Some of the things I enjoy being a Management Consultant are wide ranges of networking prospects, traveling across globe and opportunities to work across industries on a broad range of HR projects.
In past one and a half years, I have been working with Automobile, Engineering, Financial Services, Entertainment, Information Technology, Distillery, and Beverages, and Auto Component Industries on projects such as Leadership Development, HR Automation, HR Systems Analysis, HR Processes Reengineering, Manager Development, Compensation and Benefits Analysis. In the month of November 2016, I was commissioned by the CEO of a leading player in the auto-component industry in Pune, a 215 million USD organization with 1,728 white-collar employees in three plants across India, to help them refine their manpower hiring processes with an astute focus on preparing the organization against ongoing talent shortage, which, according to them, had been affecting their expansion plans in India. At that point in time, my client had more than 65 open positions; some of which were open for over 180 days. Around the same time, Manpower Group, a leading global recruitment company, came up with its annual talent shortage survey results, announcing “40% of Global Employers Report Talent Shortages”. In this article, I will be sharing an overview of my diagnosis study with the client and the proposed project plan.
Before visiting their corporate office, for a meeting with the leadership team, including Vice President HR and AVP Talent Acquisition, I had few rounds of telephonic and offsite discussions with the CEO. To summarize his requirements regarding manpower requirement: he needed a ready pool of talented people, willing to take up challenging assignments at any given point in time, at any work site, positively motivated, working towards the requirement of clients with utmost sincerity and accountability, always meeting the threshold of On-time Delivery (OTD) and in the process of doing so add value to organizational growth and help us in creating a positive brand. To him, the educational and socio-economic background, gender, religion, physical appearance, and industry background of the candidate was irrelevant. He also said, “However, whenever I discuss a new project with my teams or asks reasons for the delay in project execution or below acceptable OTD, I am often given reasons of a shortage of manpower”. My problem diagnose meeting with leadership team, which begun at 10 AM, within one hour of its start, turned into a blame game meeting, with functional heads blaming HR for their failure to source and attract good talent from the market; HR team was blaming external forces such as talent shortage in the market, poor education system overall, impractical expectations of candidates and poor work ethics of Millennial generation. Some of the key pain areas highlighted by leadership team were as follows:
– Poor quality of resumes shared by HR and Recruitment Consultancies [Only 3-4 profiles out of 10 get shortlisted by the hiring managers]
– Below average soft skills [Communication, Language, Time Management, etc.] among candidates
– High Cost [Disproportionally high salary expectations of job candidates]
– Too long waiting time [From the date of the Offer Letter, candidates take 60-90 days to join]
A discussion with HR and Talent Acquisition Team brought forward following points –
– Frequent changes in the job description by hiring managers
– Opaque job requirements – Many times hiring managers mix 2-3 roles in one job description and make it complicated to search
– Unclear short-listing criteria are adopted by hiring managers [often candidates get rejected on the basis of their gender, marital status, age, religion, physical appearance, etc.]
– Hiring managers want us to schedule interviews on working days during working hours only, making it difficult for candidates working in different cities to participate in the recruitment process
– Few candidates turn for job interviews [While 7 out of 10 candidates come for the first round of the interview, only, 3 out of 10 candidates come for final round of interviews]
– Poor offer acceptance and joining ratios [while 6 out of 10 candidates accepts the offer letter only 5 out of 10 joins on agreed joining date]
– High first-year attrition rate [First-year attrition rate is 45%, while attrition rate among those who are working with the organization for more than TWO years is 12%]
As we came to an end of our Day-1 of discussion, I asked the AVP – Talent Acquisition to schedule a meeting with THREE of their active Recruitment Partners. 60% of manpower requirements of the organization are filled through recruitment consultancies. Next day in my meeting with recruitment consultants following points was shared –
– Hiring managers change interview schedules at the last moment without any consideration which makes it difficult to coordinate with candidates for rescheduling the interview.
– Midway through the recruitment process, the position is put on hold without any convincing response. Often, we are made to do aggressive follow-ups
– Many times, we are given a requirement, which is a mix of 2-3 roles. Not only that, most often we are asked to work within constraints of location, educational background, industrial preference and limited budget.
– Some hiring managers of the organization directly discuss their requirements with us and give us specifications which are is a contradiction with the job descriptions shared by the HR.
By the end of first round of discussion I fondly began to remember the story of an Elephant and FOUR blind men.
Once upon a time, there lived FOUR blind men in a village. One day the villagers told them, “Hey, there is an elephant in the village today”. They had no idea what an elephant was. They decided, “Even though we would not be able to see it, let us go and feel it anyway.” All of them went where the elephant was. Each one of them touched the elephant.
“Hey, the elephant is a pillar,” said the 1st man who touched his leg.
“No! It is like a thick branch of a tree,” said the 2nd man who touched the trunk of the elephant.
“It is like a big hand fan,” said the 3rd man who touched the ear of the elephant.
