Whatever happened to the war for talent?
Hiring is a buyer's market these days, thanks to the recession, and employers are inundated with highly qualified job candidates at every level. It's cream-of-the-crop rather than bottom-of-the-barrel, and a time of remarkable opportunity for HR executives.
Yet that opportunity has, paradoxically, actually made it harder to find the right people.
Because of widespread cutbacks and hiring freezes, many employers are able to do only "focused hiring" for essential positions that can't remain unfilled. Often, these new hires are being brought into a pinched environment where fewer people are doing the same or even more work as before.
At the same time, the recession has forced companies to be more competitive than ever, and so employers and managers have to be extremely customer-oriented, and at the top of their game.
What this means is that, essentially, all new hires have to be star players. They have to be able to hit the ground running and get up to speed almost immediately, because the company doesn't have the luxury of waiting. They have to be willing to put in extra effort and perhaps extra time, because of the company's competitive need for quality and efficiency -- and because they may be doing the work of two people.
And they need to be employees and managers who will stay with the company and not bolt as soon as the economy turns around. Companies can ill afford the cost -- or time -- to replace them.
The right hire during the recession is not just the candidate who is the most qualified, but the one who is also most likely to be engaged and committed. Those qualities are not always easy to discern. And employers have an added burden: They're getting many more applications for each job opening, often 10 times the number they received before the recession.
This double challenge -- finding diamonds in a haystack, so to speak -- has led to a surge in pre-employment assessments, according to some assessment firms and HR consultancies.
Most companies, of course, have cut back on hiring. Scott Erker, senior vice president of Selection Solutions, a division of Bridgeville, Pa.-based Development Dimensions International, estimates that only about 15 percent of large employers are doing their usual amount of hiring. About 25 percent have a hiring freeze. The remaining 60 percent, he says, are doing "focused hiring" -- filling only key positions, or recruiting top people who may be available.
And while the employers who aren't hiring have no need for pre-employment assessments, many of those that are -- even in a limited way -- are using such assessments far more than before.
Some assessment firms, such as Kenexa, are seeing an overall net increase.
"I predict we'll do more work this year," says Russ Becker, the managing partner of assessment and testing at Wayne, Pa.-based Kenexa. "We're particularly getting more requests for assessments in corporate management, because the candidate pools have gotten larger."
Heather Ishikawa, a senior business development manager for Pearson's TalentLens group, a global publisher of selection and development assessments, says many of her clients are more worried than before about making a wrong hire, despite the plethora of job candidates.
"Companies are in greater danger of getting the wrong fit," she says. One problem is that many of the candidates are overqualified -- because of the recession, they're out of work and are searching desperately for any port in a storm.
"Clients tell me they need people who can get up and running, because, more often, they're running with leaner teams," she says. "But when the economy turns around, are they going to be a good fit with the team and the company's culture, or are they going to be bored with the job? What you don't want is a mass exodus where you're trying to fill critical roles again."
Pearson TalentLens, based in San Antonio, evaluates fit through several kinds of assessments. One test measures critical thinking, which helps identify people with good decision-making and problem-solving abilities.
Another is a personality test identifying important work styles that predict success, such as achievement, leadership and cooperation. That assessment also helps determine whether the job candidate is likely to be engaged in his or her job, and will fit in with the company's culture.
Together, says Ishikawa, the tests help answer the questions, "Can they do it, and will they be willing to do it over the long haul?"
The recession is creating unexpected hiring challenges -- and a need for pre-employment assessments -- even for some employers that aren't cutting back.
Bridgestone Americas, the tire manufacturer, operates more than 2,000 Firestone, Tires Plus and other stores across the country that sell tires and repair cars. The stores are doing just as much hiring as they did before the recession.
Here's the reason, says Ron Tepner, the vice president of human resources for Bridgestone Retail Operations, headquartered in Bloomingdale, Ill.: Because of the poor economy, many people are getting their cars repaired rather than buying new ones. And so the stores are doing more business than ever.
But at the same time, says Tepner, car owners are getting less-expensive repairs -- many are asking the shops to fix only the most critical things that need to be done to keep the vehicle running, and are delaying non-essential repairs. So while the shops are seeing more cars come in, the overall amount being spent on them is less than before.
That means the mechanics, referred to as technicians, must get the cars in and out quicker -- they have to be faster and more efficient than ever before. But they also have to be very good at what they do.
To make sure Bridgestone gets the best technicians, the company in May began giving job candidates a pre-employment assessment developed by APT Inc., a Darien, Conn.-based HR consultancy.
The assessment measures math skills and reading comprehension, which are essential for mechanics, particularly as cars become more computerized and complex. People who score high, says Tepner, "are less frustrated in our environment, and they make more money, and it's the money that keeps them with us."
The assessment also evaluates the job candidates' "conscientiousness," asking questions such as how important it is to them to do a good job, and whether they always finish a project they start.
"We want people who can't sleep at night if they didn't do a good job on your brakes," says Tepner.
A "predictive validation study" -- which matched the scores of successful job candidates with how they performed six months down the road -- found that those with low scores were four times more likely than high scorers to leave their jobs within 90 days. And people who scored high were 15 percent more productive.
"That's compelling," says Tepner.
