Employers complain they can’t get employees to fill job openings for valid reasons. To a large extent that’s true.
But in this strong economy, Wharton management professor Peter Cappelli maintains human resources departments aren’t using best practices in hiring.
In a Wharton interview, “Why Good People Still Can’t Get Jobs,” Professor Capelli says companies are wasting time and money, because they lack trained recruiters who know how to ask productive questions.
He points out most companies focus on hiring people who are working elsewhere. But businesses need to be more sophisticated and consider unemployed people.
“There are all kinds of things they can do, and as far as we can tell, the kinds of things they’re doing are not particularly sensible and haven’t been very effective for them,” says Professor Capelli.
He believes it’s shocking in the “ROI-centric and data-driven world” of today.
“Even more shocking than that, employers don’t ask whether what we are doing is working, and most of them can’t ask because they don’t collect the data,” he explains.
Professor Capelli says only 30 percent of companies ascertain whether or not their hiring process is productive.
“They’re looking at cost per hire, time to fill, and they’re not looking at whether our practices give us good candidates or not,” he explains.
Moreover, Professor Capelli says recruiters make the mistake of ignoring good unemployed candidates.
Asking right questions
He says past behavior and experience are enlightening. But recruiters aren’t delving deep enough in asking the right questions.
“Specifically, what did you do in your last job, and how did you do it? They ask them sometimes, generally at a superficial level, but often they don’t,” he asserts.
He believes many HR professionals waste time asking questions “in an unstructured way with each interviewer asking whatever they want.”
The professor says the questions asked of candidates aren’t helpful in predicting their future performance: “What they probably are doing is leading to demographic biases.”
It might seem a harsh criticism, but he asserts HR professionals aren’t trained in what to ask. Meantime, candidates can accurately anticipate what they’ll be asked and that doesn’t lead to productive hires.
He says there’s a better way to ask questions.
“If you look at the people who do this well, like the executive search people who do it for a living, they spend a lot of time before they interview you figuring out what they’re going to ask by learning what you have done,” he says.
“They’ve talked to a lot of people about you. They know the projects you’ve worked on. They know the ones that worked well and the ones that didn’t. They can zero in on detailed questions and go deeper to try to find out what really happened.” he explains.
“They’re more able to get at the truth because they already know a lot before they start to interview you. I don’t know anybody who does that, frankly, at the hiring manager level, he adds.
Instead of being sophisticated in recruiting, the professor says employers are failing in other ways.
“A lot of companies have gotten rid of their recruiters, others have outsourced it, so we’re basically requiring first-line managers or the hiring manager to make the calls on whom to hire,” he explains. “They don’t hire very often, they don’t have training to do it, and we don’t check afterwards whether they’ve done a good job or not.”
He also says effective job descriptions aren’t being written nor are effective searches are being conducted.
He explains why:
“Typically, if I’m a hiring manager, I figure out what I think this job requires. Then I ask everybody else around me who might work with this person, ‘What would you like to see in a candidate?’ But then we never whittle that down. We just add it all in, and you end up with these job requirements that are impossible to fill.”
This means jobs go unfilled.
“You end up not being able to find anybody who could fill it,” he explains. “Or you don’t have the money to pay to get somebody at that price point who has all those attributes.”
Professor Capelli says many companies are ignoring the potential of internal hiring – they employees they know – their skills and how they contribute to the company’s culture.
“The No. 1 thing right now that job seekers say they’re looking for is career advancement,” he explains. “If you are not giving it to them in your own company, they’re going to leave.”
He admits companies can’t keep all employees, and some will be more valued elsewhere.
“But if we aren’t trying to fill any of our positions from within, we’ve got a big hole in the bottom of our boat, and we are never going to be able to bail ourselves out,” he maintains.
The professor laments the lack of training programs. He says CEOs are at fault for failing to invest in training over fear they’ll lose employees anyway.
“Well, everybody leaves at some point, so the simple idea that people might leave is probably not a sufficient reason to say that we shouldn’t train,” he says. “I think the big problem is that no one is thinking about this critically, no one is looking at evidence to see what works.”
It was a far-reaching interview with Professor Capelli including a podcast and transcription, which you can visit here.
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“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people not on strategies.”