CSD: The Economic Reality of Recruiting
By Mel Kleiman
Through a special arrangement, presented here for discussion
is a summary of an article from Convenience Store Decisions magazine.
Just
24 months ago, anyone who wanted a frontline, hourly worker’s job
only needed a pulse to get hired. Now, precisely because unemployment is high
and employee turnover is low, it is harder than ever to attract the best and
repel the rest.
Here’s why:
- It’s harder to attract and hire star employees today because stars,
even if unhappy, aren’t looking for new jobs. They are just going to
stick it out until the economy improves and they feel more secure about making
a change.
- While many companies have had layoffs, no one is letting their best people
go. So far, more than two million people under age 30 have lost their jobs
in this recession. Said Andrew Sum, director of the Center for Labor Market
Studies at Northeastern University in Boston, "The younger and less
educated you are, the more likely you’ve been thrown out of this labor
market." Employers need their most competent, experienced hands on
deck right now.
- The layoffs, hiring freezes and high levels of unemployment have translated
into an avalanche of job applications for every open position, making it
that much harder to identify star employees today.
- The good news is employee turnover is down. The bad news is employee engagement
and motivation are down, too. This dissatisfaction is fueled by media reports
about the huge discrepancies between CEO earnings and workers’ earnings.
Then throw into the mix the reaction to the TV series Undercover Boss. As
reported on MSNBC, "Much of the incognito intelligence
these men gathered seems wincingly obvious to anyone who earns a buck any
place other than a sumptuous corner office."
- Today’s applicants are desperate. They falsify employment documents
and stretch the truth in interviews. Once hired, desperate employees may
sue, file complaints or even fake accidents.
When it comes to hiring, there’s 10 times more information on the market
about how to look like a winning applicant than there is on how to pick a winner.
A University of Chicago study showed that hiring decisions based solely on
an interview are only eight percent more successful than flipping a coin, and
no business can long survive those odds.
Discussion Questions: How should hiring
practices adapt to deal effectively with the current economic climate and job
market? Of the challenges mentioned in the article, what are the toughest hurdles
to overcome when recruiting?
The economy might be different but hiring practices are still basically the same. So there is no need to adapt to change. My clients tell me they still have a difficult time finding qualified people willing to work. The old fashioned job application systems have failed. Too many undesirable applicants, too much paper work, and too much legal exposure.
The best employees are not the ones looking for another job. We don’t want them anyway. We want people who are already happy and productive in their current job. We want the rainmaker that never gets laid off. One of my jobs is to sometimes go into stores and find people who enjoy their work, are enthusiastic about their work, and are productive. A lot of retail workers don’t even realize they are being interviewed by a competitor. Pirating one good employee from a competitor can quickly replace 3-4 warm bodies.
Somehow, enterprises of all kinds seem to think that “In this economy, you’re lucky to even have a job” is a motivating statement. It’s not.
The way to improved employee loyalty and retention remains as it has always been–identifying top talent, nurturing it, creating career pathing for the individual, and showing appreciation through verbal and written praise, and actual cash dollars.
As an aside, I worry less about potential employees falsifying some things on their resume than I do about whether or not they can deliver once they have the job. If an applicant stretched the truth, and is willing to stretch to live up to it, it’s actually okay with me.
Recruiting, retention, motivation, productivity; these are the ongoing challenges retailers always face regardless of the economic climate. If you’re a retailer, it’s just what you do (kind of like breathing).
The question is, what needs to change? Well, nothing really if you’ve been doing the basics right all along. However, if you’ve been doing a lousy job of screening, interviewing, managing, training and coaching, then lots has to change.
My point is that everything in retail is getting more competitive (store designs, pricing, promos, supply chain, etc). Retailers need to pick up there game in every area. The reality is that the ‘people’ side of the business is still the weakest for most retailers. For those that ‘get it’, recruiting and retention isn’t that big of a deal. For those that don’t, there will always be a long list of reasons why staff are always the problem (when, in fact, they are the solution).
I take issue with one of the premises in the article. I do not believe all the “stars” are still employed and only the remainder are left looking for work. There are plenty of “stars” who were terminated/laid off during this recession still out there looking for a job. Even the “stars” retained might be unsure of their current employment and quietly looking for something.
Here is my major issue with the “reality of recruiting.” There is rarely any acknowledgment of receipt of a resume by the receiving companies. A resume is sent and seems to be lost in the abyss. Common courtesy says even an automatic response acknowledging receipt of the resume is better than nothing. Second issue is, rarely will a recruit hear back from the initial interview even when promised. So the problem as I see it is more about the recruiter needing to have respect for the applicant. That does not seem to be the practice. Just because there is an abundance of applicants does not mean the recruiter can be less respectful of the applicants.
There will always be embellished resumes. It is no different than the movie previews we see. And we surely know the previews and actual movie do not always meet the same expectations. Once we make up our minds on the best applicant it is incumbent upon us to give the person every opportunity to succeed. Are we doing that in either the hiring or training process? Is there a training process other than “you start tomorrow morning”?
I will disagree with Ed. The stars are employed. A star knows how to worm their way into a job no matter what the economy is like. Recently a client told me that he was personally approached by a man who wanted to work in his store. He volunteered to work for a week for free and vowed that if he was hired, my client could easily fire two current employees and come out ahead. Well, he did prove himself and three lesser employees were fired. Now those two have a father-son relationship.
A real star finds a way to get work. My clients don’t want applicants. Ed, how many times did you use the word “applicant?” My clients want recruits, not applicants.
Yes, most stars are still employed in the current economic climate, but stars need to be paid and many companies are not willing to do that.
There are good employees who are unemployed for a variety of reasons. For example, Hollywood Video recently went under and everyone was laid off, including the stars.
“And the survey says” – Poor hiring/interviewing practices by companies is the number one hurdle companies face. I agree.
We often find clients have never truly trained those individuals that have been charged with the responsibility to qualify, interview and hire. This all important function is often left up to front line people who are the same ones who may have to cover a shift if no one is hired.
When I ran a retail operation with 6,000+ employees, we faced similar issues as are occurring today. Our solution was for our HR group to develop a “people bank” where we hired qualified people whether we had an immediate need or not. The trained HR professionals and the front line personnel jointly made the hiring decisions. We carried additional payroll but we quickly learned that the cost of the extra personnel was far less than the hard cost of turnover.