Hiring talent remains the number one concern of CEOs, as found in the most recent Conference Board Annual Survey. It’s also the top concern of the entire executive suite. Unfortunately, many companies struggle with the search for talent because their hiring expectations are not realistic: There is a big gap between what companies want and what they can afford. Many Human Resources teams have long suffered the consequences of working with unrealistic budgets, yet breaking the cycle continues to be a challenge.
Today, the need to fix the budgeting process and setting realistic expectations when it comes to recruiting and hiring has even more urgency. As the trend of an extremely tight labor market continues, companies need to review and reevaluate processes when planning and budgeting to fill positions.
First, let’s look at how things can go wrong and some tips on how to stay on the right track:
Candidate Salary and Budget:
Hiring Managers know what kind of candidate they’d like to hire. However, they frequently offer a salary range that doesn’t match the job description. For example, the job description speaks to someone at a VP level, but the salary budget maxes out at a Director’s level. This is a huge problem. Companies have to get serious about considering market intelligence on current candidate value.
There are many resources available to make sure the job title, job description, and job location are all within range for a given role. This is also where partnering with an external recruiter becomes quite valuable as this is one of their primary responsibilities—staying up to date on candidate market value.
Along with this issue, failing to create an overall, realistic recruiting/hiring budget can be detrimental to the entire scope of filling new positions. Well-seasoned HR professionals have likely learned this the hard way. In an effort to provide tips to earlier career professionals responsible for recruiting/hiring, here are a few expense areas to be sure to include when constructing a viable budget:
- Internal time/resources
- External recruiting partnerships
- Filled position expenses (new employee; total compensation and benefits package)
- Travel and relocation expenses for candidates outside of the area
Finding the Perfect Candidate:
In a perfect world, candidates would check off 100% of every desirable skill, requirement, and personality fit for the hiring company. Unfortunately, as the unemployment rate continues to hover at a record low, the talent shortage remains a major issue for companies. Therefore, it is highly unlikely that organizations are going to be able to find, attract, and hire a candidate within a reasonable amount of time and with every single looked-for requirement.
When demand outweighs the supply of job seekers, companies need to make adjustments to the hardline skills, and even certifications/education requirements to fill a position. Understandably, hiring managers may have a difficult time agreeing to forego a desired skill on paper, and therefore end up with few or no people to interview.
Being open minded, weighing all things involved and considering candidates that may not fit the profile 100% will greatly improve the odds of filling the position successfully. There are a few areas that can and should be considered negotiable. The bottom line is “what does it really take to do the job?”
- If there are experience or skill deficiencies, what can employers do in terms of training and onboarding to close these gaps?
- Is the salary too low for the role given current market data?
- Is there wiggle room on narrowly defined industry background experience?
- Can transferable skills from a role outside of the identified scope be considered?
Having a Realistic Sense of Urgency or Timeframe to Hire:
Most of the time, companies identify an urgent need to fill a role. Urgent is usually translated as “fast.” However, they often inadvertently set themselves up for a slow hiring process due to the aforementioned issues of having an insufficient budget and unrealistic candidate expectations.
In addition to those items, there is the issue of a disjointed and overly lengthy recruiting, interviewing, and hiring process. It is estimated that nearly 60% of job seekers lose interest in a job if the hiring process is lengthy. That is why it’s good to know exactly how long it takes to hire someone and for what kind of role.
Identifying the time to hire can help you identify weak spots in your recruitment process and implement improvements. When setting a realistic time to hire (technically fill), companies should always work through the following:
- How long will it actually take to identify that you have the right candidate?
- How fast do you move when you find the right person?
- Where are the bottlenecks in your hiring process?
- How long does it currently take to fill various roles?
- How long does it take for candidates to move from one stage to the next?
- How does your time to hire compare with the industry average?
By asking these questions and understanding the real answers, while keeping in mind budget constraints and realistic candidate requirements, organizations should be able to formulate a pretty strong timeframe for the entire process.
This process may seem time-consuming (and even overwhelming) to HR departments that are already too thin—and it can be. But, by spending time analyzing all aspects of what actually goes into the recruiting and hiring procedures—beginning with setting a true budget, and being realistic about expectations—organizations will experience a smoother process and more successful outcome.
This is also a great place to use your external recruiting partner’s expertise. They can provide excellent strategies and industry insights that save companies both time and resources.