Recruiting Isn’t Working. It’s Time to Break the Cycle.
Steve Lowisz
Founder “Guide, Don’t Drive?” Leadership Movement, 2 Time TEDx Speaker, Keynote Speaker, CEO, Investor, Board Member. Inspiring leaders to Get Real and Lead.
Speaking as a search consultant of more than 2 decades, it’s no secret that recruiting teams often fail to deliver results. As a result, our industry has earned a bad reputation – but let’s look at some numbers to put the issue in perspective.
- 50% of new hires fail
- The average cost per hire has risen to $4,000 (and is likely even higher, given that this metric is from 2017 before the labor shortage increased)
- 60% of candidates have quit an application process because it was taking too long
- We hire candidates for skill…but employees are only fired for skill 11% of the time. 89% of fired employees are let go for attitudinal reasons!
Recruiting Needs a Kick in the Rear
In a nutshell…the recruiting process is really messed up! If any other business process had a failure rate of 50%, heads would roll! But for some reason, we accept poor results in recruiting.
We treat astronomical recruiting expenses as just another business expense. Meanwhile, we act like bad hires and turnover are inevitable, or problems that can’t be remediated.
It’s all part of the cycle caused by poor recruiting processes. It doesn’t have to be this way. We can break the cycle. But first, let’s take a closer look at how poor recruiting practices affect our teams…
- Recruiters struggle to find quality candidates or are overloaded with requisitions. They spend as much as 50% of their time sourcing candidates, which leaves them little to no time to build relationships with candidates or hiring managers. They run out of time to work with the hiring manager to find out what the leader really needs for a given position. Meanwhile, they don’t have the time to learn what candidates are truly looking for in a career. As a result, they struggle to make placements and overall candidate quality suffers. Turnover increases proportionally and the vicious cycle starts all over again.
- Hiring managers are unhappy with the quality of their candidates. They ask their recruiters for more and more so they can find better candidates. Now the recruiter has to put in even more overtime to find more candidates! Otherwise, the hiring manager may feel they need to “settle” and hire a subpar candidate. Six months later, the employee is failing or quits. Now we’re back to square one.
- Business leaders are frustrated that they’re not able to make better hires faster. They know that open seats and turnover are cutting into the bottom line. They work with agencies that charge commissions to make placements. Unfortunately, commissions motivate agencies to make as many placements as they can as soon as possible. Many focus on quantity over quality subconsciously due to how they are paid. While it may fill seats, the cracks will start to show in 6-12 months when rushed hires fail on the job. The cycle starts anew.
It’s clear that something has to change. Businesses can no longer afford to accept the status quo of 50% hire failure rates at a large cost-per-hire.
You Can Break the Cycle. But You Have to Think Outside the Box.
The good news is that there are solutions to all of the above recruiting challenges.
Recruiters who are struggling to find candidates or overloaded with requisitions can work with a third-party sourcing team. Hiring managers who are unhappy with their candidate quality can work with different recruiters who provide submittal-to-interview ratios of 80% and above. Lastly, business leaders can work with recruiting companies that don’t charge commissions, which inherently set up a conflict of interest between cash flow and quality hires.
However, all of these professionals need to recognize that the solution lies in rethinking the entire process and possibly the entire industry. If you’re tired of dealing with all the same old headaches, it’s time to re-evaluate the same old process. Albert Einstein said it best: “The definition of insanity is doing the same thing over and over again, but expecting different results.”
Do you agree? Disagree? Somewhere in between?
I’m curious to hear your thoughts on the matter – leave me a comment or shoot me a message now with your opinion!
Strategic HR Consultant / Workforce Planning / Talent Optimization / Scalability
5 年What about this? Getting better at assessing talent, capabilities, interest level, and potential vs. focusing exclusively on whether a person has done this work before? How many people want to leave a job to do pretty much the same thing some place else? They leave for more money and hopefully some new responsibility meshed in so they feel that they have a chance to develop and broaden their skills but really it’s just inflation and greener grass. What if recruiters and hiring managers got better at career pathing as part of recruitment? With more focus placed on hiring someone stellar with a commitment to training and developing the recruit? When are you typically your most engaged?
Physician Recruiter at OrthoCarolina
5 年Agree. Not just recruiting though. Application process STINKS! Take a lesson from TicToc. Pressure on recruiters is terrible. Interviewing skills/processes are horrendous. Onboarding is awful. Where are the mentors? Retention is guaranteed to fail with what is going on now. The advertised culture has to be true and honest and that rarely happens. Employee engagement surveys are fraught with quid pro quo. All that said - not all companies and systems have these problems throughout. It is a shame that most of them do. Retention has taken on a whole new meaning and we had better be ready for it. Whew! That felt good. Thank you.
CHRO | SVP Human Resources | Best Practices | Transformation | Change Management | Growth | M&A | Integration
5 年Outsourced recruiting definitely an important resource to optimize internal recruiting function. But I think the biggest problem with successful hiring is focusing too much on job descriptions which focus on responsibilities and experience. I think the breakthrough to better hiring is focusing on: 1. What urgently needs to get done (the critical 20% that will drive 80% of the results) 2. What are the obstacles/challenges the person will need to overcome 3. How does the person get things done (style) Curious if Steve or others have thoughts on this.
Tax Consultant @ R&K Partners
5 年Great insight Steve! Having a prospective from outside the recruiting industry, I wonder to what degree the companies who have "50% of new hires fail" have issues that exist aside from their recruitment process.?
Talent Acquisition Leader @ Federal Reserve Bank | Talent Ambassador
5 年Steve, thanks for putting out some good bait for us recruiters to chew on!. This is a good one. I tend to agree with you, but I have been giving this thought and don’t know where to start. In my opinion, until companies start viewing the purpose of the talent acquisition function differently, then little will change. What I mean by that is viewing it as a critical business function versus a basic service. Even though I believe some companies are doing this, the prevailing view is “recruiting will find candidates for us.” To solve this, I believe we own the solution in some way. What that is, I’m not sure at this moment. But, I look forward to being in the group that does!