The Top 25 Recruiting Trends, Problems, and Opportunities for 2014, Part 1 of 2
Below you will find the first section of a two-part article by Dr. John Sullivan, followed by a reflection on the concept of cost avoidance by KGT owner and president Jim Kuhn.
“The Top 25 Recruiting Trends, Problems, and Opportunities for 2014, Part 1 of 2”, by Dr. John Sullivan
Even if you work in a corporate recruiting function with low resources or minimal expectations for change, every recruiter still has a professional obligation to maintain their awareness of the latest trends and predictions. I have grouped 25 predictions of the leading corporate recruiting trends for 2014 into four separate sections. Part 1 includes two sections that cover 14 new opportunities and continuing current trends. Part 2 (to be published next week) includes the final two sections, which cover 11 remaining trends that cover new challenges and areas that will continue to diminish in importance.
Section 1: The Hottest Recruiting Opportunities for 2014
The top opportunities that will dominate strategic corporate recruiting during 2014 include:
1. The competition for top talent intensifies — You could call 2014 “the year that intense recruiting competition returned.” That is because after years of slack hiring, the competition for top performers and technical talent will increase over the next year in many industries to the point where current recruiting resources and tools will be stretched to the limit. Aggressiveness, the need for counteroffers, higher rejection rates, and a renewed focus on recruiting the currently employed will all return to prominence. As a result of this increased competition, executives will begin to put pressure on recruiting to produce new recruiting approaches that provide them with a competitive talent advantage.
2. Employer branding returns as the only long-term recruiting strategy – After years of minimal funding and attention, strategic employer branding begins its return as the only long-term recruiting strategy. This shift is partially due to increased recruiting competition but it also comes about because social media now makes it so easy for others to virally spread either positive or negative comments covering working at your firm. The willingness of current and former employees to comment online about their work environment increases the impact of firms that reveal what employees and applicants say (i.e. Glassdoor, LinkedIn, and Universum). Talent leaders are also gradually learning that providing a weak candidate experience can quickly damage that brand. There is now a growing division between the one percent top employer brand firms in each industry (e.g. Google, Facebook, Deloitte, P&G, and McKinsey) and the remaining 99 percent of firms that simply offer “paycheck jobs”. This dramatic and perhaps insurmountable difference in brand strength and employee treatment may permanently limit the capability of the remaining 99 percent to attract any more-than-average talent.
3. Recruiting finally adopts the practice of monetizing its business impacts – Even though it has long been a standard business practice, recruiting is finally beginning to move away from its long-held attempt to “align with business goals” and instead focus on having a direct impact on business goals. Because revenue is one of the prime corporate goals, by quantifying the revenue impacts of great compared to average and weak hires, recruiting can now convincingly demonstrate its “highest of all talent function business impacts” to executives. Demonstrating the direct connection between recruiting results and improved business results will eventually supplant quality of hire as the most important recruiting measurement. By monetizing its revenue impacts, recruiting can also make a continuous business case (via Cost Avoidance metrics), which will provide it with the necessary funding to meet this latest hiring surge.
Jim Kuhn’s reflection on above article:
Cost Avoidance is very important to Talent Acquisition teams. In recruiting we have the ability to save a significant amount of money for companies we work with by wisely choosing the most cost-effective methods to source candidates. In recruiting, there are three primary criteria that help us determine sourcing methods – Quality – Cost – Speed.
Your recruiting team is able to use social media to attract candidates who are actively seeking new positions. You can also source passive candidates by directly identifying qualified individuals using LinkedIn, Xing, and other great tools that are now available.
At KGT, we use the concept of “cost avoidance” to measure the Value of our candidate sourcing services.
It works like this:
• For each placement, we calculate the hypothetical cost of finding candidates through a third-party recruiter who typically charges 25% of base salary of the placed candidate.
• We then subtract that actual cost of the candidate sourcing methods actually used- the result is our “cost avoidance” metric.
• For example, if we recruit and hire a person at a $40,000 annual salary, a company would hypothetically pay a third-party recruiter $40K x .25 = $10,000.
• When we recruit and hire the person via social media postings- which cost $500 per position posted, we record a cost avoidance of $9,500.
• When we recruit and hire a person via “search research” (with the help of an hourly-paid researcher), that costs $3,000, we record a cost avoidance of $7,000.
• That $7,000 has a top line sales value (at your current margins) of 10 X or $70,000.