Prior to the recession, he says, such an assessment probably wouldn't have been effective. "The candidate pool wouldn't have been large enough to get enough good people. We wouldn't have been able to fully staff our stores with only people who scored high."
However, there are now more top-flight mechanics looking for work, particularly as car dealerships around the country are closing. There are so many candidates, says Tepner, that Bridgestone is able to replace some of its "C-players" with "A-players."
"The recession is presenting us with opportunities we might have delayed or not explored," he says.
Like other assessment experts, Daniel Lezotte, APT's vice president for the Midwest region, says pre-employment assessments can't guarantee whether a job candidate will be a success. But they can help improve the odds.
"The goal is to help increase your probability of making the right selection," says Lezotte. "You can never be 100 percent certain, but if you go from 60 percent to 70 percent across a large number of people, that's significant."
Picking from the Plethora
While the recent flood of job candidates has been a blessing for employers, it's also been a headache -- how do you sort through hundreds of applications for a single opening?
Since the recession began, many more companies have been asking job candidates to take an online assessment when they submit their job applications.
"They're used as a first screen, before the hiring managers look at the resumes," says Ken Lahti, director of product strategy and innovation at PreVisor, a Roswell, Ga., firm that develops pre-employment assessments.
These "screening assessments," says Lahti, can be used to evaluate candidates' problem-solving skills, personality and background experience.
They're necessarily short -- less than 30 minutes -- because applicants at this stage have yet to be considered full candidates.
The assessment scores allow employers to choose from the top candidates, and screen out those who don't make a minimum, or "cut" score.
Lahti says that, prior to the recession, 60 percent of PreVisor's major clients were using screening assessments; now perhaps 90 percent are. Many, though not all, of those clients are also using the more extensive "selection assessments" later in the hiring process.
Assessment experts emphasize that testing is only one part of that process -- behavioral interviews are still critical, and job simulations can also be of immense value. But assessments, they say, can help identify the kinds of star players who are becoming so essential during the recession.
Because new employees are unlikely to go far if there's a disconnect with the company culture, many assessments ask questions to see whether there will be a good match. Does the job candidate prefer to work on teams, or alone? Would he or she feel comfortable being empowered to make decisions? Is the person rule-oriented, or does he or she work better with looser boundaries?
Cultural fit is a key element of overall employee engagement, says Julie Gebauer, a managing director at Stamford, Conn.-based Towers Perrin, and co-author of Closing the Engagement Gap. Some elements of engagement, she says, come from the employee -- such as a person's openness to challenge, optimism and inclination to set high personal and professional standards.
But, says Gebauer, while a person can score high in those areas, "if you're at a company that is not the right fit for you, you can be totally unengaged."
It's essential, she says, that companies are clear with prospective employees up front about what will be expected of them. And they also need to be clear about a candidate's own expectations.
For example, would the person be willing to be available 24/7 via a BlackBerry? Would he or she be willing to work 50 hours a week? How important is it to work in other parts of the world?
While interviews can get to questions of this type, assessments provide a more objective view of "culture fit," says Gebauer. But it can't stop there -- employers have to follow through. "It's important to live up to the deal," she says.
Towers Perrin's research has found that senior leaders and front-line managers play a critical role in employee engagement and, unless they deliver on the culture they promise, the new employees will leave as soon as the economy improves.
Senior leaders and managers can live up to the deal by investing in the right resources to get the job done and by expressing empathy with employees' concerns.
"Leaders have to walk the values they [espouse] or they won't have an engaged workforce," says Gebauer.
One approach to securing cultural fit is to assess a candidate's "values hierarchy," says Shawn Kent Hayashi, chief learning officer of The Professional Development Group, an Upper Gwynedd, Pa.-based consulting and coaching firm.
For example, is the person primarily interested in making a meaningful contribution to society? Is he or she motivated to do a good job by being a problem-solver, or by being useful, or by being part of the best organizations and teams?
The goal, says Hayashi, is to determine "whose motivations will be met by the work, and so who will stick around."
Erker, of DDI, says culture-fit assessments are also being used to weed out candidates who may be less than truthful about their intentions. Many people out of work -- or fearful they soon will be -- are looking for "placeholder jobs," he says, to last them through the recession, but will try to hide that fact from prospective employers.
"It's difficult for companies to hire candidates when they only tell you what you want to hear," he says. "In the glory days of the war for talent, candidates were more truthful about what they wanted -- they'd say, 'I'm only going to be here for a few years.' Now, they're more desperate. They may have in the back of their minds, 'This is not my career job; this is my sit-tight job, and as soon as the economy turns around, I'm out of here.' "
At Columbus, Ohio-based Nationwide Mutual Insurance, one of DDI's clients, pre-employment assessments are very helpful in identifying candidates who will be dedicated to helping its customers, says Rocky Parker, associate vice president of talent acquisition.
"I want to make sure I hire people who can absolutely provide service in a time of need -- people who absolutely have that belief system." But because of the recession, he says, "in the short run, people are very thankful to have a job, so you may not see their normal behaviors." Pre-employment assessments "can bring some science into what can be a subjective process of looking for cultural fit."
However the hiring process is approached, the recession offers employers an unusual challenge, says Erker. "If we're going to fill a position, we better fill it with the best person possible -- and if we can't, shame on us, because there are so many candidates out there."