Hiring for Critical Roles: You're Doing It Wrong
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Transcript of Hiring for Critical Roles: You're Doing It Wrong
HIRINGFORCRITICALROLESYou’re Doing It Wrong
David WilkinsVP, Taleo Research@TaleoResearchBlog: talent-management-blog
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EXECUTIVE SUMMARY
› High unemployment is a myth (when hiring for critical roles)
› Skill shortages for critical roles are bad and getting worse
› “Hiring” as a default approach is mostly bad
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
› We need to switch the model to development and mobility first.
› We need better talent intelligence, job definitions, and matching tools.
› But mostly we need a strategy.
POLL
› Are you having difficulty filling critical roles?
› Yes
› No
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
When it comes to critical roles, which group are you hiring from?
http://www.bls.gov/news.release/empsit.t04.htmhttp://www.bls.gov/emp/ep_chart_001.htm
#TaleoTalent
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.
#TaleoTalent
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.
Nearly seven in ten executives surveyed (68%) reported they have a high (39%) or very
high (29%) level of concern about retaining critical talent.
- Talent Edge 2020: Blueprints for the new normal
#TaleoTalent
OTHER PERSPECTIVES
The 2011/2012 Talent Management and Rewards Study, North America, Towers Watson
10 Hardest Roles to Fill in the US:1. Skilled Trades2. Sales Representatives3. Engineers4. Drivers5. Accounting & Finance Staff6. IT Staff7. Management/Executives8. Teachers9. Secretaries/Administrative Assistants10. Machinist/Machine OperatorTalent Shortage Survey, 2011, ManpowerGroup.
8 Hardest Roles to Fill in the UK:1. Finance and Legal Professionals2. Customer Service3. Technical and IT4. Marketing Professionals5. Sales Professionals6. Production Staff7. R&D8. AdministratorsUK Critical Talent Pipelines, 2012, Taleo
#TaleoTalent
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
3,000,00020-30%
Instead, enrollments have GONE DOWN.
POLL QUESTION
› How do you typically fill critical roles?
› Mostly external hires
› Mostly internal hires
› A pretty even mix of each
CHALLENGES IN HIRING EXTERNALLY FOR CRITICAL ROLES
› Cost
› Time
› Retention
› Engagement
#TaleoTalent
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
#TaleoTalent
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
How much more do external hires cost? 18-20% more according to new research by
Wharton.
“Why External Hires Get Paid More, and Perform Worse, than Internal Staff”
Knowledge@Wharton
#TaleoTalent
EXTERNAL HIRE CHALLENGES:RETENTION, PRODUCTIVITY, AND ENGAGEMENT
› External hires aren’t as productive as internal hires; new research suggests that it takes 2 years to get “up to speed”
› External hires average shorter tenures than internal hires
› External hires average lower performance reviews
› Hiring outside = risk to 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
#TaleoTalent
EXTERNAL HIRE CHALLENGES:RETENTION, PRODUCTIVITY, AND ENGAGEMENT
› External hires aren’t as productive as internal hires; new research suggests that it takes 2 years to get “up to speed”
› External hires average shorter tenures than internal hires
› External hires average lower performance reviews
› Hiring outside = risk to 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
Despite higher costs, external hires “get significantly lower performance evaluations
for their first two years on the job than do internal workers who are promoted into
similar jobs.”
“Why External Hires Get Paid More, and Perform Worse, than Internal Staff”
Knowledge@Wharton
#TaleoTalent
WHY DOES TALENT LEAVE?