“It is like a huge wall,” said the 4th man who touched the belly of the elephant.
They began to argue about the elephant and everyone of them insisted that he was right. A wise man was passing by. He stopped and asked them, “What is the matter?” They said, “We cannot agree to what the elephant is like.” Each one of them told what he thought the elephant was like. The wise man calmly explained to them, “All of you are right. The reason each one of you is telling it differently is because each one of you touched the different part of the elephant. So, actually, the elephant has all those features what you all said.”
That’s what is happening with TALENT requirement. Management defines the talent as per the requirement of business needs and its diversified expansion plans. However, the way it gets translated and interpreted by HR, Hiring Manager’s and Recruitment Agencies is very different from the vision of management team and requirement of business. As it gets cascaded down the hierarchy, the definition of talent gets diluted and instead HR and Hiring Manager’s get into an ongoing rift without understanding that both of them are working for the organization and not for one another, as they make it appear like. Thus, I understand that the shortage of a talent is an MYTH. It is a cover-up story created by talent acquisition team and hiring managers to wrap their failures and inabilities of attracting and hiring the right talent. The talent shortage happens whenever employers complain that they cannot find people with just the skills and background they want at exactly the price they would like to pay. Organizations need to follow an approach of systems analysis, see a bigger picture and how their roles are interconnected.
Before we proceed further, let’s reinterpret the Talent Shortage Survey of Manpower Group for the year 2016-17 –
– The survey was conducted in 43 countries among 42,300 organizations. Among surveyed employers, 40% of Global Employers [48% in India] reported Talent Shortages. In other words, 60% Global and 52% Indian employers claimed that they always get required talent whenever they need, wherever they need and within their allocated budget.
– Talent shortage cannot be seen in isolation. There are several factors that contribute towards talent shortage, such as – working environment, work-life balance, organizational culture, labor laws, social security, industry-academia collaboration, political stability, etc.
– The survey highlighted the shortage of talent in India among following job titles – IT Personnel, Accounting and Finance Staff, Project Managers, Sales Manager, Customer Service Representatives and customer support, Technicians, Quality Controllers, and Buying and Procurement. Next time, when an organization will not be able to find, say, efficient project managers, they will blame it on the poor talent supply instead of evaluating their recruitment processes.
For the second and final phase of my discussion, I studied their recruitment processes, profiles of successful candidates and remarks of hiring managers on interview evaluation forms. I also prepared a questionnaire for the CEO, Vice President HR and few Hiring Managers. I also participated in few job interviews. Finally, a conclusion was derived that the talent shortage in this organization was not real instead it was an outcome of poor communication across hierarchies, and misinterpretations of messages. The deemed shortage of talent can be addressed if the organization will follow below-mentioned recommendations [I believe these recommendations will be of great help for any organization across industries –
1. Relocation – When an organization wants to play at a national or global level, why do they limit their talent search to one city or the worst one particular part of a city? Whenever any leader tells me that they don’t have a relocation policy, it becomes easy for me to conclude that they are not serious about TALENT. Many start-ups, small-sized and mid-sized organizations do not pay much attention to this critical aspect of talent attraction and hence lag behind in the race. Sadly, these are the same organizations that make maximum noise for talent shortage. Not having a right person in a right role is more expensive than hiring someone from a different part of the country and pay them relocation allowance.
2. Widen the Talent Search market – From outside, it might appear that hiring someone from the payroll of your competitors might make your work easy and it might give you some inside information as well, however, that’s not the right approach all the time. Instead, expand the horizon of your talent search from SAME Industry to SIMILAR Industries to ANCILLARY Industries. Even within same industries, the working culture of different organizations varies, therefore, the challenge for someone to adapt to your organizational culture will remain same with a small degree of variation.
3. Employee Referral Programs – Attracting and hiring talent to the organization is not a sole responsibility of HR and Talent Acquisition Team, in fact, everyone in the organization, particularly the leadership team, is responsible for attracting talent to the organization through directed efforts of branding. Create an effective “Talent Reference Program” to reward those employees who are bringing talent to the organization through their family and friends.
4. Coach Interviewers – Being a good interviewer is a skill, which can be learned. As a part of leadership development program, train and coach your managers to be effective interviewers. Questions like – “Tell me something about yourself; what are your strengths and weaknesses; and why you are looking for job change” are too general questions to tap the right talent. Prepare a questionnaire on the basis of skills and competencies required in candidates. Interviewers must prepare for the interviews and do their homework in advance.
