The past decade of talent has been a competitive one. As a Korn Ferry study revealed, the current global talent shortage could threaten business growth in the coming year as a result of a talent deficit of more than 85.2M workers by 2030, with nearly $8.5T revenue opportunity potentially lost if the shortage isn’t addressed. And it’s leading many companies to make talent an urgent priority about what the next decade will hold for recruiting, as well as what strategies to implement to get the upper hand in this race.
From our experience creating next-generation hiring software, a business transformation starts with talent. How and who you’re able to hire can make all the difference in which companies will survive the next decade of growth.
To learn more about the forces shaping the future of talent acquisition and business growth, we turned to our CEO, Sarah Nahm, to hear her top trends over the next decade for hiring.
Trend #1: Talent will evolve from a cost center to a revenue driver
According to the Predictive Index’s 2018 CEO Benchmarking Report, four of the top five challenges keeping CEOs up at night relate to talent. It’s no surprise to us at Lever that these top challenges include: Finding the right people, building better operational processes, aligning employees with the company strategy, getting the most out of their people, and creating a great work environment.
Metrics have become an essential part of marketing to prove and measure the value of dollars spent on key campaigns. Going forward, talent leaders will continue to take this approach to show metrics to CEOs, such as how talent is performing post-hire, key sources for finding the best hires, email campaigns that worked best to recruit, and more. They’ll also want to include the entire organization in headcount planning to drive and meet the needs of the business.
All of the above is leading more talent leaders to think and forecast like a sales leader, reach and close talent like a marketer, and gain insight into all of their talent attraction efforts like a finance leader. Businesses will also then turn more to talent leaders to grow the business.
Trend #2: Hiring Gen Z will require omni-channel reach
In our recent webinar series, A New Decade of Talent, many strategic talent leaders cited the need to meet candidates where they already are — especially in preparing for the next wave of talent (Gen Z) entering the workforce. “This next generation is even more tech savvy,” says Nahm. “They have been watching YouTube videos on iPads since before they could even talk. They’re not distinguishing when they’re on a desktop versus a phone versus a voice activated system, so employers can’t expect them to stick to a standard application form. Especially not if you expect them to click through several steps.”
On average, Gen Z use their smartphones 15.4 hours per week, more than any other type of device. They also are much more active via text, with an average of 133 messages per week sent by a young person aged 18 to 25 years. The good news for employers? Open rates via text are also much higher with a 98% open rate.
Talent leaders will need to adapt to successfully recruit this next generation of talent. This is especially true given that there’s been a 41% increase in the use of ad blocking software in recent years by this audience, so traditional channels like job ads won’t cut it anymore. Knowing which sources to leverage to find the best talent in this demographic and leveraging nontraditional methods (e.g. text or social media) will make all the difference.
For example, Lever customer Renewal by Andersen | Esler Companies updated their platform to enable text messaging and it made a huge impact, eliminating their candidate black hole. Now, every candidate who applies for high volume roles receives a call and text that the company would like to speak with them. (To learn more about how Renewal by Andersen was able to up-level their communications to meet candidates where they’re, check out their story here.)
Trend #3: Internal mobility will be key in times of potential recession
Signs of a looming recession came up throughout 2019. Most notably, the U.S. trade war with China stoked recession fears, but other warning signs included the bond market, GDP, corporate profits, manufacturing contraction, the cass freight index, copper, gold, business spending, and the global economic policy uncertainty index.
In the case that a recession hits during the next decade, instead of reacting with layoffs, companies with strong internal mobility programs will be able to still grow where they need to. Why? Because it takes an external hire on average of a little over two years to catch up to the level of competency that an internal hire would exhibit on day one!
In order to keep employees, companies are realizing that internal mobility can be a strategic advantage to grow the business. During a recent webinar in our New Decade of Talent Series, Headcount Planning, Reporting, and Budgeting, the CFO of Hired, Ed Schaffer said: “It’s not an equation of what it’s going to cost me. It’s about setting up objectives to achieve and investing dollars in the right places and people to hit those objectives.”
For productive interviews with internal hires, check out our eBook, The Ultimate Guide to Internal Hiring.