#TaleoTalent
YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:PERFORMANCE MANAGEMENT AND COMPENSATION
Top
Per
form
er R
eten
tion
Pro
duct
ivity
Top
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er F
light
Ris
kH
igh
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entia
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epar
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pens
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ench
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ks
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ob R
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f Bon
us P
ool t
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ers
with
out a
Car
eer
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vg P
erfo
rman
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evie
w S
core
s
#TaleoTalent
YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:PERFORMANCE MANAGEMENT AND COMPENSATION
Top
Per
form
er R
eten
tion
Pro
duct
ivity
Top
Per
form
er F
light
Ris
kH
igh
Pot
entia
ls b
y D
epar
tmen
t
Com
pens
atio
n B
ench
mar
ks
by J
ob R
ole
% o
f Bon
us P
ool t
o To
p
Per
form
ers
Top
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form
ers
with
out a
Car
eer
Pla
nA
vg P
erfo
rman
ce R
evie
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core
sWe know we need to keep top performers, but we don’t know who’s at risk or why…
#TaleoTalent
YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:SUCCESSION AND TALENT MOBILITY
Cri
tical
Rol
es w
ith N
o
Iden
tifie
d S
ucce
ssor
s
Suc
cess
ion
Ben
ch S
tren
gth
% o
f Lea
ders
hip
Pip
elin
e Fi
lled
Ext
erna
lly v
s. In
tern
ally
% o
f Suc
cess
ion
Pla
ns A
ctua
lly
Impl
emen
ted
Top
Per
form
ers
Not
on
Suc
cess
ion
Pla
ns
Per
form
ance
Rev
iew
Sco
res
afte
r
a M
obili
ty E
vent
#TaleoTalent
YET WE KNOW NEXT TO NOTHING ABOUT OUR TALENT:SUCCESSION AND TALENT MOBILITY
Cri
tical
Rol
es w
ith N
o
Iden
tifie
d S
ucce
ssor
s
Suc
cess
ion
Ben
ch S
tren
gth
% o
f Lea
ders
hip
Pip
elin
e Fi
lled
Ext
erna
lly v
s. In
tern
ally
% o
f Suc
cess
ion
Pla
ns A
ctua
lly
Impl
emen
ted
Top
Per
form
ers
Not
on
Suc
cess
ion
Pla
ns
Per
form
ance
Rev
iew
Sco
res
afte
r
a M
obili
ty E
vent
We know we need to have succession plans for critical roles, but we don’t…
#TaleoTalent
YET WE KNOW NEXT TO NOTHING 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.
#TaleoTalent
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
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
Job RolesCatalog Job
Requirements
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
Job RolesCatalog Job
Requirements
Match Potential Candidates
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
Job RolesCatalog Job
Requirements
Match Potential Candidates
Assess Gaps
DevelopmentPlans
Update Requirements
Green light Candidates
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
Job RolesCatalog Job
Requirements
Match Potential Candidates
Assess Gaps
DevelopmentPlans
Update Requirements
Green light Candidates
#TaleoTalent
YOUR DEFAULT HIRING FLOWCHART
CatalogExternal Talent
Talent ProfilesCatalog
Internal Talent
Critical Talent
Pipelines
Job RolesCatalog Job
Requirements
Match Potential Candidates
Assess Gaps
DevelopmentPlans
Update Requirements
Green light Candidates Add
#TaleoTalent
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
#TaleoTalent
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
#TaleoTalent
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
DevelopmentPlans
Assess Gaps
#TaleoTalent
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 related 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 RequirementsAssess Gaps
#TaleoTalent
› Goal is not to “hire,” but to match talent to requirements
› Yet we don’t know the basics
MATCHING – NOT DEEP ENOUGH Match
48%75%
say that their skills go unnoticed
feel that their work history & experiences are not leveraged by their employer
#TaleoTalent
My family / partner21%
My friends outside of work4%
My colleagues and peers43%
HR software / systems 1%
My line manager22%
Don’t know5%
Other 1% None of the above
3% My family / partner43%
My friends outside of work9%
My colleagues and peers22%
HR software / systems 1%
My line manager13%
Don’t know5%
Other 1%
None of the above6%
MATCHING – NOT SOCIAL ENOUGH
› Co-workers know talent best, yet aren’t involved in matching
Match
Professional & work capabilities
Professional & work aspirations / ambitions
#TaleoTalent
MATCHING – NOT AUTOMATED ENOUGH Match
#TaleoTalent
BLEND YOUR CRITICAL TALENT PIPELINES
› Internal candidates
› External candidates
› Stop-gap contingent workers
Critical Talent
Pipelines
#TaleoTalent
WRAP UP
› High unemployment is a myth (when hiring for critical roles)
› Skill shortages for critical roles is bad and getting worse
› “Hiring” as a default approach is mostly bad
– It costs more.
– It results in lower productivity and performance.
– It hurts engagement and turnover for hi-pos.
› We need to switch the model to development and mobility first.
› We need better talent intelligence, job definitions, and matching tools.
› But mostly we need a strategy.