Before now, TA leaders were not even on the table for decision-making. But now that they are, we still see organisations not paying attention to their professional advice and strategy. Instead, employers are relying on outdated decision-making processes, with poor use of technology, and untrained professionals, as it is used to merely replicate existing practices. The unplanned growth initiatives without proper analysis are also contributing to a chaotic hiring process.
However, as recruitment trends shift, more Talent Acquisition leaders are incorporating data to alter the narrative. According to a Forrester study, 80% of decision-makers are focusing more on improving hiring quality and hiring speed. They also want to use hiring tools and data to better understand candidates. Let’s examine some of these challenges and mistakes affecting recruitment, and how we can move forward.
1. Erratic hiring decisions
In 2020, the Covid-19 Pandemic caused many organisations — especially tech companies to make poor hiring decisions. In all fairness, the unexpected pandemic and global lockdown shined a bright light on the possibility of growth in the tech industry. Therefore, many tech companies failed to conduct proper due diligence and began recruitment in an attempt to stay ahead of the curve. Reports from CNN showed that from 2019 to 2022, Amazon had a 106% increase in employee headcount, Meta had 103%, Salesforce had a 67% increase and Twitter had 63%.
Both employees and managers are now bearing the grunt of these hiring decisions, as many become unemployed, and a lot of recruitment resources are wasted.
We’ll refer to this as headcount and not recruitment because most of these employees were not needed on the long term. Now, we can see massive layoffs of ten thousands happening in these organisations. Since they didn’t reach their expected growth, they had to lay off these staff. Both employees and managers are now bearing the grunt of these hiring decisions, as many become unemployed, and a lot of recruitment resources are wasted.
2. Talent hoarding & bidding
For certain roles, we can see companies engage in fierce competition to attract and retain the best talent to gain a competitive edge. This trend has been on the rise as organisations recognize the crucial role skilled employees play in driving innovation and success. As a result, companies find themselves vying for the same limited pool of highly qualified individuals, leading to increased competition and bidding wars.
However, talent hoarding isn’t always done for the right reasons. Most times, top organisations ask Talent Acquisition (TA) Leaders to find new talents for them, regardless of whether they are needed or not. The entire purpose of doing this is to get top-skilled talents within the company for the “rainy days”. Organisations keep highly skilled individuals away from competitors until they are eventually laid off. This practice not only wastes talent but also affects those individuals who are left idle for months, especially those on work visas.
For some roles, especially in the tech industry, the salary range has widened drastically due to talent hoarding.
This hiring strategy has significantly increased the pay gap for top-skilled talents. As companies often resort to offering higher salaries and more attractive compensation packages to entice skilled professionals to join their organisations. In some cases, this can create a hyper-competitive environment where companies are willing to go to great lengths to secure the best candidates, sometimes even hunting employees from their competitors. For some roles, especially in the tech industry, the salary range has widened drastically due to talent hoarding.
3. Lack of (recruitment) strategy
Employers lack of recruitment strategy is evident in its failure to internally identify and nurture potential talent. Instead of proactively assessing their internal resources and identifying individuals with promising potential, there is a haphazard approach to hiring. The recruitment process often involves a simple email, instructing the hiring team to go and find suitable candidates, without considering the need for a comprehensive strategy.
This lack of strategy becomes particularly apparent when there are challenging roles to fill in a specific country. The recruitment leader resorts to engaging agencies and exploring options like relocation, without considering the lessons learned from previous experiences or adopting a location strategy that could attract diverse candidates, including more women.
Without a proper strategy, companies are truly hiring amiss.
For instance, a data driven recruitment strategy based on talent intelligence, inspired with insights from platforms like Giant would have shown the best locations, the needed perks, the salary range, and the best places to access talents in each industry in Europe and the US. However, these hiring managers go out with the desire to meet the recruitment headcount the company has requested. Without a proper strategy, companies are truly hiring amiss.
Furthermore, the accountability for finding these talents are disproportionately placed on the shoulders of the HR or recruiters without providing them with the necessary resources and support. Even individuals who lack proper training or expertise in recruitment are tasked with sourcing and identifying potential candidates. As a result, these employees are ill-equipped to carry out effective talent searches and are left grappling with the challenges they face.
4. Talent Management
Talent management in recruitment is frequently undervalued, with the potential consequences of poor management practices being ignored. Given that senior-level positions typically account for 70% of all hiring demand, there’s a need to grow talents internally. Continuously recruiting candidates for those senior positions while failing to develop internal talent would exacerbate the lack of diversity in fields such as technology, where there is already a significant gender gap at the senior level.
It is the company’s responsibility to prioritize providing appropriate support mechanisms to nurture each employee’s development.
Furthermore, failing to provide the necessary assistance and resources for the growth and development of existing talent leads to higher employee turnover, and even more recruitment issues. It is the company’s responsibility to prioritize providing appropriate support mechanisms to nurture each employee’s development.
5. Wasted hiring cost & resources
The wastage of resources in the hiring process is an often overlooked aspect that organisations should consider. Unfortunately, the influence of the CFO often outweighs that of the CHRO, prioritising monetary aspects over the value of human capital. Employers keep disregarding the cost of attrition, which can amount to billions of dollars annually for organizations. For instance, Amazon spends about $8 billion annually on attrition.
When hiring at a fast pace, compromises are made on crucial elements such as diversity, quality, and new hire engagement.
When hiring at a fast pace, compromises are made on crucial elements such as diversity, quality, and new hire engagement. Inevitably, it results in a high attrition rate, with individuals joining organizations only to leave shortly after. The lack of strategy, the poor use of data, and more all wound up in high recruitment costs and wasted resources.
The light at the end of the tunnel
Data, and insights have emerged as powerful tools, shining a light at the end of the tunnel for both employers and job seekers. With the increasing availability of technology and digital platforms, vast amounts of data can now be collected and analyzed to make informed decisions. Recruiters can leverage this wealth of information to gain valuable insights into candidate profiles, market trends, and hiring strategies.