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U.S. Recruiting Trends for 2016

Posted by Michael D. Haberman

recruiting trends 2016 eskill

As we start off a new year, it’s time for companies to ramp up their processes for finding, selecting, and retaining high quality talent. This post will discuss some of the trends and issues that are projected to be important in 2016. We will look at the employer side of the equation with a rundown of the issues important to employers. We will also discuss the staffing firm side of the equation and what is important to them in working with employers to get employees hired.

Key Trends for Employers

Every company agrees that finding, hiring, and keeping employees is critical to their success. In order to do this successfully, companies need to address the following issues.

Finding Employees

For many companies the major obstacle in getting good employees hired is JUST FINDING good employees. Although there are a lot of people available, often the skill-sets companies need are in short supply. The educational and training systems are not keeping pace with the growing demands companies have for new skills.

As a result of this short supply, two other issues arise. As with everything in a supply and demand situation, the talent that is in short supply becomes more expensive, and compensation becomes a challenge. Additionally, there are always other “buyers” for talent and the competition is fierce in many talent marketplaces.

Sources of Employees

One of the biggest growing trends is the increased use of a tool that has been around for quite some time: employee referrals. Employee referrals (42%) have become almost as important as social professional networks (44%) as a source of candidates. Companies are also using Internet job boards as a reliable source (39%). The U.S. is better than the global average at using referrals, but India is the best user of employee referrals.

In attracting people, employers have found that their “brand” is of high importance to catching the eye and mind of candidates. Consistency of message between recruiting and marketing has taken on a new importance in many organizations.

Quality of Hire

From the employer side of things, quality of hire is the overriding metric. Unfortunately, though it is the largest variable, only 32% of employers say quality of hire is important. The other two metrics employers consider important are time to fill at 31% and hiring manager satisfaction at 23%. In my opinion, the quality of hire is by far and away the most important measure and not enough emphasis is being put on this measure.

Interestingly enough, the way companies’ measure quality of hire is varied. Fifty-seven percent of companies measure quality of hire by turnover; 42% measure it through manager satisfaction; and 40% measure it by new hire performance evaluation. Sadly, only one-third of companies polled around the world think they are good at measuring quality of hire.

Retention of Employees

Employee retention is top of mind with talent leaders, as we saw that many of them use retention as a measure of quality of hire. Unfortunately, many pay scant attention to internal hiring (which helps address employee retention). It is significantly lower on the priority scale for many companies. Furthermore, less than one-third aren’t recruiting internally at all. Leaders who are truly concerned about retention will need to start to prioritize internal recruiting. Employees who work for companies that don’t recruit employees internally for promotional positions are not likely to retain quality talent.

Increasing Use of Assessments

One of the ways many companies are meeting the challenge of finding quality talent and increasing retention is through the use of pre-hire assessments. According to the Wall Street Journal, “In 2001, 26% of large U.S. employers used pre-hire assessments. By 2013, the number had climbed to 57%...” and it continues to grow. Also according to the same article:

Steven Davis, a University of Chicago economist who has studied the gap between job openings and hires, found the annual sum of hires and separations — called labor-market churn — has declined by more than 25% since 2000, suggesting, he said, that as employers intensify their front-end screening, among other factors, “a larger fraction of the people they hire are working out.”

Companies have discovered that assessments produce better candidates that stay longer. Combine that with the decreasing prices of assessments and the increasing ease of administration, and they have become a “no brainer.”

Key Trends for Staffing/Recruiting Firms

Staffing and recruiting firms provide many candidates to companies that lack the expertise or manpower to effectively find all of the talent needed, themselves. They provide valuable services to many employers; however, they are also faced with many issues. Having been in that business for a number of years, I know it is a tough job. Recruiters have to “sell” to employers and also “sell” to candidates. Additionally, they face the challenge of helping a company with their needs while having to deal with the company’s budget.

Tools

Recruiters have expanded their set of tools with social media and social professional networks like LinkedIn. They have found that while Internet job boards and applicant tracking systems produce higher volumes of placements, the social networks produce a higher quality of placements.

Branding is critically important for firms, to both attract candidates and distinguish themselves from their competition. The name of the game today in the recruiting business is to find the “passive” candidate. Eighty-six percent of recruiters focus on finding this highly desired candidate who allows them to charge higher fees for their services.

The use of metrics and quality measures have not really made inroads into the recruiting business, with many firms admitting they do not have a good handle on these measures.

Relationships

Both companies and recruiting firms have realized the importance of relationships in hiring. Companies need to do a better job of connecting internally to improve branding, connecting with candidates in order to sway their decisions, and establishing relationship with recruiting firms to seek help in finding badly-needed rare talent. The recruiting firms also need to be well versed in establishing relationships with candidates. The use of social media and LinkedIn allows them to bond with highly talented “passive candidates,” who will bring the competitive advantage they will need to be successful.

Conclusion

In the ever-changing and challenging world of attracting and keeping talented workers, companies need to continue to develop their brand and improve their metrics around the process. They need to become more relationship driven, in order to become more attractive to that talented worker. Improvements need to be made in quality of hire metrics, and retention programs need to be improved so the talent that was so ardently acquired doesn’t leave due to a lack of opportunity or attention.

Sources:

United States Recruiting Trends 2016, by LinkedIn Talent Solutions

United States Staffing Trends 2016, by LinkedIn Talent Solutions

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About Michael D. Haberman

Author

Michael D. Haberman is Vice-President and co-founder of Omega HR Solutions, Inc., a consulting and services company offering complete Human Resources solutions. As the former founder and President of MDH Consulting, a Human Resources consulting firm, Mike has more than 35 years of experience in Human Resources, and he uses his broad-based background to help companies solve employee problems and deal with governmental compliance.

3 COMMENTS Join the discussion
  • Ava S. January, 11, 2016

    Great article! These trends will definitely influence the recruiting process in 2016 and help create a new world for HR. Recruiters are changing and will continue to change towards a more human side built on communication and relationships with candidates and employees. And skill assessment tools will help with that as well.

  • Camila R. January, 13, 2016

    The changes that started years ago are turning into trends, which is a great thing to see. In the fast-moving world of candidates, with the way employees move from one company to another, it is of the utmost importance to secure the talent and increase the retention rate. I like the idea of recruiting from inside the company, as those candidates are already part of the culture and are more likely to stay with the company. 

  • Lillian M. January, 17, 2016

    Companies have evolved in the past few years, building a culture, a brand, a connection to their employees, and recruiting firms have to find the right talent to fit all those criteria. It isn’t an easy job, but with the right tools and adapting to new trends, anyone can succeed. Assessment tools, for skills or behavior, will shorten the time for recruiting and help the recruiter select the best talent.

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Guest January, 17, 2016