As we continue to see the labor market rapidly change, companies and individuals need to adapt to these changes as the new normal. Some businesses are hiring for a select few roles. Still, the rise in candidate applications, with more than 16 million people filing for unemployment in the US over the last two weeks, will be of epic proportions. For companies like online grocers, warehousing, and shipping companies that are faced with sudden, exponential growth in business, it means dealing not only with the high volume of applicants but also how to effectively interview and fill roles at a scale they likely built for. Other businesses may have had to furlough much of their staff but know the day will come when the economy picks back up, and they will need to hire quickly.
These are all challenges that we’ve helped leading global brands address for more than three decades, so we’d like to share how companies like yours can modernize their hiring process.
At the beginning of this year, we published The Trends Report 2020 and detailed ways to address the challenges that lay ahead, given the current state of the market. Of course, what no one saw coming was that just two months later, the entire global economy would be turned upside down.
While market conditions have changed, hiring the right talent at the right pace and scale will be as challenging as before, just for entirely different reasons. Let’s examine some of those trends, how things have changed, and why they are still applicable.
Trend #1: Hiring for Retention
With unemployment rates at the beginning of the year at historically low levels, competition for talent was fierce, and retaining candidates was becoming an increasingly significant problem. The recent change in market conditions, however, may make job seekers more apt to take a job offer that they otherwise would not have, for the sake of employment and stability. That may solve a company’s immediate need but can cause issues for a business if they cannot retain those employees for the long term. And the financial impact of turnover is substantial. Many estimates show it costs businesses about one-fifth of a worker’s salary to replace that worker after turnover. If that worker holds a position of seniority, the cost of turnover is even higher.
Pre-hire assessments, which are often used for performance-based predictions, are also being used to predict employee retention. Over the last several years, we’ve invested in innovative ways to accurately predict turnover, including scoring open-ended text for culture fit and a candidate’s intention to remain at an organization long past the probationary period.
Performance may be a strong predictor of success in the short-term, but if you also look at retention during the hiring process, it may be the key to making a better longer-term hire.
Trend #2: Improving the candidate and recruiter experience through technology
Candidate experience is something that we often talk about as a crucial area for companies to focus on when unemployment rates are low, and competition for candidates is high. Many of the things that make for a great hiring experience in a candidate-driven market, such as self-scheduling and on-demand interviewing, are meant to make the hiring process as quick and efficient as possible. Those can be of great benefit now too, however, for dealing with high applicant volume, a higher-than-normal number of roles to fill, or both.
Trend #3: Establishing Artificial Intelligence (AI) laws and ethics
Artificial Intelligence technologies have widely been promoted as game-changers in the virtual hiring technology sector, for helping companies to hire better and faster. One downside of the expanding AI market, however, is that many offerings are driven purely by technologists, rather than in conjunction with experts in human resources and I/O psychology. As a result, products may claim to use AI to predict job performance and turnover better, but many offer little in the way of scientific proof, protected class fairness, or demonstrated job relevance.
Some examples of AI technology and claims that you should question in more detail:
- Tests that claim to predict job fit by color preference
- Tests that use imagery instead of words
- Simple games purporting to measure job-relevant constructs
- Video interviews scored on facial features and micro-gestures
Some vendors claim these products are valid and legal predictors of job performance, but little publicly available scientific data proves it. Before settling on any AI solution, ask for the scientific data supporting the claims.
AI ethics is something we feel is an essential consideration in any economic climate, and you can learn more about our point-of-view in Modern Hire’s Ethical AI Position.
Trend #4: Streamlining the hiring process
A high volume of applicants and/or a high volume of roles to fill can mean increasingly stressful experiences for candidates, recruiters, and hiring managers alike. So when market conditions dictate either or both, as we see now, companies look to technology to help streamline the process.
We talked above about pre-hire assessments and their role in retention. Assessments with a virtual job simulation, however, cannot only give organizations information about a candidate’s potential future performance but can also provide the candidate with a realistic job preview of what to expect if hired. A realistic job preview helps both the candidate and the organization make a more informed decision.
Assessment technology that can also receive performance data back about candidates that have been assessed and hired can further improve the quality of assessments moving forward.
While today’s market is more than a little different from it was just a few months ago, there are things that any company can do right now to deal with their current or soon-to-be situation to better prepare them for an influx of applicants, increasing numbers of roles to fill, or both. You can learn about these trends, as well as others, and how to deal with them in more detail The Trends Report 2020.