory
42
Research Data – Predicting Job Performance
43
Blend Your Critical Talent Pipelines
• Internal candidates
• External candidates
• Stop-gap contingent workers
Critical Talent
Pipelines
44
45
46
47
Wrap up
• High unemployment is a myth (at least for critical
roles)
• Skill shortages are bad and getting worse
• “Hiring” as a default approach is flawed
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
• We need to reprioritize development and mobility
• To do this, we need better talent intelligence, job
definitions, and matching tools
• But mostly we need a strategy
48
Suggested Resources to Follow
http://www.slideshare.net/TaleoResearch
http://www.taleo.com/talent-management-blog/
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The Evolution of Reference-Checking Into a
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