5. Simplified, Superior and Scalable Processes – If a candidate is available in the job market, it means he is an active job seeker. He will join the organization that will first give him the job offer. He will not wait for your recruitment process to get completed before taking a decision, therefore, shorten the recruitment process. Complete all rounds of interviews, including assignments and assessments, if any, in a single day. Wherever possible, take panel interviews instead of rounds of interviews. In one-to-one interviews, candidates often get rejected on the whims and fancies of interviewers, which is another reason for recommending panel interviews over rounds of one on one interviews. Longer the recruitment process, higher is the probability of candidate getting disengaged and walking out of the process. Any interviewer who has no time to take interviews is not serious about hiring talent, he must not complain about the shortage of talent. We are living in a talent market. We need them more than they need us. In a day, if a manager has TEN tasks to complete and talent acquisition is one of them then that must be his #1 priority.
6. Benchmarking compensation and benefits – Benchmarking your compensation and benefits with the market is not once in a lifetime or once in a five-year kind of event. Do it yearly. Keep it abreast with the market. Compensation and benefits strategies of the organization play an important role in attracting and hiring good talent. Let’s accept that every talent comes with a price-tag. Check your budget, if you can afford it or not. If your budget for the role does not match the price-tag of talent, then let it go. Do not bargain and hire someone at a premium, if your budget doesn’t allow. When you bargain, you might get a new person on board but you will lose several other employees, dissatisfied due to an imbalance in internal equity. On the contrary, if you are hiring someone at a lower rate than your budget, you are preparing for certain first-year Strictly remain in the FOUR walls of your budget.
7. Workforce Planning – Long ago I read, “Failing to plan is planning to fail” and “One hour of planning save 10 hours in execution”. However, in reality, planning is one among the most underused management tools. Workforce or Manpower planning is one such “annual event”, which does not get as much time and importance as it must get. Leadership teams often cover-up their failures to prepare an effective workforce plan with phrases like – unsure business, economic uncertainty, volatile marketplace, system complexity, to list a few. Nonetheless, the reality is, an efficient plan usually takes care of every uncertainty, volatility and complexity. When you don’t plan for your future manpower requirements then midway through the year you end up with a shortage of budget, and open positions that are not approved. Planning is a skill that can be learned. Train your managers to be good planners.
8. Friendly Interview Schedules – Talent you are seeking to bring to your organization is working elsewhere unless you are looking for fresh graduates. Good candidates are unlikely to attend interviews on working days. Hiring Managers must schedule their interviews as per the availability of talent not as per their own convenience. Remember, you need them more than they need you. We are in a talent market. Screening interviews over phone calls, preliminary interviews through SKYPE, LYNC or other available video technologies are highly recommended. Unless you are willing to complete all rounds of interviews in a single day, for a higher turnout of candidates, it is recommended to schedule interviews on weekends or on holidays. In the past, I have successfully conducted early morning and late night interviews.
9. Create learning organization – Nothing is better than creating your own talent pool to fill in critical roles within the organization. Define competency framework of your organization, identify high-potential and high-performing employees, prepare gap-analysis and fill in the gap through robust leadership development programs and mentoring. Not only will this help in attracting and hiring good talent from the market but also in engaging, motivating and retaining existing employees. No doubt that the compensation and benefits are decisive factors but talented candidates prefer to join organizations that allow them to sharpens their skills, learning new competencies and help in overall development. Prepare talent strategies that encourage certain roles to be filled through internal hiring ONLY.
10. Continuous Improvement through data analysis – Data capturing is the first step towards analytics and improvement. In the entire process of attracting and hiring talent there are several situations that provide opportunities to capture real-time data, such as frequent reasons for profile and interview rejections, job offer acceptance ratios, first year attrition rate and reasons thereof, rounds of interviews conducted before making a job offer, and reasons for rejecting the offer letter. In his article, “Why You Should Interview People Who Turn down a Job with Your Company”, Ben Dattner has said, “Every company gets rejected by job candidates, and you’re missing a big opportunity if you don’t ask these people why they did it. The next time you get a “No, thank you” call or email, explain that there are no hard feelings and dig deeper for more information. Focus on questions like:
What did you see as the positive aspects of the role?
What were your concerns about the role?
What were the most important factors in the decision you made?
What feedback or suggestions do you have for your interviews, interviewers, and the interview process itself?
Can you provide feedback or suggestions for the hiring manager, human resources, or the organization overall?
These conversations might be awkward, but if you don’t solicit feedback from people you’ve interviewed, they may give that feedback publicly, like on a website such as Glassdoor.
Analyse data to improve your processes and hire the best talent from the market to stay ahead of the competition.
Survey results are not accurate all the time, the latest example is recently concluded presidential elections in the USA. The talent shortage is an outcome of poorly drafted and executed recruitment processes, discouraging working culture, insufficient career development opportunities, and badly managed industry-academia relationships. Before looking outside to blame and make an excuse for our failure to attract and hire talent, let’s first look within and put our house, our processes, and system in order.
My client has taken a first step towards fighting the war of talent shortage by bringing together all stakeholders, deciding to analyze the existing system, and taking a call to improve processes. It’s certainly not a once in a lifetime event. Process improvement is a continuous process. They have decided to improve their processes by capturing real-time data, analysis, and predictive index. What about you?