Trend #4: Candidates will hold companies accountable to D&I
In recent years, diversity rapidly emerged as a top concern, sparking discourse that affected talent leaders, HR leaders, and business leaders at every level. While most of the accountability had been driven by media attention in the past decade, the next decade’s D&I advocates are a company’s own employees and candidates.
In order for companies to demonstrate accountability on diversity and inclusion internally, they’ll need to put themselves in the employees’ and candidates’ shoes. Will Otto, Predictive Index’s Talent Design Manager, says it’s about aligning as an organization on what candidates want. Which, he says, is to feel part of the organization, to show up to a place with diverse perspectives, and for employers to prove that D&I are important.
So how are companies creating more inclusive work environments? At Predictive Index, passion, data, and resilience are at the heart of their program. Practical applications include internal threads or groups to foster belonging and discussion, as well as a basic set of principles that all employees can follow. These include awareness of diverse perspectives, action-oriented errors, acknowledging the complexity of issues of identity, and assuming best intentions.
Katee Van Horn, D&I advocate and founder of VH Included says, “One of the most inspiring things happening right now is the emergence of a new breed of technology designed to help organizations actually create more inclusive, diverse cultures, where employees experience belonging in a meaningful way. One example, Swirl, is based on the idea that employees need and want more authentic connections at work: It’s a Slack plug-in that facilitates employee matching and encourages meaningful interactions for better collaboration.”
Inclusion also drives business efforts, helping employees feel safe to take risks when needed to grow or innovate. The benefits of physiologically safe environments are manifold, according to one Harvard study, including that it allows “people [to] believe that if they make a well-intentioned mistake, others will not think less of them for it, nor will they resent or penalize them for asking for help, information, or feedback.” The result? More innovation and trust.
“It’s incredibly exciting that exponentially more organizations are focusing on diversity in their hiring efforts compared to a decade ago,” says Nahm. “But it’s time for inclusion to catch fire, as well. Building an inclusive work environment makes good business sense. You want every new hire to be successful, so that they are productive and retentive, and inclusion is about making the parameters for success wider and wider.”
Failing to deliver on inclusion, on the other hand, will be increasingly likely to result in employee churn. “D&I is top-of-mind for the next generation workforce,” says Nahm.”And if they’re not seeing organizations ‘walk the walk,’ they’ll be the ones walking.”
Trend #5: Talent leaders will extend their influence post-hire
“It doesn’t stop once you find the right people,” says Nahm, “You have to nurture those talent relationships with your own employees, who should be developing the knowledge and skills to take their company through future waves of growth.” The talent lifecycle has always been a relationship-building process with sourcing, nurturing, and, increasingly, re-engaging talent from previous searches. Beyond the hire, a lifecycle model also needs to be created and applied to employees at multiple checkpoints, including re-hiring them for their second and third jobs at the company.
Considering that the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary, this is a fixable problem that we anticipate CEOs caring more and more about as we enter the next decade of hiring. “Not enough companies invest after the hire, which leads to lost productivity and unnecessary attrition,” says Nahm. “Today’s workforce wants growth and progression. If they don’t get it at their current employer, they’ll seek it elsewhere. Employers are starting to make the changes that make a difference, which is a trend that we only see increasing in the coming years.”
According to Gallup’s 2018 Employee Engagement report, engagement is highly related to positive business outcomes. To survive the next decade of talent, companies will need to think through everything from the candidate’s first impression to onboarding and ongoing employee engagement. For instance, at Lever, we leverage impact descriptions instead of job descriptions to get candidates interested and invested from the beginning. Providing milestones and measurable goals from the outset also makes it easier to track employee impact once they’re onboarded.
“Since candidates and employees have more choices at their fingertips, they’re more likely to invest and grow a company that values their work and uses employee engagement best practices,” says Nahm.
Final Thoughts: Looking forward at the next decade of talent
CEOs are now focused on talent more than ever before. Candidates have higher expectations of employers. Data and technology are key to success, so it’s important to ask questions like: Is your ATS effective at helping you nurture strong relationships with both active and passive talent? What can you automate and make more human in order to meet candidates where they are today? And how will you maintain visibility and engagement with those employees post-hire?
These investments can make all the difference. They’re also key to transforming and growing your business through the next decade of strong talent. To learn more about how Lever can help, check out our industry report: How Lever Built the ‘Salesforce for Recruiting.’